Evening star., 1919-11-13
PLAN FOR FUNDING
RAILROAD DEBT IS
ADOPTED IN HOUSE
Amount Fixed Upon Is Ap'
proximateIy 525 Millions
for Carriers.

- Ihe House rejected To-Day the IHteR
state Commerce committees plan for
funding the $775,551.O0o. owed by
Carriers to the government for I'M
provements and hetterments. and sub
stituted proposal by Representa-
tive Dennison. republican. Illinois.
providing for the funding Of approx
in1atelY $3.50, 600, 900 less than that
amount In framing permanent 1egis-
lation for the railroads
The unliquidated indebtedness Of the
railroads after the set-on of debts
paid in equal fnstaIlments covering
period Of ten years. The net result
of the plan, it's proponents said. would
be to reduce from $355,00O, 600 10
$17i, ,000, 900 the amount that Congress
will have to appropriate to square ac-
coupts between the railroad admins
:tration and the carriers at the end OF
this year.
Under the-Dennison plan. adopted
by vote Of ta4 to 66. practically all
the money, owed by the government
rentals would be set OF against the
carriers capital account Indebtedness
of $fT5,55l, 600 to the government ana
the remainder. would be secured by
demand notes bearing per cent in
terest. r 80. - 'af
Estimates Submitted.
Estimates prepared by the railroad
administrations Of appropriations re-
quested under Senate and House bills
-$615, 451 900 under the former and
$563355, ,0ee under the latter-were
contained in, a supplemental report
submitted in tho Senate today by
Chairman Cummins of the Senate in
terstate commerce committee. The
report stated that $200,000.000 in each
case would be reserve fund to care
for requirements Of carriers In the
transition to private operation
The fight over the funding plan was
renewed in the House and vote to-
day on this section finally agreed
upon.
Letter From Alfred 2. Thom.
A letter from Alfred P. Thorn. coun-
sci OF the Railway Executivee Asso-
citation. favoring the House nill pan. pan
was presented by Representative Mer-
ritt, republican, Connecticut, leading
the fight for the Secretary.
= It was IN answer to oh3ecttonS OF
Director General Hines to the funding
plan in the bill. and declared that the
not unjust to the government, but
would require the roads to pay the
same interest as paid by the govern
ment to the carriers during federal
control for the use Of the additions
and betterments of the lines.
Esch Bill Is Opposed. ~
Progress on the Esch bill ran up
against a stone wall in the House
yesterday. Stubborn opposition was
voiced to the Esch proposal to refund
by the carriers. The counter propo-
sition under consideration today was
offered by Representative Denison, re-
publican, of Illinois.
Opponents of the refunding plan de-
clared it would compel Congress 20
appropriate tS363, 355s000 by the end
Of This year 10 sQua16 the aceounts OF
the railroad administration. and Mr.
Denison proposed a substitute. which
he said would decrease the amount
needed to $171 100000.
Under the Denison plan it is pro-
posed that $415. 100000 owed by the
government to the carriers as stand
ard return be set of against the debts
due to the government by the roads.
The pending Esch bill calls for only
a partial immediate set-off. Propo-
nents of the committee plan, which
was understood to have been written
into the measure after a bitter fight
in the interstate commerce commit
tee, urged that proposal as a square
deal to the railroads. which were
charged with debts contracted with
out their consent during the period of
government operations
Called Undu1y Liberal Policy.
Director General Hines In his letter
addressed to Chairman Esch Of the
interstate commerce committee de-
scribed the bilrs plan as an "unduly
liberal policy" He asserted that the
plan would provide working capital.
not needed by strong roads. while
those most in need of financial aid
would not receive it. The carriers,
he also asserted, would not be en-
couraged to finance their needs from
private sources. The director general
added that Congress should definitely
fix the interest rate to be charged
against the refunded Indebtedness,
pointing out that the bill might grant.
rates SO low as to be unjust to the
government. and suggested that the
interest rate be nxed at per cent.
Several, Sections Approved.
Before becoming tied up with con-
sideration of the refunding plan. the
the bill. including that directing sur
render Of the lines by the government
at the end of the month in which the
bill is passed, and that placing the
operation Of boat and barge lines
established by the railroad admin is
tration on the Mississippi and Black
Warrior rivers under War Department
engineers.
CApT1TPED RV Do