The star-independent. [volume] (Harrisburg, Pa.) 1904-1917, 1914-10-19
WILLARD MAKES
INITIAL SPEECH
President of the Baltimore and Ohio
Says the Needs of the Carriers Are
Pressing and Immediate and Situa-
ton Is Extremely Critical

geney, due in part to the European war.
were begun here to day before the In
terstate Commerce Commission. The
Commission is hearing argument only
upon issues which have arisen since
its decision in July, which denied abso.
lutely increases east of Pittsburgh and
Buffalo and granted increases west
from those points to the Mississippi
river.
All the Commissioners, except Chair
man Harlem, who was ILL., were present.
Mr.. Clements presided. The railroad
lines were represented 'by their princi-
pal executives. individual shippers
and shippers organizations who oppose
further increases were represented by
counsel. among them Clifford Thorne,
who led the opposition to the last ap.
plication.
Railroad Statement Heard First
To-day's hearing was given over to
statement for the railroads. The
shippers and their representatives will
be heard later. Daniel Z. Willard, pres
ident of the Baltimore and Ohio rail
road, made the opening statement for
the roads.
"The needs of the carriers are
pressing and Immediate he declared.
1.-The actual situat tion has become ex-
tremely critical
The railroads are seeking fiat in.
crease of five per cent in freight rates
throughout the territory east of the
Mississippi and north of the Ohio and
Potomac rivers.
Refers to Former Decision
Mr.. Willard called attention to the
decision of the Commission in the for
mer case, wherein was stated that the
met operating income of the railroads
in official classific catiOn territory is
smaller than is demanded in the interest
both of the general public and the rail
roads, and to the fact that. the rail
roads had already taken action to Sc
cure additional revenues through vari-
GUS advances and changes of practice.
1.-The measures of relief proposed by
the Commission will not, in our opin-
ion, adequately mee- tine existing situa-
tion, he added.
"The annual statement of all the
railroads involved in this proceeding
combined for the fiscal year ending
June 80. 1914, show roundiy that the
total operating revenues during that
year were approximately 100000
less than during the previous year.
while the operating expenses during the
same period were approximately $lS,-
100000 greater.
The net operating income of these
for the same period amount
ed to 100000, or approximately
ST., 100000 less than was earned dur
ing the previous year, and equal to but
S.sS per cent. upon the property ia
vestment, a lower return than was
shown at any time in fifteen years.
The income applicable to interest
dividends and surplus due the fiscal
year just closed, was $264,900,00O O.,
4.O2 per cent. upon the total capital
obligations, this return also being low
er than any in fifteen years.
A war such as that now raging
causes great and immediate disturbance
to industry, commerce and finance. 1t
causes contraction of credit and great
restrictions, if not the actual stoppage
of international trade as well as serious
disturbance to domestic commerce and
as we have seen it has thrown the Sc
curity markets of the world first into
panic and then in suspension of opera.
tions.
Results Produced by War
In so far as the war and its con.
sequences tend to change the conditions
the enlistment of new CAPT
tai they tend to change the fundamental
relation between railroad and shipper
for the cost of capital is one of the
most important elements of the cost of
transportation.
''lt is known that the railroads of
the United States have over $500.
100000 of outstanding obligations
which will mature and must be met
within the next twelve months alone.
1t was shown in the original record in
this case that the roads in Official
Territory only had spent
approximately $200,000,OO0 per annum
upon their properties for improvements
and extensions during the last ten year
period, and it will be necessary to con
slider such expenditures if the roads are
to maintain their standard of service
and provide Tor the growing needs of
the future.
" Further, as nearly as can be ascer-
there are more than $4,000
100000 par value of American rail
road securities held abroad as invest
ments. The demands for cash in Eu-
rope, growing out of the present sit
uation. will doubtless result in large
selling of sach securities when the mar
kets or stock exchanges are again
opened and the possible effect of such
selling upon railroad credit and related
subjects in causing much concern.
with all this in mind it will read
lily be seen that the available supply
of and probable demand for new CAPT
tai, ss well as the interest rates there.
on. are matters of great Importance not
only to the railroads but also to those
who depend upon them for transporta-
ton
Mr.. Willard concluded his statement
by saying that grave emergency ex-
lists and that should it appear at any
time that the emergency had passed,
the commission had power to order any
and that he was of the opin
ion that should reductions be shown
to be warranted the railroads would not
oppose them. .....,..
Vice President Shriver of the Balti.
mora and Ohm Suhm / tted dafa fnr th a