Evening star., 1933-05-05
The Railroad Bill.

President Roosevelt. in his message
to the Congress and in an administra-
ton BILL has undertaken to place the
strong arm of the Government behind
the railroads in an effort to help them
eliminate waste and balance their
budgets The Presidents broad plan is
to coordinate all the agencies of trans
portation in order to maintain adequate
service. He told the Congress, how
ever, that he was not yet ready to sub
NIT comprehensive plan for perma-
nent legislation and that he would con-
fine himself to three emergency steps"
which should be taken at the present
special session.
Most important of these three steps
recommended by the President is the
appointment Of Federal co-ordinator
Of transportation, with broad powers
to encourage, promote or require action
on the part of carriers in order
to avoid duplication of service, prevent
waste and encourage financial reorgan-
izations." The Federal co-ordinator
will work with groups Ct railroads to
carry these instructions into effect.
The other steps recommended by the
President are the repeal of the recap
ture clause of the Interstate Commerce
Commission act-under which earnings
OF railroads in excess of six per cent
on their valuation are segregated and
one-half Of these excess earnings are
placed in fund to be disposed of by
the Government-and the placing of
railroad holding companies and corpo-
rations under the jurisdiction of the
Interstate Commerce Commission. The
commission has heretofore declared
the recapture clause to be unwork-
able and impracticable Through the
use of holding companies certain
persons have sought by indirection to do
what they are prohibited from doing
directly. The proposal to place these
holding companies on all fours before
the law and the Interstate Commerce
Commission with the railroads them
selves is entirely wise.
The President in his message point
ed to the fact that available traffic is
not sufficient at this time to utilize
existing railway facilities and the sup
Elementary facilities provided by new
and other forms of transportation. He
still regards, he said, the railways as
the main arteries of commerce in the
United States. In these circumstances,
it has been obvious that something
must be done to fit the railway services
as far as possible, for the benefit of
both the public and the railroads, to the
existing traffic, with the hope that as
business improves more and more of the
present facilities may be put back to
use. The railroads themselves have
been anxious to bring abovt such CO.
ordination and saving as is now pro-
posed under the administration emer-
gency railroad bill. They have con-
sidered the feasibility of setting up a
co-ordinator of their own. But it is
obviously easier for the Government to
take such action. The railroads have
strongly urged immediate legislation to
regulate motor bus and motor truck
carriers.
Generally speaking, the bill seems to
be pleasing to the railroads as far
as it goes, although that section which
undertakes to deprive railroads of &C
cess to loans from the Reconstruction
Finance Corporation and to prevent
bond issues until the Interstate Com
merce Commission shall find that there
is reasonable prospect that the car
riers can survive the existing depression
without reorganization may be under
attack. The feeling exists that this
provision might hamper a very large
number of the railroads.
Railroad labor, on the other hand,
is prepared to fight the measure unless
some provision Is written into the
bill which will take care of the en-
ployes who may be thrown out of work
through the coordination of services
now in contemplation. 1t has been esti-
mated that perhaps 100000 employees
will lose out under these co-ordinating