New-York tribune., 1920-04-20
u. S. Railroad
Loss Fixed at
1875 Millions
House Committee Renorts
Government Investments
i'll Securities of Lines Will
Shrink $25O,OOO,OO
Hines Budget Reduced
Purchase of $9O,OOO,OOO in
Liberty Bonds Held by
Carriers Is Authorized

WASHINGTON, April 19.-Total loss
to the government growing out of Fed
eral control of the railroads was esti-
mated to-day by the House Appropria-
tions Committee at about 81 375, 900 900,
This includes the $225.0OO:OoO estimat-
ed as guarantees to the roads under
the terms of the transportation act
but does not include the matter of
under-maintenance.
The actual loss during the twenty
six months of active government con-
troll was placed at $904,O0O,OOO The
committee stated that the government
had lent $862,000,0OO to the roads and
SAID that since much of this went TO
weaker lines to prevent receivership
during Federal operation probably not
all of this sum would be recovered.
Inc committee was reporting on the
emergency deficiency appropriation
measure, in which $3O00O0,0OO was in
cluded for the railroad administration.
Director General Hines had asked for
S420, 900 600 to wind up the admnistra-
tons affairs, but the committee cut
the total $30,000,000 and recommended
that the Treasury be instructed to pur-
chase $90,000,00O worth of Liberty
Bonds held by the railroad administra-
ton, thus making available that addi-
tlonal amount for winding up the ad-
ministration's affairs.
The committee explained that it had
made the reduction because the trans
portation act provided $4,000, 900 for
settling claims against the government
growing out of Federal control,
Discussing the cost of Federal opera
ton of the roads, the committee in it's
report said
"Clearly it was not the purpose of
the director general of the railroads
to give the impression that S9O4.OOO 900
would cover the total losses Sustained
by the government during Federal cor
troll, nor should it be inferred that
$225, ,000, 900 shown as the additional
loss the government will suffer because
of Federal control is the only loss
which the government will sustain be-
cause of the Federal control and opera
tlon of the railroads.
:, ASIDE from the question of the
claims of under-maintenance made by
the railroads and the loss of interest
to the. government on appropriations
made tor the operation Of the roads.
1t must be remembered that the gov
ernment will have an Investment in
railroad securities arising from Fed
eral control Of 1852 100000. Manv of
these loans were made to weaker roads
IN order to prevent receiverships dur
ing Federal control.
mo one will contend that the GOV
ernment will realize the full amount
invested in these securities. If all the
securities owned by the government at
the present time, including its invest
ment in Liberty and Victory bonds,
were sold upon the market for cash, it
is quite probable that the loss to the
government in these transactions alone
would total more than $25O,OOO,O0O on
total investment of more than $685.
100000, including the investment in
inland waterways. Assuming that the
railroad securities owned by the gov
ernment would shrink S250000,0O0 by
the present conversion thereof into
cash, the total loss to the government
chargeable to Federal> control and
operation of railroads amounts to ST.
375, 100000, leaving out of considera-
tion any question o. under mainte-
nance"