Evening star., 1933-09-20
RAIL EXECUTIVES
SALARIES REDUCED
Action Taken SO Carriers
Can Get Lower Interest
Rate From R. F. c.
BY the Associated Press.

Salaries of railroad executives on
most lines which have borrowed money
from the Reconstruction Finance Cor
poration have been reduced SO the car
riers can obtain q lower interest rate
on loans.
With the exception of a few lines
which have so-called work loans, or
owe only small sums all roads in debt
to the corporation have submitted SAL
airy schedules and permitted r. F. c.
officials to stipulate the salaries that
could be paid.
This was in line with an announce
ment by the corporation nearly three
months ago that If the roads would
reduce salaries of executives the in
terest on railroad loans would be cut
from 5l2 to S per cent.
Scales Not Same.
The scale of reductions, however
was not the same in all instances.
Carriers in comparatively strong posi-
tion, despite their having to borrow
from the Government. did not receive
as neaVy cuts as others less well off.
The railroad division of the corpora-
ton Is giving close supervision to the
financial position Of the roads owing
1t money and those in financial difi-
culties are getting the closest sort Of
scrutiny.
Consideration is being given to reor-
ganization and consolidation Of lines
which owe large sums to the CORPORA
ton.
The plans, with one exception, still
are in the embryonic stage, but one on
cial said yesterday that consultations
were being given serious thought. This,
he explained, was especially true of
roads that in tho - f,r,
under the Federal bankruptcy law
passed by the last session of Congress.
The consolidation of the Western Pa
cif1c Railroad: the Denver g. Rio Grande
Western Railroad and its subsidiaries,
the Denver & Salt Lake Railway and
the Denver & Salt Lake Western, has
been suggested. The Interstate Com
merce Commission and officials Of the
Reconstruction Corporation proposed
this as a means Of solving the financial
difficulties of the roads.
Officials Of the Chicago, Burlington
& Quincy Railroad Co. are seeking an
interest in the consolidated system
through purchase of stock interest in
the Denver & Rio Grande Western.
This plan was understood to contemplate
giving the Missouri Pacific Railroad
half interest in the Rio Grande. and the
Western Pacific and the Burlington
each quarter interest.
Plan Being Worked Out.
The plan is being worked out in New
York by q committee composed of
President Pyeatt Of the Denver q Rio
Grande Western; L. w. Baldwin, presi-
dent and trustee of the Missouri Pacific
and a member of the Operating Com
mittee for the Rio Grande: Ralph Budd,
president Of the Burlington rulte; Ger
aid Hughes, president of the Denver &
Salt Lake. and T. M. Schumacher, tllsir-
man Of the Executive Committee of tie
Western Pacific Railroad Co.
The Rio Grande last year borrowed
$3.50, 900 from the Reconstruction Cor
poration to construct the Lotsero cutoff
through the Denver & Salt Lake West
ern. It also borrowed large sums to
pay interest on its debts
The Western Pacific likewise borrowed
from the corporation to meet its debts,
but recently when it asked $1,000, 900
to pay interest the Interstate Commerce
Commission and the corporation turned
down the request. Commissioner Meyer
wrote to officials Of the road suggesting
the consolidation as possible way out.
The Western Pacific was able to meet
its interest payments despite the re-
buff. however.
The other reorganizations still are in
what one official called the mention"
stage.