The Rock Island Argus and daily union. (Rock Island, Ill.) 1920-1923, 1921-08-10
CALLS ROAD
FUND PLAN
"'HAND OUT"
Senators LaFonette and
Pomerene Attack Hard
ing Appropriation.

Washington, Aug. 10.-Opposition
to the administration bill for fund
ing about $500 100000 for the rail-
roads developed openly today be-
fore the senate interstate commerce
committee.
Senator LaFollette, Republican,
of Wisconsin, opened fire on the
bill. while Democratic senator's
characterized tine proposal as d
loan to the railroads. Senator Pom
creme of Ohio, referred to it as a
hand out"
Director Meyer of the war finance
corporation, defended the bill as a
measure for general countrywide,
as well as railroad rehabilitation,
and denied that it was a loan or d
hand-out.
Senator LaFollette inquired into
the origin of the legislation. Mr..
Meyer said he personally conceived
the plan, without suggestions from
anybody. His plan, he said, was
approved by President Harding,
Secretary Mellon and Secretary
Hoover.
Mr. ldeyer said he had not at
tended any conference of bankers
with the president and did net
know that The legislation had been
discussed at such a conference.
Did you know that Mr.. Hoover
was going 10 New York to confer
with railway executives about it:
persisted Senator LaFollette.
Mr.. MeySS disclaimed such
knowledge, whereupon he, Senator
LaFollette, referred to loans by the
war finance corporation to the
Brooklyn Rapid Transit company
and a New Orleans street railway
company, which he said soon after
wards became bankrupt. The sena-
tor said he did that to indicate how
business was transact
The director replied that he re-
garded the B. r. T. loan as even
ually good" and said the New Or
leans loan had been paid in full.
Senator LaFollette sought to
show that the bill really would au-
thorize the war finance corporation
to fund, or sell, over one billion dol
lars of railroad securities rather
than only S5OO O,OOO,OOO-
Meyers Claim.
Mr.. Meyer declared that funding
of the latter amount only was con-
templated,. or could be reasonably
accomplished.
Director Davis of the railway ad
ministration said a total of S1,144,-
600 900 had been advanced to car
nd hnf
to meet which the railroads had
given $31O,000,000 in equipment
trust notes and $40, 100000 in cash,
leaving a balance of 1858 900 900,
of which SCI 100000 already has
been funded privately. Above
500, 100000 of the. government ad-
vances, therefore, he said, have not
been funded, but for various rea-
sons, the bill would require fund
ing of less than $500,000,000.
The whole purpose of the funding
bill, Mr.. Davis said, lis to let the
public instead of the government
carry these loans"
Washington, Aug. 10. = Only
good" railroad securities held by
the government will be marketed
bys the War Finance corporation,
Director Meyer told the senate In
terstate Commerce Commission, III
further explanation of the admin
istration plan to fund the carriers
debts. Provisions of the funding
bill were permissive and not man
datory upon the corporation, ne
said.
"Of course we can't throw hur-
dreds of millions of securities on
the market" the director said. I'VE
would take them over temporarily
and market them later, furnishing
funds to enable the director general
to adjust accounts with the rail-
roads"
Director Meyer said that about
5000 900 900 of railroad equipment
notes. given for loans from the gov
ernment, during the war. were
..frozen credits and We propose ~
unfreeze them for the benefit of the
government