New-York tribune., 1919-08-15
Security Owners Council
Outlines Project Before
Commerce Committee of
the Lower House
Labor to Share Earnings
transportation Secretary in
the Cabinet Is Opposed
by Luther NJ. Walter
Ne1D York Tribune
WQshinUtOn Bureau

WUSNsNgtOH OuFeuW
WASHINGTON, Aug. 14.-The War
field plan for taking over the railroads
at once, which provides for rates that
would give a fixed return upon the in
vestment and that surplus profits
should be divided equally between la
Dor, the roads aid the public, was pre-
sented to the House Interstate and
Foreign Commerce Committee to-day
by Luther M. Walter, general counsel
for the National Association Of Own
ers of Railroad Securities.
That labor should participate in the
earnings of the carriers is a funda
mental of the plan, Mr.. Walter de-
clared Capital invested in railroad
properties is entitled to q fair return,
he added; labor employed upon the
properties deserves a just wage, and
the public is entitled to efficient ser
vice at the lowest cost.
He opposed, however, the position of
the railroad exectives for Federal in
corporation, for a transportation board
and for secretary of transportation
in the Cabinet, and said that under the
minimum return plan the net result
of railroad operations III the pre-war
test period, which is the basis of gov
ernmental rental, would have been the
carriers for division with labor and
the public. This would have been ac-
complished, he said, on the level Of
rates then prevailing.
Represents $4,000, 100000
The National Association of Owners
Of Railroad Securities, according to
Mr.. Walter, is voluntary organiza-
ton made up of holders of railroad
securities, both stocks and bonds, the
latter predominating. Through its
membership, directly and indirectly,
by institutional and individual mem
bership, the association now repre-
sents nearly $9,0O0,000, 900 actual paid
up membership Of the outstanding S19,-
100000, 900 Of nom duplicated railroad
securities.
The largest single holders are the
great life insurance companies, savings
banks: universities and colleges, banks
and individual investors" he said
Approximately 10000 900 people own
the outstanding 46,0O0,O0O life insur-
ance policies. One fourth of the in
vestments made by these companies to
protect the benefciaries of their policy
holders is in railroad securities. The
great savings banks, whose members
IN our association have some 5000 900
dcposltors, have largely invested their
funds in railroad securities. You
therefore, find that the great mass of
our people are vitally interested in the
integrity of railroad securities, and for
them this association appears before
your committee to present its views,
which have been embodied in what is
known as the Warfield plan. Mr. s.
Davies Wartield being the president
of the association.
PURPOSE of Association
"Thc purpose of this association is
to secure from public authority and
from the public such action as will pro-
tect the investments made and make
it possible for capital to be furnished
to the railroads for future needs. The
financial structure of all credits de-
pends upon the results of legislation
by this Congress upon the railroad ques-
tlon. We believe that capital invested
IN railroad properties is entitled to fair
return; that labor employed upon these
and that the public which furnishes
the money is entitled to efficient ser
vice at the lowest cost.
Our plan can be put into effect i'm
mediately. No other plan yet sug-
Gested dealing with the financial needs
of the carriers can be effected short
of period of years. The keystone of
tne w Warneld plan 1S Congressional
direction to the Interstate Commerce
Commission that it shall make freight
and passenger rates sufficient to pay
operating expenses, maintain railroad
properties and give not less than s
per cent return upon the aggregate fair
value OF the property devoted to trans
portation in each of the principal traffic
territories. The chief difficulty in the
past has been the impossibilty of ad-
justing rates SO that the great bulk of
the railroads Of the country could earn
sufficient to operate and maintain their
individual properties without at the
same time furnishing excessive earn
ings to few great carriers
1--WE use the property investment
account Of the carriers as the basis
upon which to apply the per cent.
because the Interstate Commerce Com,
mission in the 5 per cent case found
that the only basis available for prompt
determination Of the suficiency of the
return upon investment.
Under the Warfeld plan Congress-
is asked to direct the commission to