Los Angeles herald. [microfilm reel] (Los Angeles [Calif.]) 1900-1911, 1910-10-29
Governor of Kansas Makes Vigor-
GUS Protest at Interstate
Commerce Meeting
CONSTRUCTION RISKS TRIVIAL
Executive Offers a Million Dollar
Bond That He Can Disprove
Corporation Claims
ASSOCIATED Press)

CHICAGO, Oct. DIFFERENTIATION Of
evidence by the shippers who are op-
posing the proposed advance in freight
rates was concluded today before the
interstate commerce commission with
the testimony of Governor ". r.
Stubbs of Kansas, who in character
istic manner declared his opposition to
an increase in rates and his belief as
a practical builder of railroads that
valuations have been placed too high.
"I'll put up million dollar bond"
said the governor that / can con-
struct a main line railroad in Kansas
an up to date line, too, for $4,000 a
mile,. and make 10 per cent profit on
the job"
The lowest estimate of railroad
building offered by the railroads more
than doubled the governors estimate.
RAILROAD BUILDING EASY"
At one point in the cross examina-
tion by Attorney I. J. Norton of the
Santa Fe Governor Stubbs declared:
Nov let me tell you something.
There is not as much risk in building
a railroad in a good territory as in
starting a bank. l do not think the
railroads need preferential rates. They
can make money as they are, and they
should be run on the same business
basis as a. bank"
Don't you think, governor asked
the attorney, that the Santa Fe road
is entitled to the increased value Of
it's properties in Kansas? You do not
deny to the Kansas farmer the ad-
vance in the price of his land?"
Yes" quickly rejoined Governor
Stubbs, rising from his chair and en-
phasizing his words by pounding on
the judges bench, but that land is
worth more because of the honest Ia
Dor of the men, women and children
on every quarter section of Kansas
land, and the stock values of the rail
road holdings have been juggled and
inflated, and 1 do not know how much
water there is in it,"
TAKES ISSUE WITH RIPLEY
Governor Stubbs repeatedly referred
to the position taken by President
Ripley of the Santa Fe that market
quotations of railroad stock was a fair
criterion of property values.
Later in the cross examination Gov
ernor Stubbs again stood up and pune
tuating his Woras with blows on the
bench beside him, said:
"The railroads ought to be allowed
to make or per cent on their actual
investment and also lay aside a nice
surplus for emergency use. But they
ought not to invest this emergency
surplus from time to time in permanent
Improvements and then add it to the
capitalization. Every business man
ought to have a surplus for a rainy
day and the railroads should, too"
Continuing on this line, he said:
II do not think that $25,000,0 900 is too
great an amount for the Santa Fe as
an emergency fund for a bad year or
a washout. But keep that fund sepa-
rate and do not capitalize it.
"Now, let me tell YOU" he added
emphatically, "the people will be
pleased to pay the railroads liberal re-
turns on their actual investment if you
will only stop your stock juggling"
In a lull in the examination Gov
ernor Stubbs leaned forward and said
to the railroad attorney examining
him:
you've asked me a lot of questions
Now let me ask you one. What was
the basis of the Santa Fe issue of
$102 100000 of stock in 1896, when the
roads were consolidated; was that on
the actual valuation of the road?"
Auditor Bailey of the Santa Fe sys-
tenn answered that the stock was is
sued and exchanged for the old stock
and bonds held by the. stockholders of
the road.