Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1915-04-01

all business, there are temporary per.
iods of depression when the railroads
a. whole, including both the strong
and the weak lines, are compelled to
retrench in their expenses for q time.
1t will be conclusively proved to you
that these western carriers expended
In 1914 In maintaining their properties
$4,000 per mile Of line, which was
greater than in any other year in their
history.
1T will be proved that the railroads
In western territory as a whole have
actually expended In maintaining their
properties during the last Ave years
an average of $60.000,0O0 year more
than for any preceding Ave year per-
iod since the first railroad was built
In this territory. Every railroad wit
ness who took the stand admitted on
cross examination that they were
maintaining their properties at high
or standard during recent years than
ever before.
1T will be shown to you that the de-
cline In the percentage of operating
income on property Investment, upon
which the carriers are relying 30
strongly, results from change In the
system Of accounting and not from any
operating condition.
During the year 1914, az all people
know, there was worldwide bust
moss depression. In the United States
the grain crops of the preceding fall
fell over 900, 900, 900 bushels.
I'm the exhibits that will be offered,
it will be shown that In 1913 the net
revenues of the railroads in western
"a vnyhn nh oil -
ing expenses, amounted to $420, 100000
being the largest with only one excep-
tion+1910-since the first track was
laid west of the Mississippi.
The average net revenues of these
railroads, during the past Ave years,
averaged $500, 000, 900 per year. This
was greater than during any Ave year
period prior to 1913 In their whole HIS
tory. 1t will be proved that the per
centage return of net corporate In
come on capital stock outstanding
In 1913 was more than doubled what
1t was sixteen years ago, and Ave
times greater than 1t was twenty-five
years ago.
ION the first day Of these hearings
We announced that we expected to
prove these railroads have been build
ing many additions and betterments,
which they were charging to operating
expenses. In other words, after pay
ing 4 return on their investment, We
have been building their properties for
them, and then are required to pay
return not only on their investment,
but also on our investment, on what
we build for them. This is funda-
mentally unsound and unjust.
President FELTON, Of the Great West.
ern, frankly admitted, on direct evil
dence that practically one-half the
cost of additions and betterments
could be charged to operating ex-
penses, and that very large sums
were 90 charged during the past four
years. President Bush Of the Missouri
Pacific admitted that large portions
of the cost of rebuilding his road dur
ing recent years had been paid out Of
operating revenue, and charged to ex-
penses. Mr.. Wettling, witness for
all Of the railroads, made q similar ad-
mission, but was unable 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
3(VV,VUV,VVV nave OCOn GA pCAuCu Al gu
ditions and betterments by these
western railroads during the past
seven years. 1t is safe to say that the
cost Of additions and betterments
amounting to several hundred million
dollars. has been charged to operating
expenses by these western railroads
during recent years. So long as this
practice Is permitted to continue, 1t lis
going to be exceedingly dificult to de-
termine just what are the net earn.
ings OF our railroads.
when prosperity is at its very
highest, the railroads can show the
lowest net earnings by simply build
ing larger amount OF improvements
thereby automatically reducing their
net income.
I'VE are perfectly willing to pay the
people these gentlemen represent an
adequate return for their investment
such adequate return to include rea-
sonable surplus for tiding them over
lean years, but we are absolutely un-
willing to build their properties for
them and then pay a return on what
we build"
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