Evening Star Newspaper, June 16, 1929, Page 43

PERATIONS 0 U.§ * CARRERS TRACED Doubtful Public Sevice Seen in Loans and Guaran- teed Earnings. IV—THE RAILROADS’ FINANCES BY FREDERIC J. HASKIN. When President Wilson took over the | Pailroads as & War measure on New Year day, 1918, the Government enterea upon active par- ticipation in transportation by land for the second time. In 1864 Congress had authorized bond issues to ald private companies in constructing roads for the iron horse across the great plains, the mountains and on to the Pacific, for the purpose of opening up the West. A total of $64,600,000 in Federal aid was extended. Save for a trifing modicum, entangled in techni- calities, this has been repaid. On that occasion no hand was taken @ operation; only in financial assist- ance, save, of course, tha’ Government. troops ‘helped repel Indian attacks on the track-layers. But when, in the bitter Winter nf 19i7-18, the raliroads became congested with' the flow of troops, muhitions of war and food for the armies and the allies, the Govern- ment took the carriers over bodily and proceeded to operate them. How this was done is a thrilling chapter of World War history. Federal control terminated on March United States | COUNTY DAIRYMEN ° DISCUSS NEW RULE Meet to Take Up Health Card of Distriet Officials Now, Being Enforced. Special Dispatch to The Star. ANDREW CHAPEL, Va., June 15— Capt. Thurlow White, representing the Falrfax County Chamber of Commerce, and Mark Turner and Harry Leigh, representing the Fairfax local of the Virginia-Maryland Milk Producers’ As- soclation, together with about 25 dairy men from two of the three locals in the county, met in the school house at Andrew Chapel to_ discuss the s uation now existing between the dairy- men of the county and the Washington health office. Capt. White, Mr. Leigh, Mr. Turner 1, 1920. Operation of trains under Government management ceased, but the control period had left & heritage of tangled finances which presented a eolossal problem. Under the Federal control act, and under the transportation act of 1920, there were various payments and counterpayments provided for. The two principal items related to the advances made to railroads and to payments on sccount of guaranteed earnings. The war found the rallroads in a period of financial weakness. There was insitent demand for funds to finance the Liberty Loans, the Government dominating the money market with its patriotic appeal to the plé to buy bonds. Private companies, such as railroads, could not borrow save at high rates of interest. The Government raised the wages of the railroad workers. The carriers found difficulty in meeting both current operating expenses and maturing obligations. Liberal Government loans to the rail- roads were made to meet this situation. In 1921 the Government held bonds and other obligations of the railroads n the huge sum of $680,438,553 as se- eurity for these loans. Guaranties to Railroads. Congress had provided that the car- rlers should be guaranteed a certain return on their capital. This was com- ted in accordance with an involved lormula providing for various offsets here and allowances there. The Inter- afate Commerce Commission estimated that. for the period of railroad control the sum total of such guaranties which the Treasury would have to remit to the carriers was $536,000,000. Railroad rates had been raised all along the line, in some instances as much as 100 ‘per cent, dnd it had been hoped that the higher rates would bring in enough to pay the wage increase and the standard return as well, but when Mr. Mellon came to the Treasury, a balance of $105,550,000 still was due from the Government to the carriers on account of these guaranties. It was a part of Mr. Mellon’s task to Tes tire this indebtedness. The rallroads are at once the sine and the arteries of the national coms merce. To understand the extraordinary task, some sort of rough picture of the reilroad situation in the United States must oe drawn. During the haste of the war the equipment had been used up ruthlessly. Repairs to locomotives and cars were far in arrears. In the boom years immediately following the war, the car loadings were heavy and cAr congestion was a frequent trouble. Then came the deflation period of 1920-21. Money became tight and im- terest rates rose to practically prohibi- tive levels. The market for railroad bonds was slack. Several roads went into receiverships. It was an unhappy time for the entire Nation, and the ob- ligation of rallroad finance was 1o light burden to be borne by the Treasury in addition to its many other problems. Happlly, Mr. Mellon's tax theorles had been at work. Already they were bearing fruit in reduced taxes and in- creased revenues. Also his policy of debt retirement was in full swing, and money began to flow with greater fr dom. He began to pay off the guaran- teed sums due the rallroads, retiring millions of this indebtednes; each year, All the time, it must be remembered, the Treasury was collecting 6 per cent interest on the funds it had advanced o the roads on the other account. By 1925, the hold-over guaranties of more than $100,000,000 had been paid off by the Treasury with the exception of some relatively small amounts con- eerning which there was disagreement. Two.Edged Public Service. Tt was during this period that Mr Mellon not only served the Nation well as its financial guardian and fiduciary, but he also served the rallroad com- panies equally well. No railroad is in the complete sense privately owned. 