The Montgomery advertiser., 1903-05-01
AGAINST COMPETITION
,THoMAS SAYS IT IS NOT GOOD FOR BUSINESS.
President Baer of the Reading De clares His Company is Not Over capitalized-Cannot Reduce
 Rates on Coal.

:, New. York. April 30.-President Baer of the Philadelphia and Reading Railroad and the Temple Iron Companies, resum-
 ed 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 summer
 from all mines on percentage basis,
 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 case when it was founc
 the market would take more, were the
 cars refused.
 MT Baer said there had never been any
 freight rates for anthracite on the coal roads. Railroad charges. he said, should
 be such as to enable roads to earn profits representing al percentage equal to the prevailing rate of interest. It was a mat ter of the greatest satisfaction to him that he had never been a party onsr to oyer cSapitaiization. In case of De deducted in calculating the proper earnings and freight charges to produce them. He then described to the Commission the stock issue of the Reading and their market value in re- cent years. He said the capitalization is fair and honest; that the stockholders are entitled to fair return on their invest ment; that the Reading could not reduce it's hard coal freight rate and hope to earn that return. It was the hope of his administration, he said, to enable the
 Reading Company within a year or two
 to pay 4 per cent on its first and second
 E. B. Thomas, President of the Le-
 high Valley Railroad, succeeded Mir. Baer in the witness chair.
 MT. Thomas said he was present at a
 conference of. the Presidents of the coal
 carrying roads to consider the congestion
 at terminals and the complaints of iride-
 pendent operators that the roads were discriminating in furnishing cars in fa-
 vor of their own mines. The percentage of coal tonnage carried by each road was discussed and a certain division of per
 centages, or allotment of them, was ten tatively agreed upon. The tentative per- centage agreement had no reference what ever to the amount of coal any operator was free to mine. There was no intention
 to restrict any of the output but to an- ewer the complaints and to settle the
 trouble arising from the impression of the independent operators that the roads
 were favoring their own mines. The per centages allotted in 1890 remained about the same until 1902, on account of the natural business conditions surrounding each road. The business had settled into those we'll defined channels. MT. Thomas said that unrestrained and unrestricted competition was one of l the worst evils to which the country could
 be exposed. The witness was asked if he
 so conducted his road as to avoid com Lpetition of that sort and he replied he
 had not been successful in conducting This road so as to avoid such competition. The witness was asked if he conducted the coal business over which he had con- | trol on the principle he had announced that he was averse to unrestricted and unnecessary competition. To this end to | the question as to who fixed the Lehigh Valley coal prices. cousel for the Lehigh Valley objected. The Commission over ruled the objection and directed the wit l ness to answer, but under advice of coun- l sel he declined to answer.
 The witness said that personally he | would like to publish to the world the
 much-talked-of 65 and 35 per cent coal purchase contracts with the independent operators. He said the importance of the contracts were very much overestimated.
 MT. Thomas said there could be no comparison between hard coal and soft coal rates and he offered to take the Com mission out into the hard coal regions to show them the difficulties of mining there Commissioner Clements asked if a new independent operator would be on an equal footing, as regards getting his coal to market, with the other operators, and Mir. Thomas replied that he did not know where new investor would be able to locate a new hard coal mine. He said new coal mine investors would be wei comed by the Lehigh Valley road and given all possible encouragement and get sold their entire product to coal com panies controlled by coal roads for 6S | per cent of the market price. The Com mission adjourner until tomorrow.