The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-12-24
BY THEODORE PRINCE
Times Special Writer

=
/ posed reorganization plan all rail-
roads would have a financial stake
in all the roads, but they could OBJ
tain certain powers, inmunities
and direct responsibilities to con-
troll and direct their own destinies.
To do this, they should, in addition
to buying stock in this corporation,
assume certain financial response
bilities or burdens, for the corpora
ton would have to be supplied with
income as we'll as capital. The gov
eminent would lend S2,000000, 900,
a huge sum when it is considered
that during the war they only
loaned s1,O8O,OOO0OO. This was all
paid back, except about $4,000 900,
not computing profits on interest
made by the government.
1t seems to be forgotten that the
inability of the weaker lines to COM
pete with the so-called rich roads,
complexities the rate structures. The
latter roads, on account of superior
plant and equipment, can carry
freight at less cost than the others.
So it is clear how all these factors
are intimately connected. BY treat
ing them separately, as we have in
the past. we have achieved nothing.
A common responsibility with init
mate cooperation can alone bring
order out of our chaotic tranSporta-
ton industry.
The corporation should be en-
titled to obtain the following reve-
nue.:
(a) The difference charged by it in
lending money to the railroads, say, at
or per cent and that paid to the
Government, namely per cent.
tb) 1t should receive 1 per cent on
all gross revenues of the railroad.
Co Railroads earning net income (after
payment of all proper charges) should pay
1 per cent thereof annually to the cor
poration.
Cd Each road should pay 10 per cent
of economies effected by reason of the
operation of the corporation. A sliding
scale of such economies, dependent on
gross revenues of all the railroads from
SO. 0OO, 600, 600 to $4,000, 900 900 annually,
would be set up, so that as traffic and
business increased, larger percentage
of economies would be forthcoming. A
method for determining such savings Is
provided for in the plan.
The proposed plan endeavors to
bridge the intervening gap between
depression and prosperity. The cor
poration would pay or retire its debt
by:
/. The debenture bonds of the United
states Government. by which S2.OOO, OOO.-
000 would be lent to the corporation by
series of sinking funds in p wears.
,. When and if the above could be con-
sidered by the corporation as fairly and
properly set up, then the corporation
would have to negotiate with the RFC TO
take over within a period of years the
loans made by it to the railroads out OF
the Governments debt on some practical
refunding system.
g. To repay to the railroads which made
contributions out of their net income to
the corporation.
4. And finally. at as early a date as pos
sible and consistent with the purpose of
the plan. to set in motion a plan by which
the railroads should reduce their long
term Indebtedness.
= After a certain period. determined by
the regulatory bodies set forth herein. no
bonds should be issued without sinking
fund provision for their reduction or even
tual retirement.
This would give every railroad
some representation on the board of
the corporation; giving each a right
of supervision over all, and all
right of supervision over each. 1t
also would give all the railroads,
with a single eye and purpose, prof
liable and efficient management, as
we'll as a financial setup that
would enable them to become finan-
cially sound when normality re-
turned.
In prosperity they would pay off
debts and so prepare for the eco
nomic recesSions that recur in our
present economic system.