Bemidji Daily Pioneer Newspaper, August 25, 1921, Page 6

PAGE SIX T T T T T eI " LIMITED [ onew! wowt ZOWE! ' MICKIE,THE PRINTER'S DEVIL R s T AW, SENOR, NOL ARE ENJONING ZE MOS OF ALL W' HOY PLACES | EVER WLZ IN, ‘MG wasssussssaatsunnd | (S YK HEAUY- WRIGHT CHAMPEEN ! Talk It Over It pays to hash things over a bit now and then, because there’s a lot yf good meat in hash. The season- ing might be changed a bit, however. —What “Abit” It?— Worse Than the Hat After dodging a big hat for sever- al minute, a picture show patron said in a loud whisper to the wearer: “Madam, since you cannot remove your hat, will you please flap your ears back.” | —And Remove the Puffs— Ask the “Pep” Man | If a corset cover covers a corset, what does a corset cover? When a bottle is opened, is it call- ing Daddy when it says “Pop”? | What are the dimensions of a bath- ing suit? Where can a man buy a cap for his knee? Or a key for his lock of hair? Can his eyes be called an academy because there are pupils there? In the crown of his head, whntl gems are set? Who tunnels nose? Can the crook of his elbow be sent to jail? If so, what did it do? How can he sharpen his shoulder | blades? Hang, if we know. B —Do You?— What Is an Optimist? We have been told that an optimist is the man who continues to pay his bartenders’ union dues. —1It’s Bootleggers Dues Now— Took No Chances Bank robbers in a Nebraska town carried off the door of the bank vault. Perhaps they were afraid of the finger-print artist’s handiwork. —Safety First— Tastes Differ In some places they put editors in jail. Out in Edmonton, Canada, the citizens are planning to put stained glass in a church as a memorial to a deceased editor. Pray, what do these Edmonton papers print in their col- umns, anyway? ~—Maybe, Thankful He’s Gone— McADGG MAKES PUBLIC, DEAL WITH RAILWAYS (Continued From Page 1) sation to the hcarriers equal to the average of the net earnings of the three best years of their histary. namely from Julv 1. 1914, to June 30, 1917. These rentals aggregated for all proverties under federal con- trol, approximately $940,000,000 per annum. In these contracts (section 7) it was expressly agreed that the United States should have the right to de- duct from such rentals “all amounts required to reimburse the United States for the cost of additions and betterments made to the property of the company not justly charge- sble to the United States, unless suzh matters are financed or other- wise taken care of by the company| 10 the satsfactiom of the director general.” The director general agreed, however, not to deduct for additions and betterments in such a way to prevent the railroads from paying the fixed charges “they had theretofore regularly paid.” After sufficient allowance for such fixed charges the director general was free to deduct each year from the rentals due the railroads the amounts advanced for ‘“additions | and betterments,” even if such de- ductions should compel the railroads to reduce or defer dividends on cap- ital stock, unless, of course, the rail- roads financed such ‘“additions and betterments” to his satisfaction. In order, however, to relieve rail- road stock holders of apprehension as to how this power would be exer- cised, the director general consented to the following provision (section 7-a standard contract). “The vower to deduct the amount due by the company for the cost of | additions and betterments not justly | chargeable to the United States is| further declared to be an emergency power to be used by the director | general only when he finds that no | other reasonable means is provided by the company to reimburse the United States and, as contemvlated by the President’s proclamation and | by the Federal Control Act, it will be the policy of the director general te so use such power of deduction | s not to interrupt unnecessarily, the | regular payment of dividends as made by the company during the test period.” | This provision imposed no obli- | gation whatever on the director gen- eral as he could not go. beyond the | power conferred upon him by law. | 1t was a mere declaration of policy. While I was director general (year the bridge of his! Hartey;Davidson Motoreycles Bicyeles and Supplies GENERAL REPAIR SHOP 311 Sixth St.—Bemidiji | March 1920,) the railroads were not |nor to sell bonds or stock as they WALK ANOTHER SYEP 1918) and Walker D. Hines was director general (January, 1919, to required to pay for ‘additions and betterments” out of the rental due them at the expense of dividends, had theretofore done, to reimburse the government for these expendi- tures. The cost of such additions and betterments was generously advanced by the United States so that on March 1, 1920, when the railroads were re- turned to private control, they owed (and still owe) the United States the enormous sum of $1,144,000,000. These “additions and betterments” include “motive power and equip- vuw s Thace experditres were not forced upon the railroads. The rail- roads needed them and were glad to have the government lend them the money at 6 per cent ,which was less than the market rate. Congress had to appropriate this $1,144,000,000 out of taxes levied on the people and these very appropriations for legns to the railroads have been used by unfriendly crities as a basis for the charge that federal control was wasteful of government money, whereas the debt the railroads owe the government on this account is a valuable asset if