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Show AMERICAN BU5INE55 LOOKS TO C0NGRE55 FORJEEDED LAW8; Railroad ' Problem Is by Far Greatest Facing-Legislature; Facing-Legislature; Money Conditions Expected I to Dominate Trade World, i j I By W. S. COUSINS, Editor The American Banker. Nl YORK, .May 25. Whether from force of habit or from an inherent doubt of the ability cf congress to find a satisfactory solution of the j many problems with which it will j r-e confronted during the next few weeks, traders on the security exchanges wei e more disposed to sell than to buy during J the past week. Hence it was somewhat i contraiy to expectation that simultan- eoijsly with the opening of the new session ses-sion of congress, from which so much is expected, stock prices should move abruptly downward and trading turn largely professional. While there s a disposition In many quarters to hold out a severe Indictment against the Government for extravagances and errors In the handling of war funds and the manipulation of the implements of production, the real trouble la to be found in the growing realiza tion of the seriousness of the roalrcad problem and the recogni t!on, that however well disposed congress may be it is confronted with liir Halations that place an almost insurmountable barrier bar-rier directly In the path of railroad f-et-tlement. This Is considered the rnosl important im-portant problem now engaging the attention atten-tion of the American people. The railroads are now showing an operating oper-ating deficit at the rate of $768,000,000 a year and it is said that In a short time the billion dollar mark will be in sight. Their present condition and the experiences experi-ences of the past sixteen months have influenced in-fluenced the country against government operation. Tho country sees itself faced with heaxy taxes to carry the burden or government operation of railroads. The social, political, economic and commercial life of the nation demands that all the interests involved get together on a cooperative co-operative basis. This can only be done after the most thoughtful consideration by all who are well posted on the subject and by restricting the collective demands to what is reasonable. .Everyone is now in a mood to look for the solution on the middle ground of compromise. Plans Are Merging. Many plans have been advanced for the solution of the railroad problem. They differ greatly, but all interests which have been working constructively on plans for remedial legislation and railroad development de-velopment have been gradually drawing nearer in their efforts. Director General Hines says that the best interests of the country will be protected by returning the roads to private management and not by permanent government control and urges avoidance of delay. Certainly raiiroad managers, tanking interests and the genera', gen-era', public concur in this viewpoint. The Association of Owners of Railroad Securities, which has the confidence of many of the ablest bankers and economists econo-mists of the country, has outlined a plan which has found most acceptance among those who have given specific consideration considera-tion to the subject. Briefly the plan is as follows: Provision is made for the organization by act of congress of a corporation to be known as the National Railways association. associa-tion. Into this association would be paid earnings in excess of 6 per cent and through the corporation this money is to be disposed of for equipment or such other purposes as the management may determine. deter-mine. This corporation yields no profits to the railroads. Us trustees would consist of the nine interstate commerce commissioners commission-ers and eight operating and financial men selected by the boards of directors of railroads rail-roads in various locations of the country. Personnel Considered. Regional commissions ore provided in the six existing regional territories now laid out by the interstate commerce commission. com-mission. Three commissioners would sit In each of these Districts and residents of these districts only would be eligible for appointment. Thus would be secured the men who would not only be conversant with the territory over which they would preside, but would give the opportunity for an effective co- ordinaatlon with the state commissions in the various states comprising each of the six districts. In his cabled message to congress President Pres-ident Wilson disposes cf the railroad problem prob-lem in fifteen words, stating positively that the railroads will be handed over to their owners at the end of the calendar calen-dar year. This places an added incentive for the prompt consideration and settlement settle-ment of the financial tangles introduced by the deplorable results of government operation and control. In addition to the task of considering the peace treaty congress is confronted with a program which may be briefly outlined as follows: Return of tho rail- road-s; legislation to place United States shipping in private braids: return of telephones tel-ephones and telegraphs; putting the army and navy on a peac basis, with which is associated the iuesiion 'f military training train-ing a nd preparedness; reconstruction of revenue, lava and reduction of taxes; new Immigration law to meet conditn ns developed de-veloped by tho war; protective tariff Lo shield American industries and pieaeive standards of living. Europe Responsibility. America's participation in tho war gave her an cprortunity to vindlrate the great principle of international trust and brotherhood, broth-erhood, but present world conditions are such mat American tesources ;ire needed in the rehabilitation of the stricken countries coun-tries of Hmope. In many respects our participation in European affairs has just begun and we now face the greatest re- " spo risibility in meeting the f inane ia.l and other needs of Europe during the vears of reconstruction that nre immediately ahead. At tho same time t he successful fulfillment fulfill-ment of this responsibility will bring with it the greatest possible reward. There have just returned from Europe a number of prominent American ban iters and economists who have been engaged in a. minute examination of financial conditions con-ditions on tho other side. The party includes in-cludes Frank A. Vanderlip, of the National Na-tional City Bank, of New York; Henry P. Davison, of the Morgan Co., fand others. Mr. Vanderlip is emphatic in his statements state-ments that only American wealth anel resources re-sources can save many of the countries of Europe from economic collapse and that we must apportion our credit unstintingly if we are to be of service in the dark hour of Europe's history. While emphas!ziug the responsibility of the United States to the world in this critical period, Mr. Vanderlip !s not pessimistic pes-simistic of the results. "If America rises to her duty," he said, "I am very optimistic optim-istic over the outlook. The thing is too big for me to dwell upon, but I am greatly Impressed with the tremendous thing that has happened to Europe. It can be saved, but it is up to America to do it. Is National Duty. ' Europe has got to be looked at as a unit, not as made up of individual countries. coun-tries. If some countries are helped others may be left stranded. We must pull together to-gether In reconstruction as we; did in military mil-itary work. This is not going to be anybody's any-body's game, but everybody's duty. It is not only the bankers that must concern themselves with reconstruction of Europe, but business men over here must appreciate appre-ciate the necessities of the situation and extend a helping hand to the war-ridden countries."' Reports to the federal reserve board from tho various centers confirm the rapid react jvstment of business to new conditions and especially to the new price basis. From every district comes an indication in-dication of the increased activity of trade due to the revival of purcha-slng under the prospective grpat increase In agricultural output. The general disposition to abandon aban-don the attitude of hesitation and postponement, post-ponement, which has be en characteristic for some time past, has i endered the question of control of prices by public authority au-thority less urgent than it seemed to be a few weeks ago. Prices Seek Level. What is now happening seems to indicate indi-cate that business will, after a period of initial readjustment in prices, proceed upon a level not far removed from that established during the war, leaving the question as to the ultimate level of prices to the future and to more slowly acting forces. The problem of strengthening the structure of credit and of eliminating : from that structure all elements of weakness weak-ness "w ill then continue as a permanent factor in the situation, pending the time when banking policies have been so developed de-veloped and applied in practice as to bring about the restoration of prices to a stable and normal basis. There is considerable speculation as to the course of steel prices. The general opinion is that advances above the quotations quo-tations agreed upon with the industrial board are certain. On the other ha nd. there lias been some price cutting, also some advancing of quotations. In general, gen-eral, however, the prices of the industrial board are the ones which predominate. Prominent steel men think that higher prices in all steel products will rule before be-fore September. This presupposes that business will be on a large scale at that time, for it is quite improbable that prices could be advanced out of proportion to demand. de-mand. It is expected that heavy foreign for-eign buying will have developed by fall. Increased demand both for foreign and domestic account is already being felt. |
