Evening star. [volume], October 25, 1935, Page A-2, Image 2

About Evening star. [volume] (Washington, D.C.) 1854-1972

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PEDESTRIAN LIGHT
TEST IS 0 I
Special Signals to Be In
stalled at Fourteenth and
- E Streets Corners.
Hoping to persuade pedestrians to
Cross intersections only when they
have the “go" signal, the Commis
sioners today ordered Installation of
special pedestrian signal lights at all
corners of the intersection of Four
teenth and E streets as an experi
ment.
At the same time the city heads
adopted an opinion by Corporation
Counsel Prettyman holding that they
do not have authority to install
“parkometers” along the curbs of Dis
trict streets for the collection of fees
from motorists for the “renting” of
parking space along the public high
ways.
The green traffic light signal for
pedestrians was ordered subjected to
the experiment on recommendation of
Traffic Director Van Duzer, who re
cently championed the proposal for
pedestrian control. That suggestion is
being studied by Prettyman at request
of the Commissioners. The move to
day was regarded as a step in keeping
•with Van Duzer’s plan for a system of
protecting pedestrians from their own
mistakes.
The "parkometer plan was reierrea
to Prettyman recently when a com
pany offered to install machines here
which would belong to the District
after their cost had been collected
out of proposed parking fees. The
plan was to install machines at every
available parking space. When the |
driver deposited a coin in the ma
chine a flag would be raised indicat
ing he had rented the space for a
certain time.
Prettyman found that where the
Commissioners have rented public
space, such as vaults under streets
and sidewalks they have done so un
der specific acts of Congress. He
told the Commissioners the law does
not permit them to mark off the
streets and charge for parking in
such places, or to erect "parkometers”
or any similar device. The city heads
thereupon dropped the matter.
INVENTOR BURNED
IN DEMONSTRATION
Combined Automobile • Boat • Air
plane Catches Fire on
Library Lawn.
Constantinos Vlachos, 38, self-styled
Inventor, narrowly escaped death in
one of his own contraptions today
when a combined automobile-boat
Birplane caught fire as he was staging
a demonstration on the lawn of the
Congressional Library.
Vlachos' head, shoulders and hands
■were burned when an umbrella-like
rig on top of his craft burst into flame.
’He was taken to Casualty Hospital,
•where his condition was not believed
Berious.
Vlachos, who lives at 1007 Twelfth
street, called his Invention a "tri
phibiam ”
According to his wife, who witnessed
the disastrous demonstration, the craft
has never been off the ground.
The body of Vlatfios’ invention is
similar to the carriage of a motor cycle
side car, with rubber tires and bicycle
wheels. The overhead arrangement
apparently was constructed of some |
highly inflammable material, according
to the speed with which it was con
sumed by the fire.
-•
GREEK LEADER HELD
UNDER SURVEILLANCE
Kondylis Government Denies Re
bellion Reports—Ships De
layed by Strike.
By the Associated Press.
ATHENS. October 25.—George Pap
enbreu, leader of the United Demo
cratic party, was held under police
surveillance In his hotel today al
though the government officially de
nied reports of a rebellion.
Premier George Kondylis said that
everything was quiet. Athens was
calm.
British tourists coming to Athens
this morning from Crete reported
their ship had been delayed on sail
ing by a strike of longshoremen, but
that otherwise they were not dis
turbed.
(In Paris, the newspaper Midi re
ported that the Athens government
had oredered three destroyers and
2.000 soldiers to Crete, where, it stated.
30.000 Republicans were under arms
In a rebellion. The newspaper said
450 Republicans had been arrested in
Athens.)
Papandreu was arrested last night
©n a charge of circulating manifestoes!
against the Kondylis regime.
Irvin S. Cobb
Borah Would Be Hope
less As Candidate To
A ny Party Bosses.
