The free lance. (Fredericksburg, Va.) 1885-1926, 1910-10-18
.TELLR.R. SECRETS.
Heads of Lines Testify Be.
fore Commerce Board.
REASONS TO BOOST RATES
Explain Embarrassments They Are
Laboring Under to Keep Pace
With Development of the
Country.
REASONS TO BOOST RATES

Washington, Oct. l5.-Railroads IN
Eastern Trunk Line territory have pre-
scented to the interstate commerce
commission their reasons for the pro
posed advance in freight rates.
Counsel for the roads have express
ed entire willingness to rest their case
on statements made by James Nc.
Crea. president OF the Pennsylvania;
Daniel willard, president Of the Balti.
more & Ohio and W. c. Brown. presi
dent Of the New York Central lines.
Such heavy mental and executive
artillery as vas numbered in this le-
gal proceeding seldom has been EN-
ployed in investigations by the inter.
state commerce commission.
Great financiers and railroad execu.
tlvcs. who ordinarily do not take the
public into their confidence. have stat.
Ell their opinions and Views regarding
not merely the business Of their re-
spective lines. but also the economic
problems which confront the Ameri.
can transportation companies. They
have discussed their operations in the
past and their proposals for the fu.
ture They have indicated what they
regard as the embarrassments under
which they are laboring in their ef-
forts TO enable the railroads to keep
pace with the tremendous develop
meat and progress OF the United
Sta,es. They have sought to justify in
creases made in freight rates.
Must Have Vast Sums.
Vast sums Of money must be avail
able. according to testimony given by
the presidents OF gigantic systems. to
carry their plans into effect And they
are unanimous in the opinion that the
necessary funds can be obtained. d.
rectly or indirectly. only through a
reasonable advance in freight rates
These. they say. aside from the money
thus derived. would make their securi-
ties more attractive to investors
W. c. Brown, President OF the New
York Central, resumed the witness
stand for cross examination. The only
other railroad witness to be called is
J. c. Stewart. vice president in charge
Of operation OF the Erie railroad.
Mr. Brown was asked by Mr. Lyon.
OF the commissioners counsel. wheth-
er the New York Central followed the
principle adopted by the Penn ylvania
railroad Of applying a dollar OF surplus
10 Improvements for every dollar OF
dividends paid
1t might be very desirable to pur-
sue that plan. replied Mr. Brown. but
the New York Central has not been
able TO follow IT,"
AS a matter OF fact, the New York
Central never has been able to ap-
prOach the record Of the Pennsylvania
in that respect We have not been able
even 10 do as well as the Baltimore &
Ohio by putting as much as 80 cents
OF surplus into improvements for each
dollar in dividends.
During twenty-one years the New
York Central has paid an average OF
4.76 per cent in dividends to its stock
holders. an average less than they
could have realized II they had invest
ed their money in first class mort
cages. During that time they have
taken out of earnings and applied to
improvements 127 per cent, or just
about % cents for each dollar OF diyi
dends."
After Mr. Brown had given similar
information Of earnings and surplus
set aside for improvements on other
Of the New York Central lines, Com
missioner Lane asked how it happened
that in such rich territory the New
York Central paid such small diyi
dends.