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Whole Coast Watches Flight of Seaplanes Two U. S. Seaplanes Reach Halifax on Flight to Europe ! Continued from pa*e 1 the afternoon awaited wtth keen ex- i pectancy the appearance of the advent- ! urous airmen. At 6 o'clock the first I definite tidings of their approach was | received and crowds quickly gathered , upon the hills. When the 'planes were j sighted sirens and whistles of factories and steamships let loose in an ear- : splitting welcome, which the crowd ? echoed in an outburst of cheering. Captain Hines, in command of the : American naval forces here, went out | on the naval tug Iroquois with a party of prominent citizens, including Consul General Young, the French consul Gabourdy and Lieutenant Colonel Thompson. The Iroquois was anchored off the Lighthouse, and the planes, as they soared overhead, were greeted with waving flags and handkerchiefs and enthusiastic cheers. M. Gabourdy offered 500 cigarettes to the first per? son who sighted one the planes, and the prize was won by Quartermaster Richards, U. S. N. Warships Ablaze With Lights A number of other craft also put out to welcome the aviators. The cruiser and the destroyers glittered gaily with myriad lights. Within a few minutes of alighting Commanders Towers and Richards re? ported on board the Baltimore, which is anchored off St. George's Island, and their report was transmitted by wire? less to the naval department at Ottawa. The aviators then made themselves comfortable for the night in prepara? tion for their flight to-morrow. The N. ('. :? was towed from her anchorage and made fast to the stern of the Balti? more, from which she was supplied with oil and fuel. Commander Towers, chief of the ex? pedition, said: "I cannot give an interview until 1 submit a summary of the flight to the department. We followed our sched? ule, leaving Rockaway at 10 and ar? rive,' here at 7. Conditions weren't bad." With that he went back to his shaving soap and hair brush. Captain Claverius, of the Baltimore, a little more communicative. "Conditions wehe very favorable, ami the only strong winds were struck off the coast of Nova Scotia," he said. The aviators were quite comfortable andexperienced no hardship from cold. Commander John H. Towers, who brought the two seaplanes safely to ' port after a flight of 510 miles from ? Rockaway Point in nine hours, an- \ nounced that he expected to get away to-morrow morning on the second leg of the journey, which will take the ? aircraft to Tr?passe;-, X. P., a distance of 4?50 miles. Commander Towers based his ex? pectation or a repovt of Professor Alexander McCadie, the meteorological exper. at Harvard University, who sent the word from Halifax this morning which decided the aviators to take the air Professor McCadie said to-night the present, favorable atmospheric con? ditions wer': likely to continue for an? other twenty-four hours, at lea Mi-sing Seaplane Sought Meanwhile destroyers and other craft are searching for the missing NC-4, commanded by Lieutenant Commander A. C. Read, which fell behind the other craft because of engine trouble. The destroyer McDermott was seen to steam off at full speed to the assistance of the NC-4, but late to-night no word had been received aboard the U. S. S. Baltimore, the mother ship stationed here, to indicate that she had been picked up. The airmen reported, how? ever, that the point at which the NC-4 was compelled to come down, the sea was reasonably calm, and they expected no serious difficulty would be encoun? tered in rescuing the men or saving the "plane. All the aviators agree that the first leg of the transatlantic journey called for the most severe test and all are delighted with the way in which the , two hydro-airplanes performed. They say the new meteorological equipment stood up especially well. Strong head winds were encountered, throwing the 'planes 30 degrees off their course, ac? cording to Lieutenant Commander R. E. Byrd, radio operator in the NC-3, the first to arrive in Halifax harbor, and the apparatus recorded perfectly these divergencies, enabling the air? ships to hold to their course with the greatest ease. Highest Altitude 3,500 Feet Commander Towers said the visibl lty throughout the trip was remarkably good and as an illustration cited the fact that the Cape Cod district was spread out before them like a map be? fore they turned east for the Nova Scotia coast. The two planes flew at various altitudes during the trip, the N'C-1 ascending at one point to 3,500 feet, the highest altitude recorded dur . ing the journey. At times the two 'planes were out of sight of each other, but they adhered dowry to the schedule fixed before the start and flew up the harbor within ten minutes of each other. An enthusiastic welcome awaited the -American aircraft. Captain H. K. Hinea, senior naval officer of the port, accompanied by United States Consul Young and many of the most promi ?.;. residents of Halifax, were aboard ? naval tug Iroquois, stationed near to the entrance of the harbor. The official party cheered wildly as the 'planes took the water, while the whis craft anchored in the harbor led to the din. Fliers Tired, But Happy ^ Later Captain Hines and Consul i o?'