Omaha daily bee., 1921-05-08
Senate Will.
Probe F.
Situation
I. c. c., Road Executives and
Shippers to Discuss Lowering
of Rates-Finance Ad-
justment Expected.
Cummins Sure Of Success
By ARTHUR SEARS HENNING.

Chicago Tribune Omaha Bee Leased Wire.
Washington, May with Presi-
dent Harding endeavoring through
existing agencies to improve the con-
diton of the railroads as the first
important step in restoring CONNER
cial and industrial normalcy, Senator
Cummins will inaugurate next Tues
day an investigation by the senate
committee on interstate commerce of
the cause and remedy of the present
plight of the transportation systems.
The president believes that freight
rates must be lowered in order to
revive business. A start in this di-
rection has been made by the 2S
cents ton reduction in the rates on
coal for Great Lakes transShipment.
The conference to be held next week
by the Interstate Commerce commits
sion, railway executives and shippers
of building materials on the reduc-
ton of rates on such commodities is
in line with the presidents idea that
business revival would be promoted
by lowering the transportation cost
of articles used in industry.
Executives to Testify.
Whether the Cummins-Esch trans
portation act is success and
whether the existing governmental
agencies are equal to the task OF
solving the present railroad problem
are matters upon which the senate
committees investigation is expected
to throw much light on the matter.
The first witnesses heard by the
committee will be the railway execu-
tives.
Senator Cumrnins expressed him
self strongly today to the effect that
the railways would be able to read
just their finances, through higher
efficiency in management and re-
duction in cost of material and la
Dor, to point where earnings
would again cover expenditures,
charges and a reasonable profit. He
ascribed present conditions to an in
dustrial readjustment, which had as
yet proceeded unevenly, not yet al
fecting costs of production or op-
Grafton as it had affected earnings
Recognizing the awkward period
with which some of the railways
might intervene before they had re-
adjusted working costs to a point
where net earnings would cover ma
turing charges on their debt, he ex-
pressed the belief that the creditors
OF such railways would be lenient in
not enforcing their claim pending
the period of readjustment.
Like Other Industries.
The railroads." Senator Cum
minis said, "are in no different situ-
alton from the other industries of
the country. Like many other pro-
ducing industries, they are confront |
ed with a sudden and violent shrink |
age of business which helps to make |
the selling price of what is produced |
lower than the cost of production.
They will have to solve the prob
lem in the same way as other pro- |
ducers are trying to solve it, by the |
bringing of the cost of materials and
the cost of labor into line with the
proceeds of what they have to sell.
Senator Cummins was asked if it !
was possible for the railways to do |
this on sufficiently drastic scale |
to cover both working expenses and
charges on the debt. He replied that
he had no doubt of it.
"To assume the contrary" he said,
would be to assume that a national
system cannot be self
supporting in this country. If that |
were so, there would be nothing to
do but for the government to take it |
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