New-York tribune., 1919-07-24
Proposal of United States
Chamber of Commerce.
Giving U. S. Control,
Explained by Warburg
Warns Against Patchwork
Remedial Legislation to
Permit Systems to Earn
Dividends Is Discussed
Ne.D York Tribune
Washington Bureau

washington buTedU
WASHINGTON, July 23.-The United
States Chamber Of Commerce plan fo'
solving the railroad problem was placed
before the Interstate Commerce Com
mittee Of the House to-day through thu
National Transportation Conference, (
body created by the chamber for th'
purpose Harry A. Wheeler, of Chi
cago, former president Of the Chambe'
of Commerce, read a paper explaining
the plan. Alexander W. Smith, an at
torney of Atlanta, Ga, read state
ment supporting the idea of compulsor.
Federal incorporation for consolidated
railroad systems, provided for, in tn,
plan, and Paul M Warburg, formerl,
vice chairman of the Federal Reserv,
Board, discussed the financial side O.
the scheme.
The plan suggested by the conferenc,
as set forth by Mr.. Wheeler, it's chair
man, provides:
/. Return of railroads to private
ownership and operation as soon as
the necessary remedial legislation
can be enacted.
2. Consolidation Of existing rail-
roads into strong competitive sys-
TENS.
SuDJcCt 10 l. feUeIal LAWS
3. Requirement that all carriers
engaged in interstate commerce sub
lect themselves as corporations to
Federal legislation.
4. Exclusive Federal regulation of
the capital expenditures and the Sc
curity issues of all carriers engaged
in interstate commerce.
5. The Intcrstates Commerce Com
mission to retain its present powers
and to be given additional powers
over rates.
6. Creation of a Federal trans
portation board to promote the de-
velopmcnt of national system of
rail, water and highway transporta-
tion; to pass upon the public neces-
sity for capital expenditures; to reg
ulate security issues; to administer
and enforce the measures that may
stabilizing railroad credit, and to de-
termine the grouping Of consolida-
tion of railroads deemed to be in the
public interest.
Adjustment of Wages
7. Adjustment of wages and work
ing conditions of railroad employees
by boards consisting Of equal num-
hers of representatives of railroad
the Federal Transportation Board as
referee.
8. Adoption by Congress of q plan
for the stabilization of railroad rev.
enues and credit by means Of:
(a) Enactment of statutory rule
providing that the rate structure es-
tablished by public authority shall
be designed to yield net return Of
6 per cent per annum upon the ag-
gregate fair value of the property.
(b) Use of the aggregate property
investment accounts of the railroads
as fair value Of the property for
rate making purposes.
(c) Creation of two kinds Of con-
tingent funds, an individual railroad
contingent fund established by each
general railroad contingent fund
maintained by contributions from al
prosperous roads, managed by trus
tees appointed by the Fedora
Transportation Board and used tt
support the credit of all of the rail
roads OF the country. Any excess il
the general railroad contingent funt
above $3.50 900, 900 is to be usedsf fo
the general development of tn
transportation system of the country
Creation of Reserve Fund
(d) Creation of railroad reser,
fund administered by the Fedora
Transportation Board to facilitat
prompt sterilization of ralroa
credit and loan Of sb0o.o0o,O 900 t.
this fund by Congress- as soon as tn
railroads AFRO returned to their own
era. the loan to be used, If neces
sary, in making advances to the gen
eral railroad contingent fund, an
to be repaid in interest from money
contributed hy the railroads to tn
(e) Determination and announce
ment by the Federal Transportatio
Board Of the grouping or consolida
ton Of railroads deemed 20 be i
the public interest.
% Organization OF the board G
directors of each consolidated raj
road system with twelve member
of the board, one to be representa-
tive Of the employees Of the syster
nominated for such position by tn
employees, and three to be selecte
By the Federal Transportation Boar
to represent the principal interes st
IN the territory served.
Programme Adopted by Leaders
This programme was adopted at
series OF conferences held In Dece
Der Of last year attended by pror
nent men belonging to each imports
nterest-commerca industrial, az
cultural, financial, labor. govel
mental, transportation, economic, CT
and social.
Mr.. Smiths argument was that =,
railway companies engaged in int
state commerce are subject to co
puisory Federal incorporation beca,
the states by permitting their cor,
ratlons TO cross state lines have
picitly made interstate corporate
interested members OF the commit
ana ne was cross-cxamined at so
length as to how companies could
both state and Federal CORPORATIONS
the same time. Mr. Smith would
have the railways give up their at
charters. but would superimpose r
eral charters, the latter to obtain
all cases of conflict.
Dir. Warburg warned against pat
work legislation.
Pay Own Board"
"The National Transportation C.
ference" he explained, ain approa
ing the subject OF remedial railr,
legislation was guided by the fun
mental thought that transported
should pay its own board. g.. Z
the yield Of transportation rates, b.
freight and passenger, should be su,
Gent to pay for the transportat
cost, including a reasonable return
the value Of the railroad propert
devoted 10 the public service