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About Omaha daily bee. (Omaha [Neb.]) 187?-1922 | View Entire Issue (Jan. 5, 1918)
VOL. XLVII. NO. 173.
OMAHA, SATURDAY MORNING,
1918 SIXTEEN PAGES.
Train). ( Httrit.
SINGLE COPY TWO CENTS
ewi Stand lit., it.
GERMAN .DUPLICITY BLOCKS
IS RAILROAD PLAN
NEW RAIL BILL
FIXES PAY TO
Stockholders to Receive Com
pensation at the Rate of the
Average Net Earnings for
Last Three Years.
Washington, Jan. 4. The adminis
tration bill for government operation
of railroads proposes that the govern
ment shallpay compensation at an an
nual rate as near as possible to the net
operating income for the three years
ended June 30, 1917.
The bill also would appropriate
$500,000,000 to be used as a "revolving
fund" with the excess earnings of the
roads for the operation of the law.
The bill is entitled "A Bill. to Pro
vide for Operation of Transportation
Systems While 'Under Federal Con
trol, for the Just Compensation of
Their Owners and for Other Pur
poses." While the president in his address
laid stress on the importance of prop
erly preserving the properties for
their return, the administration bill
specifically provides that government
control shall obtain throughout the
war an "until congress shall there
after order otherwise."
Many government officials and rail
road men made no concealment of
;heir belief that the railways never
vould return to private hands.
Section 1 provides 'that the presi
dent is authorized to agree with and
guarantee to the roads that during
the federal control they shall receive
as just compensation an income at an
annual rate equivalent as nearly as
may be to the roads' average net rail
way operating income for the three
years ending June 30, 1917. This the
bill officially calls the standard re
turn. This section provides that the
net railway operating income is to be,
computed from returns to the Inter
state Commerce commission, exclud
ing debits and credits, arriving from
the accounts which are called in the
monthly interstate commerce return?,
Ot t I . . n J . r 1 1 1 n a-
No Excess Taxes.
Ko federal taxes in excess of taxes
tssessed during -the year ended June
30, 1917, are to be charged against
the revenue in computing the,standard
return. Any net railway operating
income in excess of the standard re
turn is to be the property of the
United States. The amount of the
standard return accruing during the
three-year period is to be determined
by the Interstate Commerce commis
sion, whose certificate as to the
amount is to be taken as final and
conclusive for the purpose of the
agreement and guaranty.
During the federal control adequate
depreciation and maintenance of the
properties of the road will be included
as a part of the operating expenses or
t provided through a reserve fund, in
accordance with principles and rules
which the president will determine.
Up to President.
Section 2 provides that if no
such agreement is made with a road,
the president may, nevertheless, pay
or cause to be paid tp any railroad
while under federal control not ex
ceeding 90 per cent of the standard
return. Under this section the legal
rights of the, railroad for prosecution
of its claim for the balance before the
court of claims is provided fpr, and
any amount found due above that
amount, that had been paid will bear
interest at 6 per cent a year and any
excess amount paid by the govern
ment will be recoverable by the gov
ernment with 6 per cent interest.
Submit Claims to Board.
Section 3 provides that any claim
or just compensation which is not
adjusted under the terms provided in
section 1 will be submitted to a
board of three auditors appointed by
the Interstate Commerce commission,
whose members and official force
will be eligible for that service with
out any additional compensation.
These auditors will give a full hear
ing to the road and to the govern
ment and will report to the president
the amount due the road as just com
pensation. A sum not exceeding the
amount so reported may be agreed
upon by the president and the road.
Failing this agreement, either the
federal government or the road may
file a petition in the court of claims
for final ascertainment of V the
(Continued on Pago STn,
g a. m.
6 a. m -
1 a. in.... . .....26
8 a. m .......... 26
9 a. xn 27
10 a. ra... 2'
11 a. m... 3S
12 m 0
1 p. m
I p. m.... 46
4 p. m 46
6 p. m. . . 44
6 p. m. 43
7 p. m 42
8 p. m 41
r nmn.niliTn IataI Record.
