The daily Gate City. [volume] (Keokuk, Iowa) 1855-1916, 1915-03-30

the strong and the weak lines. are
compelled to retrench in their ex-
penses for time. 1t will be conclu-
sively proven to you that these west
ern carriers expended in 1914 IN
maintaining their properties S2,Soo
per mile OF line, which was greater
than in any other year In their MS
tory.
1T will be proven that the rail-
roads in western territory as whole
have actually expended In maintain
ing their properties during the past
five years an average OF $50,000.O00
year more than for any preceding
five year period since the first rail-
road was built in this territory.
'It will be shown to you that the
decline in the percentage of the OPP
Grating income on property invest
ment, upon which the carriers are re-
lying so strongly, results from
change in the system of accounting,
and not from any operating condt-
ton.
During the year 1914. as all peo-
pie know, there was o worldwide
business depression. In the exhibits
that will be offered, 1t will be shown
that in 1913 the net revenues OF the
railroads in western territory as
whole, above all operating expenses,
amounted to 1920, 900, being the
largest, with only one exception-19l0
since the first track was laid west
of the Mississippi river.
"The average net revenues OF
these railroads, during the past five
years, averaged $500, 900 per year.
This was greater than during any five
year period prior to 1913 in their
whole history.
1T will be proved that the percent
age return OF net corporate income
on capital stock outstanding in 1913
was more than double what 1t was
sixteen years ago, and FIVE times
greater than it was twenty-five years
ago.
| "On the first day Of these hearings,
we announced that We expected to
prove these railroads have been
building many additions and better
ments, which they were charging to
operating expenses. At that time.
we did not realize how easily those
facts would be proven, before it
came our turn to offer evidence. AL
ready our claims have been complete
ly substantiated In the cross exalnina-
ton of railroad witnesses themselves.
President FELTON,, of the Great
Western, frankly admitted on direct
evidence, that practically one-half of
the cost of the additions and better
ments could be charged to operating
expenses, and that very large sums
were so charged during the past four
years President Bush of the Mis-
souri, Pacific admitted that large por-
tons of the cost of rebuilding his
road during recent years HAD been
paid out of operating revenues and
charged to expenses Mr.. Wettling,
| a witness for all of the railroads,
made similar admission, but was I'M
able to state how much Of that had
been so charged. The magnitude of
the sum involved may be grasped.
when it is noted that Mr.. Wettling's
exhibit shows that over $7O0, 0O0, 900
have been expended in additions and
betterments by these western rail-
roads during the past seven years.
So long as this practice is permitted
to continue, 1t is going to be exceed
ingly difficult to determine just what
are the net earnings of our railroads.
when prosperity is at its very
highest, the railroads can show the
lowest net earnings, by simply build
ing a larger amount of improvements
and extensions, and charging large
portions of this to operating expenses,
thereby automatically reducing their
net income.
I'VE are perfectly willing to pay
the people these gentlemen represent
an adequate return for their invest
ment, such adequate return to in
clude reasonable surplus for tiGing
them over lean years, but we are
absolutely unwilling to build their
properties for them and then pay a
return on what we build. There is no
justice in that. The American people
will not permanently submit to any
arbitrary action which works sub.
stantial wrong on the public"