The Birmingham age-herald., 1910-10-28
One Witness Says Railroads
 Pad Their Expense List
VALUES PLACED TOO HIGH
Manager of Traffic Bureau of Omaha Commercial Club Gives Figures on Railroad Valuations Which
 Are Interesting

Chicago, October 27-G D. White of Nevada, Ia, a member of the Corn Belt Meat Producers association and ono of the witnesses for the shippers in the movement against permitting pro- posed freight rates to become permanent testified today before the interstate com merce commission in the rate hearing He asserted that he had examined the statistics presented by the railroad and said:
 T saw there a tendency to increase or pad statements of operating expenses out of all proportions. do not mean that maintenance charges have been increased and show corresponding increase in rev. enue."
 Mir. White. who was the principal wit ness in the afternoon session of the commission. introduced number of statistical tables compiled by him from reports to the commission. and different state commissions. One of his tabula- tions gave the present value of the Chi cago, Milwaukee and St. Paul railroad as $249, ,3s2,s59, and its present capitaliza- tion. at $40, 157, 500, with asnet capitalize tlon of s253, ,397 800. The net operating in- come of the road.- the witness said. was $7734.000, making the rate of return on the valuation I'll per cent, and on the net capitalization 8.09 per cent.
 Other tabulations were presented by the witness to show that, the traffic of all the railroads in the country had increased in density; the number of tons per mile also increased and that on four roads-the Northwestern, the Santa Fe, the Northern Pacific and the Rock Island railroads-there had been a large increase in the maintenance expenses.
 In an analysis of the gross earnings, the operating expenses and the net earnings of all the roads In the country since 1890. MT. White stated that tho net rev- enue of the roads per mile in 1910 ex- ceeded the net revenue In 1900. 45 .25 per cent: and that 1910 exceeded 1890 in the net revenue per mile .35 per cent
 E.. J. Mcvann, manager of the traffic bureau of the Omaha commercial club, took the stand before the Interstate com merce commission today. The witness ruthlessly reduced the reproduction val uation of s3,S00,000 placed on the Burling- ton roads terminal property at Omaha by General Manager Ward, of the rail- rosS. ~Se as'fs-ed 'Nlua of the termi- nals, witness stated, is 1851 .205.
 "This," continued MT. Mcvann, lis about 25 per cent less than the actual value. which makes the latter about s1,- 000.000 I found that the railroads in Omaha paid about 50 per cent more than the actual value of the land. so that MT. Wards estimate would have to be cut in two to give the correct value of tho terminal lands.'
 Continuing, witness declared that simi- lar conditions obtain at St. Paul and Du- luth.
 Mir. Mcvann centered his testimony on the Burlington, the Santa Fe, the Chicago and Northwestern and the Chicago Mill waukee and St. Paul railroads, which he said were the governing factors in west ern railway affairs.
 "In examining the operating expenses of these four roads, said the Omaha traffic expert, q found that there has been an unprecedented jump in operating expenses in 1910 say unprecedented be- cause none of the roads witnesses would say that the increase was abnormal.''
 From examination of railroad reports to the interstate commerce commission witness found that the Santa Te mainten- ance account increased 25 per cent in 1910 over 1909, and It's transportation &C., count advanced 23 per cent during the same period The maintenance account increased 22h per cent on the North western and the transportation account H.6 per cent in 1910, as compared with tn0 Dr6ceQlnk year Ho DuTitilBton maintenance account increased 16.5 per cent and the transportation account II per cent.
 McVann said that increased business normally would show an increase in oper- ating expenses before an advance in maintenance expenditures. He made this statement in contrast to. the fact that the Santa Fe's maintenance account in- creased more than It's transportation &C., count in 1909-10.
 ''That might be explained he said, by the purchase of construction material for future use.'
 Mr. McVann gave his opinion of the proposed increase In freight rates.
 ,'It is my honest opinion." he said, "that the proposed increase in freight rates will not increase the revenue of the railroads. but will decrease their rev. enues by it's effect on business in the stoppage of movements of goods.