SANTA MONICA, Calif., October
25 (N.A.N.A.)—Bill Allen White says
Senator Borah is good presidential
timber. Well, the Republicans might
go further and fare worse—they prob
ably will.
Once I was sure most of the smart
tricksters were naturally Republicans,
Just as most of the honest idiots were
naturally Democratic. Lately, though,
the Republicans have borrowed many
of the sterling half-witted tactics of
the opposition. Where there’s a
choice of two ends, they’ll take both.
Besides, to any set of party bosses,
Borah, as a candidate, w-ould be ab
solutely hopeless. He makes up his
own mind, instead of sending it to
some reliable Old Guard laundry. He
88 ys what he believes. He believes
what he says. When he talks, he
talks about issues, not about Borah.
Whereas, the average aspirant's
speech-making Is so full of empty
platitudes apd the capital I’s come
so close together, all I can think of
Is a picket fence around a vacant lot.
If you’re looking for Borah’s proto
type in the other camp, ask the bell
hop to page Carter Glass. He’ll prob
ably be found In the subcellar. He
was there at last accounts, catching
up with his sulking.
(Copyright. 1935. by the North American '
.... Newspaper Alliance. Inc.)
*
What’s What
Behind News
In Capital
New Home Building
Drive Is Mapped
For Roosevelt.
BY PAUL MALLON.
The basis for an extensive residen
tial building campaign has been placed
on President Roosevelt’s desk, or
nearby. It is in the form of a confi
dential report from Peter Grimm and
associates. They are the New York
real estate experts imported into the
Treasury Department to plan some
thing big on housing.
Mr. Grimm has been prying quietly
into local conditions in the area east
of the Mississippi and has found that
existing housing facilities are 96 to 98
per cent occupied. Or, as a real
estate expert always puts it, vacancies
are 2 to 4 per cent.
This is a rather surprising figure
because normal vacancies generally
amount to about 10 per cent. It means
time is ripening for a housing boom.
Rent Increase Forecast.
Mr. Grimm and Co. are supposed
to take the view that the boom is
certain within three years, but that
a more deplorable trend will come
first. They foresee a perpendicular
rise in rents. This, they say, has
already started, Imperceptibly. What
they mean by imperceptibly is that
residential rentals are now tending
to slide up 5 to 10 per cent above last
year.
LOOKS
Like another
ALTITUDE .£
RECORD m
The boom, as they see it, will
cause a spiral cycle on building
which will last a few years, until
the country is again overbuilt.
Then will come another depres
sion, lasting until the country
again catches up with the builders.
This is inevitable, they say, but a
swift start now on a Federal housing
promotion campaign may take alti
tude from the spiral and level it off
somewhat. Apparently no new Fed
eral agencies are needed, in their
opinion. What they want to do is
to create a home-building urge among
the people. Home-building shows will
be opened in large cities around the
first of the year. These will be held
in armories, etc., will display model
homes, fine, modern home-building
equipment, incite the housewife to
prod the husband into building a
home of their own.
Mr. Grimm and company think it
can be done.
Still Clashes With Ickes.
Mr. Grimm has applied foot-ease to
all the toes he stepped on around here
at first; that is, all except one. His
troubles with Secretary Ickes still con
tinue. But then, Mr. Ickes has al
ways been another government in a
different country. He is sticking to
his low-cost housing ideas, which put
the Government in direct competition
with what Mr. Grimm has in mind.
When Mr. Grimm talks housing,
he means homes costing from
$2,500 to $7,500, privately built.
When Mr. Ickes talks of housing,
he means Government-built homes
which he expected to build for
around $2,500, but which are cost
ing about $52337. That clash will
never end. No one, in the New
Deal or out, has ever been able to
do much about Mr. Ickes.
So many enthusiastic housing ef
forts have been made and have failed
to justify either the enthusiasm or the
money spent on them that Mr.
