The Washington times., 1914-04-27
G. S. Patterson. Solicitor of
PennSy, Says New Capital
Is Not Earning Dollar.
BRIEFS ARE FILED BY
RAILROAD COMPANIES
Clifford ThoTne, for Western
Commissions. Tells |. C. c.
Raise Is Not Necessary.

Oral arguments by attorneys repre-
sentsng the thiTty-fve Eastern rail-
roads. which are appealing to the Inter
state Commerce Commission for a per
cent increase in freight rates, were be-
gun before the commission today. At a
conference of opposing counsel. before
Chairman Harlan called the commission
together. it was suggested that five
days will be necessary for the arsu-
ments, divided equally between the
roads and the protestAnts.
Mr.. Harlan said the commission would
decide tomorrow as TO the time TO be
given to arguments and the division Of
such time.
He said. however. the commission
would first hear the railroad attorneys.
then Clifford Thorne. representing West
ern railroad commission: attorneys for
lake and rail interests, Attorney
Charles ". Lyon. representing shippers
in the Pittsburgh coal district; attor-
neys representing other protesting ship
pers. and then Louis D. Brandeis. coun-
sci for the commission. The carriers
will be permitted to close the argu-
ments.
General Review.
George Stewart Patterson, general
solicitor of the Pennsylvania railroad,
opened the arguments with a general
review of the conditions which have
moved the carriers to apply for a rate
increase. New capital obtained by the
railroads. he declared, is not earning a
dollar TODAY
Net earnings. he said. show an alarm
ing decrease, and the roads are hard
pressed for capital
Before arguments were begun. briefs
were filed on belalf OF the roads. sum-
marizing the position OF he railroad
companies, 1t is set forth that the pur-
chasing power of money has so de-
creased during the last eighteen years
that the purchasing power Of the
moneys now paid 70" freight on the
railroads was in 1912 approximately %
per cent less in the market for COM
modities than it was in 1885,
II is declared that a protest would
have gone up from the country II It
had been proposed b. law IN 1885 to
require the railways TO reduce their
rates and the compensation received BY
them for their services from S5 to 20
per cent. yet that. the roads insist, las
beer the result
Double Burden.
Tine railroads are still required to
sell their services at rates less than
those esta blished years ago. the briefs
declare, and 10 take their pay in de-
preCiatsd currency. while they must buy
their labor. buy their materials. borrow
their capital. end pay their taxes on
the basis OF pTesent-day commodity
prices
The problem. it is declared. is not
merely a question of dividends to rail-
road stockholders, but affects all inter-
ests. Unless the roads are permitted TO
increase their revenues. there will not
only b" = reduction or suspension or
dividends. but default i'm interest pay
nents and total suspension OF diVI-
bends = the briefs declare, ''wh;ci would
produce great panic.
Contradicts Briefs.
Clifford Thorne, representing the
Western railroad commissions. filed
brief in which ne contended that the
net operating income. above all opeT-
atInc expenses Of the railroads, has
been increasing instead or declining.
The net operating income of the
railroads. during the four-year perioo
commencing in 1910. has been greater.
80 far as our records go. than during
any other foUr-vesr period since the
steam engine was invented, his brief
asserted.
NJ Thorne denied that there was
danger OF a pani' In this case. If you
deny the right 10 ageneraladVance.
"' told ihe commission, YOU know.
ard We know. that tire prosperity Of
ihoS" companies is bound to keep on
'n' reasinS. just as it has N the past"