Newark leader. ([Newark, Ohio]) 1917-1946, 1921-12-02
PLUMB RIGHT
WALL STREET BANKERS WOULD
UNLOAD ON U. S.
Scheme to Force Government to Adopt
Refunding Act and Prevent State
Control of Interstate Rates
Plan of Security Holders
(By Federated Press)

Washington-Coming swiftly upon
the heels of Glenn Plumb's prediction
that the Wall Street bankers would
soon be launching drive to unload
their holdings upon the Government
at a generous price, is the threat Of
S. Davies Warfeld, president of the
National Association of Owners of
Railroad Securities, that the Govern
ent must either cease to "destroy
confidence in railroad securities" or
face Government ownership.
Testifying before the Senate Com
mittee on Interstate Commerce in pro-
test against the Capper Bill and
pending amendments to the Refund
ing Bill which restore to the States
the power to fix intrastate freight
rates, Warfeld declared that these
proposals are regarded with grave
alarm by the security owners" and
that if adopted they twill reopen the
whole question of Government omwner-
ship of railroads"
eff the great investing institutions"
he declared, care thus notified that
Congress and the Interstate Com
merce Commission are not at least
endeavoring to secure the stated
reasonable return on public xervice
property, taken in the aggregate, then
the opportunity of the carriers to
secure money from permanent invest
ing sources to supply this public serv-
ice will be greatly limited, and it is
a grave question whether it will not
reach the extent of requiring Govern
emnt railroad financing through tax
alton"
The Immediate purpose of this
statement was to hasten adoption of
the $500,000,000 refunding bill, and to
prevent State control of intrastate
rates. Back of that, however, was the
ultimate plan of sale.
Glenn E. Plumb bases his forecast
upon the disclosures in the Rock Is
land Railroad valuation, just an
nounced by the Interstate Commerce
Commission.
Allowing for every element of value
claimed by the company-such as the
increased value of the land, good will
and intangible factors of various kinds
the Commission gives the Rock Is
land only 1886, 100000 for 9,278 miles
VI IOdu. Ills gives oil average Vdlu-
alton of about $4,000 per mile. At
the same rate, the 265,0O0 miles of
railroad in the United States would
be valued at $9,8'2,000,000. The
valuations announced by the Commits
sion for the first $4,000 miles of rail-
roads throughout the country run
close to this rate.
For the past they have tried the
effect of high freight and passenger
rates, and are convinced by this ex-
perience that rates cannot be further
increased without injury to their
actual earnings. They have slashed
wages, and have discovered that men
work slower and with less interest in
their tasks. They have men laid off,
and have found that they were merely
postponing maintenance rather than
making a saving.
"Since the point has been reached
where it becomes impossible for the
railroad companies to pay dividends
or interest on their obligations" says
Plumb, "they must either find some
means of cutting down their obliga-
tions or they must unload their
properties upon the Government with
the confession that they can no longer
operate the roads. Inasmuch as no
means of reducing their obligations is
in sight, and since the present ad-
ministration is as friendly as any ma
tional administration could ever be,
we may reasonably anticipate their
decision to sell to the Government
very soon."