Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-10-20
Greater Interest Rate on New
Loans, They Say, Makes
More Revenue Imperative.
WILLARD DOESN'T DISPUTE
FIGURES OF SHIPPERS
Clifford Thorne Reads to I. G, C. Re-
ports Showing Earnings on
New Capital Invested.

Today's hearing before the inter-
state commerce commission on the ap-
plication of the eastern railroads for
increased freight rates on their con-
tention that financial exigencies
brought on by the European war make
them needful. was devoted largely to
cross-examination of President Will
lard of the Baltimore and Ohio on the
relations of that system to the Gin
cinnati, Hamilton and Dayton.
Louis d. Brandeis. special counsel for
the commission. laid stress on his Ques-
ton on the Baltimore and Ohio invest
ment of more than S20,000.000 in the
Ohio line and its assumption Of obli-
cations of a like amount. The witness
said the investment represented only
an interest charge of $1.000,000 an
nually, and insisted that would not
have affected the present situation Of
the line.
Taking up statements filed by the
carriers to support their plea, Clifford
Thorne, appearing FOR several state
sociations, asked Mr.. Willard If 1t were
not true that the years picked by the
railroads for comparison to show fall
turn were the only years that would
show that result. The statement COM
pared figures for 1910 and 1913 Mr.
Thorne read figures for 1918 and sew
1910, which showed earnings on new
capital. Mr.. Willard did not challenge
the figures read and his cross-exam-
nation closed.
Shows Need Of Money.
Charles A. Conant of New York,
financial expert. who was to follow.
had prepared a statement in which he
discussed financial conditions as at
fected by the European war. particu-
larIy as related to American railroad
securities. He estimated the cost of the
war, if it continues approximately a
year. at not much less than $15,000.-
100000.
THE demand for capital for purely
war purposes and for the settlements
which succeed the war;" said Mr..
Consnt, will be SO great as to alb
sorb an amount equal to the entire
savings for Investments made in all
civilized countries for a period Of sew
eral years."
The effect of this, he said, will be
to raise the rate of interest securities
higher than for many years. Continu-
ing. Mr.. Conant said:
Higher Interest Probable.
1.-THE fact that such enormous sums
to pay the costs of the war are sought
almost exclusively by means of gov
eminent loans will make it impossible
to obtain capital for other purposes,
except at a rate of interest considerably
higher than that paid by governments"
Mr.. Conant quoted authorities indi-
eating that the worlds new capital
nnrmaIfv available for investment
amounts to about $4,000, 0oo. 900 year.
He concludes that If the war cost for
one year has to be paid out of the
amount of annual savings indicated by
these figures, then every dollar of new
capital for approximately four years
will be absorbed in government loans.
and there will not be a penny available
in any financial market for making
railway or municipal improvements.
Enormous Sums Involved.
Referring to estimates by Sir George
Paish, economic adviser of the British
government, that the total amount Of
foreign capital invested in the United
States is $4,000. 100000. and in other
American countries at $4,000. 000. 900.
Mr. Conant said:
1T is these enormous sums In foreign
holdings which represent the most
serious menace to the American market
and to the possibilities of our future
been advanced to us from time to time
over a long period, because there was
not a sufficient fund in America to
meet the requirements of our develop
ment.
TT would hardly he in the range of
the capacity of the banking system
of the country to absorb the entire
amount of $4,000. 00Q. 060."