Evening star., 1920-02-21
RAILROAD BILLS
PASSAGE Expected
AT AN EARLY DATE
Employees Organizations
Making Desperate Efforts
to Prevent Adoption.

'"oS' important piece of business and
financial legislation which has been
before Congress since the passape of
the federal reserve act is expec,ed
I" pass finally both houses of Con-
| srtsS within the next few days.
/ desperate efforts are being made by
! org anizatlons of railroad employes
ana others to prevent its uassag.
w men the bill goes to the Presidentf
lurther efforts Will be made by IN.
same persons to have him veto tbo
measure
/ ihe National Association of Owners
OF railroad Securities have issued n
statement declaring the bill as agreed
| 10 py the conference of the Senate
ana House the most satisfactory pro-
gram of business Legislation ever de-
N1sed by a iaw-mak king body" indi-
eating that the owners of the roads
believe the legislation sound.
"A catcchlsm relating TO the railroad
! Dlll mas been widely distributed by
| this organization Of owners of rail-
! road securities. which seeks to throw
/ hsht particularly on what section q
! OF 1he measure actually does provide.
/ ThiS is the so-called financial secttop .
| follow:
Does section of the bill guarantees
| any return to the railroads?
| IL does not 1t neither guarantees
\ n h.
| ligates the government to make GOD
| any dchcIt Section . directs the In
| teIstate commerce Commission to es-s
~laoilsh ~ rates or rate level which.
WIN yleld return of an nearly as
| may be u per cent on the aggrepate
Iair value of the railroads grouped i'm
| each OF such number of rate districts
! as the commission may determine III
! me rates provided by the Interstate.
| commerce Commission do not Weld
s > l.. nar
| SaLt value, the loss is the railroads"
me catchechlsm explains thar a
rate level cannot be established that
| VIII care for the necessities of the
| majority of the roads without making
! IL possible for few of the more fa-
bly, situated roads to make ex-
cess profits. For this reason, section
OF the railroad bill provides that
| a1ter per cent has been earned by
! any railroad, upon it's fair value the
! excess shall be divided between the
| road earning it and a public fund
| Does this mean that section takes
| the earnings of one railroad to give
| to another" the catechism continues.
HaIf-and-HaIf Division.
1T does not. If a railroad earns
| more than per cent. the excess is di-
| Vided between the road and the gov
| ernment for expenditure in the ship
pers' interest: the division is half and
/ half This fund is to be expended
| transportation facilities to be leased
| to all railroads.
| How will section tend 10 estab-
lfsh credit for the railroads."
| while section will not produce
| more than the minimum return neces-
| sary for the essential roads as a
whole to survive il will introduce an
| element of certainty heretofore lack
| ing. Heretofore a road has invited
! loans or investment without knowing
! J., fa Law mr. w h.
J err the destructive per cent level OF
| 1914 or the more liberal level of
| 1870. Under section an ind!viduai
/ railroad which would earn per cent
! or 3 per cent or or per cent on
| the fair value of its property would
| have some reasonable assurance that
| it will have a chance to earn its rea-
| sonable share of the total earnings or
the group. if it exercises diligence ana
| efficiency.
"In providing for the making or
! adjustment of rates, does section
directly provide any return or give
| any consideration whatever to securi-
| ties, whether stock or bonds. or give
value to watered stock?
at does not. Section is based eN-
clusively on value and not on the
amount of the securities outstanding
The accouts of the railroads are kept
under the commissions S Jurisdiction.
and the commission is able to deter-,t
mine with reasonable certainty the
values of these properties for rate
making purposes. Since the securi-
ties are not considered in the vaiua
tions made, no watered securities. II {
there are such, can enter into the fix-
ing of rates.
Several Amendments Proposed.
Several amendments to the federal :
reserve act were proposed this week 3
in both Senate and House. Senator
Ransdell of Louisiana introduced two Z
4: LOT 30 ha H.
ject-matter They propose TO extend x
to state banks and trust companies ,
members of the federal reserve sys-
TEN. the same rediscounting privi-
leges allowed national banks in their 4
transactions with federal reservefs q
banks. Under existing statutes ma >
tional banks are permitted to redis-
count certain lines of credit up TO 20 {
per cent of their paid-in and unim- ,
paired capital stock, while the other .
banks are limited to 10 per cent
Under existing law" said SenatorE
Ransdell. discussing his bills. state 8
banks are at a disadvantage with ma
tional banks and the purpose of my :.
amendment is to place them on
parity. The principle of the proposed
amendment has the approval of the
Federal Reserve Board. One of the :
bills Incorporated in the original law
the full text of the law as amended
and the other merely amends the
federal reserve act by extending the
above privileges to the member state +
banks without writing into the fed
eral reserve act the provisions of the !
law reltve to national banks Both
bills have been referred to the Senate :
banking and currency committee.
Amend Reserve Act.
Representative McFadden of Penn .
sylvania has introduced bill which =
would amend the reserve act SO as
to permit q member or non-member I
hank Cof the federal reserve system) A
TO make ..rea sonable charges to be .
determined and regulated by the
Federal Reserve Board, but in no s
case to exceed 10 cents per 500
or fraction thereof of checks presents
ed at one time for payment and COLI
lection and remission by exchange or
otherwise The same is to be applied
to drafts. This bill has gone to the
House banking and currency com-.r q
mittee
The President of the United States &
is requested, in a bill just Introduces
in the House by Representative HUI y
of Tennessee to propose to the Cows
ernments of all important commerciai .
nations with which this country is at
peace an international trade agree ~
ments congress, to meet in Washington
at the earliest possible date. This con- "A
press under the bill. is to consider
unfair trade m" hods of all kinds, tn- 3
cluding discril.. ..ations, retaliations,
unfair utilization of bounties, SUBJ
sidies. rebates etc, economic ana s.
financial violations of territory OF
economic alliances, undue coioma 3
preferences. 1t is to formulate COM
mercial treaty agreements to prevent y
unfair trade practices of these kinda