The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1910-10-15
need HIGHER RATES
TO RESTORE CREDIT
Roads Lack Improvements,
Says President Brown.
SMALL DIVIDENDS PAID OUT
Head of New York Central Under
Cross-examinRtiOn by Interstate
Commerce Attorneys Lays Particu-
lar Stress on Earnings and Hx-
Denses of Shipping Interests.

In the course Of his testimony yester-
day before the Interstate Commerce
/ Commission, President Brown laid par
ticular stress upon the declaration that
what American carriers needed was a re-
/ Mobilization of their credit Mr.. Brown
was under cross-examination all day by
Attorney Frank Lyon, OF the Interstate
Commerce Commission, and Francis b.
/ James, of Cincinnati. and Louis Bran
/ deis. Of Boston. the latter two represent
/ Ing the shipping interests in connection
with the Investigation which the com
mission conducting into proposed in
! creased freight rates.
/ President Brown declared the most
/ important effect Of the carriers being
/ permitted 10 make freight rate increases
/ would be to materially increase their
credit. both at home and abroad. and
thus enable them 20 secure additional
money 10 make Improvements TO keep
pace with the demands OF the shipping
/ public.
Mr.. Brown was asked by Attorney
Lyon whether he thought it would be
good thing for the New York Central TO
put a dollar OF surplus into Improvements
for every dollar disbursed as dividends.
Mr.. Brown replied.
Small dividends Paid.
I think il would be very desirable If
that policy could be applied 10 the New
York Central As a matter OF fact, the
New York Central never has been able
to approach the record OF the Pennsyl-
vania Railroad IN that respect. nor have
we been able to do as we'll as President
Willard said the Baltimore and Ohio had
done; that is, setting aside 80 cents for
Improvements for every dollar OF divi-
deuds
During the past twenty-one years the
New York Central has paid an average
Of 476 per cent in dividends, and its stock
holders have received less than they
would have received II they had made
their investment In farm mortgages. Dur
ing that time we have taken out OF the
earnings and applied 10 Improvements.
additions. and betteTments I27 per cent,
or just about . cents for every dollar OF
dividends
Replying 10 a question or Commissioned
Lane. Mr.. Brown gave fl as his opinion
/ that even II wages had not been increased
materially by the New York Central it
would have been necessary 10 make in.
cTeases in freight rates He said his
road could simply earn enough 20 pay
dividend
President Gives Figures.
President Brown said that the Lake
Shore road during the past twenty-one
years has paid out to its stockholders Isl
per cent per annum in dividends, and 5.23
per cent in improvements; the Michigan
Central 47S per cent in dividends and 395
per cent IN improvements: the Lake Erie
and Western. Isl o. cent in dividends
and rs per cent in additions and better
ments: the Rutland has paid out lis per
cent in dividends and has put IS into
Improvements. the Pittsburg and Erie,
.9T2 per cent In dividends and 25G per
cent in improvements and betterments,
and the Big -Four. 2s9 per cent IN divi-
dends ana I53 per cent in hetterrneuts
and improvements. These are what are
known as the New York Central lines.
Mr.. Brown IS the third railroad presI-
dent TO be heard by the commission, and
more viii follow II present plens are car
ried out