.tig went aboard the Baltimore and warmly congratulated the aviators upon th? .r achievement. They found the ii-.rmc.T) at dinner, tired out from their a work, bat enthusiastic over the performance of their 'planes and ,:cr?y di?cussing with Professor Mc '.he ?poajiibilities for to-morrow. Just before the official party left Baltimore a lookout reported that the NC-4 ?a? in sight, but the search ??hts of the ship, which were imme? diately flaahed in all directions over -.V;r and on the sky above, failed to disclose the m i ?sin?/ craft. If tho preiscnt weather conditions COPtimu a?a a ?tart is made to-mor ro? on the aecond leg of the trip the aviator? p?Jin to hug the Nova Scotia co-ant tz&til th*y are off Louisburg and then h?sad directly for .Newfoundland. Aft*r the experience gained on the run it/ Halifax the American? declare they ar* ab?iolutely confident of completing til? trip to Trexjawwy on Bthedule time. We Will Be First,' Say Navy Fliers "The United State? navy ???planet will be the first to fly acroag the Mean?' To those fortunaU; persons who Hnet Em KC bttvdi ?j| th<t Roclc&way nava '"?? ' ?' M ??? ??? <? )i',ir >,? 10 y< ?t'.erdaj tunmioM Cenm?n?tt -lohn H. fowert'i e?nft??Ht prediction ?Appeared ? tote Hunif eonefu?ion. A* the moment "four bell*" rant ?t?ear above the entfne noiae theNC-8 flagship of Commander John H. Tow- I ers, "admiral" of the transatlantic I seaplanes, started on tho first leg of j her momentum aerial voyage. With a roar from the concentrated power of ? lfi.000 horses the huge ship tore ? through the haze-swept waters of Ja- j maiea Bay. Fifty seconds later she literally leaped from the water into i the air at terrific speed. The haze had scarcely shadowed her ! graceful lines when Lieutenant Com- ' mander A. G. Read's NC-4 rushed j through the water after her. The ! "Four," too. rose with graceful ease in ! fifty seconds, and quickly pierced the | misty shroud. Then the NC-1, first of her type, and I commanded by Lieutenant Commander P. N. L. Bellinger, raced madly after her two sisters. Sixty seconds after her start she sprang into the air. Wind Conditions Perfect All three 'planes took off toward the southwest, in the opposite direction to which they had to fly. Five minutes after the first "take-off" the anxious watchers on the beach saw the three in majestic formation gradually emerge from the smoky black haze, headed due east. They were flying splendidly, the twelve Liberty motors humming in the perfect unison of smooth running. All | tho signs boded well for a rapid and j successful flight to Halifax. The wind, but a gentle spring zephyr, was just sufficient to aid the giant craft with? out retarding their progress. Behind them in the air one of the big F-5 L typo of two-engined flying boats was acting as attendant. In her cock? pit were the photographers of the navy taking official photographs for the archives of the Navy Department. The F-5 L, piloted by Gunner C. D. Griffin and Ensign J. R. Briggs, ac? companied the NO seaplane as far as Fire Island and then returned to Rock away. There Griffin reported they had left the three transatlantic planes flying strong in a due easterly direc? tion. "The NC-1 was twenty miles off shore," said Griffin, "about fiOO feet in the air. The NC-4 was flying ten miles off shore at an altitude of 500 feet, and the NC-3 between them at a distance of fifteen miles off shore and | 800 feet high. "We flew quite close and could see Commander Towers sitting in the com? manding officer's cockpit in the nose of the NC-3. We semaphored to him, saying 'Good-by, good luck.' He replied with a wave of his handkerchief." Orders for Flight Brief The spirit in which the navy is mak- ?' ing its_ attempt to fly across the At- | lantic is voiced in the flying orders j announced by Commander Towers just j before the start. They read: "Should any seaplane becoir.e sep? arated from the formation it shall make the rest of its way along the course until normal conditions ob? tain. In case any seaplane is forced to come down the others to remain in the vicinity until a report of the other 'plane's condition is received. "Sharp spirals and steep banks are forbidden. "IfN the commander's flagship is forced down orders wili be awaited as to which 'plane, if any, shall re? main. If necessary the commander will use one of the other seaplanes as his flagship. A standard altitude ' of 1,000 feet will be maintained." There are to be no aerial acrobatics nor reckless flying. The expedition is of a scientific nature and is to be con? ducted as such. Commander Towers remarked before stepping aboard his craft, "We are all assigned to special duty. That is all." Early yesterday morning it looked as if the flight would have to be post? poned again. Conflicting reports re? garding weather conditions were being received, which made decision on part of Commander Towers almost impos? sible. First 'Plane Ordered Out Promptly at 7:30, however, he or? dered the NC-3 out of her hangar. She had lain there through the night, while j the mechanics worked