New Britain herald., 1914-04-27
EASTERN RAILWAYS
 FILE RATE BRIEFS
Arguments in Case Opened Before
 Interstate Commerce Commission. HEARINGS MAY LAST FIVE DAYS

Claimed That Total Suspension OI
 Dividends By All Railroads Would
 Not Produce Amount of New Cap
 ital Required For Their Operation.
 Washington, April 27.-That gov ernment ownership of railroads would be a necessary sequence to a refusal of the interstate commerce commits. sion to permit an advance in freight rates-or, at least, to provide for ad- ditional net revenues to the roads was the suggestion made in briefs and arguments submitted to the com mission today in the eastern advance rate case.
 When the arguments opened it was suggested by counsel that the pro- ceedings might require five days.
 George Stuart Patterson, general counsel of the Pennsylvania, opened the argument for the railroads
 Purchasing Powers Decreased.
 It is set forth that the purchasing power of money has so decreased m the last eighteen years that money now paid for freight charges is worth thirty per cent. less in the market for commodities than in 1896.
 The brief submitted by the general counsel of the carriers said:
 t'The railroads are still required to set their services at rates of pay even less than those established years ago. after competition had forced them to a low level and to take their pay in a depreciated currency, while they must pay their labor, buy their ma- terials, borrow their capital and pay their taxes on the basis of present day commodity prices.
 No Return From Capital.
 After reviewing the financial con- dition of the great sytems to show that the railroads, as individual sys- tems, are not earning an adequate return on the money invested in prop erty and equipment, the brief adds:
 Tt appears Gas MT. Willard of the Baltimore and Ohio said in his open Etin9ss atatenaArt9 Ehat ther~ ffesv~A Acafs{tnl- invested in railroads in official class iflcation territory, during the last three years, has earned little or no
 
 erally are actually earning less net after paying operating expenses and taxes, than they were earning at the beginning of the period and before the $659,S62,000 had been spent.
 Property Increase Demanded.
 During the ten year period these railroads found it necessary to in- crease their property investment ap- proximately $2,ooO, 100000, an aver age of about $2o0, 100000 per annuln and it is certain that an equal, if not greater amount per annum will be necessary to meet the requirements of the future.
 Tt is mistake to think that the problem is merely a question of divi- dends to railroad stockholders. The problem in a broad and true sense affects all interests and the outcome of this particular case-whichever way it is decided-will mark an. epoch, because 1t will, in effect, very largely determine whether we shall, as in the past, continue to look to private capital and private enterprise for our transportation requirements, or be compelled finally to accept the only alternative possible Default Is Predicted. Unless the railroads are permitted to increase their revenue by a reason able increase in the rates for trans portation services so as to help meet the large and permanent increases in the cost of capital, wages, taxes and other expenses, then it will be only question of time when there will result not merely the reduction or suspension of dividends, but also in some cases, at least, default in the payment of interest and other obliga- tions.
 Total suspension of dividends by all the railroads, though it would pro- duce a great panic, would not pro- duce the amount of new capital re- quired."