New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-10-20
President of B. & o. Chief
Witness Before Inter
state Commission.
BRANDEIS ATTACKS 6
PER CENT DIVIDENDS
Daniel Willard Says War Is Civ
ing Cause for Anxiety as to
Enlisting New Capital.

] NtnlUElOD, ONl. 10 bihb N".'
! business depression and the war IN
] Europe had caused shrinkage OF over
/ S76,00O,000 in their annual net reve-
nues. representatives of thirty-eight
| Eastern railroads, operating more than
4 $4,000 miles OF transportation lines,
appeared before the Interstate Com
merce Commission to-day, reopenng
/ their request for authority to increase
| freight rates at least . per cent.
Daniel Willard, president Of the Bal
timore & Ohio Railroad and also mead
of the conference of presidents or the
| lines involved, was the principal wit
ness. He was supported by mass
I of statistics presented by Vice-Presl-
/ dent Shriver Of the same line, acting
/ for all the roads.
In opposition TO the plea OF the
carriers. Clifford Thorne appeared for
, the public service corporations OF sew
eral Middle Western and inter-moun-
/ tain states, and also for shippers or
CARNATIONS in the region affected.
Louis Brandeis. counsel for the com
mission, assailed Mr.. Wizards posi-
tion in cross-eXamination, particularly
calling attention TO the fact that the
Baltimore e. Ohio had adhered this
| wear to its policy of declaring 8 per
cit OF more than s3,000,000. The af-
fairs Of this system were the only ones
TO receive detailed attention to-day,
as officers of the other lines were not
present. Mr. Brandeis implied in his
questions, however, that similar pol
icy had been followed by all the lines.
Justified by Big Surplus.
Mr.. Willard said the dividend had
been maintained at 6 per cent TINS
year on his recommendation. He de-
clared he believed it would be JUSTIFIED
by the fact that the road had S32,-
100000 in surplus.
He had recommended il. he said,
because it was necessary to maintain
the credit of the line. A recent note
issue of S35,000,000 by the road was
marketed at par. bearing 412 per cent
interest, and a commission of one-halt
of ! per cent was paid. making the
total cost per cent. This issue must
be met in June next year, Mr.. Willard
said. and the present outlook was that
money then would be or 8 per cent.
Mr.. Brandeis took exception TO the
statement Of the surplus. He insisted
that S22, 100000 &C the $50, 100000 was
represented in the lines investment IN
securities of the Cincinnati, Hamilton
g. DAYTON Railroad, now in the hands
of a receiver. Mr.. Willard admitted
this, but declared that the purchase OF
that road was not at issue in the hear
ing. -.
"Whatever our necessities" he said,
"they are not due to the Cincinnati,
Hamilton & Dayton"
"Yet YOU have $35.OOO.O00 in notes to
pay next year, said Mr.. Brandeis.
land YOU have advanced S22 100000 to
the Cincinnati, Hamilton & Dayton
Sees No New Causes.
Mr.. Brandeis declared the statement
Of the railroads mad disclosed so Tar
nothing originating since the commis-
sion's recent ruling rejecting the East
ern lines previous plea for per cent
advance in rates. In reopening the
case the commission specifically limit
ed Il 10 matters arising since that time.
Mr.. Brandeis said that decision had
forecast a falling of in revenue of
$4,000 coo for the period embraced,
and the companies statement of $751;
100000 shrinkage served only TO con-
firm that estimate.
"Thc commission also forecast I'M
provemont in business conditions" sad
Mr. Willard, whereas there actually
has been retrogressior."
Mr.. Willard told Mr.. Thorne, In an
gwcr 70 "A question. that he did not
know Of any company that had bee9
able to market it's securities at bet
ter rate than the Baltimore & Ohio.
"Can YOU mention any increase in
labor cost since 1922" pursued Mr..
Thornc.
yes" said Mr.. Willard. 1--WE have
advanced our laborers engaged on
maintenance work in the aggregate be-
tween 100000 and 100000 year"
"Are these increases asked for TO
establish credit or to obtain money to
meet Obligations ?" asked Commissioner
Clements.
Value of the b. & o.
"Roth. in a measure" said Mr.. Will
ard. "The Baltimore & Ohio is well
worth its outstanding obligations and
much more, but our returns have been
small. We have put SS0,000,000 into
the property IN the last two or three
years. Conservatively, it will require
100000 a year for many years.
Mr.. Brandeis drew from Mr.. Shrivcr
a statement that the ratio Of operating
expenses mile had decreased in 1914
from the 1913 figure. In the same con
nection, Mr.. Thorne began cross-ex-
animation tending TO show that the
cost of railway supplies, with the eX-
ception OF coal, was lower this year
than in preceding years.
Mr.. Willard said IN his statement
before the commission that the needs
OF the carriers were pressing and I'm
mediate. and he described the situa-
ton as Extremely critical He added
that in his opinion the measures of re
lief proposed by the commission would
not meet the situation. Continuing, ne
said:
"Thc annual statements Of all the
railroads involved in this proceeding
combined for the fiscal year ended
June so, 1914, show roundly that the
total operating revenues during that
year, were approximately S53,0OO,OOO
less than during the previous year,
while the operating expenses were APP
proximately S1S,000,000 greater.
"The net operating income of these
companies for the same period were
S77,7OO, 900 less than in the previous
wear and equal to but 39S per cent
upon the property investment, a lower
return than was shown at any time in
fifteen years.
Lowest in Fifteen Years.
"The income, applicable to interest
dividends and surplus, during the fiscal
wear lust closed was S264 100000, or
402 per cent upon the total capital
obligations, this return also being
lower than any in ffteen years"
As to the war, ne said that in so far