The Washington times., 1914-10-19
RAILROADS SAY WAR
BRINGS THEM CRISIS
President Willard Makes Plea
at Hearing on Advanced
Rate Cases.

The Interstate Commerce Commits
sion's re-hearing Of 1872 Eastern rail-
roads application for a per cent ad-
vance in freight rates was opened to-
day with statements by Daniel E. Will
ard, president of the Baltimore and Ohio
railroad, and George NJ. Shriver, vice
president of the same road. tending to
show that the world war has brought
such a crisis in railroad affairs that i'm
mediate increased revenues ar eimpera-
tive.
President Willard declared 1.-The needs
Of the carriers are pressing and imne-
date" and that the actual situation
has become extremely critical"
Vice President Shriver summarized
conditions with the statement:
"A striking feature Of the 1914 returns
is the complete disappearance of surplus
or margin"
Figures presented showed the rail-
roads in Eastern territory paid average
dividends Of .5S per cent In 1914. but
that their earnings were s., 10000 less
than the dividends, the smallest paid In
ten years.
He continued: 1T is known that the
railroads of the United States have over
$50, 100000 Of outstanding obi cations
which will mature and must be met
within the next twelve months alone.
Further. as far as can be ascertained.
there are more than $3.0O0, 900 par
valve of American railroad securities
held abroad as investments.
The Pennsylvania railroad submitted
financial statement showing that the
net income from operations was lowest
In the fiscal year ended June 80. 1914, for
any year since 1905. The statement
,lxyo min otnra EaS
invested $512. 325 600 in additional railroad
facilities, but in 1914 the systems net
income from operations was s2.40.5Ss
less than before this large sum was
spent.
The Pennsylvania system last year
earned $40 on its capital obligations CT
81. 263 3S5, S73. the lowest earning In fifteen
years The surplus was the lowest In
fifteen wears, and was less than half of
the surplus realized in all but two Of
the fifteen years, the report showed.
Cross-examine Schriver.
Louis D. Brandeis. special counsel Of
the commission: Clifford Thornc. Of the
Iowa railroad commission. and Frank
Lyon, representing shippers. cross-ex-
amined Schriver. Brandeis. in his ques-
tioning,. attempted to substantiate his
theory that wastefulness is responsible
largely for the plight of the railroads.
The Cincinnati. Hamilton and Dayton
railroad, a Baltimore and Ohio subsidi-
airy, now in receivership, and which Is
to be the subject Of investigation by
the Interstate Commerce Commission.
was brought into the hearing. 1t was
shown BY Brandeis' quest oning that
operation Of the Cincinnati, Hamilton
and Dayton was an enormous drain on
the Baltimore and Ohio. and that 1t was
forced to dip into its surplus to pay Its
dividends.
Cross-examination also developed the
fact that the suspension Of dividends by
the New Haven and the Boston and
Maine had cut deeply into the general
average of dividends paid by the East
ern roads.
Lyon brought out the fact that the
Baltimore and Ohio's earnings In July
and August Of this year Were greater
than those of any other two months
since last November. Shriver insisted
this proved nothing.
Commissi oner Clements warned the
cross-examiners to confine their ques-
tons to the scope of the hearing, as
described in the commissions order re.
opening the case, and not to "rehash'
matters that were fought out IN the
nreyious advance rate case.