New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-02-28
'REA ASKS JUSTICE
FOR THE RAILROADS
In 1913 Penn. Report He
Says Policy of Regulation
Needs Remedying.
GROSS EARNINGS
AT RECORD FIGURE
But Increased Cost of Operation
Makes Gain in Net Small
8.5 Per Cent for Stock.

90 PeT NsHt IOI OtOAh'
1T is difficult to escape the conclusion,
says Samuel Rea president OF the Penn
svlvania Railroad, I'm the company's re-
port for the year 1913. that some way
must be found whereby the serious but
divided responsibility Of government reg
ulation Of rates, wages and other ran
way matters shall either be concentrated
under one administrative branch Of the
government. or the results OF legislative
acts. orders of commissions and awards
Of arbitration boards shall be recognized
by rate regulatory commissions, 80 that
regulation OF wages. rates and other mat
ters may continue without working
manifest Injustice to the railroads and
those who have invested i'm their securl-
ties"
Total operating revenues OF the Penn
sylvania system last year were sls5,ioo's20'
an increase OF O7s3, 227 over 1912. and the
largest I'm the company's history. Owing
10 an ADVANCE VI FiifOt'tiVv III
expenses, however, the net revenue from
rail operations was reduced 10 &7Al%4A
gain of only s556, 229. The bulk Of the IN
creased operating costs was for main
tenance and transportation.
President Rea attributes this unfaVor-
able showing TO the extra crew laws ana
the wage increases granted under the
Erdman act
THE extra crew laws alone" he says
involved an expenditure by the Penn
sylvania Railroad system east OF PITTS
burgh and Erie of $4,000, and this VIII
convey some conception Of the extent Oh
the needless expenditures that have oeen
placed upon all the railroads In this ter
rtory."
As a result Of the wage increase grant
cd the Eastern railroads last year the ex-
nenses Of the PENNSYLVANIA Railroad will
be increased approximately sISO,ooo' MI
Rea says. lie continues:
ut is evident, therefore. that the anil
ity to regulate wages and working condi-
tions and other heavy operating ex-
penses has as the result of federal ana
state legislation largely passed from the
control Of your management, az has also
the power Of your company and other
railroads TO charge reasonable rates for
the public transportation service rem
dered"
The PENNSYLVANIA operating income
for 1913 totalled s3S,1s2,4SS; other in
come brought this up to a gross income
of s57.712.S9S, a gain Of s1.2S7,51o. This
increase was due largely to the item "dlvi-
dend income" which last year amounted
10 s13.6f5.905. The increase, says the re-
mort. was due principally 10 the exchange
during the year Of the company's Balu-
more & Ohio holdings for the Union Pa
cifc's Southern Pacific stock. which the
latter had to dispose of under the Harri-
man merger dissolution plan.
An increase Of s1.054.37S in the COM
nauv's fixed charges left surplus APP
uIicable to dividends equal TO Sil,s-o.-
.SS2. which. not including an appropr-
alton Of s1.Ss2.775 for sinking and other
roserve funds. is equal to approximately
81 per cent on the s493,Ss3,900 capital
stock outstanding compared with e.5 per
cont earned I'm 1912 and SIS per cent in
1911. Last year the Pennsylvania trans
forred TO profit and loss account s54O,6O0,
AGAINST s1,661,1O4 the previous year.
The report refers TO the increase IN
freight rates requested by the railroads
in official classification territory. which Is
now before the Interstate Commerce
Commission. Concerning the commits
sion's order that the carriers furnish ex-
tensive information relating to various
features of operation and traffic and the
relation of the roads and their employees
and officials with respect TO contracts for
purchase of material, etc. this is said;
"NVhile there is no objection 10 furnish
ing the additional information desired, be-
yond the great delay and expense in
volved, the serious aspect of the situation
AT the present time is that no immediate
decision may be expected II all tho
features involved IN the commissions Ia
quiries are 10 he considered and deter
mined before action is taken upon the
important question at issue; and mean
while railroad revenues are rapidly de-
clining.
IF. however these inquiries and the
information furnished I'm response thereto
can be made a matter of subsequent IN
vestigation, an earlier determination OF
the entire question is possible; in fact,
as the commission, through the uniform
accounting system I'm effect since 1907,
supplemented by special Investigations
and the work of its own examiners. has
full information as TO the inadequate re-
turn earned by the railroads on the CAPT
tai invested In railway lines and equip
ment. there would seem 10 be no sub
stantiai barrier against Immediately
granting the very small measure OF re-
lief sought I'm the application and so
urgently needed"