New-York tribune., 1921-02-21
Quick Aid Urged
For Railroads TO
Avert Bankruptcy
Facing the Financial Crisis
of Their History, Says Chi
cago Banker, Advocating
Early Settlement by u. S.
Special Dispatch TO The rrtbsnc


! CHICAGO, Feb. 2o.-"The railroads
Of this country are facing the financial
crisis of their history, and unless way
is found to relieve them from the strain
it would not surprise me to see some
| of the lines GO into the hands of re-
ceivers," declared John J. Mitchell,
chairman of the board of directors of
the Illinois Trust and Savings Bank
and of the board of the Merchants
Loap-Illinois Trust banking group, be-
fore leaving for Washington yesterday.
He goes to the capital to attend meet
ing of the Federal Reserve Bank board.
| "Three elements enter into the pres
ent railroad situation" continued Mr..
Mitchell. "First, the government has
not paid the railroad the moro than
s4oo,oOoooo owing to them under the
guaranty This has been held up un-
der technicality by Secretary Of the
| Treasury Houston. The bill now pend
ing in Congress provides for the pay
ment of this money, and it will be
interesting to note # President Will
son signs the bill and in so doing
! Treasury.
Secondly, the government turned
back the railroads to their owners in
very demoralized condition, despite
the fact that the agreement under
| which the railroads were taken over by
the government provided that they
should be returned in as good shape as
they were received. Instead the road
| beds were in bad condition and broken
down cars and engines were scattered
all over the country.
GAS result the railroads have claims
| against the Federal government for lost
or damaged cars and locomotives as
well as damaged roadbeds amounting
! in the aggregate to more than the un-
| paid guaranty.
"The third element is the high
! freight rates that have been fixed. They
are too high. Placing q high price on
! anything does not help the merchant
il the people will not buy the goods
at that price, and the high freight
rates do not aid the roads when they
lose traffic thereby.
"The roads doubtless would amend
these rates, but they have 10 power
| The roads must take them and get what
traffic they can. Nor can they go into
the market and borrow money under
present conditions with any degree Of
success.
80 you can see that it is not the labor
question alone that is bothering rail
road executives. The popular notion
appears to be that the United States
railroad labor board turned down the
railroads in their efforts to adjust the
wage question. That is not entirely
true The railroads sought to have the
agreement entered into between the
government. and the railroad employees
prior to the return of the railroads to
their owners abrogated The labor
board said:
We cannot do this. We are here
to arbitrate specific questions in dis
pute between the RAILROADS and their
employees. Go and see Your employees.
Talk matters over with them and then,
when you have specific cases to lay
before us, We Will deal with them
$50 now the railroads are taking up
| the questions with their employees.
One of the questions is the overtime
charges and another is the time allowed
one hour week-for| each employee
to turn in his time to the office of the
road. These two items under the rul-
ings Of the railroad unions, it is csti-
mated, run up to some $500, 100000 a
year"