feverishly tun i ing up the three new Liberty motors 1 which had been installed in place of i the faulty ones. The other two I 'planes had remained on the concrete j base sinCu their trial flights the night i before. She was hauled onto the platform | of the marine railway and quickly i launched. Then she was given her j first trial flight with the new engines. I Exactly at 8:30 o'clock she rose from I the water in thirty-nine seconds with i her transatlantic crew aboard. She rose to an altitude and flew in a manner that greatly pleased the other crews watching from the beach. Dur? ing this flight Lieutenant Commander Lavender, chief radio officer, spoke over the wireless telephone to the other ships lying on che beach and told them the NC-3's engines were run? ning splendidly. Meanwhile on the beach the NC-1 was being swung on the calibrated compass lines to work out her com? pass deviations. This was completed just before "8 o'clock. Five minutes after 8 she took off in a preliminary trial flight with Commander Bellinger and his crew. Twenty-five minutes later she re? turned. At this moment the thick black haze had darkened the atmos? phere to such an extent that the NC-1 was compelled to use her night landing flares to make a landing. As she cir? cled over the NC hangar two powerful point? of light shot out, piercing the inky haze and lighting up the watet where ?he settled. Wings Still Give Trouble After a short run her blunt nos? pushed up against the beach. Ther one of her pilots shouted to Comman? der Towers "?She still has a tendencj to roll over. 1 had to hold the stick firm all the time." He referred to the difficulty .expert enced with the ailerons. This aros? through the necessity of using the left wing of the N't!-2 and the original winj of the NC-1, following the unfortunau accident? to the remarkable craft Evidently the two do not quite balance Commander Tower? said this would no aflVct the flight, but would be a bigge; strain on the pilot. By this time ' was clear that Com mander Towers wa? feeling very dubi oua. Hi? usual imperturbability di( not desert him, nor did his face giv , any indication of the thoughts tha , j were passing through hi? mind. Th ' j only indication was the fact that h actually smoked two cigarette? in th course of a? many hours. At frequcn interval? he ?cot up small test bal loon? to observe weather condition? a various altitude?. These told him th wind was blowing from the north wit a velocity of thirty mile? an hour. At 9:15 o'clock Commander Tower announced the flight would be mode ? , soon a? the three, ?eaplane? could go The words were ?carcely out of hi I mouth when, floating noiselessly ove I th? N 0 hnngar at an altitud? of onl i00 feet, the navy's giant "blimp" C " h'ive ?n VieVI her II ispuno-1 uiza m< ? tor? ?ilenced. The crew leaned ov? . and waved down. "Get out of the air; that's our?! shouted one of tho N O men, laugl S irigly. , with ? final wav? th? bUsw roi higher, circled the hangar thrice, and then departed on a Liberty Loan dem- ? onstration. Designers of 'Planes See Start About the beach were some 500 for? tunate people; relatives, friends of the crews, officials, reporters and photog? raphers. Among them were the men whose genius had designed and per? fected the 'planes?now waiting pa? tiently to see the fruition of their plans. There stood Commander G. C. West ervelt and Lieutenant Commander Hunsaker, who, together with Com? mander H. C. Richardson, one of the pilots of the NC-3, were the three navy men responsible for designing the. remarkable craft. : Richardson is lucky because he has been given the oppor? tunity to fly the pro<luct of his genius. In the eyes of both Westervelt and Hunsaker could be seen the desire for the same honor, but their duties keep them here. Engineer Gilmore, of the Curtis Cor? poration, and his assistant^, who coop? erated with the three naval men in de? signing the craft, were also there to see the start. Captain Xoble E. Irwin, head of the Bureau of Operations, and his two daughters were there. One of them, Phyllis performed a pretty little cere? mony by going around to each membei of the three crews and presenting j? four leaf clover. Others present included Margaret Jane, the eight-yaar-old daughter of Commander Richardson, and her mother. Mrs. Ida E. Harding, aunt of Lieutenant L. T. Barin, ono of tho I pilots, came on from Norfolk, Va., to. see the start. Herbert L. Satterlee, ! member of the firm of J. P. Morgan, ? and a former ?Secretary of tho Navy, j and Mrs. Satterlee were present. In | all about twelve women were present. Rations for Trip Served A few minutes after Commander Towers announced his decision Lieu? tenant J. L. Br?ese, beaming joyously. ran over with the ration of sandwiches and thermos bottles of hot coffee that are to sustain the crew as Jar ?is Hali? fax. He handed them up to the men on his boat, the N C-4?the only one which did not make a preliminary spin. So well did he do it that the "movie" men did not have a chance to "get" him. They voiced their protest and he willingly accommodated them by per? forming the job all over again. At 9:43 o'clock