The Bemidji daily pioneer. [volume] (Bemidji, Minn.) 1904-1971, 1914-05-01
Extraordinary Testimony Submitted
During Closing Days of Rate Hear
ings Before Commerce Commission
CAUGHT WITH THE GOODS
Figures of DR.. Warne Show That
Gross Earnings of Last Year Were
Even Greater Than During 1912.
BY Congressman c.. H. Tavenner.

by congressman &. II. IaVenner.
Washington, May 1.-Extraordin-
airy evidence submitted by shippers
in the closing days of the rate hear
ings before the Interstate Commerce
Commission seems to indicate that
the railroads have again been
''caught with the goods
Even those who have most bitter
ly fought railroad injustices in the
past were inclined to believe this
year that the roads were telling the
truth when they said their net earn
ings have declined because on in
creased wages, and not until recently
has there been much reason to believe
that the Commission might not grant
the five per cent increase in freight
rates which the roads are asking.
But all these estimates have been
upset by the evidence offered by the
shippers at the last moment. The
figures which have been brought for
ward seem to show without question
that instead of having smaller net
earnings than formerly the railroads
during the past year have made more
money than ever before in spite of
higher wages paid to their employ
ees. The roads have shown an ap-
parent decrease in profits by methods
which practically amount to jugglery
in bookkeeping
1t is extremely doubtful in the light
of the showing which the shippers
have made if the five per cent in
crease will be granted.
One of the most illumin ating wit
nesses who have appeared before the
Commission was Dr. Frank J. Warne.
the statistician, who was employed
in this case by the Pittsburg Coal
Company DR.. Warne presented an
analysis of railroad figures the like
of which the Commission had never
seen before.
Working from the railroads own
reports of their finances, DR.. Warne
compiled 500 graphic diagrams
which as a whole revealed on the
part of the railroads a most bold and
cynical effort to deceive the public
and the Commission, and thus secure
the right to mulct the consumer up
on an argument based on false pre-
lenses.
The Warne exhibits show that the
apparent reduction in railroad earn
lngs is not due to increased wages
as claimed, but to a very large in
crease in expenditure for mainten-
ance of way and equipment and
structures. Thus the case resolves
upon the point whether the commits
sion will approve these increased ex-
penditures. 1t is the Inference in
the Warne testimony that these in
creased expenditures were purposely
made to show an apparent reduction
in earnings
nv Sl'0N earnings OIL the Amer
lean railroads last year were ten
per cent greater than in 1912, the in
crease being $131,OOO,OOO. Whether
this increase and more was taken
UP by wage Increases, DR.. Warne SET
out to show
The tables showed that the pro-
portion of wages to total operating
expenses was less in 1913 than in
any year since 1890.
On the other hand the proportion
of maintenance of equipment to total
operating expenses was larger in
1913 than in any year since 1898.
The proportion of expense for main
tenance of way and structures to
total operating expense was larger