The Lexington progress. (Lexington, Tenn.) 1884-current, 1921-02-11
REP. SIMS ATTACKS PROvIS-
IONS OF RAILROAD ACT

respect has he been OF greater value
to the taxpayer than from time to
time helping to throw light on efforts
to raid the public treasury for some
special interest.
In a minority report on the pend
ing amendment to the transportation
act to permit the railroads to go into
an already depleated treasury and
force the government to pay hun
dred millions ahead of the time con-
Ftemplated by law he strikingly shows
up the disadvantage under which the
Government would be placed by such
law.
The Government seems destined to
pay staggering sum to the railroads
Of the country before it distangles it
self from its wartime wards.
Economists in Congress who voted
for the transportation act last
spring which sought to wake general
provision for the roads by Govern
ment guarantee for the first six
months of private control are gasp
ing for breath after digesting the car
riers' claim that theer is due them
$500, 000,000 to cover the deficit for
the first six months under private
control This is almost equal to the
deficit for the whole period of Gov
eminent operation lasting more than
two years. One phase of the matter
which has ELECTED comment is that
the railroads piled up this imposing
deficit during the spring and summer
months when operating expenses are
lowest and when the extraordinary
conditions that hampered operations
during and Immediately following
the war had disappeared.
Some months ago treasury Off
cial told the writer that if the roads
were physically able to pay the gov
eminent all that they owed it would
be sufficient to wipe out the floating
debt of the country. There is no i'm
mediate prospect of the railroads be-
ing able to liquidate this vast indebt-
edness, but on the other hand they
are asking for a mandatory law that
will require the Government to Dor
row money at high interest rates to
pay what the carriers estimate is due
them in advance Of the adjudication
of the claims by the orderly process
es contemplated in existing law.
| During the six months period the
treasury advanced $3.50, 431, S74 to the
railroads on account, presumably to
meet fixed charges and operating ex-
4 penses. Many of the roads used these
advancese to pay dividends and meet
other expenditures not connected with
fix charges or operating expenses,
The Pennsylvania Railroad drew $685.
DOC, 900 on account, more than the ag-
gregate for all the railroads Of the
South. The Southern Railway re-
fused the government guaranty and
by good management not only met
expenses, but accumulated a surplus.
| In addition to more than a quarter
of billion dollars advanced on this
account s300,000,00O revolving fund
authorized by congress in the trans
portation act to be advanced to the
carriers for purchase of equipment,
ETC., is practically exhausted
| Millions of dollars owed to the gov
eminent for capital improvements
during the federal control period are
still outstanding. Moreover, the gov
eminent has advanced many millions
to the roads on equipment trust GER
tificates, this paper representing OBJ
legations of subsidiary corporation
organized by the carriers to buy
equipment. In his minority report
just submitted to the House, Repre-
sentative Sims, veteran member of
the Interstate and Foreign Commerce
Committee, sharply disagrees with
the majority report on the bill.
"The reasons and arguments pre-
scented at the time the transportation
act was under consideration, for
which the six months guarantee was
asked, were that the existing war
made rates, although to be continued
were not sufficient to meet the neces-
sary requirements of the carriers
prior to giving them increased rates
and fares, and that it would in all
probably require six months to en-
able the Interstate Commerce Com
mission to hold necessary hearings
and provide for such increased rates
and fares as were authorized by the
new act. For this reason only, the
guaranty subsidy was authorized to
begin with private operation and to
continue for six months. The guar
anty subsidy was not based upon any
Government service to be rendered by
the carriers during the six months