Commander Towers went aboard his flagship. The N C-4 was on the launching platform of the marine railway. In the water on her left was the NC-4, while the N C 3 was on her right, also in the water. An he took his station in the com? manding officer's cockpit Commander Towers waved his handkerchief and shouted to the people waiting on the beach : "Goodby, boys. There is nothing that we can see now that will prevent us from being in Halifax by C o'clock, which will be the end of the first lap. The men are a fine set; we couldn't have better. We bave been looking for ward to this kind of weather for near? ly a week. We are confident that the American navy seaplanes will be the first to cross the Atlantic Ocean." Wireless Connection Assured Lieutenant Commander R. A. Laven? der, chief radio officer, who is in Com? mander Tower?'? 'plane, at the last moment said: "Our wireless instru? ments have been tested and aro work? ing tip top. Wo will be in touch with at least two destroyers by wiro less all the time. If any apa | ratus should go wrong on one destroy i er we can get in touch with another, J or with ?and." Lieutenant Commander Bellinger, ! commander of the NC-1, was boyishly happy. His flying suit has always been ft thing of beauty and wonder to tho j rest of the crews, and with hi? beam? ing smile yesterday morning, It gave him a boyish look that seemed to bello the fact that he is one of the navy'? j first aviators. He was smoking a big cigar when i the newspapermen trooped over to htm ?'or hi? laut message. Ho said! "With the help Of God, and r; gplto Of tin devil, we will do this little thing," hi? Southern accent smoothing out tho do termination of hi? phra?tti. Lieutenant Communder A. C. Hem) of the NC-4, a smaller, quieter and ' more serious man, said: "Nothing 1mm At top?Naval seaplanes N C-l, N C-2 and N C-4. Bottom?Com- | mander J. 1?. Towers (left) and Lieutenant L. T. Barin, discussing weather. Insert left?Lieutenant Commander A. C. Read of the N C-4. Insert right?Lieutenant Commander P. N. L. Bellinger. Progress of Flight as Shown by Reports nPlIK three naval seaplanes?NC-1, A NC-3 and NC-1 -left the Naval Air Station, Rock?way, at 10 o'clock yesterday morning. They were re? ported along their course at the following times: Time re- Distance Place. ported, in miles. Fire Islund. l():4u 40 Montauk Point, L. I... 11:30 90 Block Island, R. I- 11:35 9? Naushon island, Mass. 12:50 170 Hyannis Point, Mass.. 1:10 100 "Chatham, Mass. 1:28 -OS Boston .. 1:3). I'll First station ship.... 2:18 258 Second station ship. .. 3:10 3f0 Third station ship... 4:10 370 Capo Sable. 5:10 -130 Lockport, N. S. tC:30 440 Mouth Haiifax Hfrrbor 16:55 475 Landed at Halifax_ t8:00 540 'Here tho NC-4 experienced en? gine trouble and proceeded more slowly on throe engines. tNova Sco? tia time. been overlooked in the construction of these 'planes. They'll do the trick." Two minutes before 10 o'clock Com? mander Towers waved his hand in sig? nal for the start. There followed im? mediately a tremendous %roar as the motors on the three 'planes started up one after another. People on tho beach instinctively put their hands to their ears to shut out tho din. A touch of extreme patho'a marked the successful start. Just before Com? mander Towers boarded his 'plane, a friend of Chief Special Mechanic E. H. Howard telephoned him in the Brook? lyn Naval Base Hospital that the start was about, to he made. Late Wednesday night Howard's hand was cut off by the propeller of the NC-4, on, which he was to have flown as engineer. A little later the frjend telephoned the 'planes had left. A nurse answered the 'phone. The friend waited: Then came a, feminine voice, punctuated by a sob, saying: "You will have to excuse him. He feels pretty bad." At. the last moment there were some changes in the crews of the three sea? planes. They finally got away as fol? lows: N.C. 3?Flagship Com man ding officer?Commander John II. Towers, commanding officer of tho fleet. Pilot?Commander H. C. Richardson. Pilot?Lieutenant David H. McGul lough. Radio operator.Lieutenant Com? mander R. A. Lavender. Engineer- Machinist L. R. Moore. Reserve pilot Lieutenant Braxton. Rhodes, to go as far as Newfoundland. Navigating instrument export-?Lieu? tenant Commander R. E. Byrd, to go as far as Newfoundland, N.C. 1 Commanding officer Lieutenant Commander P. N. L. Bellinger. Pilot?Lieutenant Commander M. A, Mitsher. Pilot?Lieutenant L. T. Barin. Radio operator?Lieutenant Harry Sad en water. Engineer?Chief Machinist's Matt) C. 1. Kesler. Reserve pilot ? Machinist Rasmus Chriatensen, Newfoundland only. Experimental officer Ensign C. J. McCarthy, Newfoundland only. N.C. 4 ?Commanding officer Lieutenant ( lommander A. C. Read, Pilot Lieutenant E. P. Stone. Pilot- W. K. Ilmton. Radio operator- Ensign R, C. Rodd. Engineer -chief Machinist's Mat? E, S. Rhoads, in place of Hownird, who lost his hand. Reserve pilot ? Lieutenant J. L. Br?ese, Newfoundland only. Flight to Halifax Test For Real Sea Journey Seaplanes to Wait in Newfound? land for Secret Date of "Hop Off" on Trip to the Azores Yesterday's flight is the first leg in the flight to Newfoundland. It