Highest yesterday ... 46 34 i
Loweit yesterday .... 24 2" t6 20
Mean temperature ..35 27 42 31
PrerlDltation 00 .00 . .00
Temperaturo and precipitation departures
from the normal;
N"orml temDerature 31
Exerts for the day 1
Total deficiency since March 1 440
Normal precipitation 02 inch
reflclncy for the day 02 inch
Total rainfall sine-" March 1 J1.84inehes
Deficiency since March 1 T. 4 9 inches
Deficiency 'for cor. period, 19)6. .12.61 Inches
tiefic'.tncy for cor. perio. 1H15.! l.2 inrhes
I A. WELSH, Meteorologist.
U. S. CONTENT IMPERATIVE;
' TO PAY FAIR COMPENSATION
Asks Legislation Authorizing Proper
Maintenance and Reasonable Bet
terment While Under Federal
Washington, Jan. 4. President. Wilson today laid
before congress, assembled in joint session, his rec
ommendations for carrying out government operation
To provide for proper maintenance of the roads
and their return to owners in the same order as the
government takes them over the president recom
mended legislation to authorize their upkeep and bet
terment during the period of fedefal operation. .Legis
lation to this effect is all contained in the administra
tion bills which would appropriate a $500,000,000 fund
for government operation.
Bills' to carry out the president's ideas already had
been prepared under the supervision of the Depart
ment of Justice and were immediately introduced with
plans for prompt consideration in both house and sen
ate. The president) spoke as follows:
"Gentlemen of the Congress: .1 have asked the
privilege of addressing you in order to report that
on the 28th of December last, during the recess of
congress, acting through the secretary of war and un
der the authority conferred upon me by the act of
congress approved August 29, 1916, I took possession
and assumed control of the railway lines of the coun
try and the systems of, water transportation under
"This step seemed to be imperatively necessary in
the interest of the public welfare, in the presence of
the great tasks of war with which we are now dealing.
- As our experience develops difficulties and makes it
clear what they are I have deemed it my duty to re
move those difficulties wherever I have the legal power
to do so.
ASSUMES GRAVE RESPONSIBILITY.
"Tq assume control of the vast railway systems of
the country is, I realize, a very heavy responsibility,
but to fail to do so in the existing circumstances would
have been much greater. I assumed the less responsi
bility rather than the weightier.
"I am sure that I am speaking the mind of all
thqughtful, Americans when I say that it is our duty
BIG LOSS BY FIRE
IN BARRED ZONE
Six-Story - Building Destroyed
and Part of Water Front
(By Associated Press.)
Hoboken, N. J., Jan.' 4. Fire which
threatened part of the water front,
which is within government control,
started today. The blaze was dis
covered in a six-story building oc
cupied' by the Gatti-McQuade com
pany, mill supplies manufacturers, in
the barred zone. That structure
seemed doomed and the flames spread
to adjoining buildings.
All the fire apparatus An Hoboken
was called out to prevent spread of
the flames to the Hudson river piers
and a nearby munitions factory.
Soldiers on Guard
Firemen, United States soldiers and
civilians, aided by New York fire
boats and railroad tugs, brought the
stubborn blaze under control after a
fight of several hours. Owing to the
cold weather the water pressure was
Paper stock estimated to be worth
$100,000 was destroyed in the Gatti
McQuade building, their entire prop
erty loss being estimated at $250,000.
Numerous small fires, caused by
sparks carried by a 40-mile wind, were
' New York Sends Aid.
New York, Jan. 4. Representatives
of the War department have asked
Fire Chief Kenlon of New York to
send fire apparatus to fight flames in
an army storage house at Hoboken.
Chief Kenlon dispatched a fire boat
to Hoboken, Tne Delaware, Lacka
wanna & Western railway also sent
three fire-fighting tugs from this city.
Another Blaze Starts.
An urgent call for aid in fighting a
fire in'a building where army supplies
are stored at West New York, N. J.,
on the Hudson (which is part of
Hoboken), was received by the po
lice department today from United
States authorities. A police fireboat
was dispatched to West New York.
The scene of this blaze is several
miles north of that of the fire which
destroyed the Gatti-McQuade build
ing at Hoboken today.
