New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1919-02-01

commissions and the Interstate Com
merce Commission
Mr.. Warfeld will be recalled to the
witness chair for cross examination
the latter part Of next week. He was
followed to-day by Hudson r. Burr,
chairman of the State Railroad Com
mission of Florida, who, besides in
dorsng the proposals laid before the
committee by Charles +. Elmuuist.
president CT the National Association
OF State Utilities Commiss ions, in
dulged IN detailed criticism of various
acts OF the railroad administration.
The whole attitude of the railroad
administration when shippers prote st
against its arbitrary acts" complained
ME- Burr may be sumed up in the
expression: We'll, what are you going
to do about it?'"
Hines to Appear Monday
The committee adjourned to Monday
morning, when Walker D. Hines. who
succeeded William G. McAdoo as d.
rector general of railroads, will be
heard IN defense Of the McAdoo pro-
poSal for extension of the period Of
government control to five years.
Mr. Warheld presented detailed argu-
ments in opposition to various plans
which heretofore have been presented
Tor consideration of Congress, the
fundamentals of which plans he
summed up as: CD compulsory Fed
eral incorporation of railroads; (2l
provision for new cabinet officer to
De known as the secretary of trans
portatlon; CD regional railroad COM
panies, into which present railroad
companies shall be merged; and (4)
withholding from the government the
mutation and determination of rates
at the same time asking that such
rates shall provide sufficient revenues
to the railroads.
Inc prlncIpal argument of the wit
ness against Fedora incorporation was
based on constitutional ground, and in
support of his contention he quoted
from opinions from Elihu Root, Hugh
l.. Bonr, jr., of Baltimore; John C. Mil
nurn and 3. II. lnness Brown, of New
York; John S. Miller, of Chicago, and
forney Johnston, of Baltimore, which
LAWYERS, with others, he subsequently
quoted IN support CT the constitu-
uonallty of the security owners plan
Political Virus Feared
His opposition to the secretary of
transportation was that it would in
volve the railroads in politics and
make them subject to such changes of
Iciicy as would come every four years
with succeeding administrations
Division of the country into five
railroad regions he described rs a drag
upon individual initiative and incen-
tive, and as tending toward the prin-
clpals of government ownership.
He held it to be untenable that
the government, in legislating to in
sure sufficient revenues to the rail
roads, should surrender the right to
initiate the rates necessary to pro-
duce such returns.
In. discussing the fixed return and
excess profits distribution features of
his plan, Mr. Warfeld said:
"Applying. under the plan, the net
operating income to property invest
ment for the period of three wears.
June 80, 1914-1917, of alp those rail
roads operating in the official South
ern ard Western classification terri
tories, there would have been turned
over to the fund for the uses specified
herein approximately $4,000, 600 per
and for use in the public interest
equals per cant on S1,660000, O0O
No Guarantee Demanded
In this connection Mr.. Warfeld took
care to explain that he did not wish
the plan to be considered In any way
as involving government guarantee
of returns. All that was desirable,
he said, was that Congress should pro-
vide that the Interstate and regional
commissions, in fixing rates, should
maintain level of rates that shall
produce rate of return at least equal
to per cent on the combined pooling
and combined property investment Of
the railroads operating in each of such
territories"
The fund created, Mr.. Warfeld saws.
would be held under supervision of the
Interstate Commerce Commission. The
third portion of the excess earnings.
that is, exclusive of the one-third for
the benefit of the employees and the
one third returned to the railroads
earning it, would be set aside "to
be used for making good deficiencies
In net earnings that may result in con-
sequences Of unusual railroad or traf-
nc conditions, purchase of equipment
Tor the joint use of the railroads or
for other purposes"
But" the witness added, "such fund
may not be thus limited. Discretion
may be given the Interstate Commerce
Commission for its use, in the public
interest, with limitations prescribed by
Congress. When the annual surplus
created through the operation of ex-
cess earnings reduction becomes an
amount which, III the opinion Of the
Interstate Commerce ComSn ission, Just
flied d decrease in the rates, then such
decrease in rates will be made through
the regional commissions, but not so
as to impair the fixed rate of return.
Effect on Strikes Discussed
"lf the time comes for threatened
strike because increase of wages is
denied, the commissions can properly
point to the fact that a structure has
been built that protects the employees,
the shippers and the people who supply
the money to operate the properties
# wages are to be increased it can be
done only by an increase in rates. If
the emloyes can bring about greater
elA ciency and increase the revenue they
will receive the benefit of their .pro-
portion of the surplus thus earned"
With regard to provision for financ-
ing the equipment alocated railroads
during Federal control and for other
permanent purposes, the Warfield plan
provides for Federal incorporation of a
Nae,caai Railways Association. This
association would be managed by
seventies trustees. nine to be composed
Of the members Of the Interstate Com
merce Commission and eight named by
the railroads. 1t would purchase from
the government the equipment bought
by the Railroad Administration. Fur
Their. the plan provides:
1.-THE trustees shall act as the agency