Evening star., 1938-03-15

"OSiuW out o! LFe WHtLe House
meeting is expected to come some
plan for reorganization and con-
Solidation.
By the Associated Press.
President Roosevelt at White
House conference today undertook to
sift suggestions for aiding the Ma
tion's financially distressed railroads.
There were some indications Mr..
Roosevelt may send a special message
to Congress recommending a rehabiI-
tation plan after thorough canvass
of the problem.
Before meeting a group of IA per-
sons representing railroad manage
ment and labor Government officials
and Congress, the President had a
15-minute talk with Chairman Walter
M. w. Splawn of the Interstate Com
merce Commission.
Secretary Morgenthau was a last
minute addition to the list of con-
ferees. A White House aide said the
Treasury head would attend because
the meeting was expected to stress the
financial assistance for the carriers.
Informed persons predicted the first
result Of the conference would be an
exhaustive study by experts of the
various proposals, in order to develop
comprehensive program both for
immediate relief and for long time
restoration Of the railroads.
Would Entail New Laws.
Chairman Lea OF the House Inter-
state Commerce Committee, one Of the
conferees, said such program would
entail new legislation, which would re-
quire months to complete.
Mr.. Lea said enforced consolida-
ton mo doubt will be sponsored and
considered" as a long-range remedy.
but he expressed the opinion that
financial reorganization of many debt
ridden roads would be viewed as
means Of quicker relief.
Such reorganization would reduce
the bonded debt on which the roads
have to pay annual interest charges.
Chairman Wheeler, Democrat, of Mon
tant Of the Senate Interstate COM
merce Committee. another of the con-
ferees. has suggested this might be ac-
complished in part by converting
bonds into stock on which dividends
would be paid only when they were
earned.
Railroad spokesmen have contended
their difficulties were caused by in
creasing expenses and falling reve-
nues. They said the recent freight
rate increase granted by the Inter
state Commerce Commission was in
adequate. There has been some talk
of asking the commission for another
increase.
One spokesman said that what
we'd like is little preferential tax
treatment" to permit roads operating
at profit to build up a surplus against
lean years
Another plan under consideration
among railroad executives is a wage
reduction. Both this and the proposed
new rate increase will be discussed
in Chicago Friday by members Of
the Association of American Rail-
roads.
oppose Forced Mergers.
Railroad executives generally have
been represented as opposing enforced
consolidation of competing lines. They
contend consultations should be un-
dertaken voluntarily by the roads
themselves.
Mr.. Roosevelt has suggested con-
solidation of some competing lines
and abandonment of improbable
trackage, where it could be accom-
plished without depriving communities
of transportation service
Other proposals which have been
advanced include temporary govern
ment leasing of all railways and their
complete reorganization under Fed
eral direction; expansion of l. C. c.
authority over reorganization under
Federal direction; expansion of 1. c.
c. authority over reorganization cases
so that it could scale down capital
structures; recreation of the posi-
ton of Federal railroad co-ordinator:
creation of special Federal court
to speed up reOrpa niZation eases