Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-04-20
CONTROL OF THE RATES
MR. MoRAWETZ EXAMINED AT
CONSIDERABLE LENGTH.
Expresses His Views as to What Would
Be Conf1scatory Requirements and
What Reasonable

Inc senate committee on interstate COM
merce continued It's hearing at the Capitol
yesterday afternoon until about 400 o'clock
In the last two hours of the hearing the
| time was consumed largely by Senator
| Newlands, whose questions bore chiefly
upon the advisability of having a national
| Incorporation act passed by Congress and
methods for regulating such corporations
by means of provisions to be made part
| of such an act of Incorporation.
| Mr. Victor Morawetz of the Atchison rail-
| way continued his testimony. Mr.. New
| lands asked what states fix railroad rates
| affecting the Atchison.
Texas, Illinois and Kansas" he replied.
what portion of business of the Atchi-
| son is domestic and what is interstate?' he
| was asked.
| 81 cannot state, but the interstate BUSH
| ness is much greater than the local BUSH
ness
Taking the whole country. am inform
| ID that 70 per cent of the business is in
terstate and % per cent is of a local nature.
| l also understand that in one state Is
| there more than per cent of the mileage
| of the country that the amount of such
business coming under the control of state
| railroad commission Is comparatively incon-
| Siderable
! In other words. it would not be disastrous
| to his company If state rates should be
| made unduly low. But the danger of I'M
| duly low rates on the interstate business
| L
regarded the proposition for Congress to
| fix rates as far more dangerous than the
| exercise of such power by a state.
Rates on Interstate Trade.
| "a rate on interstate business too low.
| he said, would not only mean disaster to
| the railroads, but also to the country at
| large, as it might bankrupt the roads"
| He said the railroads took the ground that
they are entitled to reasonable return on
| the value of the property. but the courts
| had never undertaken to say what consti-
| tutes reasonable return.
| Would the capital and bonds be a fac
| tor?" Mr.. Newlands asked. referring to the
| rules that had been laid down by courts.
| 81 think So
would the cost be a factor?"
| Yes"
The value of stocks and bonds could be
shown by the market reports, the witness
| said, when asked how he could prove the
| value of road. The cost of the road would
| also have some bearing even though the
value of stocks and bonds Should be low.
| He said the six seven thousand miles
| of road operated by his company are own
| ed by the company, except in Texas, where
| the state provides that no foreign corpora
| ton shall own railroad in that state. They
| lease some small pieces of road.
A Confiscatory Rate.
| Mr.. Newlands questioned the witness to
develop what he would consider confisca-
| tory rate on the AlcnlSOU railroad. IL lue
interest left on the capital of the company
were reduced to per cent by rate
| fixed by the government he would con-
| slider it confiscatory. Four per cent he
would consider likewise, but per cent he
would not so regard as that is what his
road actually earns Any legislation which
would reduce the net earnings of the COM
pany at the present time he would con-
| slider confiscatory, as he did not think the
| earnings of the road now are excessive.
| DO you find there is movement to in
| crease the state taxes on railroads." Mr..
| Newland asked.
! II think there Is in some states. think
| our taxes are high and show a tendency
| to increase"
| The Atchison is paying about 50, 900, 900
| annually taxes which amounts to about
| three per cent their gross receipts.
! "1f the government could guarantee that
! 1t would never be increased should be sat
| isf1ed, but my experience is that every time
| there is a change of system of dealing with
| the roads they get the worst OF it," he said.
| 'If the United States could guarantee
| US proper rate of dividends I would not
| care what the rates were made added Mr..
| MorawetZ in reply to a question.
He objected to tax gross receipts
| because, under such a system, he was sat
| isfied there would be a constant tendency
| to Jack up the rates. Now the property
| of railroads is taxed as is other property,
according to its value.