Grimm’s enthusiasm will also be sub
jected to skeptical analysis. How
ever. the real estate picture is un
questionably clearing up. Not only
the Home Owners’ Loan Corp., but the
farm mortgage unit will go on a self
liquidating basis next year. Only th%
last dregs of emergency mortgage re
lief demand now remain. Applications
for farm mortgage help are supposed
to have dropped lately to 30 a day,
as compared with a peak of 17,000
per day.
The population Is not Increasing
much, but the marriage rate has
picked up. Also there is a tendency
of families to get away from the dou
bling-up, trebling and quadrupling
noticeable during the depression.
The wise man will build as soon as
he can, before new activity swings
building costs higher.
Johnson Is Loose Again.
What the New Dealers would like
to find out is what Gen. Johnson is
up to. His latest magazine piece ac
cused the President of turning the
New Deal into a refuge camp for
radicals in no friendly terms.
They do not know whether it
means that the Baruch-Johnson
Peek-Moley wing of presidential
advisers is getting ready to walk
out or whether Johnson is cam
paigning for the Democratic nomi
nation for himself or for some one
like Al Smith.
The solution might be simple if
the insiders did not know that, every
once in a while, President Roosevelt
permits attacks on himself from
friends in order to prepare the way
for changes in policy. He has been
known to have encouraged antago
nistic speeches and articles as psycho
logical justifications for starting a new
trend.
For that reason there is considera
ble wonder whether the heads of a
few left-wingers may be abdut to fall.
(Copyright. 1935.)
BINGHAM AT RITES
Ambassador Attends Henderson
Service at Westminster Abbey.
LONDON, October 2$ OP).—Ameri
can Ambassador Robert W. Bingham
represented the United States at a
memorial service today for Arthur
Henderson, former president of the
World Disarmament Conference, wBo
died October 20.
The ceremony, held at Westminster
Abbey, was attended by Joseph A. C.
Avenol, secretary general of the
League of Nations, and many diplo
mats, peers and labor officials, as well
as representatives of King George and
the Prince of Wales.
1
Up and Over With the Army
Perfect co-ordination between horse and rider is shown
here as Capt. Earl F. Thompson of the United States Army
team schools Masquerade for the international matches in
which Uncle Sam’s officers face the Chilean Army in the Inter
American Horse Show, to be held tomorrow, Sunday and Mon
day afternoons in Rock Creek Park, at Chevy Chase, Md.
THE TAKE-OFF.
MASQUERADE FOLDS I F HIS LEGS AS HE LEAVES THE
GROl ND, THE RIDER GOING FORWARD TO ASSIST HIS MOUNT.
, ■ ■■■■I. . . —n
SAILING OVER THE DIFFICULT 5-FOOT LOG BARRIER.
DESCENDING AFTER CLEARING THE FENCE AND THE
RIDER RETURNING TO THE SADDLE TO AID HIS HORSE IN
LANDING.
THE LANDING NEGOTIATED, MASQUERADE FALLS BACK
INTO STRIDE AND PREPARES TO APPROACH NEXT FENCE.
—High-Speed Photos by Baker, Star Staff.
WOMAN IN FATAL
CRASH TAKES POISON
Mrs. Doris Martin, 25, who was
riding with Carl Ramstad, 40, taxi
driver, when he was killed in a three
car crash on Arlington Memorial
Bridge Saturday night, was in a crit
ical condition at Emergency Hospital
today after taking poison in her
apartment at 2305 Eighteenth street.
She left a note for her mother, Mrs.
Prances Shake of Camden, N. J., de
claring her act was due to grief over
Rams tad’s death. Mrs. Martin was
only slightly injured in the accident
and testified at the Inquest Wednes
day when a coroner's Jury held the
hacker's death was due to his own
negligence.
Mrs. Sarah E. Wrenn, manager at
the apartment house where Mrs. Mar
tin lived, asked the young woman yes
terday if she Intended to continue her
residenoe there. Mrs. Martin said
she would give her answer in half an
hour. Mrs. Wrenn later went to Mrs.