Members of "Unlucky" Seventh
Ah Tired of "Watchful Waiting'.'
A large number of Omahans who
enlisted in the Seventh regiment are
becoming restless and would enlist
in the navy, but they are finable to
surmount the barrier that prevents
them doing so. Any number of them
appeal to the navy commandant
each day and ask -for advice on liow
to sever their connection with the
One young man appeared at the
navy station and candidly confessed
that he was affiliated with the "Un
lucky Seventh," that he had become
weary of "watchful waiting' and
wished to enlist in the navy. The re
cruitingvofTicer declined to accede to
his request on the grounds that" no
government administration can the entire equipment
i of the several systems ot transportation be fully and
unreservedly thrown into common service without
injurious discrimination against particular properties.
Only under government administration can an abso
lutely unrestricted and unembarrassed common use
be made of all tracks, terminals, terminal facilities
and equipment of every kind. Only under that author
ity can new terminals be constructed and developed
without regard to the requirements or limitations of
particular roads, But under government administra
tion all these things will be possible not instantly,
but as fast as practical difficulties, which cannot be
merely conjured away, give way before the new man
agement. "The common administration will be carried, out
with as little disturbance of, the present operating or
ganizations and personnel of the railways as possible.
Nothing will be altered or disturbed which it is not
necessary to disturb. We are serving the public in
terest and safeguarding the public safety, rmt we are
also regardful of the interest of those by whom these
great properties are owned and glad to avail ourselves
of the experience and trained ability of those who have
been managing them.
(Continued on Page Seven, Column One.)
Bxitish Make New
Gains at Jerusalem
London, Jan. 4. An official com
munication issued by the war office
tonight says General , Allenby, re
ports af urther advance by a part of
his line north of Jerusalem," oyef a ''
distance of a mile.
OVER A MILLION
IN PROFITS TO
, CLINCHFIELD CO.
Sold Four Ships to Government
and Got Five Per"
Cent on Twelve
Washington, Jan, 4. Profits
that amounted to more than a million
dollars were made fcy the Clinchfield
Navigation company in,a deal involv
ing government shipbuilding con
tracts, according to testimony today
before the senate commerce commit
tee investigating the shipbuilding pro
gram. This information was disclosed by
Theodore E. Ferris, chief constructor
for the Emergency Fleet corporation,
and by a report by a district officer
of the shipping board, at today's
The Clinchfield corporation, it was
declared, sold to the government four
ships tinder construction for the com
pany in the yards of the Sloane Ship
yard" corporation of Seattle, making a
profit of $420,000, and later obtained
for the Sloane corporation contracts
for 12 more ships, on which it made
a 5 per cent margin.
Senators questioned Mr. Ferris
closely as to the reason for letting
contracts for the 12 ships to the
Clinchfield corporation, an owner, but
not a builder of ships, and expressed
dissatisfaction over a deal by which
the corporation sold to the govern
ment the four ships at a price so much
higher than it was paying for their
Mr. Ferris declared he knew noth
ing of the financial arrangements, but
admitted recommending the Clinch
field corporation to General Goelhals
in a letter. The committee asked that
the letter be produced torriorrow.
person who was in any other branch
ofMhe seryice could enlist.
"Well, asked the bold trooper,
"won't you wire to Governor Neville
and ask him to (discharge me?"
"Nothing doing I" was the retort.
"Governor Neville toldus one day
over the telephone that we were wast
ing government money ''when we
called him up and asked that cer
tain men be discharged from the Sev
enth so they could enlist in the
The young man said he had enlisted
in the Seventh last September, giving
up a $90-a-month job, with the un
derstanding that he would be called
to service within a short time. He
lays that he was compelled to re
main jn Omaha at his own expense.
as the representatives of the nation to do everything
that it is necessary to do to secure their complete mo
bilization' of the whole resources of America by as
rapid and effective a means as can be found. Trans
portation supplies all the arteries of mobilization. Un
less it be under a single and unified direction the
whole process of the nation's action is embarrassed.
