The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-02-15
SINGLE RAILWAY
SYSTEM URGED
BY COMMITTEE
Drastic Changes Demanded
by Al Smith, Other
Board Members.
BUUnifcd Press

BIZ Hitcd Press
NEW YORK, Feb. 15:-Sweepinp
changes in governmental regulation
Of railroads looking toward an
eventual united single railroad sys-
tenn for the entire country. and a
realistic" scaling down Of railroad
capital structures, were recon-
mended today by the national trans
portatiOn committee.
The report, the most detailed and
thorough study Of the American
transportation system yet made,
bore additional weight because for
mer Governor Alfred E. Smith and
Bernard NJ Baruch. banker, both
certain to be influential in the
Roosevelt administration, we're
members of the committee.
Observers felt it was most likely
the report would WELD strong inhu-
ence in Democratic efforts to solve
the difficult railroad situation. Cal
vim Coolidge headed the committee
until his death.
Smith Adds Memorandum
Smith, while agreeing for the most
part with his colleagues, issued a
supplemental memorandum express
ing my conclusions in my own
language, placing the emphasis
where I think it belongs"
The committee felt consultations
were so important, if railroads we're
to be returned to a sound basis, that
they should be forced by govern
mental action in cases where man
agementS were reluctant.
All members Of the committee
agreed on two emergency measures.
Baruch, Alexander Legge, president
of the International Harvester Com
pany, and Clark Howell, Atlanta
publisher, agreed on two others to
which Smith took exception.
First, the committee said, bank
ruptcy procedure should be revised
to facilitate corporate reorganiza-
ton. second, there should be ret
roactive repeal of the recapture
clause of the transportation act
which requires profitable roads to
uclp support weak OIleS.
Smith did not agree with his col
leagues that immediate revision Of
the statutory rule for rate making,
or a modification of the Reconstruc-
ton Finance Corporations collateral
requirements for the special bene-
fit Of railroads we're needed.
Smith went a step beyond the
~ Of 70
reorganizations by faVoring a debtor
relief act to expire Jan. /, 1885.
He warned insurance companies,
colleges and trust companies that
the public will not stand for their
becoming "a preferred class of in
vestors who must get 100 cents on
the dollar irrespective of the true
value and condition of the bust
ness (railroads) they have invested
in"
Mentions Labor Issue
He proposed substitution of a
bureau with responsible head for
the present interstate commerce
commission.
Smith warned the railroads they
could not expect 10 make IdOOI inc
only scapegoat in settling their diff
ficuIties." The committee as a whole
did not consider the labor problem.
The committee found most fault
with the present statutes requiring
rate making on a basis of fair re-
turn on investments. 1t proposed
substitution of common sense
and fortnight basis" instead of
costly and cumbersome valuations
Of railroad properties.
The committee recommended also
fewer government subsidies to
waterways, and regulation of al
forms of competitive transport.
The committee was organized Oct
7 at the request of insurance COM
panies, colleves and savings banks