Show HUE OPPOSED BY LOVEIT I VIEWS OF FORMER FO MER- MER HEAD Right of Congress to Compel Compe Merger l Challenged d hut kut kutHe ut utHe He Declares Some W Weak e k kLines Lines Should Be Absorbed N V NE TEW EW YORK July Consolida 12 tion of all the railroads of tie the United States into a n. few large from ferns from twelve t to twenty five as a possible solution of the nations nation's railroad problem is opposed by byI Robert S. S Lovett former president of I the tho Union Pacific railroad in n a memorandum to Congress made public public pub pub- lic lie here today Judge Lovett for a time was di director director di- di rector of the division of capital expenditures expenditures ex ex- of the government go railroad rail rail- road inn A 64 U UL G. G McAdoo as director general Tho effect of the proposed consolidation consolidation consoli consoli- dation would be be in his hla opinion to Impair tho the credit of ot the stron strong road instead of ot Improving the credit of ot tho the thoI I weak road The Tho Inevitable effect would be to reduce tho the average of ot the tho credit of all the railroads Denies Right of Con Congre resa Congress he ho asserted has no right to compel one railroad to consolidate con con- with another It may give one ona the right to acquire the property of at the other by condemnation but It must pay for tor It and hero here Is 15 tho the difficulty difficult pay for it In cash Tho underwriting of ot a fabulous amount must be provided Will Congress Congress Con Con- gress appropriate tho the billions necessary necessary sary ary Ha Have Havo 0 wo we bankers enough to toh th h v u y J v I series of or years nd 1 what will happen happen hap hap- appen ap- ap pen to the financial welfare of ot the th country In tho the meantime M My Judgment is against the consolidation consolidation consolidation con con- of ot all tho the railroads of ot the country into a fow few companies because I believe bellevo the tho companies will bo be too large and for lor efficient arid and economical management I il believe that the absorption of ot some Borne of the weak weale lines by the strong strong- lines upon fair talI terms should be promoted pro pro- but competition In service and facilities should not only bo ho preserved but should be extended Opposed Fool Pool Judge Lovett also opposed the plan which has been discussed for tor po pooling lIng the tho net earnings of railroads by dividing divid ing them Into groups and establishing establish establish- ing inS rates sufficient to yield 6 per cent centor or some other specified return on on- the book value of ot each group U Earnings In excess of ot the era a average e he pointed out would be set aside for tor forthe forthe the unprofitable roads that earn less lesa Suggestion put forward by many financiers and railroad men that the government sh uld guarantee fair tail dividends dividends div div- on the full tull value of ot the rail rall- roads and leave the management Inthe inthe In Inthe the hands of or tho the railroad owners i was ras as characterized b by Judge Lovett as Impracticable impracticable Im Im- im- im practicable because ho did not believe behave tho the government go would take all aU the risk and none of or the profits If It a small return of ot 2 3 or 4 I per percent percent percent cent was guaranteed ho he said eaid this i would not bo be s sufficient to pay the In Interest interest interest in- in terest on bonds already outstanding I I It would make mako doubly secure what is II III already abundantly secured but It would afford no collateral for new Is Issues Issues Is Is- sues nor secure now new loans 4 Tho The Importance of establishing re-establishing railroad credit cannot be overestimated ed d. d but nevertheless s I am persuaded that no guaranty short of u a return I upon the tho full value of ot railroad property property prop prop- ert erty will be helpful to that end and that a guaranty of full value is js not practicable without government operation operation oper oper- I which I regard as beyond present pres pros ent discussion I Rail Firemen Urge Federal Ownership O Denver Colo Cob JUl July 12 The 12 Tho Brotherhood Brotherhood Brotherhood Brother Brother- hood of ot Firemen and In convention here today Indorsed a Do plan planor for or public operation of ot the tho railroads of ot otI the country which already has been I presented to the Interstate commerce committee of the tho United States Senate by representatives of ot the railroad C Continued on page pago 2 2 20 J d I I HUGE R. R 8 R. SYSTEMS OPPOSED BY BV LU lOVED LOVETT YEll Continued from page 1 brotherhoods The resolution passed p convention con reads in part as follows follows fol fol- olby ol- ol by lIy th tho o lows 1 There There Is now pending en before the American n people and their representatives I lives tives the political l solution of or the railway railway rail rail- and nn every Industrial and wn way problem human activity tho the life liCe of or every community community com com- and ond happiness happiness happi happi- and ond the tho prosperity ness of ot every o citizen are arc to a great extent extent ex cx- ex- ex the proper s solution lu- lu tent dependent upon tion of this problem the private ownership ownership own own- It Is la demanded by p of these properties as a c condition condition con con- on- on will resume control control control con con- which the they 0 that the thereof and operation I American people guarantee to them I p- p privileges which the they have not nereto- nereto Va I fore forc enjoyed I I. I c. c tho the right to io earn aur a on the property investment in investment In- In guaranteed u r return notwithstanding the fact vestment that such a guarantee would make direct obligation atlon of at the people people people peo peo- valid as a of the United States SLAtes all fictitious stock dividends and discounted discounted discounted dis dis- securities t counted bonds issued b by the railroads without consideration of or and representing the tho American no service to people be made mado If Ie If such guarantees are to good rates must be bo raised far tar in excess ex exceSs excess ex- ex cess of ot the present tI fixed ed level lc or Ind in d default of or such increased rates wn wages es must be reduced far below the tho level le as ns now fixed or both Details of Plan Pins There has 1135 been presented to the u. u i Senate corn l jm iov 00 merco a plan for a reorganization of oC the railroad industry such plan originating This with railway plan plait will also bo be introduced In Con Con- gress ress This labor plan provides for tor Immediate Immediate immediate imme Imme- diate public ownership of ot these properties properties prop prop- I tho protection of every ery dollar honestly and actually Invested as well as ti the assurance of or an adequate return on such investment without any in increase In- In increase crease In ra rates tes This plan guarantees to the public the protection of ot Its interests in iii procuring procuring pro pro- curing ultimate service at cost and at nt atthe the tho same time secures for the wage wage- earner a fair share of ot tho the profits produced produced produced pro pro- by his skill efficiency and econom economy for Joint This labor plan provides pro control of or the tho through h a 1 board of directors representing ly the wage-earners wage the management and the public and it not only guarantees guarantees guar guar- to the earners wave as a I. I class the full protection of at all nIl their Interests without invading the Interests of ot any my other classes or society but also throws open open- to each etch Individual the golden olden opportunity op op- of ot his for full d development powers of ot Initiative All officers of the brotherhood were re elected toda today V. Yo S. S Carter of or Washington ton D D. C. C headed the list as ns president C C. J. J Goff of ot Birmingham Ala Ala- was chosen to fill one of the two new offices of vice president created by this convention The other additional additional additional addi addi- vice Ico president will be named Monday I |