The New York herald. [volume] (New York, N.Y.) 1920-1924, 1921-07-21

PLAN TO FUND RAIL
DEBT Is APPROVED
Executives Association Acts Oh
Scheme for Extending Pay
ment of $500, 100000.
ROADS ARE TO GET CASH
Proposal includes More Power
for War Finance Cor VI
poration.
ROADS ARE TO GET CASH

Acting on recommendations of it's
steering committee member roads of the
Association of Railway Executives APP
proved yesterday the tentative plans
worked out by representatives OF the
Harding Administration. railway Off
Gals and bankers to FUND the $500. 000.-
900 owed by the carriers for capital ex-
penditures made during Government OPP
grafton of railroads and settle claims
81 the roads against tho United States
Railroad Administration for undermafn-
tenance. balances due on materials and
supplies. depreciation. unpaid compen-
sation and all accounts arising out of
twenty-six months of Federal control.
The action was taken at a meeting In the
board room of the New Haven Railroad
At Grand Central Terminal at which
practically the entire membership of the
} association was represented.
Although the official statement Issued
at the close of the session by It. De Witt
cuyler. chairman of the association. said
that further statement on the situation
must come from the President OF the
United States" it Is known that the pro-
posal provided for an extension OF the
powers of the War Finance Corporation
to fincnce the settlement without an ap-
preparation by the Congress and with
Us little strain as possible on the credit
Of the Government in connection with
she sale of securities which will be made
to provide the necessary cash.
The first steps looked for in the exc
cution Of the plan will be a proposal to
the Congress to amend the War Finance
Corporation act and permit the transfer
to that corporation Of certain assets in
the Government Treasury. Those secu-
rifles are about 1SO.0o0,oO0 and in
clude S250,000,000 in railroad securities
turned over to the Treasury against APP
proximately $210. 1000. goo in loans made
from the Governments revolving fund;
approximately $430.000.000 indebtedness
funded for additions and betterments to
equipment. way and structures. and
bonds of about $500, 100000 to be issued
by the railroads to fund the rema lining
capital expenditures made by the Rail-
road Administration.
Against that collateral 1t is expected
that the corporation will be able to issue
a sufficient amount of debentures for
sale to the public to supply adequate
funds for payment OF claims of railroads
allowed against the Railroad Adminis-
tration. In view of substantial conces-
sions insisted on by the Administration
it is probable that the undermaintenarce
claims will be scaled down to about
$500. 5000 or $500. 100000. Claims for
compensation unpaid for the period of
Government operation aggregate $780,
100000. Unpaid guarantee for the six
months following the REIMBURSEMENT Of
Federal control. amounting to about
$500, 100000 Is provided for by an APP
preparation in the transportation act of
1920 and thus will require no provision
In the present settlement
Although the final announcement by
the President may reveal some changes.
yesterdays admission Of rail executives
that no further conferences on that sub
ject with Administration officials were
expected was taken to mean that all
essential principles of the arrangement
had been determined.