New-York tribune., 1919-01-16
Counsel for RailtUay
Executives Discusses
McAdoo's 5-Year Plan
Neic York Tribune
lyashiu atom Bured,,

Netc Y0rk Tribune
Washington Eured5
WASHINGTON, Jan. 15.-The Senate
Committee on Interstate Commerce
took action to. day to speed up the
hearings on the railroad question.
BY resolution adopted in executive
session it was determined to limit each
of the various interests represented to
two spokesman, except where the COM
mittee might consider special circum-
stances to warrant it in hearing wit
nesses
There is every indication in the atti-
tude of members of the committee that
they have made up their minds in
general way as to the recommendation
they will make to the Senate. There is
clear opposition with the majority of
: them to the propose! cf former Direc-
tor General McAdoo to extend the
: period of Federal control to five years
for purposes of experimentation"
Present indications are that the COM
mittee will recommend q substitute
bill providing for the return of the
roads to private ownership under legis-
lation that will permit mergers and
unitication as we'll as pooling arrange
ments, but safeguarded by wider pow
ers of regulation vested in the Inter
state Commerce Commission.
Plan Action at Once
Because of the threat of the Admin
istration, conveyed to the committee
through Mr.. McAdoo, that it will throw
the roads at once back into private
hands without remedial legislation of
any kind unless the McAdoo five-year
nj ol
among members that Congress should
act without delay. One suggestion,
offered at to-day's hearing by Senator
Watson, of Indiana, is that the COM
mittee should recommend preliminary
| legislation that would either fix def
mite date for turning the roads back,
Or prohibit .heir return until Congress
shall have worked out legislation pre-
scribing a permanent policy. Senator
Cummins, of Iowa, already has a reso-
luton of this character ready to intro
duce.
Alfred p Thorn, general counsel for
the Association of Railway Executives,
resumed the stand at to-day's session
OF the committee. He had not con-
cluded when the committee adjourned
at noon until tomorrow. To-day's
statement of the witness dealt with the
situation facing the roads on either
horn of the dilemma presented by the
McAdoo proposal of a five-year period
OF government control, or an immediate
return of the properties tc private
management. Tomorrow he will trans
late into scheme of legislation the
proposals which the railway eXecu-
tives laid before the committee last
week in the testimony of 7. Dewitt
Cuyler, president of their association.
Jump in Expense Ratio
Showing how the ratio between oper-
atlng expenses and operating revenues
had jumped from 67.9 per cent under
private management to 1873 per cent
and even higher under government op-
Grafton. Mr.. Thorn called attention to
the purpose of the railroad administra-
ton, as indicated by former Director
General McAdoo, to make up the diff
terence through increased revenues.
He cited a court decision in Oregon
last summer in connection with the
rates Of short line road returned to
private management, to show the ten
dency of the courts to hold that the
McAdoo rates, as far as lntrastate rates
are concerned, take precedence only for
the period of government control
with this as precedent, Mr. Thom
pictured disastrous consequences to the
properties as a whole if they were
turned back without protective legis-
lation.
Correcting figure which he had
presented to the committee yesterday
! concerning the programme of better
ments and extensions with which the
railroad administration proposed sad
ding the roads, Mr.. Thorn showed that
the capital expenditures authorized up
to December l, 1913, instead of being
sI,l75,o0O,o0o, were actually $1,2o4,-
/ 100000. This he characterized as a
debt to the government by the rail
roads.
All Right in War Time
Replying to a question by Senator
Underwood, of Alabama, as to whether
the roads were not better off under
government operation during the war
period, Mr.. Thorn said he had always
thought that the government should
take over the operation of the roads
in the war emergency.
Discussing the damages that would
be incurred by the roads through con-
tinued Federal control in the way of
destruction Of good will, disruption of
organization and diversion of traffic,
MIR. Thorn said the net result was to
destroy the subject matter which the
government took away and to return
to the private owners something en-
/ tlrely different
.Reverting to the immense debts
/ saddled upon the roads by the govern
ment, Mr. Thorn pictured the situation
; which Congress and the public would
face at the end of the five years in
determining the future policy toward
the railroad question.
What the government proposed, he
said, was to take the roads over for
five years for the purposes of expert
system Of regulation, and he ques-
( toned whether the authority for such
action existed, in time of peace, in the
! clause in the Constitution to regulate
| interstate commerce.
Time to Think
! "Translating the wish of the govern
ment into legislation" said MIR. Thom,