Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1914-10-20
Opposition to Plea


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. Mr..
Thorne declared his purpose and the
desire of the shippers was that the
publics side of the question should be
fully brought out.
Louis Brandeis, counsel for the COM
mission, vigorously assailed Mr.. Will
lard's position in cross-examination.
particularly calling attention to the
fact that the Baltimore & Ohio Rail-
road had adhered this year to its pol
icy of declaring s per cent. dividends,
despite an annual deficit of more than
100000 in its net revenues.
The affairs of this system We're the
only ones given detailed attention to-
day as officers of the other lines were
not present Mr.. Brandeis implied in
his questions, however, that a similar
policy had been followed by all the
lines.
Mr.. Willard said the dividend had
been maintained at 6 per cent this
year at his recommendation. He de-
clared he believed il would be justi-
fed by the fact that the road had $32,-
e00,090 in surplus.
Il am not prepared to say. however,
the witness added, what l may rec
ommend in future in view of the pres
ent conditions"
He had recommended the contin-
uance of the 6 per cent. dividend, he
said, because 1t was necessary to
maintain the credit of the line. A re-
cent note issue of s35.000000 by the
Baltimore e. Ohio was marketed at
par. bearing 1-2 per cent interest and
a commission of one-half of one per
cent was paid. making the total cost
to the company 5 per cent. This issue
must be met in June next year. Mr.
Willard said, and the present outlook
was that money. could not be obtained
then at less than or per cent. AL
ready, he added, other concerns ha6
been forced to pay much higher rates
than 5 per cent.
Mr.. Brandeis took exception to the
statement of the Baltimore & Ohio sur
plus. He insisted that s22, 100000 of the
1872, 600. 600 was represented in the lines in
vestment in securities of the Cincinnati
Hamilton Dayton Railroad, now in the
hands of receiver. Mr. Willard admit
ted this, but declared the purchase OF
that road was not at issue in the present
hearing.
yet you have s35, 200 600 in notes to pay
next year. said Mr.. Brandeis, land you
have advanced s22, 100000 to the Cincin.
natl. Hamilton & Dayton"
Reverting to the possibility that inter
est rates would be greatly advanced wher
these notes fell due, Mr.. Brandeis asked
If 1t tie true that you may have Il
pay or per cent. isn't that a risi
that should be taken by the stockholder.
through a reduction of dividends rather
than be met by an advance in rates? You
defend here today a reduction of practi
tally every railroad expense except divi
dends."
Nothing we do in the way OF decreas
ing expenses of maintenance and equip
ment is permitted to encroach on safet,
of operation" Mr.. Willard replied.
Mr.. Brandeis declared the statement O
the railroads had disclosed so far moth
ing originating since the commission
recent ruling rejecting the eastern lines
previous plea for per cent advance ii
mission specifically limited it to matter
arising since that time. Mr.. BRANDED
said that decision had forecast fallin
off In revenue of s75,000,000 for the perio
embraced and the companys statemen
Of $76,O0o,000 shrinkage only served to con
firm that estimate. The commission ais
forecast Improvement in business condi
TONS" said MT Willard, whereas ther
actually has been retrogression."
Expenditures on maintenance G
way and equipment, Mr. Willard sal
had been greatly reduced because O
the financial outlook. He added tina
thousands Of cars in bad order wer
being held oy his line without repair
because they could not now affor
it,"
In response to further questions h
Mr.. Brandeis, Mr.. Willard said tn
railroads had followed the suggestion
of the commission in making some in
creases in passenger rates, both q
mileage books and straight fares.
The reads also had followed the sus
eestions of the commission as th
elimination Of certain freight servic'
do you know of any companies
railroad or other corporations--ths
have been able to market their secu
rites at a better rate than the Balti
more & Ohio 9 inquired MIR. thoTnc.
Personally, ! do not roplEd M