Indianapolis Times, Volume 36, Number 119, Indianapolis, Marion County, 25 September 1924 — Page 5

THURSDAY, SEPT. 25, 1924

LA FOLLETTE TELLS STORY OF BIG RAILROAD ‘CLAIMS' By ROBERT M. LA FOLLETTE-

This is the seventh ot a series of ten articles dealing with the outstanding events in the life of Senator La Follette in the last twelve years. A strange series of incidents occurred in Washington in the spring, summer and fall of 1921 —one of the strangest in my recollection of Government affairs. There were occurrences for which no adequate explanation could be found at the time of their happening, and for some of which no such explanation has been found to this day. They concerned certain “claims” of the railroads upon the United tSates Treasury. During the spring considerable alarmist propaganda was let loose upon the public to the effect the railroads of the land were about to collapse. How to forestall it? Why, the Government could do it by simply paying immediately some half billion dollars which it was pretended would be due later in settlement of claims growing out of the Government's operation of the railroads! A bill prepared by Eugene Meyer, director of the War Finance Board, and James C. Davis, former railroad attorney and at that time United States director general of the railroads, was introduced simultaneously in the House and Senate. In the House it bore the name of Representative Winslow of Massachusetts. In the Senate, the name of Senator Townsend of Michigan. Secretary of the Treasury Mellon put the weight of his indorsement behind it and Secretary of Commerce Hoover's unemployment commission prepared a report declaring that this was the relief needed by the country. Hearings Held Hearings were held by the Senate Interstate Commerce Committee. Two witnesses were heard: Eugene Meyer and James C. Davis, authors of the bill. All efforts to obtain a hearing for witnesses opposed to the bill were defeated by the majority of the committee. Specifically, the committee refused to hear William G. McAdoo and Walker D. Hines, the two men who nad preceded Davis as head of the railroad administration and who had had most to do with making the contracts with the railroads involved in this proposed gigantic refunding scheme. In the meantime the soldiers' bonus bill was before the Senate. It had passed the House and had been reported favorably by the Senate Finance Committee. After long debate the Senate was just about to vote. There was every expectation that the bill would pass. At 2 o’clock in the afternoon of July 6, Senator Lodge, Republican floor leader, arose 'and moved that a committee be appointed to escort the President of the United States to the Senate chamber. Other Senators looked at one another in astonishment. Few if any knew that the President had come to the capitol. The President talked very briefly to the Senate, perhaps ten or fifteen minutes. He declared, in effect, that the Government did not have the necessary money to pay the proposed soldiers’ bonus. On his departure. Senator Penrose promptlv*arose and moved that the bonus bill be recommitted to the Finance Committee for further con-

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sideration. This occasioned surprise almost equal to that caused bv the President's sudden appearance. The debate on this motion occupied two or three days and in the course of the debate there was much criticism of President Harding for his unprecedented action in appearing before the Senate just as a vote was about to be taken and, in effect, asking ' the Senate not to vote. Many members frankly regarded this as a trespass on the rights of the Senate. The motion by Penrose was successful; the bill was returned to his committee and never saw the light again. Just fourteen days after his surprise visit. President Harding sent a special message to the Senate asking for passage of the bill to give the railroads the half billion dollars they so earnestly wished. Now, despite the formidable array of the White House, the Treasury the Commerce Department, the radroad administration and the War Finance Board —to say nothing of the railroads themselvc-s —behind this bill, its advocates did not un , derestimate the opposition. They knew the argument supporting it could be riddled until only a ragg-d pretense for looting the treasury remained. The bill remained on the Senate calendar for weeks and months, with neither Senator Town send nor Chairman Cummins of the Interstate Commerce Committee dar ing to risk a vote, regardless of the awful emergency that had been proclaimed by all concerned. Chance They apparently awaited an op portunity when the bill might be AMUSEMENTS

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jammed through without extended discussion. The Senate was to taka a few days recess at Thanksgiving time, and just before that date Chairman Cummins took the floor ro give notice that immediately after reconvening he would undertake to make this railroad refunding bill the unfinished business of the Senate, and would press it to a voW! Just afterward Senator Cummins and I were preparing to hold a hearing in the Interstate Commerce Committee room and he invited me into his private room. He remarked on the rotice he had given the Senate and then said that he knew 1 would put in days and nights in preparation for discussion of the bill, and that I would doubtless also make it occasion for offering amendments to the Esch-Cummins law. “I might as well tell you,” he said, ! “that the bill will not be brought up | and, further, that nothing else will |be brought up that will enable you ito attack the Esch-Cummins act ”

