The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-08-08

owners OF tho railroads to the States.
Mr.. Plumb proposed to have the taxes
decreased by 10 per cent each year.
This would cause serious financial
difficulties to several States that derive
half their revenue from taxing the rail-
roa<S end throw an additional burden
on the people OF the country" Mr. Bark
ley said. Nc. Plumb then admitted shat
the State and Federal Governments
would have to agree on the tax question
under his plan.
Legal Obstacles Appear.
Endless legal obstacles were seen by
committee men in determining the valre
| to be fixed for tho properties. Private
property cannot be taken for public use
unless immediate payment IL given II
desired" Representative Montague
| (va) insisted. Mr.. Plumb insisted IL
could be paid for afterward. His plan
| for allowing payment to owners Tor
property TO be valued as OF the time IL
was acquired also brought sharp criti-
cism. He insisted that decreases and
not increases in value should be allowed.
Mr.. Plumb finally changed his POSI-
ton by admitting the cost of all Inn
provements on land and other property
owned by the railroads should be taken
into consideration, but he thought UNI
developed land should be paid for at the
prevailing price when acquired which In
many instances was fifty to- sixty years
ago. He also claimed the roads should
not be given credit for natural resources
found on lands they own.
Representative Sims proposed the es-
Establishment of a system, similar to the
Quartermaster Corps of the Army for
providing food to all railroad equipment
| in case the Plumb plan is adopted.
The reasons for the Senate Commit
\ tees refusal to adopt the Presidents
recommendation are given In the follow
ing letter sent by Chairman Cummins !:
MY Dear Mr.. President: In accord
ance with my promise 1 called together
the Interstate Commerce Committee Of
the Senate for the purpose of consider
| ing the suggestions and recommended
! tions contained in your letter to me OF
the first instant.
Reply Made to Wilson.
| THE Committee has carefully gone
over the whole subject and has unani-
mously authorized me to make the fol-
lowing further response to your COM
munication.
| 'The Committee recognizes the gravity
| of the situation and earnestly desires
to cooperate with you in bringing about
i the proper solution of the difficult prob
! lens which confront the country. II
feels, however, that Congress has al
ready given you complete and plenary
authority to deal with the existing sit
uation and that additional legislation
at this time can add nothing whatever
to your power In the premises.
The Director General can FIX the
wages OF all men employed in the
Transportation system and 1t seems 10
be clear that II Is for him to say whether
the compensation of these men should
or should not be increased. He has all
the available information which can
possibly be assured and It is the viyS
of the committee that he should act in
accordance with the public interest aud
his own Judgment He can be advised
upon the subject by any board or trlbu.
nal which you may select for that pur-
pose.
"The Director General has also the
absolute right to initiate rates for trans
portatlon and can advance or lower thar
as he may think necessary or wise &c
meet the requirements of the transpor.
tation system In his charge. and, more
over. he can put the new rates into
effect when in his judgment they should
become effective.
"At the present time the Interstate
Commerce Commission has not tn,
authority to suspend for examination
J or approval the rates initiated by the
} Director-General; but even II the act
which lately passed tho Senate ant
which has not yet passed the House
shall become a law and the authority o.
the Interstate Commerce Commission t.
suspend rates restored. It will still bt
, true that the plrector-General mus
J initiate the rates. and II Is entirely i'm
J possible to believe that the Interstat,
Commerce Commission would suspend
| Fv In I'd 20
any increased wages OF railway opera
tlves.
Il Guidance for I. c. C.
The committee is now diligently en-
gagged in the preparation of bill fol
the general reorganization of our sys
tenn Of regulation and control. One com
mon phase OF the many plans which
have been submitted for our considera
ton relates to the further direction
which ought to be given to the Inter
state Commerce Commission for III
guidance in determining the reasonable
ness OF rates. Upon that phase of tn.
subject diverse opinions have been de
veloped and 1t Is thought to be unwis,
to bring forward for action by Congress
any further legislation in that respec
until 1t can be associated with the gen
, eral plan of reorganization.
IF the committee felt that there wal
any lack of power on your part or oil
the part of the Director-General It woult
be quick to act, but inasmuch as II car
. perceive no want of authority II hai
, reached the conclusion that no add
tional legislation is required to meet tn,
particular emergency which you hav,
| pointed out.
with high respect. I remain
Yours sincerely,
ALBERT II. CUMMINs"
Senator Cummins's letter from Direc
tor-General Hines explains his views o
, thu legal situation confronting the rail
. road management. Mr.. Hines was quote,
, recently as indicating the opinion tina
additional legal authority was needed I,
enable the Railroad Administration 4
deal with the rate and wage question:
: before 1t. In that interview he seemed
to take the position that action OF Con
81 ess in restoring the rate control OF tn,
Interstate Commerce Commission wa
: tantamount to prohibiting any furthe
: Increases Of rates.
This, Mr.. Hines makes clear. is not hi
position. and he never authorized an in
. terview committing him to It, He wa
far from a desire to criticise anything
Congress had done, and agreed tina
| there is ample legal authority alread,
b reposed in, the Railroad Administration
to deal with both the wage and rat
, questions. In this regard he entirel,
. agrees with the position taken by Mr.
Cummins and with the position Of tn
Committee on Interstate Commerce a
E outlined by Mr.. Cummns's letter TO tn