Los Angeles herald., 1910-10-14
RAILROAD HEADS
ASSERT FREIGHT
CHARGES TOO LOW
President Eastern Systems Tes-
tify Before Interstate Com
merce Commission
OPERATING COST INCREASES
Officials Claim Adequate Service
Impossible Without Raise
in the Rates
OPERATING COST INCREASES
Associated PressI


WASHINGTON, Oct. 13.-Two presi~
dents of great American railroad sys-
TENS today testified before the inter-
state commerce commission concerning
the proposed advance in freight rates
in eastern trunk line territory.
The witnesses were President Daniel
L. Willard of the Baltimore & Ohio
railroad, and President w. c.. Brown of
the New York Central lines. Both ar
gued for the advance.
Marked similarity characterized the
statements of the two presidents.
Neither placed the responsibility for
the proposed increase in rates wholly
on recent advances in wages, al
though both asserted that the wage
increase had been an important fac
tor.
President Brown declared that i'm
provement of railroad properties so
as to furnish adequate transportation
facilities, could be accomplished only
through an increase Of the freight
income.
Mr.. Willard said he could see no
way for the Baltimore & Ohio to fur
nish prompt and adequate service
without an increase in freight rates.
"Our expenses have been Increased
during the last five years by legisla-
tion," he said. "The act regulating
the hours of labor and the employers
opposed, have added to the cost Of op-
Grating railroads.
."I do not think the present rates are
high enough and I would not think so
even though there had been no recent
increase in wages"
ASKS FAIR ADJUSTMENT
Mr.. Willard expressed the opinion
that the stockholders of the Baltimore
& Ohio were entitled to receive not
less than per cent dividends. He
suggested that the financial credit not
onIy of the Baltimore s. Ohio COM
pany, but Of other lines, practically
was in the hands of the interstate COM
merce commission.
"What would be better" suggested
| Louis D. Brandeis of the Shippers
counsel ethan a ruling of this COM
mission that would insure the Sc
curity holders of the Baltimore d
Ohio a per cent return?'
''Of course" responded Mr.. Willard,
"no action of this commission in any
sense could be regarded as lien on
the railroad property. 1t would not
be possible for the commission to
guarantee anything do oeneVe'
adjusted fairly and with a reasonable
degree of permanency, the credit or
the railroads would be supported"
Mr.. Brandeis then introduced series
of questions concerning the nature of
economies practiced by the Baltimore
g. Ohio. Interrupting him, Commits
sioner Prouty inquired of MT. Bran
deis:
"Do you maintain that before the
commission should allow any increase
of rates for the railroads, it should
request them to show that their ousl-
ness is so efficiently managed as to
warrant this action?"
WAGE INCREASE LARGE
sT think" responded Mr. Brandeis.
"the commission should find that 1t
would be a most serious injury to the
country to establish the principle that
if according to present conditions, the
railroads need more money, they should
raise rates instead of considering
whether they could not make more
money under the present rates with
greater economy"
President Brown of the New YORK
Central said the increase of wages on
that system amounted to $I,S5l,OO
year with an additional $175,OOO a
year to take effect January 1.
"a considerable part of the capital
for the improvements now in prog
ress," said Mr. Brown, was acquired
before recent increases in wages rem
dered the situation so acute But
with respect to the capital remaining
to be secured for these Improvements,
7 can confidently say that the ability
of the railroads to obtain 1t depends
upon the ability of the companies to
secure increases in revenue through
increased freight rates commensurate
with the recent increases In expen-
siveS.
"I cannot better illustrate the situa-
tion than by reference to the recent
attempts of the Michigan Central rail-
road to market in this country and In
Europe an issue of $17,5OOOOO Of its
4 per cent debentures. The now bond
ed indebtedness of the Michigan Cen
traI and the previous stability of it's
earnings should have made such an
issue attractive to any security market.
It has been impossible, however, in this
country or in Europe, to secure any
bid for these securities which could