And that was the end of the whole pother! The advocates of this raid on the treasury apparently quit cold, rather than attempt to defend their proposal In open debate In the Senate. Now, what argument did the opponents of the bill have, which the men behind it were afraid to have brought out? Firstly, of course, there was the unexampled procedure of jamming s he hill through committee without allowing opponents to be heard. Secondly, it was obvious under the terms of the bill the Government would have been put in the business of dealing in railroad securities. The War Finance Committee would have taken over a mass of railroad securities greater than held by any single private interest. It would have he come a dominant influence upon the stock exchange of the country, with ■lower to withhold or throw upon the market hundreds of millions of dollars worth of securities. Talk about “too much government in business!" Government would have been in voiced up to its eyes in the most speculative business in the world, the marketing of corporate securities. Thirdly, the Government was al i most certaiti to lose hundreds of millions of dollars. The hili required the acceptance of railroad securities lon a fi per cent basis The best secured railroad bonds were then yield ing 7 per rent and less well-secured bonds were yielding S per cent or I more. The Government would have I to try to sell bonds that yielded only 6 per cent in competing with the MOTION PICTURES

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THE INDTANAPOLIS TIMES

better paying bonds. In case of sailing at the market price the Government stood to lose $lO to S2O on every SIOO worth of bonds sold. If the bond market should decline the Government’s loss Would be even greater. The bill allowed the War Finance Board to take up a total of almost $1,500,000,000 of securities. The loss, even if the market did not decline, might therefore have been from $159,000,000 to $300,000,000. Roads Owed Government Fourthly, this adventure into bond speculation by the Government was utterly unnecessary. All the Government was bound to do for the railroads was to fund any debt owing by the railroads to the Government after the claims of the two 1 parties had been offset. The Government had claims against the railroads. The railroads had claims against the Government. When these were adjusted it would he found that the railroad owed the Government a very large sum. The only moral or legal obligation of the Government under the law' was to give the railroads ten years’ time in which to pay the Government what they owed. That was the only funding called for. Fifthly, the War Finance Corporation had been directed to use Its resources to assist financing of agn cultural products. Agriculture was even tnore important than railroads. The burden of this vast speculative undertaking, as proposed, would have hampered the War Finance Corporation in carrying out its duty to the farmers. Sixthly, the terrible emergency was in part Imaginary. Railroad ■ earnings and railroad credit were steadily improving. While some roads undoubtedly did need money, so did every other business. So did I individuals of all classes. I (Copyright, 1924, NEA Service, Inc.) The eighth article by Senator I,a Follette will appear in The Indianapolis Times tomorrow.

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BIG JOBS FOR WOMEN T. N. Wynne Beetles Head of Indiana Electric Light Association. Bv Timfg Special FRENCH LICK, Ind., Sept. 25. Public utilities are depending more and more upon women employes in responsible positions for the good will upon which their prosperity depend, said Miss Mae Fletemeyer of the Northern Indiana Gas and Electric Company, Hammond, today before the Great Lakes division of the National Electric Light Association. The World War, according to Miss Fletemeyer, gave women their opportunity in this industry and they have made the most of it. ' T. N. Wynne of Indianapolis will head the Indiana Electric Light Association for the coming year. He was elected president at the annual State meeting Wednesday. Other officers were: L. B. Andrus, Indianapolis, vice president, and Thomas Donohugh, Lafayette, secretary. Wynne is connected with the Indianapolis Light and Heat Company. | STREET ACTION DELAYED Resolutions in Connection With Elevation Heard. Action on resolutions for opening of Shelby St. and Arseni Ave. at the Pennsylvania and C., I, & W. | tracks has postponed for two ! weeks after a public hearing by the board of works Wednesday. The projects are In connection with the track elevation work to State Ave. John F. White, president of the Southeastern Civic Improvement | Club, and Edward J. Sexton, secretary. urged opening of Cruse St. | and then joining Cruse St. to Shelby by a diagonal street. Merle N. A. | Walker, who said he represented | 300 property owners in the district, i asked opening of Shelby St. Dr. | John McCool, 1412 E. Washington | St. urged opening of Arsenal Ave.

BRYSON IS FAVORED liiwanis Club Indorses Postmaster for President of Association. A resolution indorsing Postmaster Robert H. Bryson for president of the National Association of Postmasters in convention at the Claywas passed by the Kiwanis Club at its noon luncheon Wednesday. Postmaster General Harry S. New and other officials of the postoffice department were guests. Allan Dinehart, leading man at the Murat in “Applesauce” entertained. Driver Faces Three Charges Neal Taylor, 23, of 951 Eugene St., was arrested Wednesday on charges of drunkenness and operating an

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automobile while under the influence of liquor and speeding. Police say his car collided with an automobile owned by Perry Evans, 30, of 1226 N. Illinois St. WOMEN AND POLITICS Dr. McCulloch Pays Tribute to Part They Play in Party Affairs. Bp Time* Special SEYMOUR, Ind., Sept. 25. —In an address before the women's McCul-loch-for-Governor Club Wednesday night, Dr. Carleton B. McCulloch, Democratic candidate for Governor, paid high tribute to the women as politicians and congratulated them on the interest given party affairs. McCulloch declared it was through the Democratic party women were

given the suffrage. He declared the only remedy for high taxes was honesty and efficiency in administration of public affairs.

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