1t is owned privately as compared with Government ownership, but large num- bers of the public, through stock and bond holdings, participate in the own- ership. Some railroad companies have as extensive financial responsibilities as some governments. So, in & measure; Mr. Mellon was performing a two-edged public service when he assisted the carriers in taking advantage of the im- proved money situation. As times grew better, and the coun- try reached a more sound econoric level, interest rates dropped. When the rates, at which the public would absorb railroad bond offerings began dropping below the 6 per cent figure SRR "fhe “rallroads were paying on the loans from the Treasury, Mr. Mel- Jon aided the companies by permitting them to shift their indebtedness and enjoy cheaper money. Bonds were sold in the public market at 5'; and 5§ per cent and the proceeds used to pay off the debt to the Government. Thus, the Government was reim- bursed in full for the money it had advanced, increasing the Treasury sur- plus, while the railroad companies were enabled to save the difference in interest. This process is still going on. The sums involved were so huge that the shift could not quickly be made with- out disturbances to the market. It is a notable fact, however, that during| eight years no less than $349.084.877 | of these raiiroad loans was collected | and turned back into the Treasury- and with interest. Only $230.484,076 remained to be repaid at the time of | the last casting up of the account. Two-thirds of the money advanced has been repald. The Treasury is that much better off, and the railroad com- panies are in a better financial posi- fion than they have ever been before. (Tomorrow: Hamilton and Our First ‘War Debt.) .. ‘Balloon Made Safe From Lightaing Ward T. Van Orman, who is very much interested in balloon! the win- ner of several national ball is the inventor of a devise designed to protect & balloon from a lightning stroke, . and it will' be used on the bag which he will enter in’ the - coming national race. It consists $14.75 A wplendidly Woven Fiber riage. » 3-Pe. Simmons " walnut-finish _~ bed. Comprises new-style cabinet, 42-.pc. dinner set a Dresser A Ni Fi Chest of Drawers Oak Finish $8.20 $1.00 Down Swin porch, No Phone Mail Orde: Strongly constructed prises large Settee, arra ent of metal eross arms and dairymen feel that those who ex- pend $700 to-$800 for such equipment should receive a larger bonus. and Mr. Dallas Bérry were appointed a committee to attend the meeting of the board of directors of the Maryland- Virginia Milk Producers’ Association in P Washington todsy to, present the farm-| FROST CAUSE EXPLAINED. | ers’ point of view and ask the uso-’ ciation to allow a larger differential on | e cooling the milk. Otherwise the‘g-{rn;J)l-teorologiu Blames Whirlwinds ers of the county stand to lose 115 to 2| AT S cents per gallon on the milk they ship.| The dairymen of Maryland and Vir-| MADISON, Wis. UP). — Whirlwinds cause frost, according to Eric Miller, ginia are now paid on the basis of the butter fat content of their .milk, com- bined with their score for cleanliness, | Government meteorologist. | proper cooling of their milk and condi- | Two types of whirlwinds sweep over | tion of their cows. The scorecard of |Northerns States, he explains, one the District health authorities is based | bringing warm winds in front an@ fo on a cooling of the milk to & tempera- (lowed by cold gales. The second has ture of 50 degrees. If the temperature |no flowing wind and has calm, clear is above 60 degrees, the dairymen lose |air at its core. their bonus, This scorecard is being | “The second type often follows the enforced now for the first time, and in- | first, aiding frost, because its clear skies | spectorsvof the District have been visit- | allow further cooling at night. Plants ing dairies between 4 and 5 a.m. Cool- |dfaw heat from breezes, but radiate | ing to 50 degrees or less is almost im- | heat in quiet air until they are colder | arrangement, Mrs. George A. Chadwiek | ward Barber: possible without electrical equipmentthan their surroundings,” he says. On any purchases ameunting to $25.00 or more, to any part of Maryland or Virginia. Fiber Carriage Car- 4-Pc. Poster Bedroom PLANS ARE SHAPING FOR FIREMEN’S SUPPER | Hook-up Contest to Feature An- | nual Gaithersburg-Washing- ton Grove Event. | Special Dispatch to The Star. GAITHERSBURG, Md, June. 15.