tell of their wishes and wants, almost to the exclusion of everybody else. Mr. Cass. I would not think that you could consistently say that the electric railroads, that have been affirmately left out, have run away with the legislation. I doubt if that conclusion is accurate. Mr. STRONG. Would not you feel that these short lines that are of national importance that the Government should go to their aid? Mr. CASS. You mean the electric roads? Mr. STRONG. The electric roads. Mr. Cass. Yes; I think they are just as important as the short steam roads. Mr. STRONG. Do you think that the short steam roads- Mr. Cass. I think they are all of vast importance to the country. Mr. STRONG. To the whole country? Mr. Cass. Yes; I think if you should scrap four or five hundred short steam roads in this country, it would be devastating in its effect on the commercial life of the country. Mr. BUSBY. Is it not the purpose of the long railroad systems to scrap the short lines? They are not trying to save the short lines they own, and are scrapping them as fast as the Interstate Commerce Commission will permit them to do so. Mr. Cass. I know some of them are being scrapped, but others are being kept together. Mr. BUSBY. Is it not the argument that the short line is always a burden on a system? Mr. Cass. I do not think so. Mr. BUSBY. And the Supreme Court of the United States, of course, can keep them in, because it compels them to consider the earnings from the standpoint of knowledge of the whole system, and not from the standpoint of the earnings of the short lines? Mr. Cass. I do not understand you. I do not understand what you mean. I do not follow you. Mr. BUSBY. I think it is plain, if you have got a system with 2,000 miles in it, and it has a feeder line that runs out into the isolated territory 30 miles, and the main line gets the credit for the revenue from the full, entire haul, and when you, in cutting down expenses, try to scrap the depot or try to scrap the mileage, it shows against the short line, when really it is a feeder to the long line and is worth more than the big system pretends it is worth. Mr. Cass. I concur fully with you in that, sir. Mr. BUSBY. It is my conclusion, and I would like to know yoursmy conclusion is that the big railroads are not favorable toward keeping repaired and maintained these short lines. Mr. Cass. Well, I do not think that you could generalize on it like that, Mr. Congressman. I think there are some short-line railroads that the steam railroads, the large steam railroads, if you please, want to keep open. Mr. BUSBY. If I understand your statement in regard to the short lines which constitute the whole system Mr. Cass. I know some independently operated short lines that are very important to the steam-railroad connections, and I am sure they would not want to take them and scrap them. I do not think you can generalize on the value of the short-line railroads any that more than you can generalize, perhaps, on the value of some trunkline railroads. Mr. BUSBY. Has not the automobile and truck business affected very greatly the short-line railroads? Mr. Cass. Highway transportation has perhaps had more effect upon the short-line railroads than perhaps on the long railroads. Mr. BUSBY. It would be a case, would it not, of requiring that they be kept going for the help of the long lines, ordinarily? Mr. CASS. No: I do not think that follows. Mr. BUSBY. They have been hit harder than the long lines, do you say? Mr. Cass. There may be some that could not qualify, in the opinion of the board of directors of the corporation. Of course, the dis cretion is lodged with the corporation to loan or not loan. What I am getting to is the admitted disqualifications in the language of the bill. Mr. MCFADDEN. Mr. Chairman, it seems to me that in the operations of the old War Finance Corporation is largely the knowledge to be the basis of this particular system. I recall, in the operations of the War Finance Corporation, that they saw fit, in the emergency, to advance large sums of money, running into millions of dollars, to the B. R. T., in New York City, an electrically oper ated system. So, if that is any precedent that needs to be estab lished, it seems to me that would be the precedent to justify it, even to a greater extent than is stated here by the witness. The CHAIRMAN. I do not remember the language of the original War Finance Corporation act, as compared with the language of the two bills before us, but what you say took place under that bill————— Mr. GOLDSBOROUGH. Mr. Chairman, it seems to me, if you do include them, there is no burden upon those who administrate this act, to help them. Their case will stand on its own feet, and you are not imposing any strenuous burden by putting them in, whereas it might be creating a hardship to keep them