The San Juan islander. [volume] (Friday Harbor, Wash.) 1898-1914, 1910-11-04
ACCUSES RAILROADS
Of FRAUDS
MANIPULATION OF EARNING RE.
PORTS is ATTACKED BY
STUBBS.
Governor of Kansas Also Offers to
prove That Valuation Of Railroad
Lines Are Excessive-curse Of the
Business in This country-Is High
Finance.

chicago. Oct. 29.-Gov. w. r.
c+nhbs of Kansas on the witness stand
in the interstate commerce commits
sion rate hearing, declared that
be could reproduce at profit to him
Golf as a railroad contractor all the
main lines of railroads in Kansas at
cox 600 a mile and reproduce the
branch lines for $4,000 mile less.
In addition to presenting these esti-
mates as railroad contractor, the rail
road reproduction figures being many
times as large as his figures. Gov.
stubbs declared that he views the rail-
road situation literally but he pro-
tested vigorously against stock manip-
ulation and excessive valuation of
properties.
BIames the People.
81 don't believe the carriers should
be trodden down." said Gov. Stubs,
.but he should be made to show to the
interstate commerce commission what
he has invested. He should have a
a liberal return on his actual invest
ment, but he ought to bring in his
books and show just what he owns.
The people are a good deal to
blame for the present conditions.
They have allowed conditions to grow
up and many persons have bought
stocks and bonds of railroads on abb
normal returns. And all the while
the carriers have been taking millions
and millions out of the returns to
build expensive structures and then
the next year have capitalized the
structures and expect to pay dividends
on the increased capitalization
But there, l don't want to make a
speech.
Calls Railways Methods a Fraud.
Il think it is fraud" continued the
witness, ''for a railroad to take out
millions from it's earnings and build
permanent structures and improve
cars, as the Santa Fe did, and appro-
pirate it to be used for betterments
and Improvements and then say only
s965,O00 of net revenue was on hand
when. as a matter of fact, they had
100000 and had taken out all kinds
of money for improvements"
Gov. Stubs declared that as his
figures of $4,000 a mile of main line
road he would make 100000 on a
contract to reproduce the Kansas rail
roads.
Right of Way Donated
Il had proposition up about four
years ago." said Gov. Stubs, ito put a
line $50 miles through the best part OF
Kansas, from Belleville to Wichita. ]
agreed to build the road, furnish the
right of way, lay hardwood ties and
furnish everything for $4,000 a mile,
and | would have made money on the
job. But the railroads did not want it
think they had an agreement and did
not want north and south line in
Kansas. The right of way would have
been donated. Talk about right of
way. Why, gentlemen, one-sixth of the
land in Kansas has been given to the
railroads.
High Finance a Curse.
The curse of the railroad business
IN this country is stock juggling and
high finance. Stop this high finance
Make every dollar of capitalization
represent dollar invested in the road
and people will fall over themselves to
buy railroad stocks and bonds"
Frank Ryan of the Topeka state
board of railway commissioners; Viii
lam Muirhead of Topeka, special as
slstant to the attorney general of Kan
sas, and ]. R. White, traffic manage,
OF big Kansas City dry goods house
preceded Gov Stubs.
Rebates Cut Jobbers' Profits.
Mr.. Ryan and Mr.. Muirhead told Of
lamentable condition of the prop
critics of the Missouri Pacific in 1907
when, Mr.. Ryan said, people were
afraid to ride on it, and of later inn
provements.
Between 1900 and 1906" said Mr.
white, I'VE paid from 80 to 40 cents
less than the $1.47 rate from the Allan
Tic seaboard. This condition was moi
exceptional with us; it was matter o.
common knowledge that others were
allowed the low rates"
witness said the rebates applied t.
oil inbound freight and covered 80 pei
cent of the goods received by his com
pany. Profits, he added, had fallen OF