Evening star., 1938-04-11
Railroads
Continued From First Page.)

plan and promote action by railroad
companies to eliminate waste, aid
consolidation and coordination.
That the Interstate Commerce Act
be amended to broaden the powers of
the commission with respect to pooling
of earnings or traffic, to eliminate the
consolidation plan" and to approve
uniflcations; that the Authority be
permitted to intervene in such pro-
ceedings before the commission, and
make recommendations through the
commission to the President and the
Congress.
That the Authority investigate
economy and all types of transporta-
ton, encourage special fitness and
abate destructive competition.
That attention be given to railroad
financial abuses now under investiga-
ton by Congress.
Jones Comments on Report.
Mr. Jones comment on the I. C. c..
Committees report included the sug-
gestion that the Government agency
extending credit might have the au-
thority to require that the manage
ment Of a borrowing road be satisfac-
tory to it, or at least have representa-
ton on the board
He opposed any loans by the R. F. q
to pay interest on railroad bonds un-
less there was security to assure their
repayment, adding:
I'VE at the R. F.. c. have not felt
that the quoted market of securities,
railroad or otherwise, necessarily rep
resents sound value. We have tried
to make our loans on the basis of
sound value and of going country.
Many railroad securities are
selling at absurdedly low prices"
In an addendum, Mr.. Jones sug-
gested that track labor and probably
shop labor now on w. P. A. could be
allocated back to the roads that have
had to displace this labor to avoid
bankruptcy
William o. Douglas, chairman of the
Securities and Exchange Commission,
took differing view from Mr.. Jones
on loans, holding that they should be
made available to the carriers to meet
their fixed charges.
Mr.. Douglas found fault with the
report, believing the recommendations
"are not sufficiently concrete for i'm
mediate application as an emergency
program"
Gives Ideas on Loans.
He would make the loans only to
carriers not in receivership or bank
ruptcy and up to limit of per cent
Of the value of the individual carrier.
Basis for loans primarily would be
prospective earning power together
with the nature of the security Of
fered. Public interest" also would
be considered.
Henry Bruere, president of the Bow
cry Savings Bank Of New York City,
another of those asked by Mr.. Roose-
welt to give his views on the report.
expressed the opinion it would not
meet the needs of the present emer-
gency.
The railroads have had years OF
opportunity to put their houses in
order and have failed to do So" he
said. Indications are that a rear
rangement of physical facilities and
the stabilization of the industry will
not be done except under govern
mental compulsion."
Mr.. Bruere said emergency loans
would only load the carriers with q
heavier debt burden "and thus REQUIRE
eventually greater sacrifices in finan.
cial reorganizations. Such a proeram
is not economically sound unless it is
accompanied by program contem.
plating immediate sterilization of the
industry"
Stresses Earning Power.
"A program should strike boldly al
the causes of the trouble rather thar
mere alienation of the conse
quences," he continued. The Gov.
eminent should first improve thu
earning power of the railroads by
elimination of wasteful competition
and, with faith in its ability to do SC
within a reasonably short period
guarantee the interest on the funded
debt of the railroads not now ir
bankruptcy"
j. j. Pelley, president of the Asso.
ciation of American Railroads, rec.
commended for immediate aid increase.
in rates wherever that is practi.