The Washington herald., 1914-10-20
WILLARD DENIES
WAR TAX WANTED
B. & o. Executive Tells /. c.
c. His Road Needs Higher
Rate to Pay Expenses.
MAY CLOSE CASE TODAY
Brandeis Thinks Accumulated Divi-
dends Better Than Increase-Will
Probe Reason for Request.
MAY CLOSE CASE TODAY

Probe Reason for Request.
The Interstate Commerce commissio
/ yesterday started on the consideration
OF the reopened advanced rate case, an
after the days proceedings II was evi
dent that while the commission intende
! TO contine itself to conditions arisin
since the close of the record OF III
| original case, May 80 II intended to 2
into the underlying causes for the pres
ent application.
Daniel Willard, president OF the Balti
more and Ohio Railroad, and chairmai
OF the committee of railroad president
presenting the case, was put through
series Of interrogatories intended to de
velop whether 1t was the purpose of tn
application II 1t was granted to transfe
\ the burden brought about by the Eu
/ ropean war from the shareholders 4
the shipper. and whether IL was not al
attempt on the part Of the railroads L
levy war tax on the public.
Must Maintain Credit.
President Willard denied both proposl
tions, and stated that present condition,
justified the increase, particularly in vieH
Of the fact that the railroads are semi
public institutions and that 1t was vitally
necessary for them to maintain theil
credit.
Summarized, here are the figures pre-.
sented by the carriers showing theil
operations for the first two months OF
the fiscal year 1915 (July and AugusO
in addition to the statistics presented
showing the figures for operations of the
fun fiscal year 1914:
Total operating revenues, 1916, S2s7,-
o., 500; 1914, SIS, IS, SIS; total operatins
expenses, 1915, s1sS 5Os $40; 1914, S1IS E2, s77;
net operating revenue, 1915, SO, So, $50;
1914 S7S5ss,64S; operating income, s64,1s2,
Ss9; 1914, 4,463s7s. These figures are for
the thirty-eight carriers In the eastern
territory.
Commissioner Clark asked Mr.. willard
II the showing made by all the roads in
the case showed up like the Delaware &
Lackawanna would he think there was
any justification for the advance. Com
missioner Clark said this statement
showed a net incorporate income OF So Is
in 1914 and a dividend Of something like
II per cent.
Il would not think So" replied Mr..
Willard.
Mr. Willard said that on the Baltimore
and Chic there had been a large retrench-
ment in expenses, and he believed also
on ether roads both before the war and
since.
Notes Must BE Met.
Louis d. Brandeis then questioned Mr..
Willard as to the necessity for addi-
tional revenue. Mr.. Willard said the
Baltimore and Ohio needed additional
money to meet SIS. .OoO, 900 of notes which
are TO mature in June next. He said
the road had 5000 stockholders, and the
last dividend was paid partly out OF
surplus, 10000 being taken, leaving
about SS2,OO0s00e He said he still ad-
hered to the contentious made last
spring, and added:
The effect Of the war has. been that
It has accumulated the falling off in
business
He said that the Baltimore and Ohio
was able to get money at ~ per cent
in June last, but that this was now
higher
Is not this situation an argument for
a reduction of your dividend?" asked
Mr.. BrandeIs.
Mr.. Willard replied that in July last
when he recommended the continuance
Of the six per cent dividend he felt jus
titled in the hope that conditions might
get better, and he intimated that the
subject would be given consideration.
Mr.. Brandeis then stated that the fig
ures showed the B. & o. and other car
4tiS Adu ANNuNtu maintenance
equipment charges, discharged employees,
but had not reduced dividends.
Do Not Want War Tax.
rs ii not a fact that you are asking
this commission to levy a war tax in
favor Of the railroads." asked Mr.. Bran
deis.
mo. sir. do not think So" replied
Mr.. Willard.
Mr.. Brandeis maintained that the credit
Of the B. & o. would be better safe
guarded If it accumulated a surplus b.
IN dividend rather than by 60
nE into the surplus to pay the dividend:
GeTrge NJ. Shriver placed in the record
a summary of operations for the full
fiscal year 1914, and said that the
feature of the 1914 returns is the
disappearance Of surplus or
margin.
Charles NJ. Johnston and Frank Lyon.
the Pittsburgh Coal Com
rany, indicated they would strenuously
oppose the increase in rates, claiming
there have been no changed conditions
since the commission handed down its
decision.
The hearing will he continued this
and the Indications are that
the railroads will. unless individual Of
fcials are called. complete their case to-
day.
Clifford Thorne, representing Western
railroad commissions, cross-examined
President Willard and indicated that he
would make strong protests in opposition
10 the increases.
Richard Jones, jr., and H. r. Moore,
of Youngstown, Ohio, representing sew
enteen independent steel furnaces, also
their opposition to the pro-
posed advances on ore and coke.