Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1910-09-04
WHAT RIPLEY STANDS FOR
Commissioner Mcvann Explains the
Status OF Chicago Hearing.
SANTA FE PRESIDENT is BLUNT
Tells Examiners without EduivOca-
tion that what the Traffic viii
bear should he Measure
of Income,


Commissioner Mcvaun Of the Omaha
Commercial cub traffic bureau insists
the press reports from Chicago do not
present I'm its proper light the hearing
now under way In Chicago touching the
proposal of the railroads to advance their
rates.
The Perce-James incident was not the
elimination Of bad feeling said Nj.
McVann 1t was undoubtedly caused by
by the tension resulting from the fact
that the ventilation and acoustics OF the
court room are very bad. Then the hear
ings are prolonged to an unreasonable
extent by the insisteuce Of the examn-
ers on beginning at . o'clock in the morn
ing and not adjourning until in the
afternoon. As matter of fact the
general feeling, as l saw it manifested,
was good Except for the incident mem
toned the sessions were characterized
by good humor and there was little acri-
monlous debate between the lawyers.
Apparently the big railroad systems
are not acting in unison, as they usually
do in their presentation Of causes of this
kind. President Ripley, of the Santa Fe
road took advanced ground and boldly
declared that he was not satisfied with
earning enough money to keep the prop
erty in as good or better condition than
the year preceding, pay all of the inter-
est on his funded debt, all Of the dividend
on his preferred stock and have money
enough left to more than pay the divi-
dend on his common stock He declared
that he should have left from his earnings
an amount equal to the dividend on his
common stock or between $6OOO,OO0 and
s7,OOO,0OO, in addition to all the above
results. This, he said, was necessary
in order % make additions to the prop
erty and fpay for track elevation, costly
stations, etc, which in his opinion, were
not revenue producers.
Defines Proper Basis.
upon being Intercepted as to the
basis for making rates, Mr.. Ripley also
took advanced ground. His position was
that in making rates originally, the only
basis that could be used by the railroads
what the traffic would bear. and
that only when the attempt was made
TO limit those rates by authority of law
value Of the property, net earnings, ETC.,
be considered. From his standpoint,
these have only a remote relation to the
making of rates. Nothing that Mr..
Ripley said, even when most literally
construed, could be considered as evil
dence tending TO Justify the right of the
Santa Fe road to increase rates.
1.-The whole position of the railroads was
summed up by Mr. Ripley when he said
that the advances under consideration
would Yield his company less than $3.50 oOC
in revenue and that he would get the ad.
ditional 100000 that he needed by ad.
vanclng the rates still further II he wa.
able to do so. This statement undoubtedly
expresses the view of the other railroads
and shows that all the alarm that was fell
Al.
mittee advances were made and enjoinet
under the Sherman law, was fully just
fled.
The showing made by the Rock Islant
and Wabash roads was. of course, mucl
poorer than that made by the Santa f.
and, If the Santa Fe must have $1,000, 90
to put that road in shape to meet MI
Ripley's judgment of how the public SHOULD
maintain his property, many more millions
would be needed by those roads thai
additional net earnings
what Roads Must Face.
This whole difficulty arises from tn
fact that Mr. Ripley's methods have beef
used very largely and railroad capital ha
been created by the capitalization Of earn
ings through stock dividends, etc. If tn
railroads are not satisfied with the presen
basis of rates, they must face the posi-
bility that an inquiry as searching anC
thorough as this one may result in dis
closures of the origin and basis of muc
OF the capital upon which they are nov
claiming returns and which does not rep
resent any money put into the propertie
except out of income account
The situation in eastern territory will b
taken up at the New York hearing on Sen
TENDER 4 The Missouri river is vitality In
terested in this hearing as the proposition
OF the eastern railroads is to increase on
rates from the east about 10 or 20 per cen
on all the manufactured goods that we bu
east OF the Allegheny mountains and man
of those that we buy west of that line"