Evening star., 1939-03-19
Bold Plan Advanced
To Avoid Railroad .
Naturalization IA
Would Turn Lines Over
To Monoeements for
One Lost Chance
BY HENRY PAYNTER,

Associated Press FINANCIAL writer.
NEW YORK, March 18.-Some
leading railroad executives and Wall
Street bankers said today they were
studying a new, bold plan for rail-
road legislation as a last resort to
stave off naturalization in some
FORM"
Recent news from Washington has
convinced them. they said, that rail-
roads would obtain only piecemeal,
temporary help from pending legis-
lation, and that remedies remaining
under consideration out of those
originally proposed, would do little
more than postpone a fate they are
now coming to fear is inevitable.
One internationally known banker
active in railroad affairs for decades,
summed the problem up this way:
"A whole generation of railroad
management executives has grown
up so calloused to regulation that 1t
seemingly has forgotten that the
only real alternative to national
ization in some form is real man
agement."
summary OF proposal.
The proposal, which he initiated
and which is now being studied by
some leading executives in the rail
and banking field, amounts to this:
LET railroad managements really
manage the railroads for trial
period If they fail, throw them out
and let the Government take over
If individual executives or roads
given this final chance dishonesty
take advantage of their restored lib
critics, let them be heavily fined or
jailed; let the penalties be so severe
that no executive, no railroad, would
dare to resort to those ancient
abuses which gave rise originally to
over-regulation.
The plan. in its present, tentative
phase, has two main elements:
/. Eliminate arbitrary competition
2. Make justified speedy rate in
creases or decreases possible be-
tween fixed limits, with enlarged
protection against discrimination.
1t calls for these concomitant
points:
/. No reduction in pay; no laying
off of any man now employed: /:
hiring of future employees on exist
ing brotherhoods basis: but elimina-
tion of some existing arbitrary rules
governing the use of employees, to
make efficient operation possible. -
2. Full compensating protection to
shippers and passengers affected by
route. schedule or rate changes.
3. Opportunity, under existing
forms of regulation, to earn
money: to save money when pos
sible," to "adequately reward in
vestors and efficient management"
Human Relationship Problem.
The plan is based on the assump-
tion that labor and the general pub
lie believe the capitalistic system has
brought efficient management gen.
orally in other utility and industrial
fields; that the railroad problem
fundamentally is primarily hu-
man relationship problem" which
arose and rests in intrenched an
tagonisms'; that piecemeal, patch
work attempts to alleviate "over-
regulation" which grew out of those
'antagonisms" and ABUSES" woulc
only postpone temporarily inevitable
naturalization in some form.
The present alternative propose,
Is predicated on the belief rail man.
agement has Learned it's lesson,
would welcome final chance" and
generally speaking. would not now
be disposed to take dishonest ad-
vantage of such an opportunity.
Specific Proposal.
Specific proposals in rough draft
form were outlined as follows:
/. Railroads, if not nationalized
should be placed on a sound eco
nomic basis; should be allowed tc
compete or not compete, to restrict
competition, to pool services. or to
effect consultations on the basis
of economic efficiency, but that the
interests of passengers, shippers and
labor affected should be protected in
making these great changes.
2. Investors and efficient mana
gers should be allowed to profit by
efficiency; rates should be raised
and lowered quickly, within pre-
scribed limits, on a five-day basis
so that railroads can skim of
some cream" in good times and cut
rates in bad times both, on basis
Of clearly prescribed indices, but
that unwarranted, or discriminatory
rate changes should be subject to
retroactive correction for passengers
and shippers and, If malicious or in
territorial, subject in addition tc