The Washington times., 1910-10-12
POVERTY IS PLEA
Of RAILROAD HEADS
President McCrea, of Penn
Sylvania, and Counsel
on Stand.
Continued from First Page.)

had been accumulated over and above
dividends. interest charges. and operat-
ing expenses.
In concluding his preliminary state
ment President McCrea said that there
had been no growth Of business during
the last three wears: that further econ
Omies in operation seemed impossible;
that the expenses or running the sys-
ten had grown. and that the only way
in which it would be possible for his
company TO maintain its service and
strengthen its credit would be through
increased freight rates
When the railway official had con-
clUded Mr.. Tirandeis began q series Of
questions 10 show that the Pennsylvania
was earning more money than neces-
sary to meet its actual expenses and TO
maintain its credit on the market He
said he proposed to show by the COM
pany's own reports that any further
increase In freight charges was an un.
necessary burden upon the shippers, and
therefore upon the public
In answer to a question whether or
not the Pennsylvania had during the
last year paid TO it's stockholders in divi-
dends and in cash equivalents Is per
cent upon their investments, AIr- McRea
admitted that u had. He qualified that
admission however, BY saying that an
extra stock dividend had become avail
able. but that IL had not all been earned
In the past year.
Also SI4,oooyooo Extra
Going a little further counsel for the
shippers asked the railway officials II
his company did not accumulate a sur
plus last year in addition 70 the II per
cent dividends, Of something Ike ga
000.0OO- This. Mr.. McCrea also vouched
for.
When. however. Mr.. Brandeis asked
II the Pennsylvania hal not earned for
its stockholders and paid to them in one
form or another an average OF Il per
cent each year for the last ten wears.
MI McCrea failed TO recall He did say
iater th4t ne owned stock in the com
pany and that he had not received any
such fabulous return for his individual
investment
The construction OF the new Pennsyi-
Fan1H terminal IN New York at a cost
Of Sos. .O0O.O0O. was made the subject 0f
inquiry today. Mr.. McCrea said that
MS company did not hope TO receive
any material return from that Invest
ment- be said that this costly work
was authorized IN very much the same
way that the Government had author
lied the building OF the Panama canal.
~ vas desirable, he said. but not pay
ing Investment.
This gave the counsel for the shin
pers the opportunity TO declare 10 the
commission that Pennsylvania railroad
had no right 10 exact revenue from
the public IN order 20 pay interest on
non-proouctive Investments such as Mr.
McCrea had described the New York
terminal 10 be.
Commuters Rates Remain.
At this point, the question was asked
II the Pennsylvania had not increased
its Communication rates out of New York
in order 20 meet the expenses OF. main
tanning the new terminal Nfr. Nc
Crea replied that Il had not and flIrth-
ermore the company did not propose To
use the new station for commuters
Also Mr. Brandeis asked II II were not
the purpose Of the Pennsylvania to ex-
tend It's freight business into New Eng
land as a result OF its vast exoend3-
tureS in New York. He asked in the
same connection If the PENNSYLVANIA
was not gradually increasing its hold
ingS in the New York. New Haven. and
Hartford for she purpose Of ultimately
controlling the business Of Men Eng
land
Both Mr.. AIcCrea and Mr.. CIOwan re-
sented this question and the cOmmIs-
sion did not insist upon an answer. II
was not regarded as pertinent 10 the IN
Quiry in progress
During the cross-eNanination Mr
McCrea declared that while his COM
pany had advanced the wages OF It's
employees during the last ten years ap-
prONimately 50 per cent. ne said that
they were not in reality receiving more
than they did In 1900 This he said
was due TO the present Industrial con-
ditions which had operated TO greatly
increase the cost Of living.
At the same time Mr.. BTlCrea said
that the cost OF living TO the stock
holder OF the railroad had increased