The Washington herald., 1921-07-27


resentatives:
1t is necessary to call the atten-
tion ofsCongress to the obligations
Of the government to tbe railroads |
to ask your cooperation in order to !
enable the government to discharge
these obligations. There is moth |
ing new about them. but only re-
Gently has there come an under
standing which seems well to JUS
tify a sin ;ere endeavor to effect an
early settlement. These obligations
already have been recognized by the
Congress, in the passage Of the
transportation act restoring sthe
railroads to their owners, but pre-
vious recognition was made in the
contract under which the railroads
weA operateds by the government
for the period of the world war.
Justice seIf-Evfdept.
The contract covering operation
provided that the railways should
be returned to their owners in as
good condition as when taken over
by the government. and the trans
po-tation act, recognizing that bet
tsrments and additions belong to
capital accounts. provided that such
funds as. the railway compa ries owe
the government for betterments
and new equipment added during
the period OF government operation
might be funded.
There has been at no time any
question about the justice Of fund.-
ing such indebtedness to the gov
ernment. Indeed. IL has been in
progress to a measurable degree
IL IL
roads to their owners. II has been
limited. however. to such cases as
those in which final settlements
have been effected.
Process Too Slow.
The process Is admittedly too
slow to meet the difficult situation
which the owners of the railroads
have been facing. and I believe II
essential to restore railway activi-
ties and essential to the country's
good fortune to hasten both fund
ing and settlement.
Quite apart from the large sums
owing 10 the government. which
we are morally and legally bound
to fund. the government admittedly
owes the railway companies large
sums on those accounts such as
compensation, depreciation and
maintenance. There has been a |
wide difference in opinion relating
to the amount the government
owes. due in the main to the claim
Of the owners that in spite of ma
terials and hours of labor being
estimated in proper relation to sim
liar expenditure in the prewar test
period. the 'inefficiency OF labor"
still lost a wide difference between
actual upkeep and the expenditure
made during the government op-
Grafton.
Expects Early Settlement.
In order to expedite settlement and
funding an informal understanding.
which is all that is possible or prac-
ucal, has been reached, under which |
the railway claims based on the |
fnefhciency of labor" are to be
waived to hasten complete and final |
settlements, without surrender of |
any rights in court in case there |
is failure to settle. 1 have no doubt |
that early. final and satisfactory
settlements will be reached. since |
the policy of the Railway Admins
tration already has been effective |
in finally settling tia accounts of |
roads filing claims amounting to
s225,5sS,764, resulting in the pay
ment to them of s6S.141.22z..
Funds Lacking.
The way now would seem to be |
clear to very early adjustment and |
relief, except for the fact that the |
Railway Administration. though pos
sessing assets, does not command |
the fund.- necessary to meet what |
will be its admitted obligations.
There is no thought to ask Con- |
gress for additional funds. Per-
haps s500.000, 900 will be necessar' |
The Railway Administration has, or
will have in the progrVss of fund |
ing, ample securities to meet all |
requirements IL Congress only will |
grant the authority to negotiate |
these securities and provide the |
agency for their negotiation.
Would Purchase Securities.
With this end in view, you are |
asked to extend the authority OF |
the War Finance Corporation so that |
il may purchase these railway fund !
ing securities accepted by the di-
rector general of railroads. No add
ed expense, no added investment is |
required on the part of the govern
ment; there is no added liability.
no added tax burden. 1t is merely |
the grant of authority necessary to |
enable a most useful and efficient
government agency to use its avail
able funds to purchase securities
for which Congress already has au-
thorized the issue and turn them
into the channels of finance ready
to float them.
Simple Remedy.
I can readily believe that so sirr-
pie a remedy will have your prompt
sanction. The question of our OBJ
cannot be raised, the wis
dom Of early relief is not to he
doubted and the avoidance of added
or liability will ap
peal to Congress and the public
alike.
The after-war distresses of two
great and fundamental activities
have been riveting the anxious at
tention of the country. One is the
and restoration Of
the other . is the dir
tress of our railway transportation
system.
Pending proposals for relief and
their discussion have alreaGy
brought to the attention of Cor
gress the very promising possi5il-
tiles of broadening the powers OF
the War Finance Corporation for
the further relief of agriculture
and livestock production. This cor
poration has proven itself so helpful
IN the relief so far undertaken, that