The Washington times., 1913-11-24
RAILROADS BEGIN
RATE HEARINGS
Interstate Commerce Commission Hears Arguments of Heads
of Great Systems Who Declare Advance To Be
Necessary or Progress.
Continued from First Page.)

CContinued from First Page)
Pittsburgh and Buffalo, as far as the
Mississippi river. The roads immedi-
ately concerned are the forty-nine east
Of the Mississippi and north of the Ohio
and Potomac. Mr.. Delano, like President
willard, pictured the necessity for more
revenue, and the consequences of seri-
Gus decrease. He said that he did not
believe a per cent increase would be
sufficient.
Big Increase Shown.
Gross earnings from 1910 to 1913 on
the forty-nine lines increased $50 cocoon.
while taxes and expenses of operation
increased S201, 10000 President Willard
and Mr.. Delano both cited that the
present rates could not continue to stand
the strain of this disparity and the
steady increase of expenses, through
wage increases and taxation increases
made by the Government and arbitra-
tion board.
George NJ Shriver, second vice presi-
dent of the Baltimore and Ohio, follow
ed Mr. DelGno. The other speakers to-
Gay were W. c. Wishart assistant 10
the president Of the New York Cen
Iral lines, and c. NJ. Bunting, comp
troller of the Pennsylvania system, who
is primed with statistics.
Daniel Willard, president Of the Balti-
problem which the railroads east OF
the Mississippi and north Of the Ohio
are seeking to solve with an increase in
freight rates Of 5 per cent. Mr.. Willard
made the first address on behalf of the
railroads.
THE immediate and all-fmportant
question is" he said, how shall these
railroads obtain the new capital neces-
sary il they are to provide the needed
facilities, and furnish the high-class
IT, q ND
to which the public Is properly en-
titled?'
In presenting the main facts upon
which the railroads will rely to prove
the necessity for the increase in rates,
Mr.. Willard stated tliat during the past
three years the railroads in the terri
tory affected had spent In property in
vestment some $500. .O00, 900. or at the rate
of $200. .000.0O0 per year. Nevertheless, be-
cause of the fact that operating ex-
penses had increased faster than ope-
rating revenues, these railroads earned
In the year ended June so. 1913, less by
Sl6.s1l.321 than for the year ended June
80; 1910: ,,u,-s
apparently not only failed to earn any
invested. but saved even less from gros:
earnings. as return upon the orig ma
property investment, than they were
able to show before this large additiona
eXpenQlture was mdOe-
In this three years the Pennsylvania
New York Central and Baltimore and
Ohio systems increased their property
Investment over $422, $4,000 While theil
combined gross earnings increased
SIC. .ooo, 900 the net operating income wa:
withstanding the expenditure of $422
eo6ooc for betterments. additional equip
ment, etc
No Return On Betterments.
In brief" said Mr.. Willard. 'ft ap
pears That the new capital invested il
railroads In official classification terri
tory during the last three years, ha!
earned little or no return; in fact, thes,
properties generally are actually earn
ing less net, after paying operating ex
penses and taxes, than they were earn
ing at the beginning of the period, and
: before the $50, 0oo 900 had been spent
The result. as might be expected, OF
this constant tendency toward diminish.
ing net returns. has been to seriously
check, IL not altogether stop, the nor.
NAL development of railroad facilities
in the territory affected. During tbs
ten-year period these railroads found il
necessary to increase their property In
vestment approximately $4,000, ,OOO.0O0, ar
average Of about S20o 90 600 per annum
and il is certain that an equal If mo-
greater amount per annum will be nee
essary to meet the requirements of thu
future.
while the carriers fully recognize
and acknowledge their obligations to tbs
public, and are alive to the responsible
ties SO imposed. they are help.ess L
fulfill these obligations, unless the 4
nancial result of their operation l!
such as 10 inspire the confidence OF pri
rw@aN N.r 6n cNrrl mr.
of private enterprise, and the result o.
operation during the last three years /.
not such as to inspire the one or en-
c0ure ge the other.
In Sc ting forth the conditions which
have produced the present railroad
situation, Mr.. Willard pointed out tha
the cost of conducting the business o
the carriers has been, and is being
steadily increased by increases in capi
tai charges: increases in wages. II
taxes by burdens imposed by legisla
tive enactments. such as extra crew
laws. employers liability and compen
sation acts, by the elimination of grade
crossings, either in part or in whole
at the expense of the carriers, and il
various other respects
Wage Payments Higher.
Mr.. Willard called attention to th'
fact that since 1910 wage payments by
the railroads affected had greatly in
CreaSeQ-ldTRely as q resull OF HleuLa
ton and arbitration proceedings-anc
that the award just announced by th'
arbitrators would give the conductor:
and trainmen 36,O0000o per annum add
tional. The effect of the so-called full
crew laws alone has been to increas'
the expenses of these carriers NOR
than $1,000, 900 per annum.
The railroads affected paid s4, i9i.l7
in the shape of taxes for lSl3 this beInt
sn5791S7 more than for 1910. The
three larger railroad systems paid n
taxes $3l, ,2lG.OOO in 1918, this being s, %
more than for 1910
I'm short. the railroads have felt tn
burden Of the increased cost of living
like all other enterprises or individuals
but, unlike all others, have not beer
permitted SO far TO raise their prices
or adjust their charges in recognition o
that burden"
The public, added Mr.. Willard. de
mands today a higher standard of serV
fee than ever before-all OF which Is re
hected in the cost of operation. Fur
theI. the freight rates in effect in lSl
have not in the aggregate been main
tained, but are in fact lower now thai
they were then.
"In addition 10 she actual reduction II
rates" continued Mr. Willard, "th
continuous decline in the value-that !
to say, the purchasing power of none.
for q number OF years past-has ha'
the effect of diminishing still furthe
the burden Of the rate 10 the shipper
xvktt~ fha sarna time Increasing tn