The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-06-22
Big WESTERN RATE
FIGHT OPENS TO-DAY
Railroads Declare Proposed In
crease Means Only $780,
100000 More Revenue.
OTHERS SAY $780, 600, 900

WASH fNGroN, June 21.-Representa-
tives of Western railroads operating
west Of the Mississippi River and east OF
New Mexico and Denver will begin ar.
guments Tomorrow before the Inter.
state Commerce Commission for an in
crease in rates, estimated as high as
500, 900, 900 per annum
The railroad attorneys will he fol-
lowed by attorneys representing indi-
Sidual shippers, particularly shippers
Of live stock, packing house products.
coal and coke and other commodities
carried in great volume.
This is one Of the series of appeals
for an increase in revenue made by the
railroads since May. 1914 They seek
In the present instance to advance rates
on live stock, packing house produces,
hay and broom corn. cotton piece goods.
Coal coke, rice and fruits and vege.
tables.
G. o. Wright. representing the car
ricrs. estimated in a statement filed
with the commission that the additional
revenue sought would amount to about
$40. 0OO. 600.
'1f the increase were slO.oOo.o0o a
year II would make the full net oper-
ating income of these Dad only
s2O3. 2s6.463." he said, land would in
crease the rate of return by only "A
small fraction OF | per cent.
I'm round figures the rate of return
In 1914, II the proposed rates had been
applied. would have been 4 per cent.
and such a rate Of return must be con-
sidered to be below anything that even
A. .nIgaaf aa,,1I claim tn hn FAn.
sonable. 1t would not pay the interest
on the bonds. assuming that 100 per
cent. value Of the property could be
bonded at the rate OF interest accruing
on the underlying mortgages
Mr.. Wright said the carriers must in
crease their revenues to meet conditions
and that the method adopted seemed TO
be the best way. lie continued:
in the Eastern advance rate. case
there was much discussion of the
methods of increasing the revenues OF
the carriers and various suggestions
were made by the commission as 10
methods other than by the increase OF
their rates.
1--WE think. however. that II has bee'
since demonstrated that some OF the
suggestions At least made by the com
mission were not entirely practicable
under our system of rate making and
that others did not yield the additional
revenue which was expected
Mr.. Wright also declared the law does
not authorize the commission to fix rates
but that II simply has power TO fix maxi
mum rates and II therefore the in!tia-
tive In fixing rates is to be left to the
carriers they must he allowed some dis
erection and must be expected to exercise
that discretion within reasonable limits
TT carriers are perfectly willing &c
work in harmony with and submit TO the
regulations Of the commission" he added
"but a too tight checkrein which inter
feres with the reasonable freedom al
action and the exercise OF such discretion
as II was intended that the management
Of the roads should still exercise Is no
productive of benefit TO the public
In the statement filed by Clifford
Thorn and other representatives. OF pub
lie service commissions II Is contendeC
that the level of freight rates on tn
Western railroads is from 20 to so pc
cent. higher than that on the railroads
IN eastern territory and that in 1913 thu
net revenues of the railroads In thu
western territory as a whole. above al
operating expenses, amounted TO s42O.
900, 900, being the largest. with the eN
ception of 1910. in their history.
These railroads. it is said. are makirj
many additions and betterments whic|
they have charged to operating expense
and they are now seeking to get NOR
money so they can have n surplus wit
which they can build additions.
"Tersely stated" said the Thorn state
ment. the issues in this case centr,
around the one question, who shall pa
for additions and hetterments to rail
road property? The public interest de
mands better service. safer t%ransporta
ton and improved facilities but ii ais
demands that the railroads themselve
shall build these improvements and tn,
public will then pay a reasonable retur
on their values"