Atlanta semi-weekly journal. (Atlanta, Ga.) 1898-1920, 1910-10-18
BROWN EXPLAINS
WHY RAILROADS NEED
INCREASED RATES
Need Higher Tariffs to Keep
Up Their Credit, He Declares
Foreign investor Wary of
American Tribunals

WASHINGTON. oct. 14.--Railroads in
eastern trunk line territory have pre-
scented to the i.-terstate commerce com
mission their reasons for the proposed
advance in freight rates and counsel for
the roads have expressed entire willing
ness to rest their case on statements
made by President James McCrea, or
the Pennsylvania; President Daniel VIII
lard, OF the Baltimore and Ohio, and
President w. c. Browne. of the New
York Central lines, the latter being cross
examined today.
Money-vast sums of money-must be
available. according to testimony given
BY presidents OF gigantic systems, to
carry their plans into effect and they are
unanimous in asserting that the neces-
sary funds can be obtained, directly or
Indirectly, only through a reasonable adj
-ance in freight rates.
BROWN RESUMES STAND.
At the opening of today's proceedings
resident Brown, of the New York Cen
al resumed the witness stand for
denomination.
President Brown was asked by Mr..
Won, of the commissions counsel,
neither the New York Central followed
lie principle adopted by the Pennsylva-
nia railroad of applying dollar of sur
plus to improvements for every dollar
OF dividends paid.
During q years. said Mr.. Brown,
1.-THE New York entral has paid an aver
age of 4.46 per cent in dividends to its
stock holders, an average less than they
could have realized II they had invested
their money in first-class first mort
cages. During that time they have TAX
en- out of earnings an daplied to i'm
1.27 per cent, or just about
% cents for each dollar of dividends"
Commissioner Lane asked how it hap
pened that in such rich territory the
New York Central had paid such small
dividends.
Because" Mr.. Brown replied. sit has
not been possible to earn any more"
Adverting to the proposed advance in
rates, Mr.. Brown. in response to in
quiries by Attorney Lyon, declared:
MUST KEEP UP CREDIT.
81 think 1t is absolutely necessary for
the railroads to earn more money to
supplant their credit, so that they may
obtain sufficient funds to make neces-
sary improvements"
"In other words" suggested Attorney
Lyon, "if by it's increased volume of
business the earnings of the New York
Central should be enough to pay increas-
ed wages, you would not change your
opinion about the necessity of this In
crease in the rates?"
mo, sir" promptly replied Mr.. Brown.
"If the New York Central simply can
earn enough to pay the dividends and
make no provision whatever for neces-
sary improvements and betterments, and
for a surplus to meet the lean years,
do not think it is possible in such cir
to maintain the credit of
that railroad and obtain the money
necessary to make the improvements
that must be paid
81 do not think that the increases in
rates asked for are all that we should
have, but they will enable us, if granted
to obtain money abroad. The sentiment
tai effect of the allowance of the pro-
posed rates would be worth as much as
the practical advance in sustaining our
credit. 1t will convince the foreign in
Increase In rates. The fact is. there is
much doubt about that in Europe