Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1914-04-03
Atty Carter's Statement
Office OF General Counsel
Portland. Me-, March %, 1914.

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Office OF. General Counsel
Portland. Me-, March 2S, 1914.
Kennebec Journal,
Augusta, Maine
Gentlemen: r..
l enclose herewith a. statement of
transportation conditions in connec-
ton with the Maine Central Railroad.
am sending this to you (which you
are at liberty to publish as news as
coming from an authorized representa-
tive of the Company. anytime on or
after April End, 1914. twelve o'clock.
noon.
/ should be glad to have you look
this over personally, make yourself
familiar with the facts stated, which
/ am quite sure are correct, and also
to give such weight as you think prop
er to the differences drawn and sug-
gestions relating thereto.
Very truly yours,
SETH M. CARTER,
General Counsel.
The control of the Maine Central Rail-
road Company by the Boston q Maine
railroad through ownership of majority
of stock-desirable that this control
ton of this stock into the hands of in
veStorS.
Up to the present time the control
of the Boston and Maine Railroad mas
not been detrimental to the Maine Cen
trail Railroad Company. but in looking at
the future, and considering the possibili-
ties of what may take place In regard to
the ownership OF this stock on account OF
the financial condition of the Boston and
Maine Railroad, it can but be desirable
that the control of the Maine Central
should go into the hands of investors
who own the stock purely for purposes
of investment, and will be content and
DESTROYS that the road shall be managed
in the interest of itself and of the state
of Maine, which are mutual and insep-
arabic.
Increase in Cost of Operation.
While the volume of it's business has
increased to some extent. the cost of
operation and maintenance has increased
in marked degree In every directlon
Some of these increases are well under
stood by the public, as for instance. the
large and frequent increase In pay OF en-
ployees in the train service; but there
are many other increases which have not
been known to the public and some
which, perhaps, the public have over
looked. The maintenance OF the road
embraces the wages of laborers, which
have increased on the railroads as they
have in all other kinds of business. and
the railroad is In the market buying ma
which has been subject to the similar in
creases i'm cost as found in all other lines
of business during the past nve years
Taxes have continually increased, ana
in this respect the railroad differs from
most kinds of business. In that the IN
crease of the excise tax is necessarily of
an arbitrary nature and the percentage
of this increase has been FAR greater
than that of the amount of ordinary To-
cal taxes. The prevailing rates OF inter
est have increased and the railroad has
been obliged TO pay this increase upon
all of its Indebtedness which is carried
upon short time loans.
Necessity of Increase in Rates.
The greatly increased cost of opera
ton has necessitated rigid economy in
the operation of the road. All mas been
done in this way that the management
has felt properly could be done to mold
in check the increased cost OF operation
But economy may be carried TO too great
an extent, for instance. 1t might pc pos
sible TO make a considerable saving in
the cost of operation by merely curtaii-
ing the train service. Up to this time
the management has not felt warranted
in inaugurating such "a pollcy, ana IN
fact, would look upon this as the last
remedy to be applied to the situation.
But it is now confronted with the fact
that the present revenues are not SUM
Gent to operate and maintain .he roal IN II
safe and suitable manner with anything
like its present service. and at the same
time yield fair return to its stock
holders. 1t must be conceded that the
railroad in order to be a strong and EN-
Gent corporation. capable of serving the
public as they should be served. of do
ing its part in developing the future
growth of Maine, must be maintained
upon a basis which will induce the IN
vestment by our own people in the stock
of the road and this can be done only oy
maintaining it upon such basis as
yields fair return upon its capital
ielrE Inv N
operation of railroads, IL is believed that
in order to accomplish this purpose,
dividend of per cent. upon the STOCK
should be maintained. In TINS connec-
ton we must not fall to remember that
the capital stock of the Maine Central
Railroad represents dollar for dollar paid
into the Treasury of the corporation; IL
does not represent any nctltious Vaiues
franchises. 1t represents simply the
hard, cold cash which has been expend-
ed for the property of the railroad under
the best judgment of its management.
Difficulty in Raising Rates.
The difficulty in raising rates to point
which will produce sufficient revenue,
first of all is the matter OF public super
vision, The business OF the Maine Cen
trail Railroad lis partly under the control
of the Interstate Commerce Commission,
and partly under the control of the state
authorities In Maine and New Hamp-
shire. In OrQer tiIat any just dIiu equilo-
BILE increase in revenues should be Sc
cured through change in rates, 1T is evi-
dent that it must be done with the full
cooperation of all three of these public
authorities In considering any proposed
increase of rates. the ftrst question TO
consider is it's distribution between the
passenger and freight revenue. While a
new railroad built into an undeVeloped
territory may properly operate a pas
senger service which is not self sustain
ing, because such service is absolutely
necessary for the development and buld-
ing up of the territory to be served, yet
II this development has taken place ana
the railroad has been fully constructed
and the territory built up, it seems only
reasonable that the passenger service
should contribute its fair share OF reVe-
nue. necessary for the maintenance ana
proper operation of the property
The popular idea with regard to the
revenue derived from passenger business
of railroads is undoubtedly erroneous
The fact is that the passenger service OF
the railroads as a whole, in Northern
New England, does not contribute ram
proportion Of the revenue necessary TOT
the proper maintenance and operation OF
the property including reasonable re-
turn upon the investment when com
pared with the revenue derived from the
freight service. The present low rates
for passenger service have been nam