Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-10-21
POOL PLAN IS HIT
BY RAILROAD LINES
Capitol Leaders Pleased With
Rate Decision-PreSident
Studies Aid System.
CONTINUED From First PageO


plan to help the railroads meet the
serious situation which has arisen be-
cause of the slump in the market
prices of their securities. The sugges-
ton has been made that the President
has in mind a pool somewhat similar
to the half billion dollar pool now being
set up by the banks themselves to aid
those banks which are in distress.
Senator Tess of Ohio. member OF
the Senate Interstate Commerce Com
n1ittee which deals with railroad legiS-
lation said of the commissions deci-
sion:
While conditional and temporary,
the decision ought to have some sub
stantially good results, depending upon
the ability Of the railroads to meet the
requirements laid down by the COM
mission"
BroOkhart Praises Action.
The Ohio Senator added that he be-
lieved the report of the commission
showed that the commission has SYM
pathy for the railroads and at the same
time has exercised its independent au-
thority in the interests of the public
and business. The Senator indicated
that he does not believe that the COM
mission would grant the fiat Is per cent
increase asked for by the railroads.
Senator Brookhart of Iowa said the
decision of the commission had been
"a great victory for the farmers and
for the public at large" He declared
himself we'll satisfied with the report
of the commission as it related to pool
ing the increased earnings derived from
the proposed freight rate increases.
So far as the proposed increases on
specific commodities are concerned,
the Iowa Senator said, he wished to
give further study before expressing
an opinion.
Senator Brookhart expressed the
opinion that the railroads would not
accept the alternative plan now ad-
vanced by the commission for the fiat
rate increase.
Representatives of the railroads
made it clear" said Senator Brook
hart. that they would never agree TO
pooling their earnings when they ap-
peared before the Interstate Commerce
Commission in the hearings on tnlS
application for Is per cent increase.
Senator CouZens of Michigan, cnalr-
man of the Interstate Commerce COM
nittee, declined to comment on the de-
cision of the Interstate Commerce Com
mission until he had an opportunity 1or
a more complete study Of its terms: ne
said, however, that, Of course, II tne
railroads decline to accept the poolihg
of their increased earnings for tne
by the commission, the whole plan
benefit of the weaker roads, as proposed
would fall to the ground
In railroad circles it was pointed out
TODAY that there are four principal
items in the expenditures OF ralroaos
taxes. interest charges, supplies ana
labor It is impossible for the rail-
roads to bring about reouctlon IN
their tax charges or in their interest,"
charges. They already, it was SAID
have cut their expenditures for sup
niles to the bone There remains only
the charge for labor. 1t was lntlmated
.hat IL the roads are unable to agree TO
tho emergency relief plan advanced by
the Interstate Commerce Commission
they may feel compelled. under the cir
cumstances to call in railroad labor
and say to it, I'VE have reduced our ex-
penditures in every possible way and
vet we are still unable to make enough
to continue to do business. Will you
not help us in this situation by agree
ing TO a cut in wages?"
Labor Opposes Wage Cuts.
Railroad labor leaders already have
put themselves on record as opposing
any cut whatever in wages. II they
maintain this attitude and the rail-
roads should undertake to make the
cuts. the country will face critical
situation. 1t is generally believed that
labor will seriously resist all EFFORTS TO
reduce railroad wages.
In some quarters the suggestion was
made that the proposed pool of railroad
earnings to bolster up the weaker roads
would be subject to immediate attack
In the courts even if the railroads
agreed to the plan laid down by the
commission. "A stockholder or an own
er of bonds of railroad. it was said.
could enter suit to enjoin the use OF
earnings by the road whose securities
he held to pay the interest charges OF
another road
Legality Is Defended.
The legality of the plan, however
was defended today and the opinion was
expressed in informed circles that the
Interstate Commerce Commission is
acting we'll within the law in its pro-
poSal for pool.
Serious dificulties, it was said, may
arise in the actual operation OF the
plan suggested by the Interstate Com
rnerce Commission. In the first place,
there is the traffic question; in the
second there is the accounting question,
and in the third place the railroads
would have to work out a plan under
the supervision of the Interstate Com
merce Commission, of handling the pool
proposed
While these difficulties may be serious.
It was declared that it is not impossi-
BILE to surmount them. Freight is con-
stantly handled over more than one
railroad There are many differentials
in rates and a great many kinds Of
combinations. Under such circum-
stances it would be difficult to set aside
the exact increase in the earnings, due
to the freight rate increases allowed
by the Interstate Commerce Commits
sion.
Method Is Undecided.
Whether the increased revenues to be
pooled would be impounded In kind
of clearing house under the supervision
of the Interstate Commerce Commission
and held for six months or year and
then distributed to the railroads, or
whether each railroad would set up a
fund of its own to be pooled at the
end of the year was another matter
which would have to be decided.
Railroad officials would not conn.,
ment today on the adequacy Of the
measure of relief contained in the
plan of the Interstate Commerce Com
mission. Whether the total amount
needed to supply the deficits in the
interest charges could be covered by
the S1o0,000.000 Of increased revenue
was a question.
Want Bus Regulation.
While the interest in the commits
sion's report centered particularly in
the denial of the Is per cent fiat I'LL
crease in rates and in the proposed
pool, there was, nevertheless, a con-
siderable interest in the other recon-
mendations of the commission. The
railroads have commended for long
time that Congress and the State Leg
.slatures should more adequately regu-
late buses and motor trucks which
bova hecopoa cnpnetitors of the rail-