"Jt was in the true spirit of America, and it was
right, that we should first try to effect the necessary
unification under the voluntary action of those who
were in charge of the great railway properties and we
did try it. TJie directors of the railways responded
to the need promptly and generously.
"The group of railway executives whp were
charged with the task of actual co-ordination and
general direction performed their- task with patriotic
zeal and marked ability, as was to have been ex
pected, and did, I believe, everything that it was pos
sible for them to do in the circumstances. If I had
taken the task out of their hands it has not been be
cause of any dereliction or failure on their part, but
only because there; were some things which the gov
ernment can do and present management cannot. We
shall continue to value most highly the advice and
assistance of these gentlemen and I am sure we shall
not find them withholding it.
GOVERNMENT CONTROL IMPERATIVE.
"It had become unmistakably plain that only under
Chancellor of Germany De
clares in Speech Outcome of
Russ Negotiations May Be
Awaited With Confidence.
(By Associated Frrm.)
, Forecasts that Russia's refractory
attitude regarding the German peace
terms, coupled with home objections
to them, would lead the German gov
ernment to put the situation before
the Reichstag in sonic form were
made good by yesterday's news of the
appearance of Chancellor von Ilert
ling before the Reichstag main com
The chancellor's statlnient con
cerning the clauses in the German
terms which fhe Russians have re
jected was of an indefinite nature,
merely declaring that the outcome of
the incident might be awaitedchecr
fully in reliance upon Germany's
strong and correct position and its
"loyal intentions." He announced
that the Russian proposal for the
transference of the negotiations to
Stockholm had been rejected.
THIRD SERIES OF
Washington, Jan. 4. Preparations
arc complete for the opening Satur
day for the third series of officers'
training camps. From the noncom
missioned and enlisted personnel of
the regular army the national army
and the National Guard there have
been drawn thousands of men whose
qualifications, it is thought, entitle
them to advancement into the com
In addition, 2,500 candidates have
been selected from specified schools
and colleges, including military train
ing in the curriculum.
Two Billions Asked for ,
U. S. War Ship Program
Washington, Jan. 4. Plans for a
$2,000,000,000,000 government ship
building program were revealed to
day when the shipping board asked
congress for authority to place $701,
000,000 worth of additional ship con
tracts. At the same time an imme
diate appropriation of $82,000,000
was asked for the extension of ship
yards and for providing housing
facilities for workmen.
Thus far the board has authorized
to spend for ship building $1,234,000
contracts for most of which have,
been awarded. Today's request for a
further authorization and an addi.
tional appropriation brings the esti
mates of funds needed for ship build
ing to $2,018,000,000. If the additional
funds are made available they will
put largely into fabricated steeL ship
contracts, although some contracts
for ordinary steel ships will be let as
will a few for wooden ships on the
WILL BE TABOO:
Service. Will Not Be Impaired
is Opinion of General
Managers In Secret
"While some of tje frills arc likely
to be eliminated, the public may rest
assured that nothing is RoiiiK to be
done by Mr. McAdoo, or the railroad I
officials working in conjunction with I
him, that will seriously impair the I
railroad passenger service of the '
The foregoing is the assertion of
General Manager Walters of the
Northwestern after returning from a
meeting of general managers of the
central division of the Railroad Pas
senger association, held in Chicago.
When Mr. Walters, left Chicago
Thursday night the meetings were
still in session and will probably con
tinue until Saturday. The action of
tile general managers is subject to
the approval of a special committee
on national defense. If this commit
tee approves the action of the general
managers relative to passenger train
service rer.rrangemcnts of schedules'
will be worked out in time that the
changes on the railroads of the coun
try will beccme effective Sunday,
Agree Not to Talk.
According to Mr. Walters, the de
liberations of the general managers
of the railroads were secret to a cer
tain 'extent. In addition, there was
a sort of a gentleman's agreement
that those, in attendance would not
divulge the,' details of the action
However, it is learned from other
sources that are regarded reliable that
the ax is to be applied vigorously to
some of the train service, particularly
east of Chicago Regarding this Mr.
Walters refused to talk.