Martin’s apartment and found her on
the bath room floor* a bottle of poison
nearby*
4
KLONDIKE VETERAN,
68, RETIRED BY U. S.
Thomas C. Farrow, veteran of the
Klondike gold rush, will retire tomor
row after 37 years’ service in the
adjutant general's office, War Depart
ment. He will be 68 on October 30.
Farrow, who lives at 3518 Park
place, returned to the States after a
vain search for gold and accepted an
appointment in the adjutant general's
office. He had gone to the Klondike
after leaving the Army in 1897. Dur
ing his service career he served with
the famous 4th and 5th Cavalry Regi
ments in the Western Indian hostili
ties.
Born in England, he came to this
country in his youth. For many years
he* was in charge of the returns sec
tion at the War Department.
Brig. Gen. Edward T. Conley will
preside at the retirement ceremonies
tomorrow. Gen. Conley is acting ad
jutant general. Farrow will be pre
sented with gifts by fellow employe*
Railways of England have added
8,760 employes in the last la month*
4
MANY SIDE EVENTS
FOR HORSE SNOW
Brilliant Program Planned
for International Here
Saturday.
While the principal Interest In the
Inter-American horse show and exhi
bition centers around the international
military and civilian jumping classes,
a brilliant program of. supporting
events has been arranged by officials
of the three-day meet that is to open
here on Saturday afternoon.
Among the more outstanding of
these will be exhibitions of high school
horses now in training for the 1936
Olympic games and fencing and rid
ing competitions between officers who
are drilling at Port Belvoir, Va., for
the modem pentathlon events to be
held during the Olympics at Berlin
next year.
In addition, there will be exhibitions
of the Riding and Hunt Club and Red
land Hunt hounds and a number of
classes for a selected number of the
best hunters and hunt teams in this
section of the United States.
Colorful Ceremonies Arranged.
Col. Charles L. Scott, chairman of
the committee, also has arranged for
colorful military ceremonies marking
the opening and close of each day’s
program. The show is to take place
in Rock Creek Park at Chevy Chase,
Md., if fair weather prevails, and in
the Port Myer Riding Hall If the
weather Is Inclement.
The exhibition of the high school
or dressage horses, which are trained
to the point where they can be con
trolled entirely by the subtle use of
the hands, weight and legs, will be
given by Maj. Hiram E. Tuttle of the
United States Army team, which ar
rived here last night from Fort Riley,
Kans.. to meet the Chilean team in the
military events.
Lieurs. ueorge l,. Eastman, Aiirea
D. Starbird, Charles A. Symorski and
Brookner Brady will participate in
the jumping contests to be held by
the United States Olympic modem
pentathlon team, while•Lieuts. Rich
ard W. Mayo, Clayton J. Mansfield,
Brady, Morris O.‘Edwards, Frederick
W. Weber. Charles F, Leonard and
Eastman will take part in the fencing
competitions.
The machine gun troop of the 10th
Cavalry and the mounted band of
the 3d Cavalry will stage the opening
and closing ceremonies each afternoon.
11a zen to Receive Standards.
District Commissioner Melvin C. Ha
zen, president of the show, will receive
the presentation of the standards
on Saturday, while the Chilean Am
bassador, Senor Don Manuel Trucco,
accompanied by his three daughters
and niece, will be the guests of honor
and receive the salutes of the teams
in the international jumping class.
The guests of honor on Sunday will
be Mai. Gen. and Mrs. Albert J. Boley.
Gen. Boley is commanding general of
the 3d Corps Area. On Monday the
acting Secretary of War, Harry E.
Woodring, will be the guest of honor
-and receive the salutes of the Chilean
! and United States teams. Col. Henry
L. Stimson. former Secretary of State
and president of the Riding and Hunt
Club, will present the trophy to the
winning team.
