Evening star. [volume] (Washington, D.C.) 1854-1972, 1916-02-10
ThCrne Finishes Testimony
and Defenders of Brandeis
Are Heard by Subcommittee

Clifford Thorne. railroad commission
er of Iowa, completed his testimony
before the committee last night. urging
that Mr.. Brandeis had broken faith and
been guilty of unethical conduct in the
per cent rate case before the inter-
state commerce commission. He de-
clared Mr.. Brandeis had said there
would be no difficulty in getting all the
capital needed for the railroads, despite
what the bankers said, and that the
maintenance account of the railroads
was not properly subject to objection
because they had been undermaintained
in earlier years.
Il challenge your attention." said Mr.
Thorne. mot to the great volume of
issues in the case but to the fact that
there was one proposition in which
there was serious difference of opinion,
and that was the surplus. l call your
attention to the fact that there is
at the present time situation in this
country which you gentlemen should
not overlook. We are just making a
national appraisement of American
railroads. and many phases of that ap-
praisement are to come up for final
Court of the United States. If you
gradually pack that tribunal with men
possessing preconceived notions,
whether honestly or not, as to extra
high returns or unreasonably high re-
turns. 1t is going to be very costly to
the American people.
The larger railroads will welcome
that situation 1 do not know whether
you gentlemen ever have considered
what tremendous factor a simple
variation Of or per cent means with
relation to railroad surplus earnings.
Summing up his case he declared:
Il have shown conclusively from the
records that Mr.. Brandeis has commit
ted himself to the proposition that a
return on the capital stock of railroads
Of tx per cent is. to use his own words,
rather niggardly.' That Is the return
which the interstate comr7 cree COM
mission unanimously determined was
adequate. Further. the investors of
this country have decided that a stock
yielding ~ per cent in the market
places of the country is worth 100
cents on the dollar. / have repeatedly
challenged any one to name a secur-
ity which earns that amount that
does not command par or above par.
THE other proposition which l have
attempted to show is entirely inde-
pendent of the merits of the rate case
and whether Mr.. Brandeis was right or
wrong in his position as to the ade-
quacy of railroad revenue. The other
proposition related to a matter of pro-
i fessional ethics. I have shown you that
MI Brandeis was employed by the
interstate commerce commission with
any particular theory as to the DISPOSE
ton Of the case. He was asked il he
| was willing to take the burden of see
| ing that the other side of the case was
developed. and told that the railroad
side would be adequately cared for. I
have tried to show that Mr.. Brandeis
mad expressed the greatest confidence
| In the presentation of the rate case by
associate counsel
Il have shown that Mr.. Brandeis CO.
operated in a friendly manner during
the conduct Of the case with associate
| counsel, yet. at the critical time, Mr.
Brandets. without warning to Other
counsel after all argument had beer
coded entirely to the railroads. Had
4 known that such was going to be his
position. had he advised us of his de-
cision. steps certainly would have beer
taken for our protection, and we woult
have demanded an opportunity to b.
heard after Mr.. Brandeis had CLOSED
the argument for the public.
Coming from Mr.. Brandeis. who par
| ticipated with us in ross-examinatior
during the rate case. and who was EN-
ployed by the interstate commerce
commission, ! consider that his conces
sion was practically fatal to the caus<
! of the public. Our work was useless.
Questioned by Senator Fletcher.
Senator Fletcher. questioning thu
witness regarding instructions to Mr.
Brandeis in the letter from the inter
state commerce commission relating t
his employment as counsel in the rate
case, asked II II was not fact tina
Mr.. Brandeis was engaged to see tina
| "all sides were taken care Of"
Mr., Thorne said that there was such
a proposal in the commissions letter
but that later on in the letter 1t was
specifically stated that Mr.. Brandeis
should undertake the burden of the
| "other side" because the commission
knew that the railroads would be ade.
lquately represented.
In reply to a question Mr.. Thorne
told the committee that $4,000 wal
raised to pay the expenses of preparing
the data he had presented to the com.
mission in the western freight rate case
What are your politics? inquired
Senator Walsh of Mr.. Thorne as he
concluded his testimony.