Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-05-16
RAILROADS AGAIN ASK
AID OF GOVERNMENT
Tremendous Sum of Money Required to
Equip Services Properly to Meet
Needs of Country.
BY G. GOULD LINCOLN.

you can't make bricks without
" straw Nor can you handle
the crops. the manufactured
products. the products OF
mine and quarry of the country
without freight cars. And the rail-
roads cannot build or buy cars with
out cash or credit
Two and half months almost to
the day have elapsed since the rail-
roads were turned back by the gov
eminent to their owners. 1t was well
known months before the roads went
back that tremendous sums of money
cars. locomotives. passenger cars and
other equipment If the roads were to
| be placed in a condition. to meet the
demands of the country. So Congress,
in the so-called transportation act.
| made provision for building UP the
credit OF the roads and provided a
revolving fund.- of $500 100000 to be
used to aid the roads in financing
| equipment of various kinds.
Today the railroads have again ap-
pealed to Congress for further aid.
Railroad executives testified before
the interstate commerce committee Of
the Senate that the roads, to be
equipped fully to meet the tasks be-
| fore them, need 226.000 new freight
cars. 3,400 new locomotives and 5000
! new passenger cars. They figured
| that the cost of these cars and loco
motives at present day prices would
be in the neighborhood of $780,
900 900
Capacity Of Shops Estimated.
During the present year car and To-
connective shops. it is estimated. can
produce 100000 freight cars, 5000 pas
senger cars and 1000 locomotives at
cost of about $610.000.000
If these railroad executives are cor
rect. It is easy to comprehend that
the government must use its good Of
fees to aid in building up the credit
of the roads.
Some Of the executives put up to the
Senate committee a proposal that the
revolving fund be increased by about
half a billion dollars. thus enabling
! the railroads to obtain funds from
| the government il they are unable to
procure them in the open market
They also proposed that the roads be
granted a general freight rate in
! crease Of % per cent.
1 But right there some of the bank
ers OF the country began to interpose
objections. The country faces the
prospect of deficit OF some $1,000
000, 900 at the close Of the fiscal year.
| II an additional half billion dollars is
| to be found, they fear it will mean
! additional taxes. and that this Will
| injure the investment market, be-
cause the money so taken by the gov
eminent in income and excess profits
, taxes, etc, will not be available for
| investment in the various industrial
enterprises Of the country. which are
demanding money as we'll as the rail-
roads.
| The bankers appearing before the
| Senate committee urged, in eject.
that the strong roads be required to
| a very large extent to finance them
selves. going into the market for
| money, and the government aid be
/
See Defect I'm Present Law.
A defect in the existing law. as they
see it, lies in the fact that the revolv-
F., ing fund provided by the government
may not be used to meet maturing OBJ
legations OF the roads. and they urged
that the law be amended to permit
loans made from this fund to be used
In meeting these maturing obliga-
tions. If these obligations are met,
| the bankers argue, tho credit of the
| roads will be preserved ana the pub
lie will take new obligations for
equipment and extensions. One of
the bankers. Everett B. Sweeney. vice
president Of the First National Bank
of New York. expressed the opinion
that the stronger railroads. with cred
it, can go into the market and sell
their securities to a total amount of
perhaps $150.00O.00O to $25o,000,0O0
this year. There are other roads,
however, which cannot sell anything.
and those the government should aid.
loaning them money and taking their
equipment trust certificates as secur-
ity at 100 per cent.
The attitude which Will be assumed
by the Interstate Commerce Commits
sion with regard to rates allowed
the roads will be a tremendous fac