Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-07-11
LAW EFFECTIVE IN OCTOBER
President McCrea Was the Principal
Witness Today.
INCOME AND EXPENDITURE
Claim That the New Statute Would
Make a Deficit in the Passenger
Department.

PHILADELPHIA, July 11.-President
McCrea of the Pennsylvania railroad was
the principal witness today in the equity
proceedings instituted by that company
against the city and county of Philadel-
phia to restrain it from enforcing the two
cent railroad fare law passed by the las
legislature. The law goes into effect Oc
tober l, and provides a penalty of $1,000
for each violation of it's provisions. Most
of the railroads of the state have started
similar actions, and to-days proceedings
were regarded as a test case.
John G. Johnson of counsel for the Penn
syivania railroad, in opening the proceed
ing in equity. said the commonwealth had
no constitutional right to legislate rates
for tine Pennsylvania railroad under it's
charter. But for the sake of argument,
even if the law is constitutional, the two
cent rate is unreasonable and will not re-
turn fair profit for the capital invested.
Statement of Earnings.
City Solicitor Gendell in his statement to
the court said that the county was made
defendant because the penalty for violation
of the law is payable here. He thought the
proceedings should have been brought
against the commonwealth as it is state
matter Nevertheless he said, the city be-
ing defendant, lie would guard its inter-
ests, which IN this case are not great.
The first witness examined was Max RE
benack, controller OF the Pennsylvania rail-
road. He presented summary of earnings
ard expenses on state passenger business
for the first three months CT the present
year. This summary showed that the aver
age rate per passenger per mile 1907
cents.
The earnings for the three months were
S5.uIU.s3o anu the expenses 1921 ,GO7. If the
two-cent law had been in force during these
three months the earnings would have been
but s., S57, 03S. Estimated figures for the
entire year 1907. based on those Of the first
three months of the present year, were also
submitted
Is Dry Stock.
Mr.. Rebenach stepped aside to allow Capt.
John p. Green, first vice present, to testify
to the dividends paid. He said in the last
twenty-five years the dividends of the COM
nany averaged tritie less than per cent.
What is the proportion of water in the
stock?" asked Mr.. Johnson.
There is not one drop OF water, was
the quick reply.
On cross examination by City Solicitor
GendelI, Capt. Green said that the dividends
included earnings of all its lines in and out
of Pennsylvania. He admitted the per-
centage of earnings was greater than q per
cent the surplus above per cent being
used for extraordinary expenditures.
On redirect examination Capt. Green said
the last few years have been exceptionally
prosperous.
Mr. R!ebenack was again called to the
stand and was examined at great length on
the financial affairs of the company
n ri
luncheon.
Rate Law in Iowa.
DIES MONIES Iowa, July 11.-Judge Nc
Pherson of the federal court today denied
the application of two stockholders OF the
Iowa Central and the Minneapolis and st.
Louis for an order restraining the directors
of the roads from putting into effect the
two-cent passenger rate enacted by the
Iowa legislature. The judge based his ac-
ton upon the ground that no injury to the
roads shown. that the complaint that
the new rate would cut down dividends was
not proven, that increased passenger travel
might increase receipts. and that no charge
OF bad faith is made against the directors.