Omaha daily bee., 1910-10-29
Could Make Big Profit on Contract on
This Basis.
PEAKS AS RAILROAD CONTRACTOR
of Land in Kansas Given
to Railroads.
DENOUNCEs HIGH FINANCE
Vigorous Protest Made Against stock
Manipulation and Excessive VAL
uRtIOn of PrOperties-PeOpIe
Are 20 blame.

CHICAGO. oct 2S-Governor W R.
Stubbs Of Kansas on the witness stand he
fore the Interstate Commerce commission
today in tho proposed freight rate increase
hearing declared that he could reproduce
at a profit TO himself as a railroad con-
tractor all the main lines OF railroad in the
state at $4,000 mile and for $4,000 a mile
less reproduce the branch lines I'm the state.
In addition to presenting these estimates
as a railroad contractor, the railroad re-
production figures being many times as
large as his figures, Governor stubbs de-
clared that he viewed the railroad situation
literally. but he protested vigorously
against stock manipulation and excessive
valuation of properties
Il don't believe the carrier should be
trodden down" said Governor Stubbs but
he should be made to show TO the Inter
state Commerce commission what he has
invested. He should have a liberal return
on his actual Investment but he ought to
bring in his books and show Just what he
owns
People Arc to Blame.
THE people are a good deal 10 blame for
the present conditions. They have allowed
the conditions TO grow up and many per-
sons have bought stocks and bonds OF the
railroads on the hope of abnormal returns
And all the while the carriers have taken
millions and millions out Of the returns
to build expensive structures and then the
next year have capitalized the structures
and expect to pay dividends on the in
creased capitalization. But there. do not
want to make a speech"
II think 1t Is fraud, an absolute fraud"
continued the witness, FOR a railroad to
take out millions from its earnings and
build permanent structures and improve
| cars and at the end OF the year take out
100000, as the santa Fe did and appro-
| pirate IT 60 be used for betterments and i'm
provements and then say only $S65 900 OF net
revenue was on hand when. as a matter or
fact. they had 100000 and had taiSen out
all kinds Of money for Improvement"
Governor stubbs declared that at his fig
ures OF $500 Q mile of main line road he
would make s2oOoO,OOO on a contract to re-
produce the Kansas railroads.
| Concrete Example Cited.
II had proposition up about four years
ago." said Governor Stubbs, Ito put a line
$50 miles long through the best part Of
Kansas from Belleville to Wichita, !
agreed to build the road. furnish the right
of-way. lay hard wood ties and furnish
everything for $4,000 a mile and I would
have made money on the job but the rail-
an agreement and did not want a north
and south line in Kansas. The right-of-
way would have been donated. Talk about
right-of-way. Why, gentlemen, one-sixth
Of the land in Kansas has been given "a
the railroads"
In his testimony Governor stubbs de-
clared:
"The curse Of the railroad business in
this country is stock Juggling and high
finance. Stop this high finance Make
every dollar Of capitalization represent a
dollar invested in the road and people will
fall over themselves 10 buy railroad stocks
and bonds"
Missouri Pacific ImprOving.
Governor W. r. stubbs was preceded OF
the witness stand by Frank b. Ryan state
board of railway commissioners. william
Muirhead OF Topeka special assistant 4
the attorney general Of Kansas and j. r
White, traffic manager of a big Kansas
City dry goods house.
MIR. Ryan and Mr.. Muirhead told of /
lamentable condition of the properties O.
the Missouri Pacific in 1907 when. Ryar
said, people were afraid 10 ride on II, anC
OF subsequent improvements while Mr.
White related that prior to 1906 and IN,
passage OF the Hepburn act rebatinE wa
generally practiced.
Between 1909 and 1906" said Mr.. White
I'VE paid from 30 to 10 cents less than tn,
Sl7 rate from the Atlantic seaboard. 'Thii
condition was not exceptional with US:
was matter OF common knowledge tina
others were allowed the low rates"
On cross-eNaminatiOn by Attorney c. NJ
CONTINUED on Second PaEe.)