It is said to be a fact that all spe
cial service will be eliminated from
the eastern roads. The fast bonus
trains are to become a thing' of the
past, at least during the continuance
of the war, and where tvN trains are
operated, if one can handle the busi
ness, the other will come off. This
will apply hot only to one road, but
to all. There will ' be a discontinu
ance of the running of al,l parlor,
lounge, observation and l:brary cars.
However, equipment first class for
the convenience and comfort of the
public wilt be used.
-West Not Affected.
West; of Chicago, and especially in
Missouri river territory, the cut in
equipment and train service will not
be so "deep as on the eastern lines,
due to the fact that heretofore the
roads have eliminated considerable
of the de luxe equipment and have
reduced the number of trains to
practically the actual necessities.
Still there are likely to he a num
ber of trains laid off between Omaha
and Chicago, Omaha and St. Louis
and Omaha and Kansas City.
West of the river there will be a
rearrangement of train schedules to
conform with the schedules farther
There is the remoest possibility
that some of the through trains from
Chicago to the Pacific coast may be
taken off. If so they will come off
all roads, that each line may be
placed on an equal footing with
every other line.
So far as the service on the Ne
braska roads is concerned, it is said
that there will not be any reduction.
The claim is that on every road op
erating in' Nebraska every train now
operated is carrying to capacity and
any impairing of the service would
work a serious inconvenience to hc
public, something that the railroad
men and the members of the rail
road war hoard desire to avoid.
THE OMAHA BEE
The Only Paper
SHOWING A GAIN
In Department Store
Here 'Are the Figures
World-Herald . . .-.70,024
Bee Gains 13,828
WORLD-HERALD LOSS. . . 4,863
NEWS LOSS .... . .. ...10,517
Know where the Results
come from ,
KEEP YOUR EYE ON THE BEE
ALLIES MAY YET RECOGNIZE
LENINE REGIME IN RUSSIA
'AS DE FACTO GOVERNMENT
German Duplicity Has Roused Bolsheviki, Who Threaten
Renewal of War; Trotzky Offers to Withdraw
Russian Troops from Persia; Kerensky Will
Report to Constituent Assembly.
London, Jan. 4. The recognition of theLenine govern
ment in Russia by the entente allies is probable owing to tht
developments in the Russo-German negotiations, according to
the Daily Chronicle.
1 o The statement apparently is based
Chancellor Von Hertling Itl and
, .Will Probably Be Re
placed by Prince Von
(Djr Aararlntrd Pre.
Reports that the German and
Austrian emperors and their military
and political advisers are much per
turbed over the Russian attitude are
followed by one that Count von Hert
ling, the German imperial chancellor,
Berlin political circles have a
rumor that Von Hertling, who is 74
years old, is to be ousted in favor of
Prince von Buelow. the former chan
cellor, who is very close to the Ger
man crown prince.
Unless there is a change in original
plans, the emissaries of Russia and
the central powers will meet today
to continue their discussion of terms
which the Bolsheviki have declared
Are unacceptable. Russia's delegates
have proposed that the conference
meet in Stockholm, which, if agreed
to by the Germans, will make for de
lay- . r
Russ Have Plans.
A news dispatch received in Lon
don says the Russians have made
counter proposals to the Germans.
It is added that they will lie dis
cussed af the next meeting at Brest-
Litovsk on Saturday, which would
indicate the Russians have not per
sisted in their demand that future
meetings be held on neutral soil. The
new Russian proposals call for com
plete evacuation of occupied territory
pending a referendum on self-defini
Meanwhile the question of the
constituent assembly still bothers the
Bolsheviki and demands are made
that it be called at once. The gov
ernment of the Ukraine has sen to
the Bolsheviki a demand that it with
draw its troops from the Ukraine and
decide whether or not it is at war
with that government.
Assembly to Meet Jan. 18.
Petrograd, Thursday, Jan. 3. The
Bolsheviki have fixed thq opening of
the constituent assembly for January
18, provided a quorum of 400 mem
bers is then present.
