Evening star., 1921-08-10
[AF0[LETTEF|RES
FIRST GUN AGAINST
RAIL FUNDING BILL
S'"'~ ~
Senator Pomerene Calls Act
a "Hand-Out" ut"-Mr. Meyer
Defends Measure.

| Opposition TO the administration
bill for funding about s50O,000. 900 for
the railroads DEVELOPED openly today
before the Senate interstate COM
merce committee.
Senator La Toilette. republican. Wis
consin, opened fire on the bill, while
democratic senators challenged the
proposed loan to the railroads. Sena-
tor Pomerene of Ohio, referred to it
as a ''hand-out"
Director Meyer of the War Finance
Corporation. defended the bill vigor-
ousIy as a measure for general coun-
try-wide. as well as railroad. rehabili-
| tation, and denied that it was a loan
| or a hand-out.
Senator La Toilette. inquired deeply
into the origin of the legislation. Mr..
Meyer said he personally conceived
! the plan, without suggestions from
anybody" His plan. he said, was ap-
| proved by President Harding. Secre-
! tary Mellon and Secretary Hoover.
| MIR. Meyer said he had not attended
any conference of bankers with the
; President and did not know that the
| legislation had been discussed at such
! q conference.
Did you know that Mr.. Hoover
was going to New York to confer
persisted Senator La Toilette. Mr..
Meyer discIaimed such knowledge.
| Refers to d. r. T. Loan.
! Senator La Toilette referred to loans
| by the War Finance Corporation to
/ the Brooklyn Rapid Transit Company
and a New Orleans street railway
! company which. he said. soon after
wards became bankrupt The senator
| said he did, that to indicate "how
/ busines: was transacted.
/ Director Meyer said he regarded
! the B. r. T. loan as eventually
| good" and said the New Orleans loan
I had been paid in full.
/ Senator La Toilette sought to show
! that the bill really would authorize
the War Finance Corporation to fund
or sell. over one billion dollars OF
i railroad securities rather than only
$500. .O0O, 900 Mr.. Meyer declared that
funding of the latter amount only
was contemplated or could be reason
| ably accomplished.
! $500. 900 Limit.
The limit of funding under the bill
Director Davis of the Railroad Ad-
ministration. told the committee
would be s500.oO0,0O0 and probably
under" Giving a detailed statement
of the railroad debts to the govern
ment for additions and betterments
mostly equipment-furnished car
riers during the war. Mr.. Davis said
a total of $1.144.O00, 900 had been ad
vanced for that purpose. OF this, he
said. the railroads had given $310.-
00O, 900 in equipment trust notes and
$70.000.000 paid in cash, leaving a
balance of s763. 900. of which
privately About s700,00O.00o OF the
government advances, therefore. he
said, have not been funded, but for
various reasons. lack of securities
etc, Mr.. Davis stated that the bill
would require funding of less than
$500, 100000.
No change is proposed by the bill
Mr.. Davis added, in the authority
given him under the transportation
act to settle all claims against the
government.
Mr.. Davis said the bill would be
| greatly beneficial"
Its whole purpose" he said, sis t.
let the public. instead of the govern
ment, carry these loans"
Examination of Mr.. Davis is to b,
continued tomorrow.
Urges Enactment.
Chairman Cummings today received
a letter from Charles A. Livingston
representing the Illinois Manufactur
ers' Association, urging prompt en-
| the Dill In OrQer thaI tnt
railroads, industries and all shipper.
may Immediately be reliever tha
transportation troubles may be avert
ed and unemployment be lessened."
Not all of the railroad securitie.
held by the government will be ac
cepted and marketed by the Wal
Finance Corporation. Director Meyel
said during his opening testimon,
. today. Only the good securities now
held by Director Davis of the Rail
( read Administration will be funded, Mr.
Meyer said. explaining that the FRO
visions of the funding bill were per
missive and not mandatory upon thu
War Finance Corporation.
VIII Market Securities.
The securities which are deeme,
good by the corporation. Mr.. <Meye
stated. would have to be marketed
gradually.
"Of course, we can't throw hundred.
of millions of securities on the mar
ket," he said. I'VE would take then
! later, furnishing funds to enable tn
director general to adjust account
width the railroads"
Senator Kellogg. republican, Min
| nesota, interjected that there wa,
nothing in the funding bill relating
to settlement of claims between tn
railroads and the government
at simply takes the railroad secur
tiles now held by the government ant
! transfers them to another branch O.
the government to be Sold" said Sen
ator Kellogg.
J, Director Meyer added that in ad
, vahcing funds to the director genera
, on the railroad securities taken b.
the corporation the director genera
then would have funds to procee'
with adjustments of accounts.
} About 100000, ,0Qe of the railroads
!. equipment notes given for loans b.
the government during the war ar
/ lheld. Mr.. Meyer said.
'crhese are frozen credits, and W,
propose to unfreeze them for tn
/ benefit Of the government" he said.
ri n m cY,rc sArApyrs