The Birmingham age-herald., 1917-04-29
Railroad Congestion May Have Some Adverse Effect
 During Current Quarter
SORDID STORY OF
 WRECKED ROADS
Commerce Commission Report Shows How Exploitation and Manipula- ton Keep Great Lines in
 Receivers Hands

New York, April 2S-(Special) )-With this weeks new high record in quarterly net earnings for the United States Steel corporation, accompanied by an extra dividend of per cent on the $50S, GOO, ,00C common stock, making A per cent dfvi- dends for those shares for the three months, Wall street has already begun to speculate on the results to be obtained by the company for the current quarter which ends June 30, Because of freight congestion and very unfavorable operat- ing weather. which prevented the rail- roads from delivering needed fuel and raw materials. net earnings of the Steel corporation for this January, S36, ,074 eo0, were s369,Ooo below the monthly high rec ord established last November Then February, with its very heavy snow storms and very low temperature, was the worst operating month experienced in years, and hence net earnings of the Steel corporation dropped to $33, 416 900. But the troubles of the railroads began to clear up in March, and that month the Steel corporation broke all records by earning s43,630000 net For the month of December, 1914, after the war started, and before earnings began to pick up, the Steel corporation earned only g, ,556 GOO net.
 If no further gains are reported for the nine remaining months of 1917, the Steel corporation should show $5o5, ,OO0, 900 net for the year, against s36s. .Oo0,OOo for 1916, $145,- 0oo,ooo for 1915. and $ss, GOO GOO for 1914. On that basis the surplus for dividends on the $50S, ,0o0,0oo common stock, that is, after otyt o1l on the SS60, PSI, 900 preferred, would amount Ato sS7S, ,ooo,ooO. compared with the s24s, CO., 600 for 1916, the s4O,OoO.0oO for 1915. and the deficit of $2,00o.000 for 1914. A final sur- plus this year of $57S, ,Oo0, 900 applicable to dividends on the common stock would mean 76 per cent earned for those shares.
 Prominent Wall street bankers and railroad presidents who for years have been journeying to Washington to attend the annual Gridiron dinners admitted re- luctantly this week that no "skit' bur- lesquing well known men pulled off at those dinners contained more interesting features than is found in the full report just made by the interstate commerce commission to Congress on the Cincinnati Hamilton and Dayton-Pere Marouete railroad system It seems that Congress having some curiosity as to why those two companies were now just emerging from the bankruptcy courts for the sec ond time within the past decade, request- ed the commission to make. an investiga- ton. A copy of the pamphlet report on the results obtained can be had by any one writing to the interstate commerce commission at Washington.
 Tn prlef, the 26S-page report tells clearly and concisely how the Prince manage 1nent acquired control of Pere Marquette in 1902 by buying the common stock at o "a Ito1ff Co the roadbed and equipment were starved: how earnings were padded, how accounts were falsified; how top-heavy bonded and floating debts were created; how unearned dividends were paid on the common stock up to the day the prop erty was sold to the Zimmerman -Hol- lins syndicate for s125 a share
 Then it is told how the Zimmerman Rollins syndicate subsequently, made the Chicago. Hamilton and Dayton buy the Pere Marquette; how J. P. Morgan & Co. had been large owner of Chicago, Ham, lton and Dayton shares for years; how Charles Steele, a partner of the Nor gans and director of Erie had become acquainted with the condition at the Pere Marquette-C Chicago, Hamilton and Dayton system; how that property, while p. H. Hartman, an active Erie director was out of the country, was dumped on Erie at $160 a share; how F. D. Under wood was told by J. P. Morgan that if the Erie did not buy the Chicago, Hamil- ton and Dayton at once the chance for ever would be lost. Then the Erie di- rectors were frightened by story that q pool was after the western system tho pool including John W. Gates, George ". Young, Edwin Hawley, Harry S. Black, T. P. Shonts. Paul Morton and other men who at various times had been much in the public eye in highly specu- lative railroad deals.
 Then Director Hartman, who owns 100000 of Erie stock, returns iron Alaska; finds out what has been done tc Erie in his absence. and sends for Un. derwood. What then took place is tolc by Underwood himself In his testimony X as follows:
 }, Several days before the rescindatior Rrocess was had, talked with MT Harri- nsan in his office in the Equitable build. ing. Now, I cannot give you any idea where he had been in the interim, but very distinctly remember my conversa ton with him. could not forget it, nol you could not forget it. if you had heard it. about what was necessary to be done He said: You made the trade with Mir Morgan yourself. No one was present You had better go and see MT Morgan and you had better not depend on anyone else but yourself. It is up to you Yol had better go and better go now"
 Within a fortnight receivers were ap