The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-04-28
Traffic in 1010.1913 Largest
Ever Recorded, but Prop
erty Owners Lost.
PuBLIC's INTERESTS HIT
Development Of Railroad Fa-
cilities Would Be Scri-
ously Hampered.

WARRINGTON, Aprl z1.-The most in
teresting and Significant development al
the opening argument to-day in the ad.
vanced rate case was the admission by
Louis d. Brandeis. counsel for the Inter-
state Commerce Commission. that the
proposed higher freight rates seemed to
be required in Central Freight Associa-
tisa territory. In this connection Mr..
Brandeis said:
the Improperly OF raising additional
revenues by the proposed tariff fnds
striking illustration In the condition OF
Central Freight Association territory.
These higher rates seem to be required
but relief cannot be had without a read
justment of the rate schedule
Roughly speaking. Central Freight Asso-
citation territory comprises the roads that
trsvsfse the States east of the Mississippi
>snd north of the Potomac rivers. although
many Of them extend south OF the rivers
TO Q line drawn from Buffalo on the north
TO West Virginia on the south.
Mr.. Brandeis said that q thorough re-
adjustment Of rates was needed in this
territory. This statement by Mr. Brandeis
was regarded as clearly foreshadowing an
increase In rates at least for the carriers
in that section of the country. 1t was
accepted also as an encouraging develop
ment for the Eastern carriers. inasmuch
as II seemed to Indicate a moro liberal
attitude on the part OF the commission.
Mr. Patterson's Plea.
George s. Patterson. counsel for the
Pennsylvania Railroad. made one of the
principal arguments for the carriers.
"1t 10 an absolutely new thing In the
history Of American rallroadins." he said.
for . year like 1913 or = period like
1910 to 1919. when traffic vas the largest
ever recorded for similar period Of time.
TO show the position OF the owners OF the
property to be worse of than any previous
years or periods.
1T Is strong and conclusive evidence
that some change has taken place. Nor
is II difficult 20 see what this change Is
and what has brought 1t about It will
be disclosed by the collateral lines of in
Quiry. namely. increased cost and difficulty
OF securing new capital.
'There has been steady increase in
transportation. maintenance Of way and
maintenance OF equipment expenses which
are continuing In character and the full
effects OF which are just beginning to be
felt
Operating revenues are inadequate to
keep pace with the expenses and accord
inEly the money expended In procuring
facilities has earned an Inadequate rate
since 1903 and no return since 1910.
THE effect Of these things Is that at a
time when the business OF the carriers IL
largest In volume and at a time when
their investments and capital obligations
are the largest and their plant and equip
ment more complete and efficient the car
riers ind themselves face TO face with q
declining net operating income.
Would Check Development.
''rhe result, OF this tendency toward d.
minishing net returns will be to check IL
not altogether stop the normal develop
ment OF railroad facilities In this territory
In the last ten years they have been forced
TO spend 5000. 700. 900 a year and an equal
II not a greater amount will be necessary
for the future II the railroads are to
handle the business OF the country prop
erly.
1.-THE question Ia one not merely OF rail-
road dividends, although that is q cues
ton OF vital Importance. but ono OF the
interests OF the general public ana In see
ing that the railroads are maintained In q
high state OF efficiency"
Mr.. Patterson said that from 1903 70
1913 there had been a decline In the ratio
Of net operating income to property In
veetment, a decline In the ratio OF net
operating income TO total capital obliga-
tons and n decline In the ratio Of surplus
10 total capital obligations. and he con.
tinued
"All of this shows a decided Weakening
in the position OF carriers AS reEa rds their
return on investment despite the growth in
the size Of tho plant. volume and density
OF the business and the facilities and i'm
proved methods OF handling that business
"Thus during the last ten years the car
ifers md themselves after "A period Of
great growth and expenditure OF new cap
ital worse on than they were before the
growth and expenditure. although they
should be materially better OF"
NJ. nnaAa.A.l.l,. A.-