The daily Gate City. [volume] (Keokuk, Iowa) 1855-1916, 1914-10-19
RAILROADS. ASK
INCREASED RATES
Hearing Before Interstate Commerce
Commission on Application OF
1872 Eastern Roads Who
Want Money.
EXPLAINING THE NEED
figures Produced Show That the
Business Does Not Bring in as
Large Returns as
Before.
EXPLAINING THE NEED

WASHINGTON. Oct. 19.-The In
terstate commerce commissions re-
hearing of 1872 eastern railroads ap-
plication for Ave percent advance IN
freight rates was opened today with
statements by Daniel e. Willard, pres
ident of the Baltimore and OHIO rail-
way, and by George M. Shriver. vice
president of the same road, tending TO
show that the world war has Drought
such a crisis In railway a1airs that
immediate Increased revenues are I'M
perative.
Willard, as chairman of the commit
tee OF railway presidents in charge OF
the presentation of the railways case
declared needs OF carriers are press
ing and Immediate and that the ac-
tual situation has become extremely
critical.
Shriver. chairman OF committee
o. accounting officers appointed TO
compile data for the railways, summar-
lied conditions with the statement:
"a striking feature OF the 1914 re-
turns is the complete disappearance
of surplus, or margin.
Figures presented showed the rail-
ways in eastern territory paid average
dividends OF ABS percent in 1914, nut
that their earnings were $8,2OO,0oo
less than the dividends, the smallest
paid In ten years. This year, Shriver
declared. was the first year which
showed no surplus paid over DIVIDEND.
The B. and o. railway was an
example. Their total surplus after an
average dividend of 5.53 percent was
s4e1 ,25s,ooo against s47S,ooo,ooo In
1913.
Shriver gave figures to show that
roads In eastern territory have invest
ed over $9o9, 600, 900 in properties In
the past four years but returns on
June 1914 showed the companies 49,
500 900 worse of in net operating
revenue than they we're before the
5000 900 900 was spent. Total operat-
ing revenues of the eastern roads IN
|1914. was less by $48.000,O0O than In
1913 while operating expenses were
s22, O0O, 900 less than in 1913. Al
though the 1914 business was the lar
gest in fifteen years, excepting 1913,
the net operating income was the
smallest shown in ten years.
Speaking of the effect OF the war
willard pointed out that the immedi-
ate direct result has been stock mar
ket disturbance, but declared the III
innate and lasting consequence would
be enormous destruction OF wealth
and great diversion Of labor and cRpi-
tai to unproductive employment, thus
causing a check to the worlds accu-
mutation of new capital and seri-
GUS prolonged rise in interest rates
"The effect Of such higher interest
rates will continue" he predicted,
"long after the present emergency has
passed, because they will be reflected
in the basis upon which the new Sc
curities will be issued from time to
time as required for refunding and
other purposes.
att is known that the railways OF
the United States have over $3.50, O0O,-
600 outstanding obligations which VIII
mature and must he met in the next
twelve months alone. Further, as far
as can be ascertained, there are more
than 100000, 900 par value OF Amer
lean railway securities held abroad as
investments. The demands for cash
in Europe, growing out Of the present
situation, will doubtless result In large
selling OF such securities when the
markets or stock exchanges are again
opened and the possible effect OF such
a selling upon railroad credit and re-
lated subjects is causing much con-
Germ"
President Samuel Rea OF the Penn
sylvania, and President A. H. Smith
of the New York Central are also to
be heard
It is hoped to conclude the hearings
within three days.