Omaha daily bee., 1910-02-22
PROFITS OF MERGED SYSTEM
Julius Kruttschmitt Quotes Low
Average for Ten Years.
BOOST In PRICE OF SUPPLIES
vice President MOhIe Of Union Pa
cific GOes on stand ana Describes
Development OF the
system.

NEW YORK, Feb. a-Frank b. kellogg
took up today the examination Of Julius
Kruttschnitt, vice president OF the Union
Paeific-Southern Pacific system, in the gov.
ernment's suit to dissolve the merger OF the
two roads.
Mr.. Kellogg asked among other things,
about the list OF commodities used by the
merbed system, on which Mr.. Kruttschnitt
had testified prices had increased.
Did you select for this list CON modities
upon which there had been large in
crcases?" asked Mr.. Kellogg.
NO; 1 simply asked our purchasing
agents to make a list Of the principal COM
modities, showing the differences in prices
PAID was the reply. He said there were
very few things which had not advanced
in price.
Mr.. Kruttschnitt defended the decreased
speed of certain freight trains on his sys-
tenn. "A very small per cent Of the pub
lie is dissatisfied" he. declared.
The Union Pacific at times he said,
has operated under handicaps compared
with which those of the Pennsylvania,
for instance, are nothing"
"Watered stock dividends and property
valuation we're other things regarding
which Mr.. Kruttschnitt was questioned.
Asked If the increase of approximately 90
per cent In taxation on the merged sys-
TENS property in ten years which he had
testified to represented the increased value
Of the property, Mr.. Kruttschnltt replied:
II wouldn't want to say as to that, off
ham / would have to think it over be-
fore answering"
Average Dividend of Road.
When Mr.. Kruttschnitt quoted the In
terstate Commerce commission report on
dividend averages and showed that, al
though his roads were paying a 10 per cent
dividend now, the average of the Union
Pacific for a ten-year period was 462 per
cent and on the Southern Pacific 1.s per
cent, Mr.. Kellogg asked:
Would you undertake to say what por-
ton Of the stock upon which railroads pay
dividends is watered stock and what paid
actual capital investment"
Mr.. Kruttschnitt answered that he rather
believed the interstate Commerce commits
sion had disregarded watered stock in pre-
ages. He said he understood 4 of the 10
per cent dividends we're paid on invest
ments.
Don't you know" asked Mr.. Kellogg,
that the property was m~ortgaged for
800, 10000 for the purpose OF purchasing
other railroad properties, and that inter-
est on this 500, 900, 900 was paid out Of OPP
Grating expenses and charged before divi-
dends?"
IT believe our reports will show the facts,
whatever they may be-" said Mr.. Krutt-
schnitt. There has been no secrecy about
anything that was done"
MohIer on Operations.
A. L. Mohler, vice president and general
manager of the Union Pacific, followed as
a witness and described the development
OF the Union Pacific during the last ten
A s.
Mr.. Mohler in the course of his testimony
the Judgment of the late e. Fl.
Hartman as to the operation of trains be-
tween Council Bluffs and Ogden, Utah.
I'm 1901" said Mr.. Mohler, I'VE moved
some cars more quickly than we do now,
more of them more slowly. The serv-
i've is better now and more uniform, and
/ believe is giving more general satisfac-
ton. We could run a fifty-four hour
freight between Council Bluffs and Og-
den If we sidetracked passenger and mail
trains, but we would have to make forty
miles an hour and II would be risky bust
ness in such q locality
Government council pointed out that Mr..
Hartman was chairman of the executive
committee of the road in 1901 and had the
say as to the movement Of the bust
ness.
YES I know" said the witness.
but nevertheless l might question his
Judgment in this respect. But we cannot
take the risks that used to be taken. II
we lid some of our officers might go to
JAIL"
The hearing goes on Wednesday morn
ng.