Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1910-09-21
HIGHER WAGES
MEAN LOSS Of
EFFICIENCY
Is OPINION. OF
RAILWAY CHIEF ENGINEER
Testimony at Com
merce Commission Hearing
to Determine ReaSonabIeneSS
of Recent Rate Increase,

Chicago, sept. 2O,-Allcgeu man
ipulation OF a railroads. Income to
cover up earnings and to compound
it's income was inquired into today by
| attorneys for the western shippers of
/ officers of the Illinois Central rail-
road before the Interstate commerce
commission in the rate hearing now
in progress.
Interesting opinions on the pro-
priety of disposition of earnings were
given by General Manager Parks.
Mr.. Parks has told the commission
he thought a proper freight rate was
| one that rendered a fair return for
| service to the shipper and which, af-
ter paying a reasonable dividend on
the capital stock, paid fixed charges
and operating n maintenance eN-
penses. and would also give the com
pany a yearly surplus of six or seven
| millions. ito make the investment at
tractive to people witt money, and to
give the company a credit
And what would you do with this
surplus, just hold it," inquired At
torney John II. Atwood of Kansas
City, representing the general ship
pers' committee.
No. was the answer, II would
use 1t for lettering the road. For In
| stance, | would devote a part of 1t to
new depots. etc"
But" asked Mir. Atwood, when
that depot was built, you would con-
slider it a part of the actual property
of the company, a proper subject
for additional capitalization, wouldn't
you 2"
"Of course" was the nswer.
''Then. when you later had cap
italized. you would say you ought to
be entitled to q reasonable dividend
upon that capitalization p
Yes"
Then the simple fact is you think
you ought to be entitled to charge
shippers enough to bring in sufficient
earnings that you can devote a part
to new capitalization and then get a
big return on il in the shape of divi-
donds, dor you2 Is that your idea of
what constitutes d fair tariff Tor the
shippers ri
The witness did not answer.
Attorney w. n. Horton of the IL
linois Central sprang a surprise on
Attorney II. c, Lust OF the Illinois
Manufacturers Association. The rail-
way attorney asked:
MIR. Lust. will you give me the
names of four OF five Of your largest
shippers?"
why do you want them" re-
turned Lust In surprise. We repre-
sent shippers who pay $150,00O, 900
annually in freight rates.
II want them retorted Attorney
Horton, "to produce statements sim
liar to ours in which we SHOW our
returns on the Investment is only 46
and see what their returns is. Do |
get the names?'
I'VE will have a consultation, an
swered Attorney Lust.
Manager Parks introduced a new
term in railroad nomenclature
railroad intuition" He had been
asked by Commissioner Clements on
what he based his opinion that the
present physical valuation of the
road was far in excess of its $685.
600, 600 capitalization.
"Why. / haven't any exact data by
which to determine the physical val
uation," said Mr.. Parks. Il depend
upon what | might call railroad in
tuition-yes that's it. railroad intui-
ton. You see "A man can't do moth
ing for 35 years but ride over rail-
roads, compare property values ana
buy new lines. without gaining an IN
tuitive value appreciation. I couldn't
name any definite figures, but II is
much higher than the capitalization.
Chief Engineer A.. S. Baldwin, who
followed Mr.. Parks, said that because
OF the so-Called panic of 1907, mi
lions of dollars worth Of repairs, new
buildings and many other eXpendi-
lures that il would have been wise TO
incur and which 1t was false economy
not to-" had been deferred and de-
manded attention.
while your attention To your con-
troller's figures showing your COM
pany did have 81 900, 900 and $533,-
600 surplus in 1908 and 1903, respec-
lively. will YOU say it was poor busi-
ness management" persisted Mr.. At
wood.
Il don't wish TO give an opinion on
the wisdom of the management with
out knowing what their problem
was, was the reply.
Engineer Baldwin commented on
the effect of wage Increase on labor
efficiency. He said:
In ten years we have raised cer-
tain workmen's pay 25 cents a day
and as a result we are getting less re-
turn for our money This is partlc-
ularly true with the negro.
THE more money he gets. the less
efficient ne is from our standpoint.
Then. too the more independent a
worker becomes. whether through
unions or otherwise. aud the less de-
pendent he feels toward his employer.
the less conscientious effort he gives
In return. II is a safe rule to say
that increased wages means less labor
efficiency.
The Ilinoic Central announced AT
the close Of the days session that II
put in its case. II was under
stood the next railroad TO present
testimony would be the Chicago, Nil
waukee and st. Paul This road viii
appear before the commission tomor-
Surprise was evident IN The COM
mittee room when Mr.. Parks declared
tina the Illinois Central. although
rated as one Of the best constructed
and best equipped railroads in the
west and south. should expend be-
tween $4,000. 900 and $50. OOO. 900 at
once in the mechanical department In
order to- bring IL up TO standard.
He also asserted that the record
his railroad and others are making
in the matter OF killed and injured is
due largely 10 the fact that they lack
money with which 10 provide block
and other safety devices.
The Illinois Central. for example.
auaut a. OUO 600 on hlork