New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1910-10-29
Governor ReverSes Procedure
and Questions His Examiner.
AT CHICAGO RATE HEARING
Calls Stock Juggling Bane of
Roads and Intimates Santa Fe
Figures Are Incorrect.

merce commission WITH me Testimony VI
Governor w r. Stubs, of Kansas, who,
in characteristic manner, declared his OPP
position to an increase In rates and his be-
lief as a practical builder Of railroads that
valuations have been placed at too high
point
TIL put up g. 100000 bond" said the Gov
ernor, that I can construct a main line
railroad in Kansas, an up-to-date line, too,
for $4,000 mile, and make 10 per cent
profit" The lowest estimate Of railroad
building offered BY the railways more than
doubled the Governors estimate
Governor Stubbs was the principal wit
ness introduced by the shippers, who oc-
cupied only three days with their witnesses
while the railroads in previous hearings
presented many witnesses and consumed
more weeks than the shippers have days
Governor Stubbs time after time jumped
from the role Of witness to-day to that OF
cross-questioner, and repeatedly turned on
the railroad attorney with Now I want
TO ask you question
At one point in the crOss-examination
by T. J. Norton. Of the Santa Fe Railway,
Governor Stubs declared.
Now let me tell you something. There
IN a good territory as in starting q bank.
I don't think the roads need preferential
rights, they can make money as they are
and they should be run on the same bust
ness basis as a bank"
Mr. Norton asked the witness If he
knew OF the washout which put the Salt
Lake road out Of business fer a hundred
days.
Yes. ! heard Of it," was the Governors
reply.
I lust called attention to It in connec-
ton with your comparison Of the risk Of
railroads and banks" said Mr.. Norton.
A lair Raising Episode.
Well. let me give you some information
right along that line about banks inter
fected Governor Stubbs. Il can tell you
story that will make your hair stand up"
Mr.. Norton disclaimed any desire TO have
his hair stand up, and Commissioner Lane,
the top Of whose head is smooth, said.
Suppose you tell me that story. Gov
e-nor?" The story was lost in the laugh
which followed.
Don't you think. Governor was another
question. that the Santa Fe road is en-
titled TO the increased value Of its proper
ties in Kansas? You do not deny TO the
Kansas farmer the increase in the value
OF his land.
Yes" quickly reioined Governor Stubbs.
rising from his chair and emphasizing his
words by pounding on the judges bench
But that land is worth more because OF
the honest labor Of the men, women and
children on every quarter section Of Kansas
land and the stock values Of the railroad
holdings have been jusEled and inflated,
,rr.aI- tar how iC
in il
Governor StubDs repeatedly referred 10
the position taken by President Ripley OF
the Santa Ee Railway that the market
quotations of railroad stock was fair
criterion OF the property value.
- think President Ripley Is a mighty
fine fellow said the Governor. but 1 don't
agree with MIN on that point. l want the
railroads to give 10 the commission the
actual cost OF their roads. and I want them
10 get fair return on their investment"
Later in the REORGANIZATION, Governor
Stubs again stood up and, punctuating
his words with blows on the bench beside
him said:
The railroads ought TO be allowed 70
make d CT per cent on their actual in
vesrmenl. and also lay aside a nice surplus
for emergency use But they ought not TO
invest that emergency surplus from time 10
time in permanent improvements and then
add il 10 the capitalization. Every business
man ought 10 have q surplus for d rainy
dav. and the railroads should too.
Il don't think that 100000 is too great
an amount for the Santa Fe as an emer-
cancv fund for a bad year or a washout;
I'm. keen that fund separate and don't cap
italize H. The people will be pleased 10
nav the railroads liberal returns on their
actual investment If they Will only stop
stock juggling
! question about the automobiles IN
Kansas caused the Governor TO throw back
his head and almost shout:
I'll tell YOU why there are a LOT OF au-
tomobiles in Kansas. It is because We've
got q prosperous. industrious people, fertile
fields and have the STUFF 10 buy them in
spite Of the high railroad rates
In q IuII in the discrimination Gov
e-nor Stubs leaned forward and said 10
the railroad attorney examining him.
a Question for the Santa Fe.
You've asked me a whole lot Of ques-
lions Now let ne ask you one What
was the basis OF the Santa Re issue of
2l02. 10000 Of stock in 1896 when the roads
we're consolidated? Was that on the actual
valuation Of the road"
Mr.. Bailey. auditor of the Santa Fe sys-
TEN. answered that the stock was issued
and exchanged for the old stock and bonds
held by the stockholders of the road.
What ] want 70 find out said Gov
ernor Stubbs. is what was the road actu-
ally worth them
Nj Bailey replied that the actual cost Of
the road was a matter impossible to de
terrnine. as the books Of the constituent
roads Of the Santa Fe system did not go
back Of 1857. and thai the original cost Of
many Of the properties could not be ascer-
tanned
Comparing the estimate Of $4,000 a mile
given by Governor Stubbs with what the
Santa Fe had expended in building what
is known as the Belin cutoff in New
Mexico T J. Norton gave the figures Of
the cutoff at 81, os4 mile.
Governor Stubs insisted that the grad
ing obstacles encountered in the New Mex
leo line were far greater than could be
found in Kansas. The grading in the New
Mexico line was placed at SI.2J0, while
Governor Stubbss estimate allowed 5000
a mile for grading. Referring 10 the SlI.-
go q mile for New Mexico grading. Gov
ernor Stubbs exclaimed.
Il defy YOU to bring IN your grading con
tracts. I'll buy YOU four suits of clothes
if they don't show figures far below that
estimate. And they'll be 800 suits, each Of
them, too"
The commissioners directed the Santa Pc
attorney 10 file a detailed statement of his