out. The mere fact that you have put them in does not mean that they must take the help; it will be à question of fact in each case. If the administration determines in a certain case that the public good requires help, it will give it. The CHAIRMAN. As far as I am concerned, I am in hearty accord with the view you express, Mr. GOLDSBOROUGH. I do not think it is mandatory in the administration of the act to give them help; that is, in every particular case. If they are not entitled to it, they get nothing, any more than the steam railroads, if the administrators of the act The CHAIRMAN, I can appraise fully the point the gentleman raised at the outset that, inferentially, we draw a distinction as to the needs of the two systems in the consideration of credit. It would be just about like your differentiating between a wheat farm and a cotton farm. Mr. Cass, Mr. Chairman, may I make this suggestion: If the language of your bill read for example-where it says now that the corporation might lend to a banker, suppose it read it might lend to a blue-eyed banker engaged in a commercial bank. I suggest that the black-eyed banker engaged in investment banking would be up here in force objecting to the provisions of the bill. Electric railroads are engaged in interstate commerce, and those that are engaged in interstate commerce are entitled to no different treatment than steam railroads. The CHAIRMAN. That is all, unless some gentleman wishes to ask some question. Mr. Cass. I appreciate the time of the committee. Mr. DISNEY. Mr. Chairman, I move, if the committee reports the bill favorably, that the word "steam " be stricken. Mr. STRONG. Let us wait until we get final action. The CHAIRMAN. Gentlemen. I want to introduce to the committee a former member of the House from Pennsylvania, Mr. E. J. Jones, who desires to make a brief statement on behalf of the American Short Line Railroad Association. Go ahead and tell them. Hon. H. B. STEAGALL, AMERICAN ELECTRIC RAILWAY ASSOCIATION, Chairman Committee on Banking and Currency, House of Representatives, Capitol Building, Washington, D. C. MY DEAR MR. CHAIRMAN: Following your suggestion to me this afternoon while on the witness stand before your committee, I beg to submit briefly the following facts and figures taken from the annual report of the Interstate Commerce Commission, covering electric railways engaged in interstate commerce for the year ended December 31, 1929: Total miles of electric railroad engaged in interstate commerce_ Number of employees-- Total taxes paid.~. Total unmatured funded debt Total number of electric railroads engaged in interstate commerce, reporting to the commission the same as steam railroads. 10, 076 $1, 132, 889, 698 47, 397 $9,887, 897 $686, 238, 100 211 Any further information you or your committee desire in respect of electric railroads engaged in interstate commerce, or any individual electric railroad, will be very gladly furnished. Yours very truly, C. D. CASS, General Counsel. STATEMENT OF E. J. JONES, REPRESENTING THE AMERICAN SHORT LINE RAILROAD ASSOCIATION Mr. JONES. My name is E. J. Jones, and I am counsel for the American Short Line Railroad Association at this hearing. I was interested in the discussion on this transportation act, because I happen to have been a member of the Interstate and Foreign Commerce Committee that drafted the act of 1920, and I may now make this suggestion: I think there is a great deal of merit in the case, in what several Members, especially the chairman, raised as to the words "steam railroads." I am not so sure in my own mind that the word "railroads " alone is going to fill this bill. That may open it up for interpretation by the courts. I think it was our custom in the drafting of the transportation act to use the words "railroad and/or railways," so as to leave no question as to the motive power that was employed. more than you can generalize, perhaps, on the value of some trunkline railroads. Mr. BUSBY. Has not the automobile and truck business affected very greatly the short-line railroads? Mr. CASS. Highway transportation has perhaps had more effect upon the short-line railroads than perhaps on the long railroads. Mr. BUSBY. It would be a case, would it not, of requiring that they be kept going for the help of the long lines, ordinarily? Mr. CASS. No: I do not think that follows. Mr. BUSBY. They have been hit harder than the long lines, do you say? Mr. Cass. There may be some that could not qualify, in the opinion of the board of directors of the corporation. Of course, the discretion is lodged with the corporation to loan or not loan. What I am getting to is the admitted disqualifications in the language of the bill. Mr. MCFADDEN. Mr. Chairman, it seems to me that in the operations of the old War Finance Corporation is largely the knowledge to