The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1910-12-05
Interstate Commission With
out Authority in Matter,
Says Judge Cowan.
DECISION WOULD SET
A BAD PRECEDENT
Damage to Shippers and Numerous
Increases Would Follow
Favorable Ruling

/ ity In undertaking 20 pass on the gen
I eral question whether the railroads Of
+ the country are entitled 70 an increase
/ in rates Is strongly asserted by Judge
/ 5 II Cowanr Of Texas, attorney FOR
+ the Texas cattle raisers and for the IA
/ tional Live stock Association
| Judge COWan is in washington in con
! nectiOn with the hearing on Eastern
| rate Increases and other interstate con-
! merce MATTERS
/ InasmUch as Judge Covan vas tie
/ right-hand man # Senator J p. Doli-
I yer IN the shaping - Of the Hepburn
rate law. It VIII no doubt be o0rce5ed
/ his views on this sub1ecC Of u hat the
commission can do are worth while
/ noticing
Would Set Bad Precedent
! Judge Cowan not only contends The
/ commission has no authority Whatever
/ 70 consider whether the roads are en-
/ titled 10 more revenue as q general
/ proposition, but he takes the position
( that the railroads have odroitIv brouEhr
/ 90 about that the commission snail take
/ M this question and that II the commits
I sion should permit itself 20 be led int
( ruling that the roads are entitled 20
/ more revenue II would Re UNNECESSARILY
! a great many more Increases OF rates
I than the roads have given notice OF 10
1 the commission
| The commissions inquiry must Dc
/ limited under the laU, SAYS Judge
/ CuUal- 10 the Increases in rates spect-
! 1cSlly proposed Jy the roads. Should
] the commission hand down z ruling thai
! the roads arc entitled 10 more revenue,
I tnen ne declares such g ruling WOIl;
| stand as q constant meanCe 10 the ship
I DerS and Would be held up 70 view and
I taken advantage Of Ev the railroads
I every time i was necessary 70 5usr-fe
/ q Tlte increase Of anv kind
II the commission does rule that the
TOauS as q general proposition are en-
I COWanS opinion there VIII be ju-r
/ one course lert for the shippers aUs
I the public and that Is TO 90 TO Con
/ Eress and obtain the enactment q. 81
/ maximum rate law Such Law would
I declare that the rates as fled AT a
I certain time should be the existing
| rates for the country. nOJ 10 be change
/ until II should be shown 10 the con-
/ mission that they were unreaSOna BILE
/ Judge CoWan says there IS no JUST
/ hcatIOn whatever for the proposed In
I creaSes OF rates by the railroads lie
Z discussed especially the situation WIKI
/ respect 10 the roads west OF the
Mississippi and east Of the Rocky
/ mountains with which ne IS highly
/ familiar
Earnings Increasing.
The gross earnings and net earnings
/ Of these roads, said Judge Covau.
/ have been increasing steadily for
about ten years The settling Of she
country insures continuance OF. this IN
| crease II Is as certain as anything
can be IN economics. that our railroad
! Inliea-e IN the country west Of the
I AtlSSlSS1ppi has Increased as rapidly ass
the traffic could justify. and as
/ general thzg little more rapidly.
| because most OF the roads have been
/ built as Speculative projects.
/ With perhaps no exception as 70 the
/ railroads built IN the West, the tr~-
I mortgage bonds have represented rE-
| money necessary 10 construct and
| equip the road for the business rle
| road could do when built As TO most
/ instances, the second mortgage bonds
represent supposed profit in the trans
aCIcH- he stock was backShseSh-
/ The stock was the pump handle -r-.
/ managed the output and the iuEo am
every hIng connected with the road T.
l = the eighth wonder OF the world thai
/ the STOCK OF some Of O,IT roads that
| never paid Il dividend should be raIus-
| pie mat = 50 because the price of
! tie stock Is not an indication OF the
/ Nalue or the road But because con
trOl OF the stock means control OF tla
I road the price Of the stock Is indie
TIE or the value Of the take-off. what
| a gam ni5z would call the kitty
= In the States Of Missouri Keu1s-.
| Arkansas, New Mex. cO. Texas. gkl.
! aonG, and Colorado. the last ten yea. g.
. N--E Ct ttC mas more IMAM CHIEleT-
EToSS and net earnings have grown cd
/ larger per cent than the number or
/ tons OF traffic The increase IN E1iIes e.
/ has been about b per cent. Ina new
| mileage mas been largely IN an Uu-
/ productive country and speculative
/ NoLWltnstandlnE the large increase
/ IN mileage. the earnings per mile Of
/ me nave increased - 10 50 per CEN.
1 The gross and net earnings. freight and
| passenger have increased in the az
/ Eregate considerably more than 100 per
I Cor -=r--
/ per cent The ratio OF net earnings ID
/ the total capitalization per mile Of lire
/ has increased more than - per cent,
! and the ratio OF operating expenses tC
/ gross earnings has decreased notwitls-
| standing large expenditures for bet
| ternlents which have ieeE charged iE
| operating expenses admittedly
Greater in Northwest.
Taking the Northwestern states.
| iowa, Nebraska, the Dskotas, Mime
| sofa. and Montana, the same general
/ conditions exist But the volume OF
! than in the southwestern group In
/ these States of the northwest. the aver
age capitalization per mile has increased
] from about Sjf,9-H to $1,000 Still. the
net earnings pay a larger per cent on
| the total capitalization than they did
/ ten years ago The net eaFninEs for
/ 1853 in this northwestern group of StateS
| were sufficient 70 pay an per cent
/ dividend on S53.t10 per mile valuation
/ which undoubtedly was al least one
( third more than the roads in that ter
/ riJory are worth Il estimated on the
1 basis of reproduction today including
/ terminals and all property including
I uuearued Increment
I BASED on these figures Il Is nothing
I less than highway robbery for the high
WAYS. namely, our roads. 10 be permitted
I TO hold up the people f0- higher rates
I II the Interstate Commerce Commission,
nOtH Outstanding these facts. permits t1e
I rates 70 be made higher. the only relief
that I know of is for the people 10 ask
{ Congress 10 enact a maximum rate
/ law
Other representative of shippers agree
/ with Judge CoWan as TO the vast i'm
I p0TJance OF the question whether the
{ commission Is going 20 rule that the
{ roads are entitled to higher rates = hey
/ say such ruling VIII have a much
/ broader effect than on the rate Increases
which have been fled with the commits
sion. and viii work much hardship 10
I shippers The question Is likely to he dis
I cTISSed on The floors Of Congress this
winter. and Z Is not AT ala unlikely 81
I tation for maximum rate law VIII be
! started.