New-York tribune., 1919-08-16
5. Fl. Beach, New York Saw.
ings Banks Association.
Says Securities Are Held
byModerateMeans Peonle
Ask Constructive Relief
Warfield Plan Will Keen
Roads From L. S. Owner
ship or Bankruptcy
Johnston Declares

O-'' mug. 10 Mess
congress gives the railroads construc-
tive relief the economic situation vii,
overwhelm the railroads and force tb.,.
into recevership or under government.
ownership, declared Forncy Jobnsto,
advisory counsel of the National Asso-
citation of Owners or Railroad Secur;.
ties, before the House Committee a,
interstate and Foreign Commerce IN.
day. urging the adoption OF the W.
field plan as the only Immediate son-
ton of the problem. The roads have
been kept on the bread line since 191o
he added.
The same view was voiced by Samue,
H. Beach, president of the Savings
Bank Association of the State of New
York, representing, he said, interests
with an investment of $1,000, 900 900 N
the railroads.
Half the people of the United States
are directly interested in the return
of the roads to private ownership on
basis that will afford adequate nro.
lection to security holders, declared
Mr.. Beach
Are Facing Destruction
ct is our firm conviction he added,
that the railroads cannot avoid de-
struct'on and eventual government ah-
sorption unless they are assured of
return of not less than per cent
through exercise by Congress of its dutv
to stop, by act, the knife of regulation
short Of the heart of the transportation
system of the United States.
Many people think railroad secur;-
ties are mainly owned and held by the
wealthy. The fact is that the majority
of the liquid wealth Of the nation con-
ssts of the small accumulations of the
many rather than of the larger hold
ings Of the few.
This plan provides that Congress
shall, by specific act, provide that such
rates for freight and passengers shall
be established as viii produce return
of not less than per cent upon the
combined property investment accounts
of the roads.
The vital point Of this measure is
that if roads having the average of ef-
fciency can be assured of return Of
6 per cent by act of Congress. il will
settle and take out of the hands of the
Interstate Commerce Commission the
much vexed question of what is rea-
sonable return p"
Nothing in human experience af-
fords a precedent for such operation OF
railroads as the last two years have
witnessed. Operating costs have
mounted so far out of proportion TO
receipts that the bonds of at least eight
or nine railroads, which were eligible
before the war started. are in fair
way to become illegal for savings banks
to hold.
What We want is to have such leg
is!ation enacted as Will bring the rail
road securities up to the requirements
of the law"
The proposals of the warfeld plan
have been formulated on the theory
that Congress prefers to extend and
perfect the system of regulation begun
IN 1897 before abandoning it for drastic
economic revolutions" said Mr.. John
ston- We feel confident that our pro-
posals AFFORD a common ground on
which all conflicting theories can agree
as necessary to sustain the service of
the railroads upon relinquish ment of
Federal control.
Against Radical Changes
I'VE suggest no radical, complicated
or costly process. We urge Congress
to put into effect certain policies which
have been found by experience to be
essential both to the protection Of rail-
roads and to the protection OF the pub
nc interest in TRANSFORMATION.
III Congress does not axe coura-
geous and constructive action now the
progress of generation toward a regu-
lated system of privately owned and
operated railway transportation will be
destroyed, and the Sixty sixth Congress
Will have forced government ownership
under conditions and with results which
the future alone can assay.
We freely acknowledge the pro.
priety OF the main features of the bill
introduced by Mr.. Esch. The meas
ure we formulated embodies substan-
TALLY ali of the advances proposed IN
the Esch bill, but accompanies them
with the indispensable provisions
necessary to protect American trans
portation from headlong bankruptcy.
We earnestly caution the committee
against the report OF any bill without
provisions for constructive relief