is not a part of the transatlantic flight. It is : being utilized for two purposes: first,! us the mdlst convenient means of de-1 ; livering t'hc 'nlanes to their starting i place in Newfoundland, and, second, ? to test the machines over long dis : tances and measure scientifically their performance. The distance from Rockaway to Hali? fax is 540 nautical miles. After spend? ing the night in Halifax Harbor the 'planes will fly to-day to Trepassey Bay, N. F., a distance of 400 nautical miles. There they will stay until the date laid down, in Washington on Feb? ruary 24 last as the starting day. This la understood to be around May 18. The main flight is considered to be from Trepassey Bay, N. F., to Lisbon, i Portugal, by way of the Azores. The ; present plan is to fly from Trepassey to llorta, in the Island of Fayal, adis i tance of 1,7.00 nautical miles. Should i weather conditions be unusually favor ? able the flight will bo continued to i Punta Delgada, in the Island of San | Miguel, .without stopping at Horta. The total distance from Newfoundland ' would then he 1,350 nautical miles. In this flight the course will be cov ! ered by practically the entire destroyer | flotilla of the United States Atlantic 1 fleet. There will also be several capi I tal ships along the route. These ves i sei? will be so placed that they never i will be more than sixty miles apart. ! The seaplanes will be in communi?a ' tion with two or more of them at all l times. All surface craft must cease wireless communication as soon as the seaplanes come within a ?200 mile radius of them. Throughout the flight the seaplanes will have the wireless right of way. The Island of Pica in the Azores, which rines sheer out of the Atlantic to a height of 7,000 feet, will act as a directing beacon. This island will be seen by the seaplanes for a distance of more than 300 miles. The main navigating apparatus, how? ever, will be the wireless direction finder, by which the .navigators can ! determine their exact position within I two minutes irrespective of weather conditions. After landing at Ponta Delgada the three seaplanes will continue their flight to Lisbon, a distance of 800 nautical miles. From Lisbon tho flight will be continued to Plymouth, Eng ; land, a distance of 775 nautical miles. The average speed is expected to be ! sixty-live miles an hour. This meana the flight from Newfoundland to the Azores will take about l8Mi hours. In view of Commander Towers's de f termination to reach each destination in daylight, the seaplanes will leave ; Newfoundland about noon. Due to the 1 difference of time they will arrive in ? the Azores about 9 o'clock the follow j Ing morning. \NC*4 Still Missing, State Latest Reports Mo Trace of Seaplane Since It Passed a Point ?.ess Than Half Way to Destination WASHINGTON, May 8.?With two j of tho throe navy seaplanes which . I started from Rockaway, L. I? this morning on the first leg of the trams- ? atlantic flight arrived safely at Hali- : fax, navy officials were bending every j energy to-night to locating the third, ' missing since early in the afternoon. ; No report of the missing machine, the NC-4, commanded by Lieutenant Com- L mander A. C. Read, had been received ' after the machine passed the destroyer ? McDermott, first station ship, located j more than sixty miles north of Cape, i Cod and less than half way to Halifax. Orders were issued at once sendin/g the McDermott and the next ship be? yond her, the Kimberly, in search i,f the missing seaplane. Commander Read had reported just boforo reae'n- I ing the McDermott that the oil pujj.ip on one of his motors was giving trouble and he, might have to coime down. Later the NC-4 reported to Commander Towers in tbe XC-3 that the trouble had been repaired. Test Encourages Fliers Commander Towers, with the NC-1 and NC-3, made the tour to Halifax in a fraction less than nine hour.;, the distance on the map over the course they took being 525 miles. These two planes went through the. test i n such fashion as to convince officers h ;re that prospects for reaching Plymouth, Eng? land, tho ultimate goal of the navy air? men, were exceedingly bright. Each of the three planes had. a triple radio installation when it le.ft Rock "away. One set was the telephone by which they communicated with each other while in flight at a distance of a score or more miles. Stations and guard ships "listened in" on many of these conversations and reported them. Tho second sat was the regular long distance radio installation, and the third was the equipment for the radio compasses. Ah the planes approached one of the patrol vessels, long befoire it was sighted, the long distance radio was buzzing. Questions and answers flashed back and forth, dealing with directions for navigation. Important communications were relayed to and from the speeding seaplanes, som? from Washington. One carried greetings to Commander ! Towers and his crews from Acting Secretary Roosevelt, who watched the trip with keen interest all day as the department's messages came in. Another relayed cable assurances from London that every facility of the British admiralty would be at