The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1903-05-01
DEACON BAER SAYS
PROFITS ARE URGENT
Railroad President Denies Any
Illegal Combination
E. B. THOMAS ALSO TALKS
Raer Declares That He Has Never
Been Guilty of over capitalization
and Says the Reading Is
Square and Honest.
{. B. THOMAS ALSO TALKS

New York. April sO.-President Baer of
the Philadelphia and Reading railroad
and the Temple Iron company resumed
testifying today before the interstate
commerce commission. at the hearing on
the complaint of William r. Hearst that
the coal roads are charging excessive
freight rates for carrying anthracite coal
from the mines in Pennsylvania to tide
water and are a combination in restraint
of trade. He said the coal roads and coal
companies developed an agreement for
mining and distributing coal in sumnEeks
from all mines on a percentage basWp
! The owners of mines were willing to re-
strict the output so the coal roads agreed
to carry all coal in summer as soon as
mined but in no ease. when it was found
the market would take no more, were
the cars refused.
Mr.. Baer said there had never been any
meeting or agreement to make uniform
freight rates for anthracite on the coal
roads Railroad charges, ne said, should
be such as to enable the roads to earn
profits, representing a percentage equal
to the prevailing rate of interest
over Capitalization an Evil.
1t was a matter of the greatest salts
faction to him that he had never been
party to over-capitalization. In case OF
decentralization the water should be
deducted in calculating the proper Earn
ings and freight charges to produce
them" He then described to- the COM
mission the stock issue of the Reading
and their market value in recent years.
fie said the capitalization is fair and |
honest that the stockholders are en-
titled to a fair return on their invest
ment; that the Reading could not reduce
its hard coal freight rate and hope TO
earn that return. 1t was the hope OF his
administration, he said, to enable the
Reading company within a year or two
to nav 4 per cent on it's first and second
preferred stocks.
{. 3. Thomas on Stand.
e. B. Thomas president of the Lehign
Valley railroad, succeeded Mr. Baer Ill
the witness chair.
Mr.. Thomas said he was present at a
conference of the presidents of the coal
carving roads to consider the congestion
at terminals and the complaints OF in
dependent operators that the roads were
discriminating in furnishing cars In favor
of their own mines. The percentage or
coal tonnage carried by each road was
discussed and certain division of per-
centages or allotment of them was ten
tatively agreed upon. The tentative per-
centage agreement had no reference
whatever to the amount of coal any oper-
ator was free to mine. There was no in
tention to restrict any of the output, but
| to answeg the complaints and to settle
the trouble arising from the impression of
the independent operators that the roads
were favoring their own mines The
| percentages allotted in 1890 remained about
the same until 1902, on account of the
natural business conditions surrounding
each road. The business settled in these
well-defined channels had always been so.
Mr.. Thomas said unrestricted competi-
| ton was one of the worst evils to which
| the country could be exposed. The wit
ness was asked If he so conducted his
! road as to avoid competition of that sort
and he replied that he had not been sue
cessful in conducting his road so as to
avoid such competition.
Declined to Answer.
| The witness was asked If he conducted
the coal business over which he had con-
troll on the principle he had announced;
that he averse to unrestricted and
| unnecessary competition. To this and to
| the question as to who fixed the Lehigh
! Valley coal prices counsel for the Lee
high Valley objected. The commission
overruled the objection and directed the
witness to answer, but under advice of
counsel he declined to answer.
The witness said that personally he
would like to publish to the world the
much talked-of 65 and 80 per cent coal
purchase contracts with the independent
operators. He said the Importance of the
contracts was very much over-estimated.
Mr.. Thomas said there could be no COM
parison between hard coal and soft coal
rates, and he offered to take the commits
sion out into the hard coal regions to
show them the difficulties of mining
there. Commissioner Clements asked If
new independent operator would be on
an equal footing regards getting his
coal to market, with the other operators,
and Mr.. Thomas replied that he did not
know where a new investor would be
able to locate a new hard coal mine He
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