The Washington herald., 1920-04-01
BANKERSFAVOR.
RAILROAD BILL
Six of Seven Features
Adopted Recommended d
By Am. Bankers Assn.
PRES. HAWES' REMARKS
Association Head Says New
Law Will Mean Con-
tinued Prosperity.
PRES. HAWES' REMARKS

Six OF the seven recommendations
made by the special railroad COM
mittee OF the American Bankers As
sociation were incorporated in the
Esch-Cummtns bill under which the
railroads were returned to private
ownership.
Because of the financial interests
represented and realizing the gen.
eral good to the country of an
equitable adjustment of transporta-
tion difficulties which would enable
the railroads to keep pace with the
country's normal development:
President Richard 8. Halves, in De-
cember, appointed a special railroad
committee, which met In Chicago
in January and drew up reeommen-
dations. the substance Of which
were as follows:
Return of railroads to private
ownership. voluntary consolidation
of properties: permissive Fedefal
Incorporation: government guar
antee OF net operating income equal
to Federal control to all railroads
for six months; extension OF car
rier's Indebtedness to government
to run serially for from ten to
twenty years: the regulation of
rates under statutory rule. provid-
ing the net income for roads equal
as nearly as possible six per cent
on the aggregate value of the prop
exclusively regulated and controlled
by some Federal board.
The only one Of these not COW
cred in the new legislation is the
permissive Federal incorporation.
Since the signing OF the bill by
President Wilson, Richard s Halves,
president of the American Bankers
Association. has declared that the
Esch-Cummins bill is the most con-
structive piece OF legislation. con-
sidered from the standpoint of the
general public welfare, that Con-
gress has enacted in many years.
"As a stabilizer of certain national
conditions II will serve to insure a
continuance. IL not betterment, of
present prosperous conditions" says
Mr.. Hawes.
las to the labor features. let them
be given a full and fair trial. These
provisions seem to have been con-
ceived in all justice to both sides.
and the best either side can do will
be to welcome an unbiased try-out.
At least, don't judge them without
just cause for doubt. The princi-
pie OF arbitration provided is at
least equitable to all concerned.
Representing 10000 banks in
America, II is natural that our asso-
citation should have been much in
terested in the enactment OF a meas
ure that would not only safeguard
investments, but, from the much
more important standpoint Of pro-
viding. through adequate assurance
of returns, a transportation system
that would be conducive to the
commercial and industrial prosper
ity Of every community in the Unit
ed States.
when the bill was in the making
We accordingly appointed q railroad
committee, headed by Walter w.
Head, of Omaha, to go thoroughly
into the questions involved. The
result was seven recommendations,
six OF which have been recognized
in the framing of the present law.
From the bankers standpoint.
but also for the good of the generas
public in the realization of adequate
service, because improvements and
extensions have been impossible
without sufficient income. the two
provisions most salient are:
THE investment of power in the
Interstate Commerce Commission to
establish and adjust rates so that
there can be q fair return on the
aggregate value OF tho railway
property. This fair return is fixed
for the next two years at 5h per
cent. with a privilege of adding an
other 4 per cent for the purpose OF
making improvements. This pro-
At IL nf fA - hn
railroads of the country back on
their feet. In return for this profit
able rate the Interstate Commerce
Commission is empowered to regu-
late and correct the services given
for such a rate, so. while paying
more, the public will be getting
what has been lacking for many
years-adequate service. This es-
of statutory rate
should tend to restore almost imme-
diately the rapidly shrinking rail-
road credits and enable them to
make betterments long past necss-
sary.
Next in importance from our
consideration is the regulation and
control on the part of the Interstate
Commerce Commission of railroad
stocks and bonds. This should clear
the market of questionable issues
and put the financing of our trans
portation systems on a much higher
leyel"