Evening star., 1933-02-01
RAIL LRE0RGAN|z|NG
REFORM IS URGED
|. C. c. Committee Criticizes
Pending Bankruptcy Re-
lief Attempts.
By the Associated Press.

Criticizing the pending bankruptcy
relief leGsletion's attempts to expe-
dite railroad reorganization, the Legis-
tative Committee of the Interstate
Commerce Commission today recon-
mended thorough going reform of
reorganization procedure" by creating
. special court or new department in
She commission.
The Legislative Committee, headed
by Commissioner Joseph B. Eastman,
expressed its views in a letter to Sena-
tor Hastings Republican, Of Delaware,
chairman of judiciary subcommit-
tee which is now considering the bank
ruptcv bill passed by the House Monday.
The commission group said the bill
recognizes the evils in the present
system of reorganizing railroads. but
instead of dealing with these evils at
the source, it attempts to. correct them
by means of Coordinate regulation"
The report said, however, if the more
fundamental legislation the commission
deemed necessary could not be enacted
at the short session. it preferred the
House bill to companion one written
by Hastings, but suggested series of
amendments.
Hastings said he would discuss the
commission report with Attorney Cen
eral Mitchell and Solicitor General
Thacher before calling hts subcommit-
tee together tomorrow. He hoped to
report the bill to the full committee by
next Monday.
More Time Allowed.
The Houee bill, beyond the railroad
angle. would enable individuals and cor
porations to put into effect through
Federal courts a program giving them
more time to pay or cutting dawn their
debts to proportions they can meet.
The railroad reorganization would be
worked cut under supervision OF the
Interstate Commerce Commission. but
the courts would have the power of ap-
proval or ,disapproval.
The Eastman report said neither
House nor Senate bill does anything to
correct the existing situation whereby
bankers not only seize the initiative In
formulating" the reorganization plans
of railroads, but due to their financial
power and the inertia of the numerous
widely scattered security holders, they
are usually able to select and dominate
the committees which are formed to
protect the interests Of the various
classes of security holders"
Reform Advocated.
"A thorough-going reform of reorgani-
zation procedure in the public interest, u
1t continued, would go to the root of
the matter, and would intrust the work.
ing cut of an equitable and effective re-
organization from the beginning to some
well-informed, well-equipped and disin-
terested branch Of the public service,
just as has been done to some consider
able extent in the case of banks and in
surance companies.
This could be done through special
court created for this single purpose
or through special department Of the
commission likewise created for the
purpose"
The report recommended, that if the
the House bill were put through, it be
amended to eliminate the requirement
that roalroad obtain commission ap-
proval before filing its reorganization
petition with a court. Instead, the
railroad would be required to file du-
pncate petition with the commission SO
it could advise the court.