The Washington herald., 1921-07-27
u. s. Would Pay What 1t
Owes Carriers at
Once.
LINES GET 10 YEARS
TOPAY THEIR DEBT
Deal Amounts to 10-Year
Loan by U. S. OF
s4OO,OOO,O00.

President Hardings plan for
solving the railroad problem-oy
funding the amount the roads owe
the poyernment and paying in cash
what the government owes the ran
roads-was. submitted to Congress In
a special message yesterday.
The President also urged legisla-
tion to enable the War Finance Cor
poration to extend more liberal aid
to the suffering farm Industry.
owe United states s7e3, 100000.
According to a statement by Di-
rector General of Railroads Davis.
which the President attached to his
message, the railroads now owe the
Railroad Administration appropxi-
mately ;763,Oo 900 for additions and
betterments made during Federal
control. The administrations plan
is to give the railroads ten years to
pay this debt, meantime collecting
interest on it at per cent.
1t is variousIy estimated that the
government owes the railroads from
$500. 100000 to $500. 100000, not in
cluding, however. the railroads
claims for the alleged "inefficiency
of labor" during government opera
tion. The Presidents message says
the roads have agreed to waive
these claims IL the terms of settle
ment he proposed are carried into
effect.
1t has been stated that the
claims for 'ineficiency of labor
aggregated ss00,00O,0OO The In
terstate Commerce Commission rs
understood to have approved the
claims by an informal vote, al
though no definite action ever has
been taken The Railroad Admin
istration, on the other hand, posi-
lively has refused to allow them.
How Plan Works.
To make possible carrying out his
plan. the President asks Congress
to extend the power of the War
Finance Corporation so that IL may
give the Railroad Administration
government cash in exchange for
the promises of the railroads to pay
in ten years their debt OF s763,-
ooo, 900 to the government The Rail-
road Administration will then use
this cash to pay to the railroads
Immediately the money the govern
nent owes them
The War Finance Corporation,
however, viii not buy all the prom
issory notes and other collateral re-
ceived from the railroads by the
Railroad Administration for money
advanced them or spent on their
- H.
ident's message, the Railroad Ad-
ministration will need not more than
$500, 10000 to settle its debts to
the roads. When market conditions
become mere favorable, the Pres
ident's plan is. the War Finance
Corporation will sell the railroads
interest-beearing promissory notes
to the public. The deal thus amounts
to a ten-year loan of from s263, 3,000,-
900 to s463, ,000, 900 to the railroads.
As soon as the enabling legisla-
ton is enacted the Railroad Ad
ministration plans to clean up all
undisputed amounts in the roads
claims against the government. 1t
is estimated that within a month or
two il will be possible to pay on
from $500, 900, 900 to $500, 100000.
Bill Ready soon.
The Interstate Commerce Commits
sion is preparing a bill to carry
out the Presidents recommendations
with regard to the railroad prob
lem 1t is expected to be finished
this week, and Senator Cummins is
understood to have been recalled
from his home in Iowa to take
charge of il and rush II through
fba Sapafa RaDreaenfatfve Wins
low, of Massachusetts,, chairman of
the House Interstate and Foreign
Commerce Committee, also plans to
push for favorable action in the
Low er Branch without delay.