New-York tribune., 1919-09-16
Frelinghuysen Bill
Would Reorganize
Rails i'm Five Years
Competitive Basis and u. S.
Transportation Board Are
Provided for in Measure
Introduced in tho Senate
Ne,c York 7'ribums
L,,..,,t,., p,,rrn,y

Washington bureau
WASHINGTON. Sept. 15.-A bill
providing FOR the reorganization of the
railroads on competitive basis with
in five years and the creation of q
Federal transportation board to su-
pervise their reorganization was intro
duced in the Senate to-day by Senator
Frelinghuysen, of New Jersey.
The proposed board and the railroad
companies, under the terms Of the bill,
would make plans for the rcorganiza-
ton The board would be composed
of five members at $4,000 a year, to
be named by the President. 1t is
given full power to famiiarize itself
with the affairs of the railroad COM
panies, and would report annually to
Congress.
National railroad companies would
be organized to manage the roads.
Each such company would have twelve
directors two chosen by the employees,
eight by the stockholders, and two by
the stockholders from persons nomi-
mated by the transportation board.
National Charter Required
From q date two years after the pas
sage of this act no company may serve
as common carrier except und7r a ma
tional railway charter, unless the
board grants exception in its case Any
existing company may reorganize into
a national company if the majority Of
its stockholders so vote and The trans
portation board approves. The board
shall approve all securities issues.
The Interstate Commerce Commits
sion is empowered to divide the coun-
try into rate-making sections based on
geography, on railroad groupings, or
both. he bill provides that railroad
officials shall not meet and make
schedules of rates designed to produce
six per. cent on the value of the roads
in each traffic section. The Interstate
Commerce Commission then would
pass on these rates, and thereafter they
would be subject to all provisions of
the Interstate Commerce Act The In
terstate Commerce COMMISSIONS valua-
ton IS ultimately to represent the basis
OF railroad values, but pending it's COM
pietloh the aggregate property invest
inent account of the roads will be as
sumed as the valuation.
Fund For Excess EARNINGS
When the annual earnings of a rail
road exceed 6 per cent one-half of the
excess would 20 to a contingent fund
general railroad contingent fund. The
permitted rate of return may be re
vised decennially. If earnings fall be-
low per cent a company may draw
on its contingent fund. When a com
pany's contingent fund is "adeQuate'
1t may thereafter retain only one-third
of its excess for that fund and con-
tribute twothirds to the general rail
road contingent fund. This general
contingent fund shall make up the
deficiencies Of companies failing to
earn their 6 per cent 1t shall be
maintained at $3.50 600, 900, and any ex-
cess over this shall be used to develop
rational transportation or retire capi-
tai Of existing companies, or, if Con,
gress directs, it may be converted into
the national treasury
Every traffic centre would have. after
the distribution of the roads into re-
g'onal systems, at least two competing
roads.
Labor boards composed of equal
numbers appointed by the railroad
companies and by the employees would
decide labor disputes, and in the case
oil deadlock the transportation board
will be the referee