The evening herald. [volume] (Albuquerque, New Mexico) 1914-1922, 1914-04-02
Powerful Argument Made Be-
fore Interstate Commerce
Commission by Pennsylva-
MIA President Today
EARNINGS MUST COME
CLOSER TO EXPENSE
Retrenchment Begins on
Greeat System in Sweeping
Order Wiping Out Twenty
Five Passenger Trains
[nr Lcased vic % EvenIng nerald. J

tBy Leased Wire 90 Evening Herald.l
Washington. April 2.-President
Rea Of the Pennsylvania system was
the last witness 20 be heard today be-
fore the interstate commerce commis-
sion ON behalf of the eastern rail-
roads asking for an Increase In
freight rates. Oral testimony for the
roads was concluded with his state
ment.
Chairman Hnrlan and Commission
ers Clark and Meyer were on the
bench j. +. Wallis. general super
lntendeut OF motive power OF the
Pennsylvania. intcrrogated by Clif-
ford Thornc. explained that steel cars
and heavier locomtivcs had induced
an Increase In repair cost, while high
cr wages materially had added TO
that item OF expense.
j. ). Rodgers. general superintend-
cnt of the Pennsylvania. testified that
"chnrses to operating expenses on the
Pennsylvania system, east Of Pitts
hurgh. were S24,st5.s2t IN 1910 and
f4aaii. .aia in ira. an increase of
1873 per cent
President Rca said that not only
the Pennsylvania but all American
roads were confronted with the ne
cessity of rctrencnment which might
prove serious unless they were per-
mitted 20 increase their net incomes.
lie said.
"Unless the gap between receipts
and expenses can be- widened we must
begin 20 rctrench. and retrenchmeut
must begin on bcttermcnts ana Inn
provcments not directly necessary to
the movement of trains. We should
ho very rclu,tnnt to do this, as t
would be 90 run counter to our tradi-
tions and practice Of hail century.
and We are sure that il would not be
ia the public interests ANA We don't
believe the public desires H.
"NoW wc have as much public sup
port as can possibly be given TO a
plea almost national in its scope. and
We firmly believe our application for
"A very moderate freight rate increase
Is ia accordance with the best public
interest"
While he dld not assert that the
] advance was necessary To the main
I tcance of tine Pounsyiyana Railroad
company's dividends In the immediate
future Mr.. Rca declared that amy
general idea that the Pennsylvania
4 position was go strong as not to need
Iany additional revenue is not correct
I lie added that the Pennsylvania had
earned asa per cent during the fiscal
/ year of 1913.
Discussing the desirabiiity OF the
necessity 60 provide FOR future tratfe
/ demands. Mr.. Roa said.
1--WE also know that Il Is unwise
and Impossible 10 limit new facilities
to actual and Immediate neoeasities.
NECESSARILY that Involves a large
expenditure of money that only grad
uuiiy becomes productive. We kno"
that. iudglng from our past cNper-
icnce many millions could be advan-
| fage0usly expended on the system in
the next few years. We have CON
fronting us program of expenditures
which we believe Co he essential some
OF them mainly fog the benefit OF the
public. hut an of them necessary 10
properly accommodate the present
and future traffic.
"a is unwise as well as unnoces-
snry 90 commit ourselves to any large
nxed program of expenditures, ex-
lccpt 20 say thar without assurance Of
adequate earnings they cannot pro-
cced and reasonable portion OF the
Ifufi OF iNeaN tNiNfe fntufEfhirAtH hhn
improvements ought in our Judgment
To bee provided from surplus earn
inrs"
Mr. Roas conclusions. which he
Indicated applied concreteiy 10 the
Pennsylvania ana generally 90 all
other roads, were these;
81. Tho margin Of surplus Ia
steadily diminishing and the company
is not receiving any return either on
the additional capital Invested or for
the value of the service rendered and
the facilities provided for public use.
"z. Had there been NO surplus In
earlier years and had the whole of
the improvements been paid Tor oui
OF the capital, the margin would now
have reached the vanishing point.
"3. if surplus steadily decreases
improvements II made az all, vii
more and more need 40 be made out
OF new capital
"a. hut i the margin OF safety
decreases new capital win only b,
raised with greater difficulty and on
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