The journal. (Caldwell, Ohio) 1934-1961, 1958-08-21
with Rep. John Henderson
Loans To Railroads

though deemed necessary by
most members of Congress and
seemed supported by public
opinion, may mark revolution
ary departure in government
l refer to the railroad
and particularly to
that Part of it which provides
for the Federal guarantee of
loans to needy railroad COM
panies.
The bill authorizes the Inter
state Commerce Commission to
guarantee up to a half billion
dollars of loans made by private
sources to railroads. These loans
must be repaid in Is years and
may be made either for the pur-
chase of capital equipment or for
maintenance. If made for the
latter purpose, the railroad may
not declare dividends during the
period the loan is outstanding.
There have been subsidies of
one sort or another granted to
certain big industries in the past,
but this is the first example of
the government lending its
credit to any major industry.
The committees of Congress
which studied the situation are
convinced that the program is
needed to keep the railroad in
dustry intact as an important
transportation facility both in
time of peace and time of ma
tional emergency. | will concede
that the immediate situation
compels life preserving action,
but l am certain that some deep
seated difficulties need to be
treated as we'll as the superficial
symptoms. Underlying the econ
omic distress of some of our
railroads who find that their
earnings are not sufficient to
provide for ordinary mainten-
ance or who cannot obtain funds
for capital improvements or
maintenance without Uncle Sam
signing the note and mortgage as
a guarantor, are some basic prob
lens which cause investors and
lenders to shy away from rail
road securities. These are the
problems which the industry
needs to treat. Congress should
be cautious that in its enthus-
iasm to be helpful that it not
create an atmosphere which in
stead of being helpful might
actually be harmful to a free
enterprise industry.
The railroad lending program,
while unique in being directed
toward one of the nations major
industries (and one of the larger
accounts on the county tax dup
licate of most any county) is only
one of the many instances In
which Uncle Sam acts as guar
antor or lender. The G.. l. loan
is one of the prime examples that
comes to mind as we'll as similar
programs in the housing field
World Bank, Export-Import
Bank, the Small Business Ad-
ministration, the Development
Loan Fund are others. New pro-
grams are being considered this
season whereby the government
would guarantee or provide loans
for college educations, for equity
funds for small businesses, ano
for municipal facilities.
The amazing thing is that witt
national debt ceiling now in
| creased to 288 billion and the
actual debt almost as much, pre-
senting an almost insolvent pic
ture in itself, that a guarantol
of such credit rating would ado
much stature to the promissory
note.
| Soviet Aluminium
Recently, the Department o
| Commerce has announced that ;
| special study of emerging work
practices" in international trade
is being made by the Depart
ment's quasi-official Bushes
Advisory Council. Behind thi
vague language lies subjec
which Americans will hear mucl
more about in future months
That is the Soviet Unions trad
offensive throughout the world
Trade, like every other sub
iect, is regarded by the Russian
as another weapon in thei
single-minded plan for worl
domination. 1t can and is nov
being pushed by the Kremlin'
masters as a clever and aggres
sive tactic to harm the free
worlds industry through injuri
Gus competition and, thus, bull
economic situations which can b
profitable to Communism Wher
ever, wherever, and howeve
they can be created to gain sup
remacy in the world. In coun
try after country, reports re
ceived in Washington show tn
trade offensive is operating flu
scale. How it is to be combate
requires at least as much imag
nation and versatility on our pal
as the Russians are putting int
it.
All of this sounds like remot
| o4z o,.l,, ,,o1a+aJ fo tho intoy