those chargec with the execution of the act insist upon satisfactory security as the law requires. February 28, 1920, Congress en- acted the “Transportation Act,” pro- viding for the return of the rail- roads to private control on March 1, 1920, and gave the President, in substance, discretion within certain imitatons to set off aganst the debt the railroads owe the United State any indebtedness, arising out of federal control, that the United States might be found to owe the railroads. “any remaining indebtedness of the carrier to the United States in re- spect to such additions and better- ments shall, at the request of the carrier, be funded for a period of ten years from the termination of federal control, or a shorter period, at the option of the carrier, with in- terest at 6 per cent per annum, and upon such security as the President, in his discretion, may prescribe.” While it is true that the Trans- portation Act seems to confer upon the President descretion to deter- mine ,within certain limitations, how much of the debt the United States owes the railroads may be set off against the debt the railroads owe the United States, wevertheless the act does not contemplate that none of the debt of the United States shall be set off, but, on the contrary, asgumes that it will be because in express terms it provides for fund- ing only “the remaining indebtedness of the carrier to the United States.” At any rate, it is indubitably clear that under the law and the contract between the parties, the United States is not “morally and legally bound to fund,” as stated by the President in his message, the $763,- 000.000 of debt the railroads owe the United States for “additions and betterments.” The Pres have been misled -into making such a statement. All that the United States is required to do, legally and morally, is to fund, for ten years, any “remaining indebtedness of the carriers to the United States” after balancing of accounts. Up to July 15, 1920, the railroads had filed with the director general counter claims against the United States aggregating $758,000,000. Director General Davis says that the greater part of these claims is for under-maintenance of way, struc- tures and equipment, and that from 70 per cent to 76 per cent of that ypart is for alleged “inefficiency of la- bor.” The Director General char- acterizes these “inefficiency of lzbor” claims as “of a too highly indefinite, sneculative and contingent character to warrant consideration” and states that they are mnot contemplated by the “Standard Contract,” and that he hag refused to allow them. The In- terstate Commerce Commission hag, in a recent decision, upheld the posi- tion of the Director General. The president, in his message, sug- gests that the claims of the railroads against the United States may amount to $500,000,000. It is diffi- cult to conceive that the just claims of the railroads against the United States can approach any such sum. But assuming, for illustration. that they may, the accounted may be roughly stated as follows: Due the Tlnited States by the railro2ds, $763,000,000. i Due the railroads account of | alleged und~* maintenance, tenauce, $£500,000,000. Ralance “due United States, POSI-TWELY 'M ALL INY dent must |- \' COULONY YO SAVE MY ment the law now authorizes and contemplates. Such a settlement in- volves “no added expense, no added investment, no added liability, no added tax burden, and no added ap- propriation.” It involves only the risk of loss in waiting ten years for the remzinder, namely, $263,000,000. when the security may not be good but the risk the Esch-Cummins bill has already fastened on the taxpayers and t cannot be avoided. But the president proposes a new plan, namely, to defer for ten years at' 6 per cent interest the entire 7763.000,000 due by the carriers to " United States, and to pay to the rowminrs, in case, $500,000,000, for alleged undermaintenance claims, if that be the amount finally deter- mined. The president assures us that this involves, (1) “no added invest- ment;” (2) “no added liability;” (3) “no added tax burden.” Clearly he is mistaken. (1) There is an “added invest- ment” of the taxpayers’ money amounting to $500,000,000, because, instead of offsetting or cancelling $500,000,000 with an equal amount of the debt the railroads owe the United States, the treasury will have to pay the railroads $500,000,000 of new money. (2) There is an “added liability” of $500,000,000 because the treasury must continue to lend that sum to the railroads, some with good and some with poor credit, and a large loss may finally result. Thus, if the United States now cancels $500,000,- 000 with a part of the debt the rail- roads owe it, at least, to the extent of $500,000,000, the chance of loss or liability will be removed. (3) There will be an “added tax burden,” unless the advances and all interest thereon are finally repaid by the railrpads, because there v © Western Newspaper Union \_ WEATHER, ARE NOU NOY? & way for the United States to get $500,000,000 for the railroads except by taxation, unless it borrows on treasury certificates of indebtedness ~—the same thing, because these must be paid ultimately out of taxation. However, the plan may be consum- mated, whether through the War Fin- ance corporation or through the treasury direct, it remains clear that a new: credit of $500,000,000 is to be extended to the railroads for a pe riod of ten years. Whatever may be said, it