Evening star., 1925-04-17
BANKERS PROTEST
GOVERNORS VETO
Bay State Ruling Makes New
Railroad Financing More
PerpIeXing.
BY ]. C. ROYLE.
Special Dispatch to The star,

Special Dispatch to The Star
NEW YORK. April 17.-Railroads
have been making a splendid showing
both as to car loadings and profits SO
far this year. But Il good many of
them have found considerable to wor-
~ them, nevertheless. Equipment
condition, the surplus of freight cars
and the number Of locomotives avail
; able are comparatively satisfactory
Transportation conditions are excel
lent and the volume of revenue
freight and the number of passengers
promise to be unusually high Fuel
costs are not likely to rise, and roads
are getting more ton miles out of
their fuel than ever before
Rail Financing Hard.
But they have spent a number of
million dollars more for maintenance
of way and equipment than in 1924
and they want TO spend large addi-
tional sums. The way for extension
and their financing is not being made
smooth in some sections.
The veto by Gov. Fuller of Massa-
chuSetts of the railroad securities bill,
which would have allowed savings
banks and investment houses to in
vest up to 10 per cent of their de
posits in equipment trust certificates,
brought protests from roads and
bankers. 1t is through issue of such
securities that many railroads are
preparing to finance additions to lines
and equipment. The governor has
insisted also that the Legislature dis
pose of his veto at once and not hold
action in abeyance until another bill
can be drawn.
Governor Explains Veto.
His action was taken on the ground
that equipment trust certificates
might be issued without appearing on
the books of the railroad companies
as a liability. He declared the only
security for them is the equipment
itself. Bankers deplore his attitude
because of the position of the New
England railroad, and say that while
81. Paul mortgage bonds are now
selling under so, equipment trust OBJ
legations of the road are quoted close
TO par, showing their safety. Motor
busseS have been skimming no small
part of the cream from both passen-
ger and freight business in New
England.
B. & o. Has Hard Problem.
The Baltimore and Ohio Railroad
has some perpleXing problems TO face.
Gov. Smith has vetoed the measure
extending the time in which the Bal
freight division might be electrified.
If this could physically be done before
January l, 1926, some railroad men
say it would cost from $40 900 900 to
$4,000 900.
Then also the Baltimore and Ohio
must come to an agreement with the
Pennsylvania lines regarding future
utilization of the Pennsylvania station
here for Baltimore and Ohio passenger
o4nc 70 . f1,a Of -v~in
Use of the Pennsylvania terminal was
granted when both roads were under
Federal control. On return of the
roads to individual control the agree
menL was continued up to September
!, 1925.
New Train Service.
Railroads in many sections are put
ting on new and high class passenger
trains. The Pennsylvania has an
nounced a de luxe train to st. Louis.
The New York Central has followed
suit On April 26 the new Crescent
Limited, operated by the Pennsyl-
vania, Southern Railway and Louis
vile and Nashville, will go into COM
mission between New York and New
Orleans. The Illinois Central Is
known to be contemplating extension
of its lines southeastward.
The removal of the executive offices
of the Southern Pacific to San Fran
cisco after being in New York 20
years was due to aggressive plans for
future expansions.
1t is constructing more new lines
than all the other roads of the coun-
try combined, including 108 miles of
track in Oregon, l64 miles through
Phoenix, Ariz., and 100 miles to fill
the Tepic- -Guadajalara gap in Mexico,
and is increasing its rolling stock.