Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-04-18
ON RAILROAD RATES
Inquiry by Senate Com
mittee.
THE FIRST WITH ESS
CONTROLLER OF THE ATCHINSoN
ROAD
Makes an Argument as to the Power
of the Government in the
Matter.
THE FIRST WITNESS

Matter.
The Senate committee interstate COM
.nerce today resumed its hearings on rail-
way rate legislation. The committee met
in it's room at the Capitol where for three
IT four weeks it will hear the testimony of
many men eminent as railroad magnates.
distinguished attorneys and public men.
Senator Ell1ns. chairman Of the commit
tee. arrived at the Capitol in his automo-
bile and was in his room before IL O'Clock,
when he called the committee to order.
There were present, beside the chairman,
Senators Cullom. Keau. Foraker, Clapp,
Carmack. Dolliver and Newlands. members
of the committee. Senator Wetmore and
former Senator Faulkner of West Virginia
were present. There were also a number of
other men prominent in railway matter.
The First Witness
The first witness was Mr.. Victor Mora
witt. who announced himself as chairman
of the executive committee of the board of
directors of the Atchison, Topeka and
Santa Fe Railroad Company. Mr.. Nora
WITT proceeded in a systematic way to tell
what he had to say about the proposition
TO fix railroad rates. his entire argument
being against the propriety necessity of
such legislation. He stated that the Atchi-
son system is composed of 1900 miles of
railroad. its preferred and common stock
aggregating S216, 600. 900. and it's bonds S231
uOo.oD. There are 1880 registered stock
holders, but in fact about $4,000 of them.
in the opinion of Mr.. MorawitZ, as much of
the stock is held by bankers. brokers. etc.
He had been told by the controller of the
road that there are about 10000 bond
holders. but safe estimate there were
At least 5000 individual stock and bond
holders. Averaging five persons to each of
those individuals the number of persons
financially interested in these securities
were 10000. There were also he said,
5000 employees of the road and making the
same calculation of five persons dependent
on each of them. it would be seen that there
were 2G0.O0o people interested in the road
through the employees.
SO, you see," declared Mr.. Morawitz,
10000 people are financially interested in
this road and in any legislation that you
may enact with u view of lowering rates
of frcghts.
Vast Increase of Business.
Mr. Morowitz then proceeded to show the
vast Increase of business that has come to
the railroad companies since 1887, making
necessary great increases of facilities on
the part of the roads in order to care for
the additional business that is coming to
them. The Atchson road, he said. had Just
raised $I2,G0o,O00 to add to it's facilities and
II would be necessary to raise much more
money If 1t is to keep its facilities equal
to the business offered to it.
NO railroad company will increase the
amount of its investment" he said ''un-
less 1t Is reasonably assured that it will not
only be able TO pay dividends on its invest
ment already made and on it's bonds but
also on the additional capital TO be used
by it,"
In 1897 he said, the ton mileage of the
railroads of the country was $1,000. 900 coo
of tons. In 1893 it 10000 600 600 and
IN 1880 II was reasonably certain that the
hSures. when aggregated would show still
further increase of the tons per mile car
rfed by the roads. During the next ten
years there would be great additional
increase in the business offered to the rail-
: reads.
1T Will be necessary to take care of this
additional business by an investment of a
Vast sum of money" said Mr.. Morowitz
his money Will have to be spent for adj
dltonal terminals, tracks equipment etc
and the question arises. Who is to supply
the additional facilities? 1t will be a very
serious question If Congress should under
take TO fix rates so as to make more haz-
ardous than ii IS at present the opportu-
nifty 10 secure a reasonable return on the
capital invested
1t would also be q serious matter for the
roads, he said, if Congress- through COM
mission or otherwise, should undertake to
regulate rates during times of great pros
perlty. If that We're done he could nor see
what would become of the roads during
Power of Congress
Mr.. Morawitz went into the subject of
the power of Congress to empower a COM
mission TO fix rates.
Congress can he declared give COM
mission power to determine prima facia.
subject TO review by the courts. what maxi
mum rates can be imposed by the rail-
ROADS without violating the interstate COM
merce act Whether Congress can 20 b..
Sond that and give TO a commission power
10 Tx rates anywhere. in the discretion of
tAe commission, between the maximum rate
THAT could be imposed vii h0ut extnrtinr
ana the minimum rate imposed bv the
commission without cOnfiSCation, is a very
doubtful question in my Judgment
congress, he said, could not confer iudi-
clsi powers on the Interstate commerce
commission Judicial power could be given
uhiy 70 courts established according 10 the
terms of the Constitution Congress can
not give to the commission power To ad
lGdicate questions between carriers and tha
Shippers, ana II cannot vest in the courts
powers 10 fix future rates
MI Morawitz referred TO the increa so
that has taken place in the nrice NJ All
materials used by railroad compauies
Operating expenses are now he declared
% per cent OF the gross income Of the
fpauS, ana with the increased cost of mate
rial, etc. which is CONTEMPLATED there
would OF necessity be a relative lowering of
rates when the cost OF the service tn the
'F''N' -4L'L-iSttNeS IS considered. The
crease OF the gold output was so great as
20 increase the cost Of all material and that
vas going on now, in the opinion of MANY
men rms was creating u difficult condi-
ION LOT the railroads, ne did not an
ticipate that there would be apy material
increase of rates i'''' 'ei I'i
The courts can undoubtedly" he said
pass upon q rate SO far as to say whether
II Is unreasonably high and therefore extor
Tomato But they cannot be REQUIRED to
substitute their ideas of the rate Thar
should be fixed between an unreasonably
hien or "a rate so low as to be confiscatory
OF the property of the road"
II the court should find that the rate was
between an unreasonably high rate and a
rate so low as to be confiscatory. then the
court could have nothing TO say about it, In
other words the courts cannot become traf-
nc managers of the United States
The interstate commerce commission he
7alu IS a political body, in that the act au-
Jhorizing II provides how it is to be com
pOStu with RESPECT TO its members