The Waterbury Democrat., 1933-02-15
Railroads Of The
 Nation May Unite
 Under One System
National Transportation Committee Recommends That Program = Alfred E. Smith and Bernard M. Baruch Were Members of Committee

New York. Feb 15-(UP)- Sweeping changes In governmental regulation of railroads looking to- ward an eventual united single railroad system for the entire coun- try. and a realistic" sealing down of railroad capital structures, were recommended by the national transportation committee.
 The report, the most detailed and thorough study of the Ameri- can transportation system yet made, bore additional weight be- cause Alfred E. Smith, former gov ernor of New York state, and Der. nard NJ. Baruch, banker, both cer- tain to be influential in the Roose- welt administration, were mem- bers of the committee. Observers felt if was most likely the report would wield strong influence in democratic efforts to solve the difii- cult railroad situation. Calvin Coolidge headed the committee un- til his death.
 Smith, while agreeing for the most part with his colleagues, is- sued a supplementary memoran- dunn expressing "my conclusions in my own language, placing the em- phasis where I think 1t belongs"
 The committee felt consolida- tions were so important if railroads were to be returned to sound basis that they should be forced by governmental action in cases where arrangements are reluctant.
 All members of the committee agreed on two emergency meas ures. Baruch, Alexander Legge, president of the International Har- vester company, and Clark Howell, Atlanta publisher, agreed on two others to which Smith took ex- ception.
 First, the committee said, bank ruptcy procedure should be re- vised to facilitate corporate reor- ganization. Second, there should be retroactive repeal of the recap ture clause of the transportation act which requires profitable roads to help support weak ones.
 Smith did not agree with his colleagues that immediate revision of the statutory rule for rate mak- ing or a modification of the Re-. construction Finance corporation's special benefit of railroads, were needed.
 Smith went a step beyond the others on the question of corporate congratulations by favoring a deb-' tor relief act to expire January l. 1895.
 He warned insurance companies, colleges and trust companies that the "public will not stand" for their becoming "a preferred class of Investors who must get 100 cents on the dollar irrespective of the true value and condition of tho business (railroads) they have in- vested in." He proposed substitu- ton of bureau with responsi- ble head for the present interstate commerce commission.
 Smith warned the railroads they could not expect Ito make labor the only scapegoat in settling their difficulties." The committee as a whole did not consider the labor problem.
 The committee found most fault with the present statutes requir. ing rate making on basis of fair return on investment. It 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 all forms of competitive transport.
 The committee was organized October z at the request of insur- ance companies, colleges and sav- ings banks.