Officers who will represent the
United States brought 14 horses with
them from Fort Riley, while the
Chilean army team has brought nine
down from Governor's Island, N. Y„
where It has been training. Mrs. John
Hay Whitney of Upperville, Va., will
exhibit eight of her famous hunters
and jumpers.
Many other well-known exhibitors
are to take part in the meet. A total
of 55 horses have been entered in the
show. The entries number more than
200.
Bose Ban Applied.
Cultivation of white roses, which
yield half as much rose oil as the red
variety, is to be banned in Bulgaria.
_
Roosevelt’s A. A. A. Statement
--- ... —..
President Reveals Desire to Convert Emergency
Program Into Permanent Plan.
The text of President Roosevelt’s
statement today. In which he revealed
his plan to point the farm program
away from an "emergency" application
to a "long-term” plan, follows:
In May, 1933. Congress enacted
the agricultural adjustment act,
which was designed tr relieve the
distress then prevalent among
tanners. Since that time several mil
lion producers have Joined whole
heartedly with the Agricultural Ad
justment Administration In far
reaching adjustment programs.
I wish to pay tribute to the
courage and perseverance with
which these farmers, using the
facilities made available by Con
gress, have fought their way out
of the acute depression which en
gulfed them in 1932. They have
been patient in the face of delay,
tolerant of a host of irritations and
undeterred by opposition because
they knew they could never win
except through co-operation on a
national scale. The first opportunity
farmers ever had to work together
on such a scale was afforded by the
adjustment act.
The achievements of the A. A. A.
for agriculture are apparent to mil
lions of farmers. The improved
demand for city-made goods re
sulting from increasing farm buying
power is reflected in better business
in towns and industrial centers
everywhere. The adjustment act
has served the national welfare.
There are people in this country
who can see no room for further
progress in agricultural adjustment.
Of these, some would be content to
continue the adjustment programs
exactly as they are. There are even
a few supporters of the A. A. A. so
well satisfied with what has been
done that they would like to call
the job complete and finished.
more permanent nan.
But it never was the idea of the
men who framed the act, of those
in Congress who revised it, nor of
Henry Wallace nor Chester Davis
that the Agricultural Adjustment
Administration should be either a
mere emergency operation or a
static agency.
It was their intention—as it is
mine—to pass from the purely
emergency phases necessitated by
a grave national crisis to a long
time. more permanent plan for
American agriculture.
Such a long-time program is de
veloping naturally out of the pres
ent adjustment efforts. As I see
it. this program has two principal
objectives:
First, to carry out the declared
policy of Congress to maintain and
increase the gains thus far made,
thereby avoiding the danger of a
slump back into the conditions
brought about by our national
neglect of agriculture.
Second, to broaden present ad
justment operations so as to give
farmers increasing incentives for
conservation and efficient use of
the Nation's soil resources.
Simplification of present pro
grams. with a view to increased
flexibility, would readily lend itself
to the broad objectives outlined.
Decentralization of machinery to
get more efficient administration
closer to the farmers already has
begun and will be vigorously con
tinued. To simplify administra
tion the A. A. A. will work toward
the objective of one contract per
farm. The modifications planned,
m addition to making administra
tion easier, will facilitate produc
tion adjustment either upward or
downward.
May increase Production.
The time may come when the
A. A. A. will prove as important in
stimulating certain kinds of pro
duction as it has been in remov
ing recent burdensome surpluses.
For example, an expanded produc
; tion of hogs, to replace shortages
AUTO SHOW
PUZZLE CONTEST
THIS IS PUZZLE NO. 18.
| |
SEW I The Occident. |
I|
i i
STAY | Used to raise dough.
_!_|_
l I
RATE | The earth.
ii _
i i
ACHE j To arrive at.
!i
i i
CAP |] Small South American rodent. |
I!
PETAL j A little loose flap.
!
i
HAS | To scourge.
— - ■ —— ■ —- -
OEM | A sport |
!I
I I
LAVA | Maritime.
! _!
THEIR | One or the other.
