Evening star., 1932-04-02
RAIL LOANS MEET
. SENATE OPPOSITION
Couzens Proposes to Strip
Power From Finance
Corporation.

The issue raised by the Interstate
Commerce Commission over railroads
obtaining money from the Reconstruc-
ton Finance Corporation to pay bank
loans had assumed new proportions to-
day. with the commission withholding
approval of such grant for $1,000, 900
to the Baltimore g. Ohio, and the Sen
ate considering a resolution that would
strip the Finance Corporation of the
power to make rail advances.
At present, the commission must pass
upon loans to the carriers after their
authorization by the Finance Corpora
ton.
Under the resolution offered yester-
day by Senator Couzens, Republican, of
Michigan jurisdiction would be trans
ferred entirely to the commission.
Opposition Revealed.
The opposition of the commission to
railroads borrowing Government money
to pay bank loans before their private
resources were exhausted came to light
several days ago in the case of loan
to the Missouri Pacific, the commission
reluctantly approving an advance of
$12 800 900, of which $5,850000 was to
pay nail OF group OF loans nelQ Dy
three New York banks.
Approval of this part of the loan
was given. the commission indicated.
because the board of directors of the
Reconstruction Finance Corporation
had adopted a resolution granting the
<ln on condition that the commission
also approve it.
The resolution was adopted by the
corporation the same day President
Hoover called into conference officials
of the corporation. Chairman B. H.
Meyer of the Commission Finance Divi-
sion and is railroad heads.
The commission criticized bankers
who refused to renew railroad loans
after profiting from such business IL,
more prosperous times. 1t gained its
point to the extent that the banks
continued to carry half Of the total
amount of loans.
Yesterday, the commission authorized
the B. & o. to borrow $7,000,Q00 from
the Reconstruction Finance Corpora
ton to meet various forms of indebted
ness during the next month. but de-
ferred action on the $1,000,000 re-
ouested to meet bank loans due April 26.
The Baltimore g. Ohio approval
covers various debts due up to April Is
and S975. 900 worth of equipment trust
obligations due April 26.
Commenting upon the loan, the COM
mission said consideration of the
81 900 900 should be deferred pending
further negotiations on the part of the
applicant looking to additional private
financing"
The measure proposed by Senator
CouzenS, who had criticized the Missouri
Pacific loan, would set up revolving
fund of $400,000,000 in the Treasury,
out of which the Interstate Commerce
Commission could make loans to the
roads at per cent interest. All sections
of the Reconstruction Corporation act
relating to loans to railroads would be
repealed.
In making a report to the Senate
Yesterday the Finance Corporation list
ed the names of all officials and en-
ployes receiving more than $400 a
month from the corporation. These
number 106. of whom o. H. Wolfe,
manager of the Philadelphia office, re-
ceives the largest salary. His monthly
pay was given as $1,333.33.
President Charles G. Dawes and d.
rectors of the corporation each re-
ceives s83333 monthly.
Those receiving this payment be-
sides Dawes are Harvey c. Couch,
Jesse H. Jones and Wilson Mccarthy.
Five employees receive $3.50 a
month, including M. G. Bogue, special
counsel; George c. Holmberg assistant
to the directors: George Roberts, spe-
cial COUNSEL Charles A. Miller, man
ager Of the New York Office, and H. M.
Sims, manager of the Chicago Office.
G. G. Marr, general counsel, is listed
as receiving SLIPS monthly; Hugh
Leach, 81 ,083 SO, and George r. Cook
sey. the secretary, $1,000 month. S.
S. Hathaway, assistant manager of the
New York Office, and E. H. Watson.
chief of the credit department of the
New York office, are listed as receiving
salaries of 81 900 a month.