Evening star., 1914-10-19
"Needs of Carriers Pressing

-
Stating that 1.-THE needs of the car
riers are pressing and Immediate" and
that the actual situation has be-
come extremely critical, Daniel E. Will
lard, president of the Baltimore and
Ohio railroad. opened the case of the
eastern railroads for higher rates.
Mr.. Willard is chairman of the COM
mittee of railroad presidents having In
charge the presentation of the railroad
case. His statement summarized the
general facts upon the basis of which
the railroads maintain that the COM
mission should now allow the general
increase of per cent in freight rates
Mr.. Willard called attention to the
decision of the commission in the for
mer case. wherein it was stated that
"the net operating income of the rail-
roads in official classification territory
Is smaller than is demanded in the in
the railroads. and to the fact that the
railroads already had taken action to
secure additional revenues through
various advances and changes of prac-
tice. The measures of relief proposed
by the commission will not, in our
opinion. adequately meet the existing
situation" he added.
Increased Expenses Shown.
The annual statements of all the
railroads involved in this proceeding
combined, for the fiscal year ended
June 80, 1914, show roundiy that the
total operating revenues during that
year were approximately $53,000,O 900
less than during the previous year.
while the operating expenses during
the same period were approximately
$1S,00O,000 greater.
The net operating income of these
,ioo fny- f6o in1 Y1f-
ed to $25S, 100000. or approximately
$77,700,00O less than was earned during
the previous year, and equal to but
3.9S per cent upon the property invest
ment, a lower return than was shown
at any time in fifteen years
The income, applicable to interest.
dividends and surplus. during the fiscal
year just closed was $264.900,000. or
4-G1 per cent, upon the total capital OBJ
legations, this return also being lower
than any in fifteen years.
War Contracts Credit.
"a war such as that now raging
causes great and immediate disturb
ance to industry, commerce and finance.
1t causes contraction of credit and
great restriction, If not actual stop
page, of international trade as well as
serious disturbance to domestic COM
merce, and, as we have seen, it has
thrown the security markets of the
world. first into panic and then into
suspension of operation.
I'm SO far as the war and it's conse-
quences tend to change the conditions
surrounding the enlistment of new cap
ital. they tend to change the funda-
mental relation between railroad anG
shipper, for the cost of capital is one
of the elements of the cost of trans
portation.
1T is known that the railroads of the
I, 81
outstanding obligations which will ma.
ture and must be met within the next
twelve months alone. 1t was shown iI
the original record in this case that the
railroads in official classification terri
tory only had spent approximately
S200. 100000 per annum upon their prop
critics for improvements and extensions
during the last ten-year period. and II
VIII be necessary to continue such ex-
pendltureS If the roads are to maintain
their standard of service and provide
for the growing needs of the future.
Sales of Securities Anticipated.
Further, as nearly as can be ascer.
tanned, there are more than $4,000, 600,
600 par value of American railroad Sc
curities held abroad as Investments
The demand for cash in Europe, grow.
ing out of the present situation, viii
doubtless result in large selling Of
such securities when the markets OF
stock exchanges are again opened, ant
the possible effect of such selling upor
the railroad credit and related subject.
is causing much concern.
With all this in mind it will readil,
be seen that the available supply of ans
probable demand for new capital, a.
well as the interest rates thereon, ar,
matters of great Importance, not onl,
to tEa railroads, but also to those VIII.
depend upon them for Transportation.