_I_I_
Add a letter to each word shown In the left-hand column and rearrange
the letters to spell a word for which the definition is given. Insert the new
word below the definition and place the added letter in the last column oppo
site the new word. If the puzzle is solved correctly, the added letters will
spell the trade name of one of the twenty-one (21) automobiles shown in the
list below, to be exhibited at the Sixteenth Annual Automobile Show of Wash
ington, D. C., from November 2 to November 9, 1935, inclusive, at the Calvert
Exhibit Hall, 2601 Calvert street northwest, opposite Hotel Shoreham, under
the auspices of Washington Automotive Trade Association, who, with the
co-operation of The Star, is conducting this contest.
AUBURN
BUICK
CADILLAC
CHEVROLET
CHRYSLER
DE SOTO
DODGE
FORD
HUDSON
HUPMOB1LE
LAFAYETTE
LA SALLE
LINCOLN
NASH
OLDSMOBILE
PACKARD
PIERCE-ARROW
PLYMOUTH
PONTIAC
STUDEBAKER
TERRAPLANE
The first puzzle appeared October 8. The last will be published October
28. Previous puzzles may be studied m the files in the Business Office of
The Star.
Solve each puzzle, and not earlier than October 29, but not later than
midnight, October 30, send all of the solutions with a reason of not more
than twenty (20) words “As to Why an Automobile Show Should Be Held
in Washington, D. C.” to the Washington Automotive Trade Association, 1427
1 street northwest, Washington, D. C.
It is not necessary to send in the actual puzzles, but it is compulsory
that the entries show the new words. The new words will not be given out
or published, and no entries will be returned. *
* Officials of the Washington Automotive Trade Association, whose de
cisions will be final, will act as judges, and based on correctness, neatness
and manner .in which the solutions are submitted, as well as the reason for
holding an Annual Automobile Show, will award prizes totaling (100 and 100
tickets to the Automobile Show, as follows: First prize. $50 and 12 tickets;
second prise, (25 and 8 tickets; third prize, (10 and 6 tickets and 25 prizes of
2 tickets each. In case of ties duplicate prises will be awarded.
Winners will be announced in the Automobile Show Section of The
Sunday Star on November 3, 1935. Questions should be addressed to Wash
ington Automotive Trade Association, 1427 I street northwest, Washington,
a a
caused by drought, is contemplated
under the proposed new corn-hog
program, which is put up to a de
cision of producers in a Nation*
wide referendum tomorrow.
Present and future production of
supplies of food and fiber ample
for this country’s nee^s and for
available export markets is a sound
objective. However, there was
nothing sound in the situation in
the past when, spurred by ruin
ously low prices, farmers have
been compelled to mine their soil
of its fertility by overintensive
cultivation in a race to make up
in volume what they had lost in
unit price. This has resulted in
waste on a colossal scale. Dust
storms and mud-laden streams
have been symbols of this exploi
tation.
Tens of millions of acres have
been abandoned because of erosion.
This jeopardizes both consumer
and producer. Real damage to the
consumer does not result from
moderate Increases in food prices,
but from the collapse of farm in
come so drastic as to compel ruth
less depletion of soil. That is the
real menace to the Nation’s future
food supply. That has caused
farmers to lose their homes. It
has hastened the spread of tenacy.
It lies at the root of many serious
economic and social problems be
setting agriculture.
Important Gains Cited.
Already the adjustment programs
have made Important gains in con
servation and restoration of soil
fertility. Many millions of acres
which fanners have signed con
tracts to divert from surplus pro
duction are being devoted to
legumes, pastures, hay'and other
crops which fertilize the soil and
protect it from blowing and wash
ing.
