The Washington herald., 1913-11-25
RATE INCREASE
RAILROADS PLEA
President Willard, Of B. & O.,
Fears Government
Ownership.
EXPENSES ARE HEAVY
Interstat. Commerce Commission Be-
gin, investigation Of Proposed
Schedule Of Traffic Chargss.

into the proposed increase Of per cenl
in freight rates in the territory east o.
the Mississippi River and north OF the
Ohio and Potomac rivers. This Is re-
garded as the most important inquiry
ever undertaken.
At the conclusion Of the first DAY
hearing it was apparent that the fifty
two carriers involved had profited by
the turning down of their application tc
Increase freight rates three years ago
and. having made a searching examina.
tion into their own affairs, were prepared
to give the Federal authorities what they
believe is incontrovertible evidence that
the railroads must have the increases.
President Willard, Of the Baltimore
and Ohio Railroad, opened the argu'
ment on behalf OF the railroads. The
commission listened with the closest
attention to the facts which he pre-
sented in support of the contention
that the roads must have additional
revenues to meet expenses and make
needed improvements. Mr.. Willard
startled the commission by intimating
broadly that the railroads must have
relief or else the government would
have to take them and run them.
Not Question of Dividends.
1T is a mistake to think that the prob
lem is merely a question of DIVIDENDS &c
railroad stockholders, although that fea'
ture is of course involved" said Presi'
dent willard. This problem in broad
and true sense Affects all interests, and
the outcome of this particular case
whichever way II is decided-will make
an epoch, because II, in effect, will de-
termine very largely whether We shall
as in the past continue to look to private
capital and private enterprise for our
transportation requirements or be COM
PEELED finally to accept the only alterna-
tive possible. 1t is recognized, OF course
that railroad expension and improvements
must go on, and any tendency or condt-
tion that threatens to seriously check, If
not completely stop such expansion in a
large and important part Of the United
States, becomes, because of that fact,
a matter of vital Importance"
Chairman Clark, OF the commits sion,
made a significant statement at the con-
clusion of the session which indicates
that the commission intends to expedite
the case. Chairman Clark said that the
hearing would last until Wednesday and
that it would be resumed by the middle
Of December. Efforts have been made
to postpone the hearings until some time
In January.
Frederick A. .Delano, receiver of the
be presented would show that the car
riers were entitled to an increase of more
than per cent.
Others who presented the case of the
railroads were George NJ. Shriver, vice
president of the Baltimore and Ohio
Railroad; w. c. Wisbart, statistician Of
the New York Central lines, and c. NJ.
Bunting, of the Pennsylvania system.
Louis D. Brandeis, the Boston attor-
ney, and c. A. Needham, represented
the commission in the proceedings.
President Willard, after referring to
the case of 1910, in which the increases
asked were rejected by the commits
sion, said that the cost of conducting
the business of the carriers has been
and is being steadily increased by in
creases in capital charges, wages and
taxes, by burdens imposed by legis-
lative enactments, such as extra crew
laws, employers liability and compen-
satfon acts, by the elimination of grade
crossings, either in part or in whole
at the expense OF the carriers, and in
various other respects. He continued
that existing rates are insufficient to
afford just and reasonable compensa-
tioR and return to the carriers and
are unreasonably low. in view of the
value of tfA service performed. He
continued:
IncSnse of Property.
"A brief reference TO some of the more
striking features in the statements NAV
be pertinent at this time. The consoli
dated statement shows for instance, that
during the fiscal years ended June 30, 1911,
1872 and 1913 the railroads interested in
this movement increased their property
investment s65g ST., 600. The gross earn
% he 10 CT fiscal
year were s1,424, llS,OOO, or $1S6, ,7750oo
greater than they were in the fiscal yea-
ended June 30, 10.
The operating expenses and taxes dur
ing the last fiscal year. for the same
roads. at sos. .365. 900, were S2O3. .0s7, 900
greater than they were in 1910; so that
even though these railroads earned in
gross during the last fiscal year S1S6, ,775,
coo more than was earned three years
previous the net results, after paying
operating expenses and taxes, was actu-
ally a5,S11, coo less than it was in 1916.
notwithstanding the fact that over s659,-
OC0,0OO of additional money had been spent
n the meantime for additions, better
Irents and equipment"
Railroad managers would hardly be
expected, under the circumstances, to
continue large capital expenditures for
betterments and additions, II possible to
avoid doing so, at least uRless they had
reason to believe that something had
happened or was about to happen, which
would materially change the situation.
IT is believed that the preceding state
ments, II confirmed, are sufficient in
the carriers now make for advanced
rates, unless II can be shown that the
causes which have operated to bring
about such results are OF q temporary
character, or have now ceased to exist.
In conclusion. President Willard said:
THE immediate and all-important
question is: How shall these railroads
obtain the new capital necessary il they
are to provide the needed facilities and
furnish the high-class service which the
public interest demands, and to which the
public is properly entitled? The answer,
we think, is to be fonnd in the following
words, which appear in the report of this
from which 1 have already
quoted:
we should allow such rates which
will yield to this capital as large a re-
turn as il could have obtained from other
of the same grade. If rates
formerly in effect have become INSULT
rient, then higher rates should be per-
mitted. Commerce and industry cannot
afford to wait on transportation facili-
des'"
Among the railroad oficials who are
attending the hearings and who are
stopping at the New willard are: Penn
sylvania Railroad-Ivy L Lee, execu-
i've assistant, and George Stuart Pat
.erson, general solicitor. Wabash Rail-
-oad-F. A. Delano, president; W. c..
Maxwell, general traffic manager, and
I L. Minnjs, general solicitor. New
FORK Central Railroad-w. c. Brown,
,raufdapf. A II Harris 0anaral naun