the dis? posal of the daring American airmen j when they reached British waters. The communication arrangements of the Navy Department worked out per? fectly. Repeatedly messages from j Ct/mmander Towers, sent from his speeding flagship of the air squadron, the NC-3, reached tho desks of officers here a few minutes after the time they were sent. Intercepted by any of the radio stations ashore or afloat on the I chain reaching clear to Halifax, they were rushed to Washington on the | navy's leased wire. The entire operation of the system ? was grouped under direction of Lieu I tenant Tunis A. M. Graven. On one side of the Lieutenant's office is a room where the leased wires broughi in the messages. On the other side ie the transatlantic radio equipment. Re? ports from Commander Towers couic be sent to Vice Admiral Knapp in Lon? don almost as quickly as they coulc be carried into Secretary Roosevelt's office across the hall. Log Kept at Washington Olficers here kept a radio log on th< flight, made up from the message; ! that came. The log pictures graph) ! cally the swift ru?h northward of th? i flying boats with their crews. Ever the fifty minutes that elapsed afte: the NC-1 and NC-3 were safely moorec for the night at Halifax, and befort the cruiser Baltimore, stationed there sent in the official report of the ar rival, is shown. Had not that sli] occurred it could have been knowi officially in London that two of th? three American senboata had mnde th first lap of the transatlantic journo?. on schedule time almost before th? machines themselves had been moored More difficulty will be experience? in getting word through promptly whet tho long lap from Newfoundland to th Azores ?turU. When the fifth or .-?\t! station ship has been left behind com ntunicaUon will have to be relaye back by cabio. Tho destroyers cifnno communicate, more than 250 miles b radio in daytime, and they will leav their posts after the last of the flier has passed. Hi?es Urges Merging Roads Into 20 Lines Director Says Old System of Hundreds of Companies Must Go or Government Ownership Is Inevitable Elliott Supports Plan Flo and Senator Cummins Declare Consolidation Is Solution of the Problem More than 1,100 members of the j Economic Club of New York listened to ' a discussion of the immediately press? ing pcroblems of the railroads of tho country at the annual meeting and dinner of the club in the Hotel Astor last night. The speakers were How- ' ard Elliott, president of the Northern Pacific Railway; Walker D. Hines, di? rector general of railroads, and Sen-' ator Albert B. Cummins of Iowa. All three agreed that the return of ?the railroads by the government to the companies and their operation on the basis of private ownership is desirable. ,but maintained that this could only prove successful by new methods of regulation. Mr. Hines especially unaintaincd that unless a common and ? general standard of regulation is es? tablished the ultimate alternative wijl be government ownership. Consolidation Urged Mr. Elliott, speaking for the rairway executives, outlined a plan of regula? tion in which he urged the consolida? tion.of the many railroads now In ex? istence into not. more than eighteen, and the application of federal regula? tion under the supervision of either a department of transportation headed by a secretary of transportation or such an agency as will prove most ef? fective. Mr. Hines disagreed with him on one point onlyf> in that he urged that the consolidation of the present many weak and strong railroads be. made compulsory. He maintained that un? less this is made so the taonsolidatiov* will not occur, as many strong rail? roads may refuse to dilute their pros? perity with weaker road*. Elliott's Address Mr. PHliott said: "Regulation by the government is necessary and desirable, but it should not attempt management! and operation of the business, but should be con? fined to those steps necessary to pre? vent unjust discrimination, extortion or excessive profits; t(> provide for good service and the safety of the public, and for suitable living and working conditions for the -employes. "As the railway system is national in its work and -iscope, regulation by tho Federal government must be su? preme and not be weakened or set aside by state regulation. "Continuous amalgamation of vari? ous railroads vnto a number of larger systems must be permitted, so that the whole country will be well served and there will still be the spur of self interest and competition all the time so as to produce development and good service. "The income of the roads should be adjusted within a reasonable time to meet the necessary outgo, and until that readjustment can be brought about the government should protect the financial situation, not for the purpose soleJy of maJcing a return to individual holders of securities, but to prevent a financial collapse that will affect the whole country. Rate Reduction Opposed "Until the valuation work can be completed, it might be assumed ten? tatively and without prejudice as to final valuation, that the standard re? turn, now being paid by the government, '' is a fair return