Evening star. [volume] (Washington, D.C.) 1854-1972, 1902-12-17
Increase in the Cost Of Transz
portation.
RAILW Us EXPLAIN
HEARING BEFORE INTERSTATE
COMMERCE COMMISSION.
Traffic Manager Grammer of Lake
Shore Road Makes Statement
Regarding Expenses.

The investigation into the propriety OF the
advance in freight rates on grain and gram
| products. dressed meats and provisions, re-
Gently agreed upon by the railroads east or
the Mississippi river and points east and
south, was held yesterday by the interstate
commerce commission In the rooms OF the
commission. In addition to the commits
sioners, a large number of representatives
of the railroad companies interested In the
inquiry were present. Commissioner Nj. A.
Knapp, chairman of the commission pre-
sided. and the examination of witnesses
was conducted principally by Judge c. A.
Prouty of the commission. Commissioners
James d. Yeomans and Joseph w. FHer
were also present.
The particular question involved was the
advance of 21A cents per hundred pounds in
the rate on grain and grain products, which
went into effect December 8, and the In
crease of cents per hundred pounds In the
rate on dressed meats and provisions, which
is to become operative January l.
Principal Witness.
The chief witness was Traffic Manager G..
j. Grammer of the Lake Shore and Mich
igan Southern railroad. who by agreement
between the representatives of the rail-
roads interested, made the general state
ment to the commission of the objects OF
the increase. Mr.. B. B. Mitchell, trafno
manager Of the Michigan Central railroad
also testified in the proceedings The ex-
animation of these witnesses consumed all
the time of the session until IL O'CLOCK
when a recess was taken until CLOCK IN
the afternoon in order to allow the MEM
bers of the commission time for consulta-
ton as to the nature of the written an
swers or statements OF the railroad COM
panies. Upon reaSsembl1ng In the AFTER
frfn oil n
during which the commission stated that 1t
would request additional answers to be
filed in writing by the railroad companies
In reply to a question from Mr.. Grammer
in this connection, Chairman Knapp said
that If the railroads considered themselves
justified in making extensive advances In
freight charges it was to be supposed there
could be no objection to giving the reasons
for such action.
At the suggestion OF counsel and officials
of the roads represented the commission de-
cided to require the railroads to file written
statements by January 10 next, setting
forth the reasons they rely on to Justify the
advance in rates. Another hearing will be
held, probably in Washington, at the
earliest practicable date, though the time
and place are yet to be decided. Most of
the railroad officials Immediately left for
their homes.
Mr.. Grammer's Statements.
Replying to questions of Judge Prouty at
mer stated that the railroads have been
confronted for considerable time with the
statements of their accountants showing
that the expenditures were increasing much
more rapidly than their revenues. One Of
the reasons advanced by the witness for
this condition was the increased cost in the
maintenance of engines and In the added
expense of COAL Mr.. Grammer declared
that the price of iron and iron products
used by the railroads had risen in sympathy
with the coal situation, and that the cost Of
supplies now is considerably greater than
opinion that If the coal situation relaxes the
price of iron ought to decrease.
Mr.. Grammer stated that the gross IN
crease in the earnings of the Lake Shore in
the past ten months was $554.0OO, and the
net decrease for the same period was ST.
206, 900. He claimed that the increased cost
o. operations justified the advance in rates.
which would mean an increase OF about
100000 per year. He also mentioned the
fact that the wages Of the employees had
been increased 10 per cent. He thought the
increased wages would stand, and he de-
clared that he could see no reason for de-
crease in the cost Of materials for g. year or
SO at the least. He admitted that the rail-
roads generally were prosperous at this
time, but said that on account Of the alb
normally large crops Of cotton, corn,
wheat, vegetables. fruits, ETC., there SEEM
ed to him moro reason for advancing rates
Of railroad TRANSFORMATION at this time than
at any time since 1892.
How do you arrive at a rate which you
impose on the public-that Is, how do you
determine as to whether it Is right or
wrong?" asked Judge Prouty.
II don't think the fixing Of rate can be
called imposition" answered Mr.. Gram
mer. When we see we are spending more
money than we are earning, then I think
something Is wrong. either in the manner
OF spending the money or In the rates"
Earnings of His Company.
Mr.. Grammer stated that in ten months
past the earnings of the company had been
about 100000. and at that rate the earn
ings for the year would be about $4,000, 600
AT this rate" said Judge Prouty, you
will be enabled to pay the interest on your
debt, dividend of 10 per cent on preferred
stock and dividend of per cent on
your common stock, and still be able to
carry a surplus Of 81 100000. How much
ought you to carry to surplus?"
Mr.. Grammer objected to answering that
question for a number Of reasons. He said,
however, that while under the present con-
ditions the Lake Shore could get along
without bankruptcy, yet other roads might
be subjected to great and disastrous losses.
1t was ascertained from a series of uues-
lions that the actual cost Of operating a
train of fifty cars loaded with grain from,