The labor journal. [volume] (Everett, Wash.) 1909-1976, 1921-08-26
PLAN TO ROB THE
GOVERNMENT OF
HALF A BILLION
McAdOO Tells of Plan to Drain
L. S. Treasury of
S500,000,000

The Senate Interstate Commerce
Committee refused to call William
G. McAdoo to testify before that
body, but the latter has given
some testimony to the people
through a letter to Senator Stan
ley.
Mr.. McAdoo said that President
Harding was Clearly mistaken" in
telling Congress that the govern
ment was morally and legally
bound" to fund the $763 100000
debt which the railroads owe the
United States for additions and
betterments, according to the ex-
pressed opinion of William G. Nc
Adoo, former secretary of the
treasury and director of the rail
road administration.
stripped of confusing non-es-
sentials," McAdoo declared recently
in letter to Senator Stanley
Democrat, of Kentucky. a member
of the Senate Interstate Commerce
Committee, what is proposed is
that the government shall wait 10
years for $763 100000 the railroads
owe it for betterments and i'm
provements and pay Immediately
$500 100000 to the railroads on ac-
count of claims for alleged under
maintenance, taking securities
which in many instances may not
be adequate to protect the govern
ment against loss.
1T is not a question of legal or
moral obligation, but a question Of
policy"
McAdoo's criticism of the Hard
ing scheme to help the railroads
over the rocks was placed in the
Senate record by Senator STANLEY
after the former head of the rail
road administration had been re
fused a hearing before the Inter
state Commerce Committee previ-
Gus to the reporting of the admin
stration enabling bill to the Sen
ate.
McAdoo admitted that the Esch-
Cummins act conferred upon the
within certain limitations. how
much of the debt the United States
owes the railroads may be set off
against the debt the railroads owe
the United States but held that
the act does not contemplate that
none of the debt of the United
States will be set off.
"On the contrary" McAdoo went
on, "the act assumes that it will
be because, in express terms, it
provides for funding only the re
naming Indebtedness of the carrier
to the United States
at is indisputably clear that
under the law and the contract be
tween the parties the United States
is not morally and legally bound
to fund as stated by the president
in his letter. the S763,000,000 the
railroads owe the treasury for 'ad-
ditions and betterments.' The pres
ident must have been misled into
making such a statement
McAdoo suggested that settle
ments with the railroads be effect
ed by funding for ten years the
difference between the amount
which the railroads owe the gov
ernment and which the government
owes the railroads. This difference
is estimated at S263, 100000
"But the president proposes a
new plan" McAdoo continued,
namely, to defer for ten years at
6 per cent interest the entire
S763, 100000 due by the carrier to
the United States and to pay the
carriers in cash $5OO,OO0,OOO for
alleged er-maintenance claims.
The president assures us that this
involved CD No added invest
ment'; (2) NO added liability;
(3) No added tax burden
"There is an added investment
of taxpayers money amounting to
$500, 100000 because, instead of off
setting or cancelling S500,000,000
with an equal amount of the debt
the railroads owe the United
States. the treasury will have to
pay the railroads S500,000, 900 of
new money.
"There is an added liability of
$500, 100000 because the treasury
must continue to lend that sum to
the railroads, some with good and