The Washington herald., 1919-03-06
u. S. WILL CONTINUE
ITS RAILWAY POLICY
ON BORROWED FUNDS
CONTINUED FROM PAGE ONE

the railroad administration through
financial means rather than through
interfering with work invSving en-
ployment of labor. I consRer 1t i'm
portant that there be no industrial
disturbances.
In connection with the necessary
financing which will have to be done
by the railroad corporations, it Is the
rule that no such corporate financing
be undertaken except on certificate of
the Railroad Administration, and
therefore the Railroad Administration
acts as a clearing house for such
financing. thus minimizing the danger
of fir ancial confusion"
Grave aspects of the defeat OF
the s75O.OO0. 900 railroad bill by the
Senate wewre revealed when testi-
mony, given by Director General
Hines and Secretary of the Treas
ury Glass. beforeA the Senate Com
n:ittee on Appropriations was made
public. The testimony was taken
in executive session.
Secretary Glass told the commit
tee that failure to pass the bill
would make II necessary for the
railroads to borrow money, and that
borrowing by the railroads would
be disastrous to the forthcoming
victory loan.
Director General Hines declared
in his testimony that unless the
bill was passed the effect upon all
industry would be ruinous and
would constitute a tremendous
shove in the wrong direction.
In explaining the effect upon the
loan. Secretary Glass said the rail-
roads would be compelled to go
into the open market and make
loans aggregating nearly $1,000
100000 from the banks and this
would cut the market up for the
victory loan and make it difficult
for the campaign"
"As I understand it. failure to
make this appropriation will AFFECT
the financial conditions Of the coun-
try to such an eXten as to leopard
ize the liberty loan?" inquired Sem
ator Martin ..Se
Il think So" replied the Secre-
tary. That condition would reflect
itself upon the victory loan, and
think in a disastrous way. AS you
must know, it is going to be much
more difficult to make the next.
and 1 hope the last, loan than it
has been with respect to any of
=
and delirium of war when the other
loans were projected and the ap-
peal to the public was inviting
and stirring and little difficulty
was experienced, but now the war
having ended. there is a reaction
airy feeling. People seem to have
the notion that they can lay their
patriotism aside, put it on the
shelf: and everywhere l have gone
1 have been met with the state
ment that the next loan must be put
on a commercial basis, must be ap-
preached in cold blood; that the
only consideration involved is one
OF business; and 1t is going to be
very difficult to encounter that re-
dictionary spirit and overcome it,"
Secretary Glass stated that there
was no doubt that thousands of peo-
pie subscribed to the previous loans
who felt that they were unable to do
II; many of them were practically
coerced into doing it." he added. The
next loan, he explained, will have to
be made purely upon patriotic
basis.
In response to questions by MEM
bers OF the committee, Secretary Glass
said this will be the last popular loan,
but that the Treasury will have to
borrow money through the banks in
addition to the loan. The organiza-
tions throughout the country which
have participated in the liberty loan
drives will go out of existence soon,
Secretary Glass said.
Mr.. Hines, in explaining to the COM
mittee necessity for the $4,000, 900 ap-
preparation, said that 1881 10000 is
needed to pay the railroads rentals
due from the government for 1918.
or the balance of s369. 900. 900, the sum
of $3.50. 10000 is required to pay for
equipment for the railroads which
was ordered by the government to
speed up the transportation ystens
during the spring of 1913 so 00o00 900 is
due on bonds of the Boston and Maine
Railroad, which the government ac-
quired; n2.soo, coo for equipping the
New York State barge canal. the low
er Mississippi River and the Black
Warrior River; and the balance of
approximately s50,0o0.0Oo for financing
roads which have notes coming due
and bonds maturing. He said that
during the calendar year 1919 the sum
of s4s1 900. 900 will have to be spent by
the roads for betterments The total
dividends for 1918 were given at $780,
100000. but the Railroad Administra-
tion will compel the companies to
borrow money to supply the improve