The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1921-08-15

time on their side Of the account
SENATOR sIMMONS-That is the proposition
SENATOR REED-That is remarkable transaction
But the proposal is remarkable than it appears
Senator Reeds statement The railroads the Govern
$763 100000 for additions and beterments made
during Federal control In addition, the Government holds
equipment trust" certificates of the railroads amounting
to nearly $40000 for expenditures in the purchase of
and locomotives. The railroads also the Govern
men than $2OOOOOO for loans and advances made
them of the revolving fund of $3OOOOOO created
by the Transportation Act
The railroads, the other hand, have made and
making claims against the Government for sums
the total amount of which only be estimated. They
have filed with the Railroad Administration claims
ing to $75s0OOOOO representing the demands of little
less than half the total mileage On this basis the total
claims for all the railroads will amount to than
81 ,5OOOO00OO.
They have filed with the Interstate Commerce Commits
sion claims which, while not exactly known, under
stood to amount to approximately $SO0O000OO applying
only to the six months guarantee period after the roads
returned to private ownership. When the total
claims filed with the Interstate Commerce Commission,
they will undoubtedly amount to than ST. 0OOOO0Oo0
Thus the railroads demanding from the Govern
men than 00000O0o in addition to the $3662,
431 O51 already paid advanced the railroads
the United States Treasury
Some of these claims particularly those for compensa
ton under the standard return undoubtedly valid but
they constitute less than onethrd of the total claims and
certainly less than the amount that the railroads adj
mittedly the Government.
The balance of these claims made up of fake de-
mands for argess from the public treasury based upon
alleged neficency of labor and such other unsubstanta
items 'the difference in the cost of applied material
as between the and Federal control periods They
have basis for existence except in the imagination of
railroad officials.
The Director General of Railroads has absolutely refused
pay any of these claims and has settled nearly quarter
of billion dollars worth of claims basis of less than
thirty cents dollar.
In other words, if the Government chose to offset the
railroads. could wipe all the claims and still have
balance due from the railroads If this were done, 1t
would be unnecessary to pay cent out of the Treasury
or increase either the obligations of the Government
the taxes of American citizens.
President Harding, however, urges that the entire IN
debtedness of railroads to the Government be funded
so that it will not become due for period of ten years.
and that the Government take the securities of the
railroads which it holds in the hands of the Railroad Ad
minstraton and sell them through the Finance Corpora
tion turning the cash proceeds to the railroads
This means that the Government through the Finance
Corporation will virtually guarantee the principal and
interest of the railroad securities which 1t ses and will
have to make good of the public Treasury if the rail
roads at any time should default in their payments.
Mr. Basil Maney, of our leading American statistl
clans and economists analyzing the proposal, says:
Suppose John Smith owes you a hundred dollars
and YOU really John Smith fifty dollars, but he
makes fake claims against you for two hundred. Now
John Smith if he has>the gall of railroad anancier,
will come to you and say:
"'I am in bad shape. I can't get credit anywhere.
But will tell you how we can fix this up. You take
nv note for hundred dollars and give fifty of it
in cash. If you do this I won't press my fake claims
against you right although reserve the right to
sue you the claims whenever get ready
Let it be understood that however much the assumption
NAV be justified from the vagueness of President Hardngs
language it u.s. nevertheless false assumption that this