Evening star., 1935-03-20
RAILWAY FINANCE
PROBE SUPPORTED
BondhoIders' Agent Halls
Wheeler Resolution as
"Banker Rule" Blow.
BY the Associated Press.

BY the Associated Press.
To protect millions of investors and
to rid the railroads of banker con-
troll" Charles A. Beard, representing
an independent bondholders' COM
mittee, today urged the Senate Inter-
state Commerce Committee TO adopt
the Wheeler resolution for an in
vestigation of railway financing.
In a lengthy. prepared statement
the New England economist-historian
enumerated long list of railroad
systems, including the Van Sweringen
lines, which he said still we're being
| operated under the domination of
New York bankers, despite the law
prohibiting banks interested in rail-
roads from having directors on their
boards.
Held Constructive Effort.
He described the resolution as one
of the great constructive efforts of
the depression period" adding:
This resolution and the inquiry for
which it calls are means for making
| those who have wronged the railroads
and railroad investors pay back the
millions which they got wrongfully
out Of the pockets of the American
investing public.
'It is a means for building a sound
foundation for the future, so that the
railroads will be run as a railroad in
dustry-not as an adjunct of Wall
Street; so that they will be encouraged
in competition-not in stock market
speculation; so that they will serve
| first the public interest, be fair to the
employees and pay decent return to
their investors"
Morgan Control Alleged.
Beard said the real control of the
large Van Sweringen lines was in the
hands of j. P. Morgan & Co. and
New York banking syndicate formed
by that company.
This Morgan syndicate is cred
itor of the Van Sweringens in the
amount of $4,000. .000," he asserted.
THE Van Sweringens occupy
chair at the railway poker table, play
ing with the biggest chip in the game,
but behind them stands the Morgan
banking syndicate with the power at
any time to deprive the Van Swer-
ingens of their seat at the table and
to send them to the breadline."
Beard said railroad reorganization.
instead of dislodging. had intrenched
banker control. In this connection he
mentioned the Chicago. Milwaukee g.
st. Paul reorganization of 1928, in
which he said Kuhn. Loeb e. Co.
arranged for themselves a big ma
jority of the board of directors"
Receiverships Cited.
Look at the railroad receiverships
and bankruptcies Of the Middle West
and South-the Rock Island. the
Frisco the Missouri Pacific. the New
Orleans. Texas & Mexico, the Wabash.
the Seaboard Air Line-roads hun
dreds and even thousands of miles
away from New York City," said
Beard
"On the so-called protective COM
mittees' which had seized the reins
of power you will find the names of
partners, close friends and financial
allies of such firms as j. P Morgan &
Co., Kuhn. Loeb & Co.. J. e. w. Selig-
man g. Co., Dillon Read g. Co.. Ma
tional City Bank. Bankers Trust Co..
Chase National Bank and Guaranty
Trust Co. As control was, so control
is-in the same hands as before, and
more than before"
Chairman Wheeler said the COM
mittee later would hear members of
the Interstate Commerce Commission
and Jesse H. Jones, chairman of the
r. F. c.