The Birmingham age-herald., 1921-07-24
HARDING PLANNING
 ID HELP RAILROADS IN BEST OF MANNER
He Will Advise Congress Next Tuesday and Will Make Several SuggeS-
 tions as to Financing
By HARDEN CoLFAx Special Correspondent of The Age-Heraid Copyright, 1891, by The Age e-Herald)

Washington, July Especially President Harding's programme for helping the railroads over their pres ent financial difficulties, concerning which he will advise Congress next Tuesday, contemplates the follow ing:
 Issuance by the roads of bonds or securities amounting to from sAoo.- 900, GOO to s5Oo00O,oo the exact amount being as yet undetermined, the securities to mature in 10 years and to be redeemable before that time at the option of the issuing roads and bear interest at the rate of 6 per cent.
 Balancing the ledger with the rai,- roads for the governments bill against the carriers during the pe- riod of federal control, closing the account and accepting the securities as payment therefor.
 Payment by the government to the railroads in part of carriers account against the government, this account being chiefly for money owed the roads for rental of their property and for depreciation of their rolling
  and other properties during the time the government was in control of the country's transportation system.
 Utilization of this tho railroad ad ministration and the war finance corporation to fund the carriers se- curities issued to the government and thus provide the ready cash with which to pay the railroads claims. or at least the major portion of the undisputed claims.
 Only a Possibility
 The possibility-and this is only possibility which at this time is under consideration-of asking Congress for authority to purchase $10o,O0o,- 900 of the carriers securities in case the present facilities of the war ii nance corporation and the railroad administration are unable to take care of the railroads bills.
 Decision to settle the account be- tween the government and the roads, in chief part, was reached by Pres ident Harding sometime ago, being hastened sometime by the pressing need for cash on the part of most of the roads.
 The plan outlined above was pro- posed on behalf of the administration to the association of railway execu- tives at its meeting in New fork last Wednesday and after consider able discussion was accepted, all though the roads wanted 15 years Tn which to retire their funds instead 10, they will get and expressed their belief that the amount of cash they should receive in payment now Of their pressing claims against the government should be $500.000,000 rather than s4oo,oo0.000.,
 As to Position
 There seems to be question L tN xxrhn ment is in position to pay the roads $500, GOO, 900, much as it desires 10 settle its bill and enable the roads to get cash to settle theirs. Loohlns over the field here it was found that there would be no difficulty in rais- ing $400,000,o00 through the war finance corporation and the railroad administration. That to save gap of s1OO,o00, 900 and it is considered possible, though unlikely. that Con- gress will be given the suggestion that 1t authorize filling that gap by the purchase of railroad securities. somewhere between one hundred anu two hundred millions in cash with which to settle claims. It is doubt ful if more than $100, 100000 of that amount could be spared without pinching the railroad administration in it's further work. In addition,
  securities issued by the roads and held by the government. maturing I4ja years hence, to the extent or about s300,000,000.
 The war finance corporation couid be called upon to lend face value or these equipment securities Of S5VV'- 000,0 ,000 to add to the railroad admin istration's $100,000,000 thus making available total of $400, ,000,0 900. But z. | tlo be called upon to make loans where it has no securities therefore. and it would thus appear that as condi- tions exist today the roads will re- ceive $40O,000000 from the govern ment instead of the $500 00c,00v which originally was suggested.
 Congress May Provide
 Congress might provide the other sloo, oOO, 900 if requested to do so. As for the roads, they are understood to expect about s400, 900, although they would like to see it increased It is estimated that of this amount about half would have to be paid out by the carriers at once Tor blliss for coal and other supplies already due or overdue. and that the remain der would be available for repalrs, improvements and the payment |oi interest on indebtedness.
 1n no sense would the s400. .0o0, 900 he a gift to the roads or an expense to the American people. The gov ernment would exact 6 per cent in- terest which is slightly less than it would have to pay today to borrow the money. n,
 In any event, the transactions wlii result in making available eooo many handfulls of millions to pc scattered among the industries or .ae
 he all they need and consume in the way of materials supplies and re- pairs and. it is thought. will give a noticeable impetus to the business revival now on the upward trend