be the basis of this particular system. I recall, in the operations of the War Finance Corporation, that they saw fit, in the emergency, to advance large sums of money, running into millions of dollars, to the B. R. T., in New York City, an electrically operated system. So, if that is any precedent that needs to be established, it seems to me that would be the precedent to justify it, even to a greater extent than is stated here by the witness. The CHAIRMAN. I do not remember the language of the original War Finance Corporation act, as compared with the language of the two bills before us, but what you say took place under that bill— Mr. GOLDSBOROUGH. Mr. Chairman, it seems to me, if you do include them, there is no burden upon those who administrate this act, to help them. Their case will stand on its own feet, and you are not imposing any strenuous burden by putting them in, whereas it might be creating a hardship to keep them out. The mere fact that you have put them in does not mean that they must take the help; it will be a question of fact in each case. If the administration determines in a certain case that the public good requires help, it will give it. The CHAIRMAN. As far as I am concerned, I am in hearty accord with the view you express. Mr. GOLDSBOROUGH. I do not think it is mandatory in the administration of the act to give them help; that is, in every particular case. If they are not entitled to it, they get nothing, any more than the steam railroads, if the administrators of the act The CHAIRMAN. I can appraise fully the point the gentleman raised at the outset that, inferentially, we draw a distinction as to the needs of the two systems in the consideration of credit. It would be just about like your differentiating between a wheat farm and a cotton farm. Mr. Cass, Mr. Chairman, may I make this suggestion: If the language of your bill read for example-where it says now that the corporation might lend to a banker, suppose it read it might lend to a blue-eyed banker engaged in a commercial bank. I suggest that the black-eyed banker engaged in investment banking would be up here in force objecting to the provisions of the bill. Electric railroads are engaged in interstate commerce, and those that are engaged in interstate commerce are entitled to no different treatment than steam railroads. The CHAIRMAN. That is all, unless some gentleman wishes to ask some question. Mr. Cass. I appreciate the time of the committee. Mr. DISNEY. Mr. Chairman, I move, if the committee reports the bill favorably, that the word "steam "be stricken. Mr. STRONG. Let us wait until we get final action. The CHAIRMAN. Gentlemen, I want to introduce to the committee a former member of the House from Pennsylvania, Mr. E. J. Jones, who desires to make a brief statement on behalf of the American Short Line Railroad Association. Go ahead and tell them. Hon. H. B. STEAGALL, AMERICAN ELECTRIC RAILWAY ASSOCIATION, Chairman Committee on Banking and Currency, House of Representatives, Capitol Building, Washington, D. C. MY DEAR MR. CHAIRMAN: Following your suggestion to me this afternoon while on the witness stand before your committee, I beg to submit briefly the following facts and figures taken from the annual report of the Interstate Commerce Commission, covering electric railways engaged in interstate commerce for the year ended December 31, 1929: Total miles of electric railroad engaged in interstate commerce_ Number of employees.--. Total taxes paid--- Total unmatured funded debt___ Total number of electric railroads engaged in interstate commerce, reporting to the commission the same as steam railroads.... 10, 076 $1, 132, 889, 698 47, 397 $9,887, 897 $686, 238, 100 211 Any further information you or your committee desire in respect of electric railroads engaged in interstate commerce, or any individual electric railroad, will be very gladly furnished. Yours very truly, C. D. CASS, General Counsel. STATEMENT OF E. J. JONES, REPRESENTING THE AMERICAN SHORT LINE RAILROAD ASSOCIATION Mr. JONES. My name is E. J. Jones, and I am counsel for the American Short Line Railroad Association at this hearing. I was interested in the discussion on this transportation act, because I happen to have been a member of the Interstate and Foreign Commerce Committee that drafted the act of 1920, and I may now make this suggestion: I think there is a great deal of merit in the case, in what several Members, especially the chairman, raised as to the words "steam railroads." I am not so sure in my own mind that the word "railroads" alone is going to fill this bill. That may open it up for interpretation by the courts. I think it was our custom in the drafting of the transportation act to use the words "railroad and/or railways," so as to leave no question as to the motive power that was employed. |