Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1915-02-11
rwallace's rarmer.1

| u II
| About two years ago, the eastern
railroads filed notice of a general adj
vance in freight rates, amounting to
| . per cent. Under the amendment
which Senator Cummins secured to the
interstate commerce law, the Inter
state Commerce Commission was given
authority to suspend any advances in
rates. pending q hearing on the merits
of the matter, and the burden was
placed on the roads to show that the
proposed advances were reasonable,
and that they were entitled to them.
When this . per cent was made,
therefore, it was suspended by the
commission, and the matter was tried
out before the commission. After a
most prolonged and exhaustive hear
ing, the commission denied the adj
vance on the showing made. Mr.. Cliff
ford Thorne, chairman of the Iowa
railroad commission, took a very act
i've part on behalf of the public in this
hearing, and thru his profound
knowledge of the matters involved ana
his ability in examining the railroad
witnesses, was able to show that not
only were the railroads not in bad
way, but that they We're more prosper
Gus than most other kinds of big bust
ness. Here is a sample of the sort OF
testimony which Mr. Thorne wrung
from prominent railroad men. Mr.. A.
II. Smith, president of the great New
York Central lines. was on the stand:
Mr. Thorne: Mr.. Smith, you said that
since 1910 there has been decline in
net earnings of your property as well
as of property generally in this coun-
try. Am stating that correctly?
Mr.. Smith: think you are If l get
you right and you get me right.
Mr.. Thorne: Have you made exam
inaton of the earnings of your prop
erty to reach that conclusion?
Mr.. Smith: Yes, sir.
Mr.. Thorne: I am asking you this
question. can YOU name one year prior
to 1913, aside from 1910. when your
net operating revenue was as great as
it was in 1913?
Mr.. Smith: No.
Mr.. Thorne: Is your net operating
revenue average during the past five
years higher or lower than the aver
age for the preceding five years?
Mr.. Smith: Fifty-tive and seventy
two. The first was ffty-ive and the
second seventy-two.
Mr.. Thorne Seventy two million in
tne laLLeT peTlOC, tpiIll'dieb " liiNs
five million in the preceding period?
Mr. Smith: Yes, sir
Mr. Thorne | will ask you, second
Ily, was your average net corporate in
come greater in the latter five year
period or the former?
Mr.. Smith: Twenty-three and thlr-
ty-three, in round numbers.
Mr.. Thorne: Greater in the latter
five-year period?
Mr.. Smith: Yes, sir.
Mr. Thorne Further, you have made
some statement about the return on
your capital Was the percentage of
your return on your capital during the
latter five-year period greater or less
than that during the former five-year
period?
Mr.. Smith: Yes, sir.
Mr. Thorne Mr.. Smith, in 1913. was
your net operating revenue greater or
less than the average for either one OF
the preceding fve-year periods?
Mr.. Smith: The net operating reve-
nue. ii, 1912 was greater. sss.00o.0o0.
| Further along. Mr.. Smith admitted
having earned for the preceding year
| over II per cent on the outstanding
! CAPITAL stock of that road. ana in addl-
| ton put by a surplus of S1I000o0o
! In the same manner Mr.. Thorne
! compelled Mr.. Rhea, president OF the
! PENNSYLVANIA system, to admit that the
net earnings of that system for 1913
after paying all expenses. taxes, etc.
amounted to 9.e4 per cent.
To make long story short, after
the most thorough Investigation, the
commission denied the 5 per cent ad-
vance. They held that the showing
made by the railroads did not Justify 1t.
Then the European war came along.
business of all kinds in the United
1 states was at once affected. Financial
conditions were demoralized. It be-
came difficult to secure money to carry
on business operations. The railroads
suffered with all other business. They
found in this new condition another