The long-time and more perma
nent adjustment program will pro
vide positive incentives for soil
conservation. The benefit pay
ments can be made on a basis that
will encourage individual farmers
to adopt sound farm management, j
crop rotation and soil conservation j
methods. The crop insurance lea- !
ture afforded by benefit payments
will help farmers to maintain these
beneficial systems of farming with
out interruption in poor crop years. ]
Long-time adjustments can be j
adapted to natural soil advantages
of regions and localities. Already
the adjustment administration has
under way local studies to help in j
working out farm programs on a
county basis, so as to fit the best
permanent use of the varying soil
resources of the country up to that
county's share of available domes
tic and foreign markets. Thus, j
plans are being worked out that
should encourage widespread co
operation of farmers in a perma
nent national soil-maintenance
program.
The simplified and more flex
ible adjustment program of the
future can be made to serve the
permanent advantage of producer
and consumer. It can iron out the
succession of extreme shortages
which in the past have alternately j
wrecked farm income and penal
ized city people with too high
prices. It can protect the Nation's
heritage of soil, help farmers to
produce up to the full possibilities
of profitable export and give this
country the safest possible assur
ance of abundant food in the
years to come. I can think of '
nothing • more important to the
permanent welfare of the Nation
than long-time agricultural ad
justment carried out along the'e
lines.
MISS DOROTHY DETZER
TO DISCUSS WAR CRISIS
Executive Secretary of League for
Peace to Speak at Friends
Meeting House.
Miss Dorothy Detzer, national
executive secretary of the Women's
International League for Peace and
Freedom, who recently returned from
an extended trip through Europe, will
discuss the war crisis at the Friends
Meeting House. 2111 Florida avenue,
Monday, at 8 p.m.
Miss Detzer attended the meetings
of the September council and "assem
bly at Geneva and before coming back
to the United States made a speaking
trip through the industrial centers of
England.
Sunday
—in—
The Feature Section
llictor
“U. S. Takes
Million Yearly From
Ex-Bootleggers'*
Here’s the story of a branch
of the Department of Justice
headed by Joseph Lawrence
that has been quietly doing a
million-dollar business annually
for Uncle Sam.
• • • •
“Forgotten Man of
the Navy”
Navy day brings up an old
dispute as the ghost of Esek
Hopkins rises to add further
complexity to the controversy
over honors due Jones and
Barry.
• • • •
“Capital's Ghosts
Walk Anew on
Halloween Eve”
Houses built by George Wash
ington among the first reported
haunted in a city rich in lore
of spooks.
• • •
These and other features
t will be ready for you
l
—in—
(Hljf fcunfoay fctar
RAIL DRAWBACK
Plight of New Haven De
clared to Stress Serious
ness of Conditions.
BY DAVID LAWRENCE.
The plight of the New Haven Rail
road, which has occupied public
attention this week, has served to
draw attention to the fact American
railroads are worse off In 1935 than
they were In 1934; In fact, they are
slipping beck to a condition com
parable to 1932, the depth of the de
pression. And all this in spite of the
fact total operating Income for the
first eight months of 1935 was greater
than for the corresponding months of
any year since 1931.
What's the answer? The railroads
say operating costs have been forced
on them through the increased prices
of raw materials and through the
forced restoration of wage cuts before
the roads were able to absorb them.
Government Drawback.
But there's another answer. It Is
to be found in the policies pursued
for the last 20 years by the National
Government, under Republican as
well as Democratic administrations,
in failing to consider the economics
of railway operation yet in interfer
ing in management, subsidiz ing the
competing carriers and generally han
dling the transportation problem In
the same haphazard fashion of experi
mentation that has characterized the
N. R. A. and the A. A. A. under
“economic planning."
political pressure on the Executive
and on Congress has prevented the
whole transportation problem from
being viewed nationally, and, while it
is true the railroads think labor has
been too grasping and has been aioed
by the politicians because of their
votes, the fact remains that the de
pression has proved how important it
is to maintain the purchasing power
of labor. In other words, if the rail
roads could increase their traffic by
10 or 15 per cent, they could pay the
present we^es, meet their fixed
charges and furnish good service to
passengers and shippers.