on the property and ' that, pending the final valuation, the '' government shall not reduce rates ! until under normal conditions as to ' volume of business the income exceeds the standard return. "It is better for the country to have the roads ?sustained by means of the rates charged for transporting passen? gers, freight, mail and express, rather than to make up the deticiency, large or small, by appropriations from the national or state treasuries." Mr. Hines urged closer cooperation between the government's regulatory bodies and the railroads. For this purpose he advocated that the regu? latory bodies be represented on the boards of directors of the railroads, thus creating a direct link between the companies and the government. He criticised the public's tendency to re? gard the railroads as overcapitalized, calling this popular misconception one of the greatest stumbling blocks on the r.oad to fair regulation. The evils which characterized the old form of regulation, Mr. Hines said, were not mere defects on the part of the persons appointed to carry out the regulation. "No group of men," he said, "could possibly make a success of the form of regulation that existed prior to Fed? eral control. There must te a change in the system itself. The lact that we have 180 railroads whose operating rev? enue is $100,000,000 a year Jind several hundred whose operating revenue is less than that is the greai; stumbling block to successful regulation." The varied financial condition of these roads, Mr. Hines pointed out, makes it impossible to establish a defi? nite standard on which rates could be based, with the result that decisions of regulatory bodies have always pro? voked protest and proved inapplicable to all railroads as a whole. Standards Are Lacking "There was a general idea that rates ought to be such as to give a fair re? turn for fair value, but there were no standards to show what were fair rates and what were fair returns." This, the speaker maintained, must be avoid? ed in the future by the compulsory consolidation of the railroads into as few companies as possible, without at the same time destroying the oppor? tunity for competition, "for the public wants competition." "Unless we can accomplish this," Mr. Hines said, "government ownership is inevitable, for the public will bo con? vinced that reguiation has failed." Senator Cummins, who is a member of the Scnato Interstate Commerce Committee, supported the proposition of consolidating the railroads into fif? teen or twenty companies. He . op? posed their consolidation into one com? pany on tho ground that this would de? stroy the advantages of competition. Senator Cummins said: "I feel bound to say to you that .hare is but onti real remedy for the present railway situation. It lies in the further and compulsory consolida? tion and unification of the railways. It is obvious that a complete consolida? tion into one system would attain the object. For if the earning power of all the rouds, under given rates, produced j sufficient revenue to pay the cost of maintenance of operation and meet tho ! capital charge there would remain nothing but the distribution of charg?e j between communities end commodities ; but I do not favor complete consolida? tion into a single organization. "I am disposed toward fifteen or twenty railway systems under sepa i rate, independent management, subject, of course, to rigid public control, each of these systems to be in the hands t>f a Federal incorporation, with a cap ; ital representing the actual value of 1 the properties combined in that sys? tem." . The following were elected officers of the Economic Club for the year ly19-1920: Henry Morgenthau, pre s ? d e n fe; ! Ceorge W. Wickersham and William | Church Osborn, vice presidents, and ' George Gordon Battle, Samuel McRob I erts, Charles A. Coffin. William H. I Porter and Robert J, F. Schwarzen bach, directors. Stabilization of Steel Prices Is Abandoned <{> ntinned from pase 1 i ! Hines isiucd a statement in which he? -. justified the position of 'the railroad administration in its controversy witn the industria! hoard. As Profitable as War Prices ?le declared that the reduction in t steel costs since the war ended, in a single instance, ha-< been so great as to make the prices proposed by tin? steel interests and the industrial 1 board practically as profitable as wer? 1 the higher prices during the war. Elbert 11. Gary, chairman of the .steel committee and head of the United , States Steei Corporation, said after tin; i conference that all the members of the ! committee had adhered to their posi , tion that further cuts in prices could not be made without necessitating ? I lowering of wage scales. Other steel men present predicted ? that an open market in the industry j would shortly be followed by increased j business and higher prices than thoso suggested by the industrial board. Mr. Hines, in his statement, said in part : "In accordance with the suggestions : from Secretary Rcdiield and Cbair ! man Peek of the Industrial Hoard, the ; railroad administration represent.? ! tives, Messrs. Henry B. Spencer anil I T. C. Powell, had