The New York herald., 1922-02-04
HOOVER APPEALS
FOR RAIL ACTIVITY
Says Prosperity Depends on
Lower Rates and More
Building.
Special Dispatch to THE NEW York HERALD.
New York Herald bureau.

Special Dispatch to THE New York HERALD.
New York Herald bureau.
Washington, ID. C.. Feb. 3.
This greatest impulse that can be given
to business recovery from any source
is reduction of railway rates on pri-
mary commodities. combined with the
immediate resumption of railway con-
struction and equipment. Secretary
Hoover to-day declared in statement
to the Interstate Commerce Commits
sion.
Secretary Hoover said rate reductions
depend upon lower operation costs. and
that new railway construction activity
hinges solely upon restoration Of
credit for the railways.
"One thing Is absolute" Mr. Hoover
said. "Our transportation facilities are
below the needs of our country. Unless
we have a quick resumption of con-
struction, the whole communlty-agri-
cultural commercial and Industrial
will be gasping from a strangulation
caused by insufficient transportation
the moment that our business activities
resume.
FOrcsees Car Shortages.
Few seem to realize the amount OF
expansion in our transportation machine
necessary to keep pace with the growth
of the country. And an equal few
seem to have any notion of the price
we are paying for not having it. The
very moment that we reach anything
like normal business we shall have a
repetition of car shortages, followed by
an increase in the cost OF coal to the
consumer from 81 to 50 n ton: we shall
again see q premium OF twenty cents
buShel for use of cars for moving
grain; we shall in fact see a shortage
of commodities to the consumer, and
we shall see gluts upon the hands Of
the producers. We shall see factories
filled with orders again closed for lack
of cars; we shall see intermittency in
employment; we shall see the usual
profiteers in commodities due to a stric-
ture between the producer and con-
sumer."
Mr.. Hoover estimated the country's
transportation lines are short OF rolling
stock to the extent Of 1000 locomotives
and 100000 freight cars. He said that
II there is not an early resumption of
construction and equipment the COM
mercial community will pay treble the
in "A single season.
Surplus capital is pouring by hun
dreds of millions monthly into tax free
securities and foreign loans. and yet
our railways are unable to finance the
most moderate of construction pro-
grams" Mr.. Hoocer said. He predicted
that the railways eventually would re-
turn to a higher footing, If proper finan-
cial assistance is given them.
ReaSsures Investors.
'If we assume that the reduction OF
prices and wage levels will settle at a
plane no lower than so per cent. over
pre-war. and II we assume that the
present rates are to be maintained. and
IL we assume restored traffic, then the
earnings of our railways would exceed
Is per cent. on the whole of the Com
missions tentative valuation. Surely
there IS room here for safety to invest
ment as well as relief TO the shipper"
There would be no cost 90 the tax
payers OF the United States. Mr.. Hoover
said, in a program by which the Gov
ernment guarantee would be given TO
equipment trusts. with the railroads pri-
marily responsible and agreeing TO use
the cash from such negotiations for i'm
provement and new equipment
Mr.. Hoover asserted that n real pro-
gram Of construction by the railways
would give relief TO 10000 of the ma
tion's unemployed. Continuing, Mr..
Hoover said:
I'VE talk glibly OF giving billions OF
credits to foreign countries. to increase
our farm exports. wish to say with all
responsibility for the statement. that a
billion dollars spent upon American
railways will give more employment to
our people, more advance to our indus
try. more assistance TO our farmers than
twice that sum expended outside the
frontiers OF the United States-and
there will be greater security for the
investor"