The Washington herald., 1921-06-25
OFFICIALS ASKED
TOSPEED PAYMENT
OF RAIL CLAIMS
Settlement Regarded as
Necessary to Aid
Business.
DIFFER ON BASIS
Controversy Extends to Sums
Owed by Railroads to
Government.

movement ytcttiSoy ~ cPN~N w -
settlement of railroad claims as a
means of improving the financial
condition Of the roads. thus increas-
ing their purchasing power and
helping in the revival Of general
business activity. t-
This step was taken as an after
math of the dinner given by Presi-
dent Harding to Western bankers
Thursday night, at which general
business and financial conditions
were discussed.
President Harding summoned to
the White House yesterday after
noon L. z. Clark, chairman of the
Interstate Commerce Commission:
James C. Davis, director general Of
railroads; Secretary of the Treas
ury Mellon and Secretary of Com
merce Hoover, to discuss means OF
expediting the settlement Of the
hundreds. of millions of dollars
worth of undermaintenance and
other claims filed by the railroads
against the government, as well as
the payment of the compensation
due as rental for the property of the
railroads during Federal control.
Urged TO Settle Claims.
1t developed that the one point
on which all the Western bankers
were agreed was that the govern
ment should take steps to increase
the purchasing power of the rail-
roads by paying the roads as
promptly. as possible what is ~he
them.
Banker after banker. it was
learned, urged that the government
cut red tape and settle up the
claims at the earliest possible mo-
ment. II the railroads are placed
on their feet so that they can re-
some purchases of supplies and
equipment at a normal rate, il was
pointed out, a big start will have
been made toward overcoming the
present business depression Re
sumption of railroad purchases. II
was declared. will be the key to an
Improved industEial situation gen
orally.
President Harding was greatly
impressed with the views of the
bankers on this point and urged
Chairman Clark, Director General
Davis and Secretaries Mellon and
Hoover to cooperate in working out
plans for speeding up the settle
ments. The President was Informed.
however. that prompt settlement OF
claims has been retarded by the
ina bility to agree upon a basis OF
settlement.
Extra Allowance Asked.
With respect to the undermainte-
nance claims, amounting to hum
dreds of millions of dollars. the rail-
road administration has taken the
position that payments should be
made on the basis of average eN-
penditures during the test period
plus the increased cost of labor and
supplies. The railroads, on the
other hand, contend that this basis
of settlement does not furnish ade-
quate compensation. Tney insist
that an additional allowance should
be made for the added cost of keep
ing the properties in proper condi-
tion due to the decreased efficiency
of labor. 1t has proved impossible
thus far for the railroads and the
an agreement.
many Ol lne payments "hlCf nave
been made by the government to
the railroads have been on basis OF
the percentage of the total amount
In controversy.
Large Expenditures Involved.
The controversy extends to the
question of the disposition of the
amount which the roads owe the
government for capital expenditures
made during the period of Federal
control. This sum totals between
s700. 900. 600 and $500. 1000. 900. Sam
uel Rea, president of. the Pennsyl-
vania Rail road, recently proposed
that this amount be funded over a
period of fifteen years. -