—« | Preparations are nearing completion for the annual supper of the Gaithersburg- Washington Grove Volunteer Fire De- partment to be held here Wednesday nd Thursday of next week. Mrs. Henry H. Griffith heads the gen- | eral committee of arrangements; Mrs. Robert E. Palmer is chairman_of the | committees are: Hall decorations and serving, and those composing the other | committees a Hall decorations and and Mrs. Lawson King; reception, Miss wtn Interesting Ella Plummer, Mrs. Rachel Dare Etchi: son, Miss Maude V. Broome, Herbert L. | | Diamond, Willlam Davis, Harry B.| | Kanode and Walker Rinehart: meats, | Mrs. Treney, Mrs. Charles E. Crawford, | Mrs. Carroll Walker, Mrs. Lewis Reed, | Mrs, Willism Davis, Mrs. Arthur Hogan | and Mrs. Edward Johnton: peas, Mrs. | George Darby and Mrs. Garry W. Bell; bread,' Mrs. Clyde E. Thomas and Mrs. | Marshall Walker; ‘ sugar, cream and butter, Mrs~ Clay Plummer and Mrs. | Jack B. Ely; vegetable salads, Mrs. Hannah Schwartz, Mrs. Charles A | Gartner, Mrs. Barney Miller, Mrs James M. Mount, Mrs. Charles E. Be- | croft and Mrs, Harry B. Kanode; pick- | les_and jelly. Mrs. J. William Wiley; coffee, Mrs. Hershey, Mrs. Wayland and Mrs. Riley; cakes, Mrs. Norman Jacobs |and Mrs, William D. Barett: ice cream, | Mrs. Thomas I. Pulks and Mrs. Lawson | | King; candy and peanuis, Mrs. Waiter | | Rinehart and Mrs. Mabe| Becjer: fancy table, Mrs. George Reeber and Mrs, Ed- donations. James M. | tickets, Prank B. Severance, ! Mount; L gfi; FEvent! 3-Pc. Living Room Suite One of our most attrac- and of Su ite quality. tive values. Low in price an unusually fine Just_as pictured, Bagdadian Sheik, 120, Dies Leaving 100 Descendants Dy, the Associated Press. . BAGDAD, Irak. June 15.—A Mosul paper yesterday reported (he death of a sheik 120 years-old who left four wives and over 100 daughters and grandchildren. He retained his faculties until a few years ago. It is sald his youngest son s 10 years old. and soft drinks, G. E. Kinsey. Among the numerous features to staged In ments, & silver cup to be awarded the winner. On connection with the supper will be a standing hook-up contest | among the various county fire depart- King's Select Band will | | MAN-EATING ANIMALS ~ ~ t TERRORIZE CHINESE !Beasts Kill Ten Persons With' | single Week—Tiger Hunts | Being Organized. { By the Associated Press. | HONGKONG, June 15.—Dispatch to the Hongkong . Telegraph fror) | Swatow, Kwangtung, today said that for the first time in many years man- eating ts had terrorized districts within a 100-mile radius of that cit | . “In the past week,” the dispatch = | “beasts have mauled or eaten 10 per- { sons. One girl was sent to a hospital 1 As a result one tiger has been siain an entire villages are being organized hunt for the marauders. be to | EATRTS A Chinese rallway will add 10 mew | American locomotives. all purchases amounting to $25.00 or ice capacity . Less Allowance . ‘Bed Outlit§16.95 Geniine Simimons confinuous post. Guaranteed : spring and comfortable mattress. Aside from the poster bed, the suite includes dresser, French vanity and chest of drawers—made of gumwood and finished in American wal- nut. A fine suite of excellent construction that will appeal to every one. Pay $5 Down with Davenport, Club Chair and Armchair. Staunchly constructed for vears ‘of servicé, deeply overstuffed and’ uphol- stered in attractive velour. Pay $5 Down "_ Canopy and Stand Extra 69-Pc. Kitchen Cabinet Outlit§3 3,95 kitchen nd s 26-pe. setof silver-plated table. t Style—Nicely hed in Oak 3-Piece Bed- Davenport Suite One of our.best val- ues. Just as pictured, A Delightful Steamer Chair $1.98 Without Arms more. Be sure to ask for cur Free Gift to you! e Refrigerators This 3-door Refrigerator, “40:1b. 2308 .$5.00 Complete Service for 12 People . $10.95 / Metal Crib ‘With Gomforta- $1.00 Down Console Model Phonograph 6 Free Records and Bridgs Lamp .. $1,08 Down. . Cedar Chests Many New Styles $8.95 $1.00 Down of sattractive de- sign and finish, Com.$29l7 Safety Baby g For indoors or the 98c or rs fim 7/»‘7}72%‘ Fiber Suite An unusual value. Easy Terms g —— e Armchair and Rocker with cretonne-covered spring - seat cushions. with . - Bed - Davenport that opens into a ‘com- fortable bed whenever needed, Armchair and Club Chair upholster-: ed in attractive Velour. Pay $5 Down Summer Rugs Greatly Reduced 6x9 Japanese Grass Rugs .. .$l.9s 36x63 to match ................,..A69e Suite for Your Dining Room * Long Buffet, Oblong Extension . Table, Closed Server, China Cabinet, Armchair and 5 Side Chairs comprise this delightfully charming suite. Gen- uine leather seats on the chairs. Pay $5 Down 9x12 Congoleum-Made 27x84 ta match ..‘.........‘.......390 )l Rugs, $7.95 Felt Base Floor Covering. gyl ..ccoocauie “ Coco Door Mats, 39 Two-Burner Oil- Stove High Shelf is extra. A sple did cooker. iz $1.00 Down - There Is Nothing So Charming As a Nicely ing tions, Table Decorated Breakfast Set : In a variety of pleas- of this enticing break- color ’combinu-s 1 6'75‘“‘ set are finished with a hard enameled the drop - side surface, and four Chairs Easy Terms /