The Birmingham age-herald., 1910-10-14
Presidents of Two ROad- Present Figures on Rails
 road Expenses
PAY OF EMPLOYES HAS
 BEEN SHARPLY RAISED
President Brown of the New York Gene trnI Says That Railroads Are Not Making Enough Profit to Pay
 for Improvements

Washington, October 13.-Two presidents i of great American railway systems to-
 day contributed their view of. and req
 sons for, the proposed advance in freight
 rates by the roads in eastern trunk line
 territory at the investigation into the
 proposed tariffs being conducted by the
 interstate commerce commission.
 The witnesses were President Daniel
 Willard of the Baltimore and Ohio Rail-
 road company, and President W. c. l Brown of the New York Central lines.
 Both of the officials presented, from their
 viewpoint, reasons in justification of the
 advances in freight rates
 Marked similarity characterized the
 statements of both President Willard and
 President Brown. Neither placed the re-
 sponsiblity for the proposed increase in
 rates wholly on the advances in wages
 made by the railroads in recent months.
 although both asserted that the very large | increase in wage scales had been an i'm
 portant factor in the consideration of
 the rate advance.
 President Brown declared substantially
 that the great improvement and better
 ment of railroad properties, in order that the officials might furnish to the people | adequate facilities for the transportation | of their commerce, could be accomplished | only through an increase of the freight | income of the various lines. He pointed
 out that under present conditions it had | been shown to be impossible to obtain | the large sums of money necessary to
 make the proposed improvements and he
 apprehended that that impossibility would | continue until such time as the railroads
 were able to secure what he and other
 railroad officials regarded as an adequate
 return on the investments made in the | lines.
 | The hearing will be continued tomor- . row and perhaps on Saturday President Brown had not been excused
 from the witness stand when adjourn
 ment was taken this evening. | Willard Presents Facts | President Daniel Willard of the Balt- more and Ohio Railroad eofnpany to- day presented evidence concerning the operations of his road.
 When he became president of the sys- tenn on January g. 1910. he said he found | 1t necessary to arrange for S50,000.000 ad- ditional funds. most of which had to be i applied to Improvements. | MT. Willard said the gross earnings of | the system in 1910-the fiscal year ended
 June 30-were the greatest in the his | tory of the road During the last year
 the company had ordered 10000 new cars
 and 225 new locomotives The increase in our pay roll. it If had gone through the entire year. would have | amounted to $1, 635, coo" said MT. Willard,
 "and if we had had to meet the interest
 payments for the entire year that we | had for the latter months because of the | increased capital, our interest payments | would have increased S1 900 0n1 | MT. Willard declared with emphasis | that railroad stock paying less than 6 | per cent is not attractive to the investor, | adding:
 q don't believe an investor would care
 to accept a per cent stock with its ac- | companying chances of loss when he could get per cent with an assurance | of no chance of loss.'
 MT. Willard expressed the opinion that | the action of the interstate commerce | commission in the pending case would | have a tremendous effect upon investors
 both in this country and abroad. These investors" he continued Hook | with deepest interest and concern upon
 what may be done by this commission. I ascertained personally that in London and Berlin our investors were extremely anx- ious to ascertain what conditions were | to be as to rates.
 Some arrangements or adjustment IiluSt De lOT duOlllOndl IacllltleS Tor
 American railroads. I never have heard
 that we have too many railroads or that
 the railroads are too good. James J. Hill, president of the Great Northern railroad
 one of the ablest railroad executives, has
 said it would require s1,O00,00o,0oo a year
 for five years to properly equip the rai-
 roads of the United States" Commissioner Lane suggested 1t might
 be desirable and Illuminating for the rail-
 roads to enter upon a period of experi-
 ment before insisting upon an advance in rates.S
 Reasonable Dividends
 MT. Willard expressed the opinion that
 the stockholders of the Baltimore and
 Ohio were entitled to not less than per cent dividends their holdings He suggested that the financial credit not
 only of the Baltimore and Ohio. but of
 other lines, practically was in the hands of the interstate commerce commission
 What could be better?" suggested Mir. Brandeis. than a ruling of this com
 mission that would insure to the security
 holders of the Baltimore and Ohio a 6 per cent return?'
 "Of course" responded MT. Willard. mo action of this commission in any sense could be regarded as lien on the rai- road property. It would not be possible for the commission to guarantee any thing. do believe, however, that If the freight rates were adjusted fairly and
 with a reasonable degree of permanency, the credit of the railroads would be sup ported"
 MT. Brandeis then introduced a series of questions concerning the nature of economies practiced by the Baltimore | and Ohio.
 Interrupting him. Commissioner Prouty inquired of MT Brandeis Do you
 maintain that before the committee should allow any increase of rates for the railroads 1t should require them to show that their business Is efficiently | managed as to warrant that acton?' q think responded Mir. Brandeis, "the commission should find that as I indicated it would be most serious in- jury to the country to establish the prin- ciple that if, according to present con- ditions, the railroads need more money, they should raise rates instead of doing what every competitive business does, namely consider whether they could not make more money under the present rates with a greater efficiency and econ. omy manifested in their business" In response to inquiries by Clifford Thorne of the shippers counsel. Mir VII lard expressed the opinion that 1t was not necessary to obtain physical valua- ton of railroad property in order to fx