But incr:ases in traffic are tied up
with the general economic situation
and with the impediments that have
been raised by artificial measures to
retard recovery.
Economies in operating costs can,
of course, be suggested, but until the
Government itself permits a greater
degree of flexibility and there's an
incentive to management, the genius
that built up American transportation
will not be revived.
Recapitalization Held Essential.
One of the big costs, to be sure, is
interest on borrowed money. Recapi
talization w-ould seem to be essential,
too, to weed out the depreciated sub.
sidiaries and permit the railroads to
do some of the sound things they have
long been forbidden to do in getting
traffic.
To recapitalize means long-drawn
out court proceedings, but the new
laws passed in 1933 and amended last
session are of great assistance In ac
celerating the process. Thus the New
Haven's predicament has been re
ferred to in the headlines as a "bank
ruptcy.” Technically, that's true, but
actually the New Haven is going
through a reorganization that will
correspond to the receiverships of
other days.
For under what is known as sec
tion 77-B of the bankruptcy law. a
reorganization plan can be worked
out and submitted to the courts that
preserves as many of the security
holders as equitably belong in the pic
ture. Such a reorganization proceed
ing cannot be instituted unless a cor
poration can prove that it cannot
meet its maturing obligations. In
good faith, it must exhaust all its
avenues of credit. This the New Ha
ven management has done, even in
cluding a request to the Reconstruc
tion Finance Corp., which has been
publicly announced as having been re
fused. Now, therefore, the New Haven
can proceed with its reorganization.
Fail to Earn Charges.
It Is interesting to note that, of
the class 1 roads, about 67 per cent
have failed to earn their fixed charges
during the first seven months of 1935.
This means that security holders,
which, by the way, are to no small
extent educational institutions and
social welfare institutions generally,
are the ones whose incomes are suf
fering. For railroad bonds used to
be gllt-edge investments, and many
of them, in the better and stronger
roads, are still gilt-edge.
Congress, in the last session, by
putting motor carriers and inland
waterways under the regulatory power
of the Interstate Commerce Commis
sion. has taken a constructive step.
Recapitalization and readjustment of
the debt structure is another step.
But the railroads will not come back
to their own till the whole price
structure in America can adjust it
self to meet the new conditions, thus
making for that desired increase in
velocity of transactions which pro
duces more freight traffic and more
carloadings.
(Copyright 1935.1
FEW ROADS SHOW PROFIT.
I. C. C. Reports on 50 Railways
for Year.
The Interstate Commerce Commis
sion reported yesterday that only 13
of the 50 largest railroads in the
country showed a net profit after de
preciation and retirements for the
first eight months of this year.
The earnings generally were below
the same period of 1934, although a
few showed slight Increases in net in
come. The Elgin. Joliet & Eastern
jumped from a deficit of $453,310 last
year to a net of $892,721 for the same
period.
The roads showing net income, in
addition to the Elgin, were:
Atchison, Topeka <Ss Santa Fe, $3 -
467,331; Chesapeake & Ohio, $17,701,
259; Los Angeles & Salt Lake, $2,
493; Louisville & Nashville, $1,854,
660; Norfolk & Western, $13,933,839;
Oregon Short Line. $198,388; Pennsyl
vania, $11,660,944; Perre Marquette,
$238,475; Pittsburgh & Lake Erie, $2,
052,394; Reading Co.. $2,743,335; Texas
& Pacific, $355,380; Union Pacific, $7,
693,692.
The commission received reports
from 143 of the 149 class 1 railroads
up to August 31 showing total earn
ings of $368,269,609 for the first eight
months, as compered with $419,405,
242 for the comparable period last
year.
These earnings, computed after rail
way operating expenses were paid, In
cluded $263,738,344 of net operating
Income, compared with $302,872,278
last year. Other income from building
rentals, bus lines, etc., totaled $104,
$31,265, compared with $114,532,964,
< ft