Evening star., 1937-12-10
Urges Quick Rule
ON Higher Rate
Petitions. |
SUBSIDY PLAN
BELIEVED OUT
Federal Control of
Lines Opposed
by President.
BULLETIN.

ruled today a petition by
the Nations railroads for
an immediate IS per cent
increase in freight rates.
Disappointed railroad
leaders expressed belief
that the commissions re-
fusal might mean a delay
in obtaining financial re-
lief until next April l.
The action was an
nounced at the outset of
the afternoons hearing
on the railroads request
for a permanent rate
boost.
Iy the Associated Press.
President Roosevelt said today the
Interstate Commerce Commission
should seek to preserve the solvency
Of the Nations railroads, with a view
to retaining them under private man
agement and private ownership.
Discussing the financial situation
Of the carriers at press conference,
fha proci1ar,t caiI tho pttiaGnr firoa .
determination was reached on the
roads application for higher freight
rates the better it would be all around.
He said he wanted to avoid Gov
ernment ownership, but, at the same
time, he reminded that railroad
receiverships could not continue with
out some steps being taken to adjust
their financial set-up.
Question of Subsidy.
Asked If q Government subsidy was
sition was one which would be working
toward straight State Socialism and
once that started the same probably
would be done with oil and other
Industries.
Mr.. Roosevelt said the administra-
tion had no definite plan to help the
railroads, adding that the Interstate
Commerce Commission was the only
Federal agency authorized to deal
with the problem.
Asked If the Reconstruction Finance
Corp. was planning more loans to
railroads, the President said he had
discussed that Wednesday with Jesse
n. Jones, R. F. c. chairman, only in
relation to one or two roads which
seem to need very small amount of
temporary financing.
He shook his head when asked if
the post of Federal co-ordinator of
railroads was to be revived.
Describing the railroad situation as
the most difficult faced by the Ma
tion, the President recalled a 1884
statement by former Co-ordinator
Joseph B. Eastman saying the carrier
situation had improved temporarily,
but that no one on the I. C. C. felt
. permanent solution was at hand.
No Nearer Solution.
He added the question was no nearer
. permanent solution today.
The President indicated the roads
must readjust overcapitalizations and
abandon more thackage in areas that
might be served by only one railroad
and where trucks and buses could do
the job.
For example, he said, if road was
capitalized for s2OO,000,O0o and had
only net earning power for a $780,
100000 capitalization, a question was
posed what to do about it.
Pressed for an explanation, the Pres
ident replied that you could not get
blood out of stone.
Mr.. Roosevelt said regarding the
question of competition that there
had grown up a natural thing, namely,
that shippers in given community
felt if they had two roads to choose
between they would get better service,
even If the rates were the same.
In many of thse instances, he con-
tinued, one railroad could have han
died the whole business.
Consultations Seen.
He said he thought the country was
coming to gradual elimination of
competition in service between parallel
roads just for the sake of competition.
If that is the trend today, he said,
It meant further consultations and
abandonment of more trackage.
He felt there was still large
amount of trackage that could be
abandoned.
(See RAILS, Page A-14.)