Evening star., 1934-01-20
Step Too Costly and Radical
for Public Mind at Present,
Co.ordinator Says.
DELAY IN CONSOLIDATION
OF LINES ALSO URGED
Management of Carriers and Credit
Conditions Held to Hint
Radical Changes.
BY the Associated Press.

BY the Associated Press.
Answering the first of a series of
questions asked him by Congress, Jo-
seph B. Eastman-Federal co-ordina-
tor of transportation-he today the
time was not ripe for either Nation
wide consolidation Of railroads or Gov
ernment ownership.
His answer to the query, "1s there
need for radical or major change in
the organization. conduct and regula-
ton of the railroad industry, which
can be accomplished by Federal leg
islation?" was transmitted to President
Roosevelt and Congress by the Inter-
state Commerce Commission, which
the law requires to study and COM
ment on his findings.
I. c. c. Takes No Stand.
The commission submitted the re-
port, with synopsis Of Eastman S
studies, but called attention to the fact
that it neither approved nor disap-
proved the findings.
Eastman concluded:
The ultimate solution OF the rail-
road problem is public ownership
and operation.
The country is not now in a con-
dition to stand the financial strain
of acquisition OF these great prop
critics.
A grand consolidation plan is i'm
practical at this time because the
country is not in condition to stand
forced consolidation.
Eastman also reported that legal
structures placed on the co-ordinator OF
transportation, forbidding reduction of
employment through the co-ordinator' S
orders, have prevented much actual
accomplishment in the elimination OF
waste"
Would Continue Work.
He suggested continuation for an
other year, by executive order, of the
office Of the co-ordinator, and the pos
sibility that later it be made a per-
manent establishment with a small and
flexible staff.
He submitted a tentative plan for
public operation which he said lis in
tended only as a suggestion OF some of
the possibilities.
He found the Prince plan for con-
solidation into seven great systems
would not result in as much saving as
It's proponents had claimed.
Also, for the information of Congress
and without recommendation, he sub
mitted a plan for forced consultations,
through exchange of securities of the
railroads. into Federal corporations
under private ownership. with public
representatives on the boards Of direc-
tors. 1t was drawn by Leslie Craven,
professor Of law at Duke University.
Durham. N c., and a member of the
co-ordinators staff.
Eastman found, however. that all of
the plans for grand consolidation" had
the Objectionable feature of difficulty
of accomplishment under present con-
ditions and continuation of competition
at many points, to the disadvantage Of
others.
Three More Reports Due.
The Interstate Commerce Commits
first of four reports. The others, it
said. will answer the questions:
rs there need for Federal legiSla-
ton to regulate other transportation
agencies and to coordinate properly all
means of transport?
rs there need for amendments to
Federal statutes to improve details Of
the present system Of regulating the
railroads?
"Is there need for further Federal
regulation to improve railroad labor
conditions and relations?"
The Interstate Commerce Commission
In a full synopsis of the Eastman re-
port, selected from it many of the CO.
ordinator's conclusions. It said, in part:
Viewed from the standpoint of aver
age railroad conditions, the outlook for
credit is most unpromising Some rail-
roads will measure up to the necessary
standards with improving business con-
ditions; but many others will find 1t
1 slow and difficult process, even If times
improve.
Reorganization May Help.
Reorganization of insolvent carriers
will help, by reducing their fixed
charges, but they are difficult to effect
quickly, and affect credit in adverse as
well as favorable ways.
Nor is the situation from the stand
point of management and operation
satisfactory. The situation Is in
some respects like that of the States
prior to the adoption of the Constitu-
tion. These separate sovereigntties in
fact constituted a single Nation, and
they were linked together by the articles
of confederation. but the bonds of union
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