New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1910-10-13
ROADS MUST RAISE
RATES, SAYS M'CREA
PennsyIvania's President De-
CIares Money for New Enter
priSes Cannot Be Obtained.
COMMISSION HEARS HIM
He Asserts That Big Sums Spent
for improvements and Wage
Increases Make Higher
Rates a Necessity.

president Of the Pennsylvania Railroad
| Company. rendered Illuminating to-day's
hearing before the Interstate Commerce
Commission on the proposed advances IN
freight rates by the roads east Of Chi
cago. He was on the witness stand
throughout the day, and in the judy
ment Of the members OF the commits
sion proved an admirable witness
He urged the necessity. from the point
of view of the railroads. Of making the
proposed advances in rates on accOun,
Of the Increased expenses in wages in
Cured by the roads in the last ten years
l-aggregating 80 per cent in the case
of the Pennsylvania Railroad-the in
creased cost of living, which bears on
| every operative in the railroad service
great or small, and the greater cost OF
maintenance Of railway service ade-
innate to the needs Of the American peo-
pie.
| Asked bv Commissioner Prouty as TO
future railroad development in new ter
ritory. Mr. McCrea said he believed no
money would be available for new -ail-
road enterprises
.'It is not possible he asserted we
cannot get the money anywhere for that
sort OF exploitation"
| In the course of his testimony Mr. Nc
Crea asserted that the results Of the
| constant increases in the business of the
PennsvIvanfa Railroad through a long
nArfod of years had been distributed
either through reductions In rates m
creases in amounts paid for wages anu
| material or by reinvestments IN inc
| property not capitalized He expressed
the earnest belief that property OF the
i MAGNITUDE of the Pennsylvania Rail-
road. rendering a service satisfactory 70
,ts natrons and deriving. as II did de-
rive in 1909, net earnings TO the amount
| of only sol per cent OF the amount
actually invested in the property was
entitled to fair consideration by the gov
eminent and the people, and he could
not understand how d system of rates
which brought about such results eoulo
, be regarded as on too high bass
: Calls Increases VitaIly Imperative.
: President McCrea presented a type
i written
come vitality imperative that out OF the
surplus earnings of the pennsylvania
Railroad 1t should be able to make m
: movements in the service demanded by
the general public.
I'VE must go forward and not back
yard, said Mr.. McCrea. "as there is no
such thing as a great railroad standing
STILL
He pointed out that large amount OF
the surplus earnings from year TO year
had been put bar.> into the property OF
| the company in the form of better ter
nfnaIs. stations and safer crossings al
| though much of this expenditure was IN
such a form that no immediate return
upon II could be expected. He added
that in the last ten or twelve years the
Pennsylvania lines east OF P1ttsours nao
expended S262. 100000 on improvements
for the purpose OF enabling the COM
pany to go on operating the property on
a hish plane of development
Mr. McCrea indicated that the in
creases in wages alone on the Pennsyl-
vania Railroad in recent months had
AMOUNTED TO between 100000 and S.
100000 a year. In order. he asserted. TO
enable the company TO meet this in
creased expense and TO meet the addi-
tfonaI demands Of the shipping and
travelling public freight rates much
higher than those now In force would be
necessary. II Is absolutely necessary
for the company 70 recoup itself. prob
ably by an advance in freight rates. for
the great demand on its income by rea-
I'd INN 800
ments."
Mr.. McCrea said that in the last three
years there had been practically no In
crease in railroad business.
In my Judgment" he continued
least of the Mississippi River, in years
to come. there is going TO be a markedly
lower rate Of growth OF business. This
is going to fall very far short of making
good on the great increases in wages
and other tremendous expenditures
He said that the facts as applied 70
the Pennsylvania Railroad applied with
equal force 70 every other carefully and
conservatively managed road
Mr.. Mccrea cross-Exarinsd
The cross-examination OF Mr.. McCr-a
was conducted by Louis n. Brandeis.
of Boston. representing the Atlantic
Coast shippers. who was counsel for
| CLAWS in the Bal1inger- PinChOt investi-
| CATION. In response to inquiries Mr.
McCrea said that in the last ten years
| the employees OF the Pennsylvania Rail-
road had received increases in wages
aggregating SO per cent. This advance
was given TO them principally because
| of the extraordinary cost OF living al
though other causes had a cOntributOry
| effect
| Notwithstanding the increased cost OF
living. he added the thirty-sevsn thou
sand stockholders Of the Pennsylvania
/ Railroad, one-half of whom were women
and children. were receiving the sams
amount In dividends now as they had
In the last ten years. although their ex-
penses had increased proportiOnately
with those OF the employees
/ In a general way Mr.. McCrea testified
that the proposed advance in rates were
considered necessary by his railroad be-
cause the increased inroads on the IN
come had to be repaid from an advance
/ in rates.
A