The Washington herald., 1920-05-07
RAILROADS ASK
TREASURY FOR
GIGANYICLOAN
Executives Ten Senators
They Need $500. .O0O.-
600 for Operation.
SEEK NEW EQUIPMENT
Must Buy New Cars or
Won't Be Able to Move
Crops, They Claim.
NJ ROBERT T. BARRY.

By ROBERT +. BARRY.
Railroad executives proposed yes
terday to meet the acute shortage
Of freight cars and locomotives that
threatens severe losses during the
forthcoming crop moving season by
having Congress enact. as emer-
gency legislation. an authorization
for s5oo.o0o.ooo loan by the United
States Treasury to the railroads at
per cent.
Vigorous protests from shipping
interests over the car shortage have
reached Congress in such numbers
as to lead Senator Albert B. Cum
minis. of Iowa, chairman of the SEN
ate Committee on Interstate Com
merce, to reconsider railroad finan-
cial legislation even though the
Cummins-E -Esch transportation act
has been in operation only two
months.
Fund Declared Inadequate.
- The Cummins-Esch' act provided
for a revolving fund of $500. ZOO. 900
for new capital expenditures and
for operating income. but the rail-
road executives who conferred here
yesterday with the Senate Interstate
Commerce Committee declared the
] original fund was entirely made
quate. The roads have asked the
Interstate Commerce Commission to
grant an increase OF approximately
80 per cent in freight rates. esti-
mated to add around 0o0.ooo.ooo
to the annual freight bills of Auneri-
can shippers.
Cummins will confer today with
representative of the leading New
York financial institutions with a
view to acquainting himself with tn
vestment condIIi1Hs and the capacity
of the market tc absorb new rail-
road securities. Equipment orders
placed this year by strong rail-
road companies total s14o.0oo.oeo.
and investment brokers are said to
Eestimate that nor more than $500.
100000 additional can be absorbed
tBy the market uLGer prevailing con-
ditions.
Loans CostinE Dear.
These loans are costing 71-2 to
s per cent to the dominant COM
panies. There is no investment
money available tc the weaker roads
at any price, according to the re-
ports of the executives.
Although Curam;ns was said to
regard the proposed 100000, 900
loan to the roads as o. almost vi
tai necessity at this time, the
thrGsting of such an issue into
Congress at tkis, stage OF the po-
IiticaI contest is feared by some
leaders.
Senator Cummins indicated to the
executives something of his fears
regarding the possible reception of
the proposal on the floors of Con-
gress.
You raise a. serious question, af-
fecting the entire government,
when you suggest an appropriation
of $500, ,0O0, 900 to be made available
Immediately" he told them. Il had
hoped you would be able to raise
this money from private sources. II
the government would underwrite
the certificates for ten or fifteen
years, would not that enable you
to obtain your credits from private
sources?"
"If the period were made fifteen
years I think perhaps we could"
E. N. Brown. of the st. Louis and
San Francisco Railroad, replied.
Deliveries to BE slow.
Cummins inquired how soon cars
and locomotives ordered at once
| would be delivered, The railroad
officers replied that deliveries could
not be expected to begin until we'll
along in the crop-moving season,
and that the major portion of the
equipment could not be delivered
until next year. The executives ex-
planned that existing. equipment is
inadequate to move last years crops
on which bankers have advanced
loans. These loans, it was stated,
cannot be met until the crops are
marketed. When the 1920 crop Is
then considered, 1t was pointed out
the prospect for an immeasurably
more acute condition is increased
The executives acknowledged that
without some heroic remedies being
applied a congestion of shipping
assuming critical aspects might res
suit this fall.
Rail executives declared the turn
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