The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-07-10
SENATE TO EYE
RFC APPROVAL
OF REVAMPINCS
Preparing for Rail Inquiry,
They Plan to Be Watch
dog Over Funds.
BY THOMAS l.. STOKES
Times Special Writer

WASHINGTON, July 10.-The
Senate Interstate Commerce Com
mittee has set itself up as a
watchdog" TO prevent RFC ap-
proval of any railroad reorganiza-
tons which it believes may not be
in the public interest.
Senator Wheeler ID, MontD
chairman, served notice of this
purpose as he and experts en-
ployed by the committee began to
lay the groundwork for the in
quiry ordered by the Senate into
financing of railroads, reorganiza-
tons, receiverships, holding COM
panies and banker control.
The scope of the which
may rank with famous invesUiga-
lions of the past-was indicated
when Joseph B. Eastman. federal
transportation co-ordinator, sent
to the committee list of 18 rail-
roads. some of them now in re-
ownership and with reorganization
plans pending before RFC, as of
lering a good croSs-section for in
vestigation.
Hearings Weeks Away
Though public hearings probably
will not begin for several weeks,
Senator Wheeler has put his COM
mittee in standby" position be-
cause of the activity of the RFC
IN pushing reorganization plans in
vOlving several roads.
The committee, he explained, will
keep its eye on reorganization &C
Invites, especially those which en-
visage additional government loans,
and if it believes the public interest
is being iepardized, will swing open
its doors. call in all parties at in
terest. and lay the whole story on
the public record.
The committee has gathered al
ready, under the direction of Max
Lowenthal, New York lawyer and
railroad expert, who will be its CHIEF
counsel, mass of material on re-
organization now pending before the
RFC. The committee, in effect, will
constitute itself a public counsel.
Chairman Jesse Jones of the RFC
is to confer soon with the Van
Sweringen brothers, operators of the
Missouri Pacific, about a proposed
reorganization plan. Financial OPP
erations of the Van Sweringens have
been criticised in and out of Con-
greSs, following investiga lions by the
Senate and the Interstate Com
merce Commission.
Sought S75,OOO,OOO
Only a few weesk ago it was dis
closed before the Senate committee
that they were seeking $4,000, 900
from the RFC under plan which
would leave in control the Van
SweringenS and j. P. Morgan 81 Co.,
to whom they owe $48,000000.
Recently Chairman Jones an
nounced the readiness of the RFC
to advance S24 100000 to the Chi
cago, Milwaukee, st. Paul q Pacific
which, though reorganized seven
years ago. is back again for help.
The same figures appear and re-
appear in reorganization of the big
railroads and. moving behind the
scenes. are the two big banking
groups which do most of the ma
tons railroad nancing-Morgan &
Co. and Kuhn, Loeb & Co. They
will he kew figures in the inquiry
here.
Besides the Missouri Pacific and
the st. Paul, roads which have re-
organization plans pending before
the RFC are the Denver & Rio
Grande, Western Pacific. Chicago &
Eastern Illinois, Chicago e. North
western, st. Louis-San Francisco.
Chicago, Rock Island e. Pacific and
Minneapolis g. ST. Louis.