President Holds Conference, n
With Water Power Leaders
t t . V A n' i i j
Washington, Jan. . rresiuent
Wilson has summoned' some of 4.he
house leaders interested in water
power legislation :o a conference at
the White 1 Iffuse tonight with a view
to expeditious action on some meas
ure that will reconcile all differences.
on a contribution "by a diplomatic
correspondent" which is printed be
neath it. The writer says that owing
to the Bolsheviki discovery of Ger
man duplicity anything may happen.
' THREE ALERNATIVES.
"There arc," he says, "three alterna
tives: The Bolsheviki may give way,
the Germans may give way, or there
will be a rupture of relations. The
first is hardly likely in view of Foreign
Minister Trotzky's declaration. The
second is possible, for the Germans
arc past masters in the art of specious
compromise. But the third is most
probable, since the Bolsheviki have
exhibited a perspicacity which was
hardly expected in this country.
"Russia, the land of boundless sur
prises, may quite possibly witness a
revival of war, if not in the most
active form, it might at least be a
sullenly defensive war, necessitating
the keeping on the frontier of a con
siderable German force. It would at
least prevent those pleasant and
profitable commercial exchanges
which Germany hopes for.
"Assuming such a situation, and the
consolidation of Bolsheviki power,
provided failure to extract, a peace
docs not wreck the 'Lenine regime,
then recognition of that power as the
de facto government follows. Since
i that is so a socialist would be the
logical representative of that govern
ment and Maxim Litvinoff, who has
been appointed, is a likely enough oc
cupant of the embassy."
Strengthen Allies Cause.
. Referring to the retirement of Sir
Gcorge.W. Buchanan, the British am
bassador to Russia, whose services
af praised highly, the writer say:
"In his place probably would be
sent a diplomat in marked sympathy
with the ideas of revolutionary Rus-
sia t .
"Be that as it may, we expect
shortly some new statement of policy
with regard to Russia which, should
it lean toward the latest developments
and democracy, would undoubtedly
strengthen the allied cause in Rus
sia." Offer to Persia.
The Bolsheviki foreign minister,
Leon Trotzky.'is said by the Petro
grad correspondent of the Exchange
Telegraph company to have sent a
communication to the Persian gov
ernment offering to begin negotiations
for the withdrawal of Russian troops
from Persian territory, provided Tur
key will withdraw its forces. ' ' '
The Russian commissioners, the
correspondent ,says, have decided to
negotiate with the government of
Ukraine on the basis of recosrnition
of the Ukrainian republic, provided it
does not hinder military operations
against General Kaledines, the Cos
sack leader. It is suggested that
these negotiations be held at Smol
ensk or Vitebsk. .
Kerenpky Makes Statement
According to the same correspnd
ent, M. Kerensky, the deposed pre
mier, has prepaccd an account of his
services during the period of the first
revolution, which wj(I be presented to
the constituent assembly. It includes
full details of conditions at the front
during the June offensive and the rea
sons' why M. Kerensky decided to re
move former Emperor Nicholas to
In the archives of the Russian for
eign office, there have been discov
ered documents of unusual interest
dealing with negotiations between
Germany and the imperial Russian
government in regard to a national
convention to combat socialism.
Other curious documents relating to
the origin of the war throw light on
certain aspects of German policy.
These papers will be published as
soo.i as they have bceiclassified.
Commission Works Slowly.
Petrograd, Thursday, Jan. 3. The
work of the commission which is
dealing with prisoners is proceeding
slowly. The Russian delegates
claimedjhe right to send any publi
cations fliey desired to Russian pris
oners in uermany and to socialists
in the central empires. They also
demanded unrestricted direct tele
graphic communication with repre
sentatives of the socialist parties in
the enemy countries. The German
delegates replied they were unauthor
ised to make an agreement on this
Germany Posed as Conqueror.
Disclosure of details of the Brest-.
I.itovsk peace negotiations make it
clear, that Germany assumed a dorrt-
meeryig ittilurtc, while Austria, Bul
garia and Turkey were very concil
iatory and disagreed w ith the German
There were c'ilTi-i ences' also among,
the German delegates during the gen-,
cral meltings. Foreign Minister von
Kuehlmanu and General Hoffmann
clashing openly. Germany posed con
stantly as a conqueror, while her three
l!ies showed eagerness for peace and
a disposition to compromise. "
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