is certain that the railroads should be required before any fur SNSRI / THURSDAY EVENING, AUGUST 25, 1921 OFFICER, | DEMAND on a 6 per cent basis (and I think it will be conceded that they cannot be) then the obligations purchased by the government should bear a higher rate or should be purchased at a price that will yield a high enough rate to at- iract investors. Otherwise the Unit- ed States must either continue to hold them -until a market, which will ab- sorb them at 6 per cent can be found (a very uncertain contingency) or dispose of them at a logs—a loss which on final! analysis mast be born by the taxpaves. T suppose you realize that, in addi- ther advancesiare made, to abandor the “inefficien¢y of labor” claims which the Director General declares are “too highly indefinite, speculative and contingeént to warrant considera- tion.” The railroads should not be allowed to get $500,000,000 more and remain at liberty to keep the gov- ernment in litigation over such im- proper claims for an indefinite time Nor should the government be forced to buy the obligations of the railroads at a higher price than this market value at the time. The bill as drawn obliges the president, in the exercise of the authority given him, to purchase such railroad securities on a basis that will return not to ex- ceed 6 per cent of the investment. subiect to such discount as may rep- resent the customary and reasonable oxpense of marketing such securities. The bill also authorizes the War Fin- unce corporation to purchase the se- curities from the president at the same prices, etc., and then prohibits said corporation from selling the se- curities at less than the original cost. If the War Finance corporation is to be thus used as the marketing agency, then, clearly, the securities should bear such'rate of interest as will per- mit them to be sold without loss. If railroad securities cannot now be sold may arise. tity which may be need it. responsibility to 19,478 $263,000,000. years at 6 per cent interest on the re- quest of the carrier, provided secur- ity satisfactory to the president is iven. This is the kind of settle- Fayment of this balance the- gov- | ernment would have to deicr for ten eating NEW uses for petroleum A products are developed, the Standard Oil Company (In- diana) immediately organizes 1ts distribution system to supply the demand, whenever and wherever it For example, during the past two or three years a .number of devices which substitute ‘kerosene for coal in heating the home have been per- fected and put on the market. A large number of these burners have beg_n installed in the territory served by this Company. The result has been a heavy demand for Perfection Kerosene, which has proved to be an ideal fuel. . . To meet this demand for Perféction Kero- sene, the Standard Oil Company (Indiana) has so arranged its distribution system as to be able to deliver to patrons, Perfection Kerosene for heating purposes in any quan- The bigness and efficiency of this organiza- tion enables you to adopt kerosene as a fuel for heating your home, with complete assurance that you always will be able to get this fuel in such quantities as you may require, whenever ‘and wherever you may Thus does a big company, conscious of its stockholders, organization to changing conditions. Standard Oil Cbhlpé}n}’ (Indiana) 910 So. Michigan Ave., Chicago tion to the $1, 144,000,000 the ra roads owe the government for “ad- ditiens and betterments,” they have received additions loans under the Esch-Cummins bill, of about $300.- 000,000, making a total of $1,444,- 000,000. Stripped of confusing non-essen- tials. what is now proposed is that the zovernment shall wait ten years for $763.000,000 the railroads owe it for betterments and improvements, and pay immediately $500,000,000 to the railroads on account of claims for al- leged under-maintenance, etc., tak ing from the 180 or more railroads in- volved, with their varying degrees of financial responsibility, such secur- ities as they may be able to provide —recurities which, in many instances, mav not be adequate to protect the government against loss. This is not a question of “legal and moral obligation” on the part of the United States to lend the railroads $500.000.000 more for ten years. It is a quesjion cf policy, and should be considered from that standpoint only. For the adoption of such a pol- icv the Administration must, of course. take the responsibility, but it rhould be candid about it. The vublic mind should not be confused by juggling of figures, manipulation of accounts, or securities, or govern- mental agencies. To get the facts i the object of your inquiery, as it is desired. the public, and to its quickly adapt its 2550 equally the object of my reply. “With kind regards, I am. “Sincerely yours, signed is unmistakable. W. G. McADOO.” PROTECTION! “T told the messenger to wait, madam.” “Why did vou think there would be an an- swer?” “It was the paper, madam. the kind you use yourself.” The quality of Crane’s olinen olawn [HE connzeT Wi PAZER | There is a smartness about it that reflects the user’s good taste. Let, ns show you the new fashionable shapes. Pioneer Stationery House REMID.JI I noticed it was * ~ The TRAINED Man Giimbs-- fhe Untrained Man Gropes The trained man has a determined goal to reach. ‘The untrained man gropes hopelessiy— ). AXIEY and makes his task a difficult one. 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