The New York herald. [volume] (New York, N.Y.) 1920-1924, 1921-07-23
RAILROADS TO GET
HALF BILLION Cash
TO END STAGNATION
President and Cabinet Find
Key Log in Industrial Jam
and Will Ask Congress
for Aid.
DEBT TO BE FUNDED
Secretary Hoover Says Bus
mess Life of Country
Will Be InvigOrated by
Flow of Money.
TO END UNEMPLOYMENT
100000 Men in Railroad and
Nearly Allied Work Will
Be Needed in Near
Future.
TO END UNEMPLOYMENT

Special Despatch to THE New Yonx HERALp
New York Herald Bureeu.
Washington, July 20.
President Harding and his Cabinet
advisers are confident that the key
log in the industrial jam which has
gripped the country has been moved
through the bringing about of vir-
tual agreement for settling involved
accounts between the railroads and
the Government in a manner which
will relieve in large measure the
present financial difficulties of the
carriers.
Announcement was made after the
Cabinet meeting to-day that the sub
stance of an agreement has been
reached for settlement of the trans.
actions on a basis that will give to
the railroads probably half a billion
dollars In cash without drain on the
treasury.
At the same time announcement
was made that the President will
send communication to the Con-
gress next Tuesday outlining the plan
in detail and asking for the Congress
sional authorization that is neces
sary.
Details OF the plan will not be made
known until that time, but 1t was
stated the railroads had agreed In sub
stance to waive in settlement their
claims against the Government for al
legged labor inefficiency during Federal
control without prejudice to the right
TO sue.
Long Time to Pay Debts.
Amounts owed to the Government
by the railroads as a result of Fed
eral operation. including additions and
betterments. rolling stock and other
charges against the capital account,
will be funded into long time obliga-
lions. giving to the roads long period
In which to repay them. The Govern
ment will accept these obligations or
finance or discount them through the
War Finance Corporation, probably,
making available cash funds with
which the Government can settle the
claims against the Government by the
railroads for amounts due as result
of Federal operation.
Claims on each side aggregate about
100000, 900, but the items for alleged
labor inefficfency are to be withheld,
the President and his advisers failing
of conviction that they should be paid.
The Treasury to-day is in position
TO make payments to the carriers of
amounts due as soon as they are certi-
fed as due by the Interstate Commerce
Commission and consequently early
closing of the entire transaction with
consequent immediate relief to the rail-
roads Is possible. Some delay may be
met in Congress, however Just what
authorization will be asked was not
made known officially, but it Is under.
stood to involve additional necessary
powers for the War Finance Corpora
ton.
President Harding and his advisers
feel that the railroads have been treat
ed unjustly In many particulars and
sympathy is felt for their position and
inability to meet present financial re-
quirements. Some of the carriers, while
solvent. are unable TO meet their bills
payable. and equipment and other sup
ply companies are held up. with con-
eequent depression and lack of employ
mcnt.
President Regrets Loss of Clark.
Announcement was made at tho White
House that the President has accepted
the resignation OF Edgar z. Clark an
chairman OF the Interstate Commerce
Commission with great regret because
OF Mr.. Clark's sterling service. The
commission chairman II going to pri-
waite business because OF the necessity
of rchabilitating his private fortune
Frederick ]. Cox OF New Jersey, member
Of the Commercial Travellers Associa-
ton. is TO be appointed to the commits
sion.
Secretary OF Commerce Hoover be-
if~ycs the release of about $500. 00o. 900
cash TO the railroads will produce a
stimulating effect in many industries
dependent on the railroads for business.
He maintains also that putting that
amount Of cash IN circulation not only
will relieve the carriers of the present
strain growing out Of unpaid bills and
inability TO finance new improvements.
but that practically the entire Industrial
structure Will feel the beneficial results
OF a financial operation Of such proper
tons.
Another helpful factor to be consid- !
cred IN the proposed funding OF the
railroad claims according to Mr. |
Hoover. is the probability that IL will |
greatly lessen unemployment. His re-
Continued on Fourth Page.
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