Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1921-07-26
HARDING To SUGGEST
SEVERAL PLANS FOR
HELPING RAILROADS
BY HARDEN CoLFAx
Leased Wire Service to The Atlanta

| WASHINGTON, July 23.-Pres1-
dent Harding's program for helping
the railroads over their present finan-
cial difficulties, concerning which he
will advise congress next Tuesday,
contemplates the following:
Issuance by the roads of bonds or
securities amounting to from foul
to five hundred million dollars, the
exact amount being as yet undeter-
| mined, the securities to mature II
! ten years and to be redeemable be-
fore that time at the option Of the
issuing roads and to bear interest at
the rate of 6 per cent.
Balancing the ledger with the rail-
roads for the governments bill
of federal control, closing the account
and accepting the securities as pay
| ment therefor.
Payment by the government to the
railroads in part of the carriers ac-
count against the government, this
account being chiefly for money owed
the roads for rental Of their prop
rolling stock, equipment, terminals,
shops and other properties during the
| time the government was in control
of the country's transportation sys-
TEN.
Utilization of both the railroad ad
ministration and the war finance
corporation to fund the carriers Sc,
0Y0oo ant
and thus provide the ready cash with
| which to pay the railroads claims, or,
at least, the major portion of the I'M
disputed claims.
Security Purchase Plan
The possibility-and this is only a
possibility which at this time is I'M
der consideration-of asking con-
gress for authority to purchase one
hundred million dollars of the car
riers' securities in case the presen,
facilities of the war finance corpora
ton and the railroad administration
are unable to take care of the rail-
roads bill.
Decision to settle the account be-
| tween the government and the roads,
| in chief part, was reached by PreSl-
dent Harding some time ago, being
fastened somewhat by the pressing
need for cash on the part of most
of the roads. The plan outlined
administration to the Association of
Railway Executives at it's meeting in
| New York last Wednesday and after
considerable discussion was accented,
although the roads wanted fifteer
years in which to retire their securi-
tipc N the thaV 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 five hundred millions rather than
four hundred millions.
There seems to be a question, how
ever, as to whether the government
is in a position to pay the roads five
hundred millions, much as 1T desires
to settle it's bill and enable the roads
to get cash to settle things Look
ing over the field here it was found
that there would be no difficulty in
raising four hundred millions through
the war finance corporation and the
railroad administration. That leaves
a gap of one hundred million and it
is considered possible, though un-
likely, that congress will be given
the suggestion that it authorize fill
ing that gap by the purchase of rail-
road securities.
Need $780, 100000
The railroad administration has
somewhere between one hundred and
two hundred millions in cash with
which to settle claims 1t is doubt
full if more than one hundred millions
| of that amount could be spared with
out pinching the railroad administra-
| ton in it's further work. In addition
there are available equipment trust
securities issued by the roads and
| held by the government. maturing
fourteen and a half years hence to
| the extent of about three hundred
millions.
The war finance corporation could
| be called on to lend face value of
| these equipment trust securities, or
| three hundred millions to add to the
railroad administrations one hundred
million, thus making available a to-
tai of four hundred million dollars.
But manifestly the corporation could
| lot be called on to make loans where
| it has no securities therefor, and i
| would thus appear that as conditions
exist today the roads will receive
| four hundred millions from the gov
eminent instead of the five hundred
millions which originally was sug-
gested. Congress might provide the
other hundred millions If requested
| to do so.
AS for the roads, they are under
|
millions, although they would like to
see it increased. 1t is estimated tina
of this amount about half would have
to be paid out by the carriers a
once for bills for coal and other sup
plies already due or overdue and
| that the remainder would be avail
able for repairs, improvements and
the payment of interest on indebted
| ness.
In no sense would the four hun
dred million dollars be a gift to the
roads or an expense to the American
people. The government would ex-
act 6 per cent interest, which is
slightly less than it would have to
pay today to borrow the money.
In any event, the transaction viii
result in making availabye a good
many handfuls of millions to b.
scattered among the industries of
the country which supply the roads
with all they need and consume in
the way of materials, supplies and
repairs, and, it is thought, will give
noticeable impetus to the business
revival now on the upward trend.