a conference to? : day with representatives of the steel interests. Messrs. Spencer and Powell j offered spcciiic criticisms of the steel j prices heretofore proposed and .sug? gested maximum prices which the ! railroad administration would feel | justified in paying for the various steel articles which the railroads use in important quantities, including steel rail. "It was made clear that the r-ail road administration did not wish to obtain preferential prices, as com? j pared with the general public. Unwilling to Change Prices "The steel interests wore unwilling to make any change in the prices un 1 nounced in March. The conference? o:i i this subject are at an end and the rail ! road administration will, in accordance ! vvitn its settled purpose, proceed o? ! rapidly as it needs steel materials oC ; any kind t^ ask for competitive bid.* ? and purchase accordingly. The rail I road administration will at once, in ac? cordance with this policy, ask for bid? ! for 200,000 tons of steel rail. "The arguments Which have been ? presented in the effort to support the : prices proposed by the steel inter i and the Industrial Board have rested j upon costs incurred during the war j period. Even these costs show eXC mgly handsome profits to the low cost ? producers. But .?>?";? J costs,-without h in, :l ?-i In wag? j. will, on account of the termination of the I war, be subject to very important re ! auctions. "The steel interests and the i ? trial Board have proposed a price o? ! $38.50 for steel billets, and yet they have proposed prices for finished gl ! products which are wholly out of linn I with the price for Bt Open Hearth and Bessemer "Messrs. Spencer and Powell pointed out that the cost of Open Hearth re I was no greater than the cost of Bc---> ? mer rail, since the cost and price of both sorts of billets were the same, and therefore that the price of Opea Hearth raii should be no #higher than the price of 41..'J7 for Bossen raiL and that if tho steel interests wis^ 1 to encourage tho purchase of Bessemer rail they should do so by making the price of Bessemer a differential under price so arrived at for the Opea ; Hearth rail rather than through in? creasing the price of Open Hearth rail j by $2, the amount of the old difieren ! ti al. "Messrs. Spenc-r and Powell i?di . cated a willingness or. the part of .hn i railroad administration to purchase for the time being at the suggested i new prices based on 50 per cent in-i ?crease in differential pins the billet j price of $38.50 announce' i "The steel interests were un ? * I to make any reduction in their pr ^ I and, in order to repel the arg?ir that the prices for all otheT pi t? ! were out of line with the billet prices, ! manifested a disposition now to claim ! that their own billet price ol $88.50 : was lower than it ought to have beer. Blames It on Pe?k I "The uncertainty and hesitation which have been injected into this situa? j tion would never have arisen if at ti e I outset Chairman Peek ? of the indus? trial Board), hnd been willing to ?ac? cept as lin;.i the position which the railroad administration stated before. the Industrial Board made its public , announcement and which it Y;. ' i times felt, forced to maintain. But Chairman Peek has been so bent on. justifying I :s own mistaken concep? tion of his functions that he has been ! trying for weeks to get them accepted and yet he has never succeeded in gettii.g the support of the President o? the Cabinet or the Attorney General? "In closing the discussions of this subject, which have beer? carried on for some time by Mr. Peek of the In? dustrial Board, it is important that the totally erroneous impressions cre? ated by bim, particularly in * recent .speech before the United Chamber, of ? Commerce at St. Louis, be removed." Discussed by Cabinet "The fact is that the plan on whiclj the industrial board was suppose" > operate was thoroughly discussed at a special meeting of the members of thej Cabinet on February 3, and Mr. P < stated in his speech that that meeting) : approved the plan o? having the in-* ; dustrial board determine prices and make thorn effective h\ authoritativ? i governmental announcement. In this he is in error. The meeting distinctly ? declined to approve eny pian for an? nouncing prices at wh;ch the general public would buy, ami the only plan ! which was approved "was a plan ta bring about by voluntary action a re-? duoed level of prices at which the rniW road administration would bo justified. in buying freely. j>.nd therefore thei plan actually approved specifically con* templated that the board would act an a mediator between the producers andj the railroad administration. "Tho meeting of the members of th* Cabinet on February S was called, and presided over by Secretary Glass of th? Treasury Department, end, as indicate mg Mr. Peek's erroneous conception of the plan approved at that mcctinA Secretary Glass telegraphed to the ni* rector General after reading V ?> !V"k's address in St. Louis, sharn?T contradicting Mr. Peeks assumption* that tho President am! the Cabinofc over sanctioned the policy of price* 5^??! ?engaged la by the Industrial