New-York tribune., 1919-12-25
Nc,c York Tribune
III

Va hin0ton Bu1cau
WASHINGTON, Dec 24--Two rail
road bills are now before a conference
committee of Congress. One. the Cum
mins bill, was passed by the Senate:
the other, the Esch bill. was passed by
the House. Out of the two the con-
feEees are to make and report a bill
that will be sent to the President for
his approval.
The Cummins bill differs from the
House bi-l IN three important provi-
sions
First-The Cummins bill reou;rcs
compulsory consolidation of the raj
roads INTO from twenty to thirtv-fve
systems under the direction OF Fed
era transportation board. The Esch
oil PROVIDES simply for "permissivc"
cohso ldation with no spsec hc number
oi systems, and under control of the
interstate Commerce Comm sslon.
SccoHd-ln regard to rate-m..k ng, the
tummlns bi divides the coun.ry into
ratc-making regions or groups and pro
yldes for rates that viii insure a
return Of 512 per cent on the aggre-
gate property va ues o. all the RAJ
roads in each group The Esch bill
;eaves the rate making power in the
hands OF the Interstate Commerce Com
Miss on, as at present
Ihrd - The Cumrnins bill makes
strikes un awful and creates wage DIS
pute boards, whose decisions sha. be
final. The Esch bill creates an clabor-
ate system of machinery Tor concila-
ton, but does not make the ru .ings of
the conciliation boards fn.l.
B1th measures provide for The re-
ho doh
to the Federal government contracted
during the period of Federal contro,
The railroads have been advanced an
roximately 81 200 600, 900 by the Fed
eEal government. The House bill gl.cs
the roads fifteen years in which to pay
back the money, while the Cummins
OIL gives them ten years.
Under both bills government super
vision of security issues is provided
for and the Federal government is
given contro of new construction.
Loans to the roads during the period
OF transition from government to pri-
vate operation are provided for in bo h
bills through revo wing fund The
Senate bin creates fund of $500 00O,-
900 for the purpose and the House bill
$3.50 900 600.
The Cummins bill provides for the
Federal incorporation of the railroads
ihe ii ouse bil. makes no provision in
this respect.
The Cummins bill provides for the
re ~ c'0 miles cf railroad 10
private operation on the last day
9 .nVutn NAu~n lne
bill becomes a Jaw.
Transportation systems are to be con-
solidated into not less than twenty nor
more than thir,y-five systems. not re-
gional or zone system, but competitive
organizations, preserving as sar as
possible existing channe $ of commerce
and competition in the matter of SER
vice to the public rather than with
respect to rates and charges.
Unihcation OF transp portation facili-
ties into competitive systems is to be
accomplished under the supervision of
Fedora transportation BOARD. created
by the bill and given large duties and
powers, and the consolidated companies
are to be Incorporated under Federal
regulation. Consultations NAV be
made tn ough REQ sganizatlon OF exist
ing raj way corporations or through
original corporations organized under
the control of the Federal government.
Final decision as to the form of the
consultations rests with the Inter-
state Commerce Commission. which has
power of review over the tentative ap-
prova of the Federal transportation
board
.untary consolidation may take
place within seven years after the
Passage Of the law, after which COM
pulsory consolidation and incorporation
under Federal SUPERVISION becomes eff
feet We.
Capitaization Of these great railway
cNrpOratiors IS 20 bc bosel uron vn',1a.
tions determined BY the Interstate Com
nee Conn. .,ou. and IS Ao~ 20 eX-
ceed the actual value of the property
held for or used in the transportation
serv ce."
To provide for the immediate finan-
cial operations of the carriers after
their release from Federal control and
operation, the Cummins bill has three
prov 'sions ITO owe cone the fficulties
confronting us and render private op-
GRAFTON ~ossib e." They are:
BY prescribing bas of return upon
the va ue Of railway property. to give
such assurance TO investors as will in
cline them to look with favor upon
railway securities; by making a mod
crate return reasonably certain" to
establish credit for the carriers
n making the return "fairly GER
~ = "''"ir for the public Il lower
capital charge that would otherwise
In requiring some carriers which
under any given basis of rates would
earn more than fair return" to
pay the excess to the government.
which Will have authority to use the
fund thus created for assistance in
the matte of transportation facili-
ties and credits to the weaker carriers
to preserve the general system of