New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1921-07-27
Message Says Extension
OF War Finance Corpo-
ration's Power WillPro-
vide for Roads Claims
Suggests Funding
OF 500 Millions
Senate al Once Takes Up
Bill to Put Proposal of
Executive Into Effect:
MembersV VoiceApprovaI

"AoHlNGION, July 26.-In
special message to Congress to-day
President Harding presented plans
for extending the authority of the
War Finance Corporation so as to
enable it to purchase securities and
use them in the settlement of the
railroads claims against the gov
ernment and also to enable it to
give aid in the expectation of farm
products. He requested Congress
to enact the necessary legislation.
The President did not appear per-
sonally before Congress, sending his
communication over to the Capitol
| by messenger.
The President asks to have the
War Finance Corporations powers
oroadened so that it can purchase
and prepare for flotation of railroad
securities up to probably $500, ,0oo,-
OO0. The proceeds of these securi-
ties would then be used by the Gov
ernment to pay the railroads in set
tlement Of amounts due the roads
from the government. The railroad
securities represent sums which the
roads owe the government for bet
terments in the Federal operation
period.
1t was pointed out by the presi-
I dent that olJ
asked of Congress. He said the rail-
road legislation which he sought
would open the way to "early adjus.-
ment and relief of the railroad
problem.
Bill introduced Promptly
The President asked Congress for
prompt action to relieve railroads
and for the extension of powers ~
the War Finance Cornoratiop N old
IN the movement of farm exports. At
one time there was talk of combining
the two bills in one. The President
dld not request this in his roessApe
and separate bills viii be pressed. sen-
ator Kellogg, in fact, introduced the
Administration bill relating to export
OF agricultural products in the Senate
THIS afternoon as substitute for the
Norris farm export financing cornora-
ton bill
The Administration railroad hill :.
is expected. will be introduced soon
The President in his message took
the view that the War Finance Cor
poration would be al agency of much
value in restoring sound economic
conditions. He pointed out that rail
way CLAIMS, based on the "inefficiencv
OF labor" and alleged under mainte
nance IN the war period, were to he
waived by the roads for the present in
order to hasten settlement and with
out surrendering any rights in court.
ne pointed out the railroads owed the
ments, and the government also owes
the roads. Congress has already au-
thorized the funding of the debt which
the roads owe the government. the
message said.
The President made it plain that he
believed the action he recommended
as to the railroads and expectation
OF farm products would go far to help
restore normal business conditions.
NpHS icSo 0ttS Davis hepOrt
In connection with the message the
Fresldent sent to Congress a report
by Director General Davis of the ra;l-
road administration showing the nrog-
ress made in the work of effectinp a
settlement with the roads.
The text of Pres ident Hardinp's mes
sage follows:
ut is necessary to call the atten
ton OF Congress to the obligations
OF the government to the railroads.
ana ask your cooperation in order
to enable the government to dis
charge these obligations. There is
nothlag new about them, buG only
recently has there cone an under
standing which seems we'll to Justify
sincere endeavor to effect an carly
settlement. These obligations al
ready have been recognized bv the
Congress IN the passage of the trans
portation act restoring the railroads
to their owners, but previous recog-
milton was made in the contract
under which the railroads were op-
Grated by the government for the
period of the Word War.
The contract covering operations
provided that the railways should be
returned to their owners in as good
condition as when taken over by the
government, and the transportation
act, recognizing that betterments and
additions belong to capital accounts,
provided that such funds as the rail-
way companies owe the government
for betterments and new equipment,
added during the period of govern
ment operation, might be funded
Process Too Slow
There has been at no time any
question about the justice of funding
such Indebtedness to the government.
Indeed. it has been in progress to a
measurable degree ever since the re-
turn Of the railroads to their owners.
It has been limited, however, to such
cases as those in which final settle
ments with the railway administra-
tons have been effected.
The process is adm stedly too slow
to meet the difficult e'tuation which
the owners of the railroads have been
facing, and | believe itsessential 10
restore railway activities End essen.