Evening star., 1933-02-15
REPORT, COMPILED UNI
By the Associated Press.


the National Transportation Committee
published last night.
This report, the result Of more thar
| four months of work, most of whicl
was under the direction of the lat
Calvin Coolidge. has been anxiousl
awaited by large investors in the Ma
tion's $20,000,000 900 railroad system
who invited formation Of the committee
to seek solutions for the vexed trans
portation problem.
The committees conclusions-base<
on one of the most thorough survey
that has ever been made of the Nation
transport facilities by a disinterested
non partisan body-flnd the outlook fel
the roads "far from hopeless but as
Sert that rates cannot be based ON OBJ
solete capital structures, nor can com
peting forms of transportation b;
handicapped for the benefit of the rail
roads.
The committee urges sweeping con.
solidation of the roads, on O. regiona
basis, to eliminate vast and wastefu
duplication Of facilities and services. ane
that these groupings be enforced bl
governmental action where necessary
looking eventually to single nationa
system.
Managements Criticized.
AS an emergency measure, facilitation
or reorganizations where necessary to
reduce unwieldy and uneconomic capital
structures, Is urged, by revision OF
bankruptcy procedure. No broadening
Of the lending powers of the Recon-
struction Finance Corporation is found
necessary, although the committee
points out that adequate security" for
loans does not necessarily mean mar
ketable collateral"
Railroad managementS are taken to
task for not using, rather than seeking
to combat. such competing forms OF
transportation as trucks and airplaneS
and are severely criticized for seeking
Government aid without having first CO.
operated to eliminate wasteful competi-
ton and otherwise having taken ad-
vantage of all possible economies.
The report of the committee is signed
by Bernard M. Baruch, who as vice
chairman succeeded to the chairman
ship on the death of former President
Coolidge; by Clark Howell and Alex
ander Legge.
Former Gov Alfred E. Smith, while
explaining that he was in substantial
agreement with the greater part Of the
report, issued supplemental memo
randum, which, he explained, states my
own conclusions in my own language,
placing emphasis where I think it be-
longs"
Smith differed with the other men,
berS of the committee somewhat in his
recommendations for emergency action.
Both agreed that the recapture clause
should be repealed, retroactively. and
both agreed that reorganization should
be facilitated, but Smith specifically
proposed that a special debtor relief
act should be passed with a special
provision for railroads, its operation to
be definitely declared to end on jan
uary l, 1885.
Want Rate Making Rule Revised.
The committee recommended prompt
revision of the statutory rule of rate
making, asserting that the old theory
of trying to base rates on fair return"
on appraised value should be junked,
and adding I'VE see no reason why the
rate making rule should not say in
plain English that the railroads are
entitled to make reasonable profit
based on efficient operation and that
they are not entitled to earnings merely
to preserve present structures If over
capitalized"
Smith did not recommend Immediate
changes in rules Of rate making.
The comrlittee added to its emergency
recommendations the suggestion that
adequate security" for Reconstruction
Finance Corporation loans does not
necessarily mean marketable collateral, "
although, in common with smith, it
fly Ia ip0 f,n
lending powers of the corporation.
In its more general recommendations
the committee said the existing mechan-
ism of the Interstate Commerce Com
mission was inadequate, and urged IRE
organization without expansion or In
creased expense" while Smith ex-
pressed the view that the commission
should be abolished, and replaced by a
Federal department Of transportation,
under one man, or q bureau In the
Department of Commerce.
Regulatory jurisdiction, said the COM
mittee, should be extended to all forms
of transport, but should be used only to
the extent necessary for public protec-
ton. 1t said broad measure of Fed
eral and uniform State control should
be applied to motor transport. Rail-
roads, it felt, should be permitted to
enter water as we'll as other forms OF
transportation, but regulatory jurisdic-
ton should be extended to water rates
and practices.
Opposes U. s. Competition.
The committee urged that the Gov
ernment definitely shift its previous ap-
proach to the problem OF transporta-
tion in that 1t refrain from fostering
competing transportation with or among
the railroads as defense against
monopoly. This was condemned as an
ineffective effort to do indirectly and
Intellectually what the Government has
shown its ability to do through regula-
tion.
Inland waterways, the committee
said, should be made to pay their own
way or be. abandoned, and the St
Lawrence Waterway should be built
only if 1t can meet this test. Smith
fatty opposed building Of the st. Law
renee Waterway at this time. Govern
ment encouragement Of aviation was
recommended only during its ele-
mentary stages.
In regard to the work of Mr.. Cool.
idge. the committee report said. Just
as the committees work was nearing
close, it lost the distinguished direc-
his great talents unsparingly to thi
work. The report had not taken form
at the time of his death, but the COM
mittee has tried to carry on in the
spirit of his leadership"
The complete report stated first, "Ths
railroad system must be preserved
Changed conditions require new policies
but not abandonment of railroad regu-
lation.
Government policies should be freee
of any purpose either to favor or t
handicap any form of transportation
with relation to any other form w,
cannot solve the problem on the theor.
upon which horses are handicapped il
race In a fair field and no favo
competition should be permitted to de
eide the result.
DictatiOn Disfavored.
Regulation should not attempt l.
run the business Of transportation.