The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1919-08-14
FIXED RETURN
FOR R|NvESTOR
IN RAILROADS
IS new PLAN
Warfield System Submitted to
Committee Would Divide
Surplus Among Public, En-
ployes and Railroads.
U. S. WILL CONTROL
(By Associated Press)

tBy Associated Press)
WASHINGTON, Aug 1.-THE War
held plan for railroad control with |
provision for fiat return Of six per
cent on capital invested. was present
ed today to the House interstate COM !,
merce committee by Luther M. Wal |
ter. general counsel Of the national
association OF owners Of railroad
securities.
The fundamentals Of the plan. in
cluding division Of all surplus over the |
fxed return among employees. the pub
aic and the road earning 1t, we're ex'
planned by Mr.. Walter. who declared
1t could be put into effect Immediately.
THE keystone of the Warfield
plan," the witness said, lis congress
sional direction to the Interstate Com
merce Commission that it shall make
freight and passenger rates sufficient
to pay operating expenses. maintain
railroad properties and give not less
than six per cent return upon the ag-
gregate fair value Of the property de-
voted to transportation in each of the
principal traffic territories"
Opposes Cabinet Place.
Mr. Walter opposed federal incor
poration, a transportation and sec
retary of transportation in the cabinet
return plan the net result Of opera
tions in the pre-war test period. the
basis of government rental, some OF
the carriers would have turned In a
surplus for division between employees
and the public.
He said the financial structure of
credits depended upon the legislation
enacted by this congress to deal with
the railroad problem. The association
he said, used the property investment
account of the carriers as the basis
upon which to apply the six per cent.
lecause the Interstate Commerce COM
mission had found that the only avail
able basis for prompt determination
Of suffciency Of the return upon in
Vestment.
Il was fundamental of the War
field plan, the witness said, that labor
should participate in the earnings OF
the carriers.
I'VE believe" he declared, that
capital Is entitled to its return Of six
per cent: that labor is entitled to
fair wage, and that the excess earned
by the carriers after paying fair
wages and six per cent on capital
should be divided with labor and the
public. Labors share should be used
for the establishment of the insurance
oI
sharing. BY reason of the largely in
creased duties which fall upon the
commission the security holders ask
congress to create six regional inter
state commerce commissions, subor-
dinate to the commission but with all
the powers of the Interstate Com
merce commission in their respective
territories.
Regional Commission
Our plan contemplates that these
regional commissions shall act as
boards of conciliation in settling wage
disputes. being a body close to the
employees, the carriers and the ship
pers.
The issuance of securities Of all
carriers engaged in interstate COM
merce would be vested exclusively in
federal authority.
This plan would create a corpora
tion operated without profit to the
railroads and managed by the nine
interstate commerce commissioners
and eight railroad men selected by the
railroads. This corporation would
furnish expert advice to the commits
sion in the operation of carriers.
would unity terminals, would operate
equipment such as has been built by
the railroad administration and allo-
would furnish a great clearing house
for railroad operation and in times
OF emergency would constitute the
directing force for the handling of the
railroads as a single system"
In contending that six percent, as
the proper return would not be QueS-
TONED. Mr.. Walter said:
Even Mr.. Plumb. the great eXpon-
ent of low returns. admits that six
percent. is not an excessive return
under private operation
Three to Share Surplus
The great mass of the people, he
said. were vitality concerned in the
integrity of railroad securities. The
association believed the surplus over
the fixed return should be divided
equally among the employees. the pub,
lie and the earning road. one third to
the road Ito encourage incentive and
initiative in operation"
THE Warfield plan. Mr.. Walter said
in closing, would create corporation
operated without profit to the rail
roads and under federal control, di
rected by trustees the nine inter
state commerce commissioners and
eight railroad men, TO finance IN the
present emergency such equipment as
NAV be purchased by it from the rail
rOaQ ADMINISTRATOR anu diioeo'0u -
the railroads and furnish immediate
means for assisting in financing the
return of the roads. the corporation
to be continued as permanent means
for mobilizing and purchasing equip
ment to be leased to the roads, this
CORPORATION to have control Of the
excess earnings reduction fund.
ut would provide management
o. agency to continue to put into eff
f,ct the Joint use of terminals, uni
.icat:on of facilities, re-routing OF
freight by pooling or otherwise, and to
continue to adopt such methods OF
operation as may have been found
r~..i-.x N Dana Tbirfaenl