The daily banner. (Cambridge, Md.) 1897-2008, 1921-01-31
RAILROAD CLAIMS
APPALL CONGRESS-
Demand Huge Sum For Six
Months Deficit.
ASK FOR S6O,OOO,OOO
This imposing Loss Piled Up in
Season When Operation Cost Was
Lowest

Washington, Jan. 3I.-The govern
ment seems destined To pay a stagger-
ing sum to the railroads Of the country
before it dieutangIes itself from its
wartime wards.
Economists in congress who voted
for the transportation act last spring,
which sought to make adequate pro-
vision for the roads by Il government
guarantee for the first six months, are
gasping for breath after digeSting the
carriers claim that the government
owes them S60O,000.O00 % cover the
deficit for the first six months under
private control. This is olmoSt equal
to the entire deficit for the whole peri
cd Of government operation, lasting
more than two years. One phase Of the
matter which has elected comment, is
that the railroads piled up this i'm
posing deficit during the spring and
summer months, when operating ex-
penSes are lowest, and when the extra
ordinary conditions that hampered
operations during and immediately fol
lowing the war had disappeared.
During the six months period, the
treasury advanced $500, 431 ,S74 to the
railroads on account, presumably to
meet fixed charges and operating ex-
penSes. The present agitation in con-
gress over the matter arises from the
fact that legislation is now being
s0ught-and has been fav )rahly recon-
mended in the hOuse-to authorize ad-
ditional payments to the roads before
the actual amounts due them IS legally
fixed.
Some members are opposing the eff
fort to amend the transportation act
five months after the increased rates
went into effect on August 90 last, in
order to permit the carriers to go into
an already depleted public treasury
and draw this money ahead of times
contemplated in the original act.
Secretary of the Treasury Houston
is opposed TO this amendment in its
present form, as he thinks it would
open the way for fraud if the treas
ury is directed to advance millions Of
dollars before the governments respon-
sibiIity is definitely fixed
Secretary Houston has submitted to
congress q, statement Of advances al
ready made to individual railroads
under the transportation act covering
Partial payments Of the government
guaranty for the period of March l,
1920. TO September l, 1920. Out of the
aggregate of $26O.43 .S74, the tabula-
ton shows that the Pennsylvania rail-
road alone drew $50, 100000 on account.
The law returning the carriers con-
templated that such advances should
be made during the guaranty period
only to enable the roads ITO meet fixed
charges and operating expenses" 1t Is
alleged that the Pennsylvania and
some of the other systems which bene-
fitted by the guaranty gratuity paid
their dividends as usual during that
time, and such payments are not con-
sidered fixed charges or operating ex-
penses.
In addition to more than a quarter
of a billion dollars advanced on this
account. the S3OOOOo,0OO revolving
fund authorized by congress In the
transportation act to be advanced to
the roads at 6 per cent for purchase OF
equipment, etc, is practically exhaust
ed.
Millions Of dollars owed to the gov
eminent for capital improvements dur
ing the federal control period are still
outstanding. On top Of all this, the
government had advanced millions to
the roads on equipment lrust certth-
Gates. this paper representing obliga-
lions of a subsidiary corporation or
gained by the carriers to buy equip
ment.