The Washington herald., 1914-04-01
"CRISIS AT HAND
FOR RAILROADS.
President Willard, Of B. & O.,
at |. c. c. Session, Pre-
diets Crash.
HEARING TO BE RUSHED
Oficiah of Roads Asking Freight In
crease Show that Losses Have
Been Sustained.
HEARING TO BE RUSHED

President Daniel Willard. chairman Of
i the committee on Eastern railway presi-
dents, petitioning for an advance IN
freight rates In Official classification ter
kritory, was on the stand before the In
terstate Commerce Commission prac-
\ ticaIly all of yesterday. He declared that
a crisis now confronts the railroads and
that an increase In freight rates Is essen
tial to avoid 1t President Willard went
into the expenditures and receipts Of the
Baltimore and Ohio Railroad In particu-
lar and gave statistics to show that the
net earnings of the road had decreased
while operating expenses had increased
Frederick A. Delano, president OF the
| Monon, was on the stand for a short
time yesterday afternoon and will con-
tinue today President Delano asked the
commission not to judge the condition Of
all the Eastern carriers by the condition
| Of the coal-carrying roads, which he ad-
mitted was a prosperous one.
The railroad officials attendant upon the
hearing were considerably encouraged for
| an early settlement Of the case when
the commission announced that 1t would
permit the carriers to finish the presen-
| tation OF their testimony this week. 1t Is
understood when the evidence is in the
attorneys representing the carriers will
| announce their willingness to make final
argument next week. II final arguments
can be held next week the carriers hope
4 the commission can hand down a final
! decision by May l.
Wants Further Probe.
| Louis d. Brandeis, who appears in the
proceedings representing the commission,
| indicated that he would like to give a
wider latitude to the investigation. but
Chairman Harlan suggested that this
matter would be deferred until after the
| commission had had an opportunity to ex-
anime the questions propounded to the
carriers After Clifford Thorne, repre-
senting Western State railroad commits
sions, and Charles d. Johnson and Frank
| Lyon, representing coal shippers in the
| Pittsburgh district. had finished cross
examining Mr.. Willard. Mr.. Brandeis
was asked IL he desired to cross-examine
him.
There are a great many things" said
Louis d. Brandeis. representing the COM
mission. that I should like to examine
Mr.. Willard on. What l would like to
money which present rates have yielded"
Chairman Harlan. after comforting with
! his colleagues, said:
1T seems to US that this examina ton
could be deferred until a later time to
give us the opportunity to hear other
witnesses. Perhaps when the answers to
the questions which have been asked the
carriers are before US we may ask Mr..
| Willard to return for the examination"
| President Willard in explaining the
| large income of his road in. 1910. said
that in that year the entire facilities of
| the road were available and that the
! property earned that year about so, co.,
coo. He said that by 1913 the road had
expended something like $76 1000 ooo for i'm
provemcnt. and that in 1913 the property
earned sl03, 10000. but that in spite of
these receipts and in spite of the capital
expenditure which had been made in this
| period the net earnings in 1913 were less
| by about 500. 900 than in 1910 before the
capital had been spent.
Mr.. Willard stated that increased
wages. increased prices of ties and fuel
and other items had also increased and
| that the increase in fixed charges alone
during the three-year period amounted
to s2,SOO.0o0. He said the average basis
Of rates had not been maintained during
! the period.
Answering Mr.. Thorne that maInte-
nance accounts had been padded, he said
that the March floods of last year, were
responsible. to a large extent for the
size OF these accounts. Mr.. Willard
said in his opinion most OF the roads
were situated similarly.
Hugh L. Bond, general counsel for the
B. & o.. said that Mr.. Thorne, repre-
senteing Western railroad commissions,
| had stated that no immediate relief
should be granted to the railroads unless
| there was a crisis, and that Mr.. Thorne
maintained that there was not a crisis
and he asked Mr.. willard:
Crfsis Is Defined.
What are your views Of the existing
situation?'
Il should say replied President WILL
ard. "a crisis has arisen il the carriers
were no longer earning any return upon
new capital and II carriers could not be
expected to put new money into the prop
erty to handle the business office. 1t
has been found necessary for the Balti-
more and Ohio to spend s15,OOooOO or seO-
O0O.OO0 per year to provide for facilities
to take care Of the traffic along its
lines. II conditions should now make it
unwise to put additional money into the
property to place additional needed
facilities at the disposal Of the people.
I should say that was a condition of
crisis for the people who look to the
Baltimore and Ohio to handle their
traffic.
Again ! should say a crisis wa: ap-
preaching when the net earnings from
railroad operations were so small that
to maintain fair returns upon the prop
critics jeopardized the future of the rail-
roads securities. It would also be
crisis for working men. IL they should
be deprived Of their positions, because Of
inability OF employers to pay.
Says Roads Make Money.
"As I conceive It. all these conditions
Of crisis or approaching crisis are at
hand
George Stewart Patterson placed in the
record statistical matter which he sum-
married. as follows:
The petitioning railroads filed before
the Interstate Commerce Commission to-
day figures showing the results Of ope-
rations for the seven months ending
January 81. 1914, for the fiscal year be-
ginning July 1, 1913.
For the three principal systems,
the Pennsylvania, Baltimore and Ohio,
and New York Central returns
show operating revenues Of $4Ss,-
I72676. a decrease against last year of
81, 2s4.375. or 03 per cent. Operating eX-
penses increased SIS Isl. .s45. and operating
income decreased s2s.5la,1s1. or 24s per
cent.
Cross-examined by Mr.. Thorne, Mr..