Evening star., 1934-01-20
EASTMAN OUTLINES
TWO RAIL PLANS
Apparently Intends Merely to
Facilitate Study by M
Congress.
BY the Associated Press.

BY the Associated Press.
While saying it would be "unwiSe"
to move Immediately for consolidation
or Government ownership Of the rail-
roads, Joseph B. Eastman in his report
today outlined two plans involving
Federal control.
Apparently these were intended
merely to facilitate congressional study
of legislation affecting the railroads.
the plans not being recommended by
Eastman.
One was for outright Government
ownership of all railroads. The other
called for a group of Federal corpora
tions to control vast consolidated sys-
TENS.
The authorship of the plan for Fed
eral ownership was not disclosed, but
many considered it written in large
part by Eastman. The other was writ
ten by Leslie Craven, a technical eX-
pert On EastmanS staff.
Ownership Plan Outlined.
The ownership plan follows, in es-
sence. with a note that it was in
tended to suggest some Of the posi-
bilities":
Ownership: Properties to be owned
by Federal corporation, chartered Dy
special act of Congress, the stock 10 De
nominal in amount and owned by the
United States. Corporation to be named
the United States Railways me
properties would be acquired through
bonds OF this corporation, guaranteed
bv the Government. -
Management: United States Rail
ways to be managed by board OF nVe
possibly seven) public trustees, ap-
pointed by the President with the ad-
vice and consent of the senate, lot
terms Of ., 4, 6, 8 and 10 years, re-
spectively, reappointmentS 10 be 1or Az
wears. Trustees to be removable only
tor cause and to have salaries the same
as those paid justices Of the supreme
Court.
United States Railways to be con-
Quoted after the manner OF a private
corporation and upon self-sustalning
basis SO far as possible. Could be
made subject to civil service regula-
tions, if desired, but probably not
necessary.
Trustees to have full control over
all salaries and wages, subject to com
plete right of organization and collec-
tive bargaining by employees. and TO De
prohibited from employing, dscharging.
promoting or demoting any officer or
employe at the solicitation of any
pu5lic or political party officer. Such
officers to be prohibited from such
solicitation.
Could Subdivide System.
Trustees 10 have full power to sub
divide properties as they see Mt for
purposes of management and opera
ton, and TO create subsidiary Federal
corporations for this purpose II deemed
advisable
Advisory Council: Such a council to
be made up of "a unpaid members Sc
lected by groups specified in the act
and representing business. agriculture.
labor. and the like Advisory council
TO be consulted by trustees on such
questions of general policy as either the
council or the trustees request De SO
considered.
Taxation: Taxes to be paid by
limited States Railways to the Federal
Government like any private corpora.
ton, and also to be paid to states ana
municipalities, provided they agree 10
uniform taxing provisions approved by
the trustees.
Bonds: Trustees to have power to
issue bonds of the United States rail-
ways at their discretion. to provide Tor
new construction or additions and bet
terments. to purchase properties OF
other transportation agencies, and 10
nroyide for debt maturitieS If no other
funds are available for this purpose
Sinking funds to be provided for all
bonds.
Would Meet Earnings.
Upotar. TructaeS IN he under duty
so far as practicable. of producing net
earnings sufficient to meet all charges,
including bond interest and sinking
fund provisions.
Deficiencies: Government to meet
any deficiencies in earnings. but the re-
payment of such appropriations TO be
charge on the future earnings OF the
corporation.
Regulation: United States Railways
to be relieved of regulation by the In
terstate Commerce Commission, except
over rates, accounting, certlncates lot
new construction and acquisitions OF
other transportation agencies, but com
mission to have no power to suspend
changes in rates.
.Other agencies: United States Rail-
yavs TO have power to acquire other
agencies of transportation. subject TO
approval of commission, including terms
and conditions.
The essence of the Craven plan fol-
lows:
Compulsory consolidation to be in
aueurated. at any time within but be-
fore the end of a relatively short PERIOD
say. four years. and succeeding such CO.
ordinative activities in the way OF pool
ing. ETC., as may be required under the
present emergency legislation.
Corporations Proposed.
The creation of Federal corporations
to hold the consolidated systems, upon
the boards of which will be public
representatives, who will be members OF
the staff of a permanent Federal CO.
ordinator.
The creation Of the office Of per
manent co-ordinator, q non-politlcal
executive, acting as co-ordlnatlve
administrative agency, assigned Ger
tain of the administrative functions
Of the commission. and having impor-
tant functions with reference to re-
search work and labor problems.
"A new consolidation statute pro-
yiding for q flexible procedure.
AN amalgamation board. established
as a special administrative tribunal.
with power to approve or modify the
proposed plans, its fact determinations
to be final, unless arbitrary or based
upon errors of law.
"A declaration of policy by the Gov
ernment to establish rates fnsuring
adequate railroad earnings, but guar
anteeing no certain returns.
, nntroro anr AnDFcrEn