Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1917-06-18
FORMER STATE RAILROAD COM.
MISSIONER ARGUES AGAINST
RATE. INCREASE.
MAJORITY OF LINES
ARE PAYING DIVIDENDS
Railroads include Surplus Earnings
Put Into improvements as Portion Of
Their Investment, to Which Thorne
objects-Most Unfortunate Time TO
Place Additional Burden on Business.
pecial to Times-Republican

Special to Times-Republican.
Des Moines, June 1S.-Clifford
| Thorne, formerly member Of the Iowa
| board Of railroad commissioners, now
| counsel for number of shippers assoc
| Citations which pooled their interests
to fight the proposed Is per cent in
crease in freight rates asked for by
| the railroads, declared in his argument
! before the interstate commerce COM
mission last week that the companies
are now in the midst of one OF the
most prosperous years in their history
| and are not entitled to increased rates.
He said the railroads were trying to
add an additional tax burden on the
American people of $3.50 per family. He
declared that two-thirds of the tra1lc
| in the United States is being handled
| by companies having thousand mil
| lion dollars in surplus earnings, eight
! hundred million Of which was in cash,
time deposits and marketable securf-
| ties.
The carriers have based their claims
! in this case on two propositions, SAID
Mr.. Thorne. First, on the existence
of an emergency or crisis in their n
nancial condition, brought about by the
| war, the Adamson law, other wage aa-
vances and the excessive prices on fuei
and other materials and supplies: ana
Second, on the low returns they
are receiving upon the book value OF
their properties or their so-called prop
erty investment
Are Paying Dividends.
Mr. Thorne argued that the prop
erty investment figures as now given
by the railroads include the money they
| have put into their property for I'M
provements made out of surplus earn
ings and these surplus earnings should
| not therefore be considered property
| investment He declared that shippers
object 10 building the properties Tor
the railroads and then paying a return
on what they had built.
Two-thirds of the traffic Of the
United States is being handled by
twenty-seven railroads that have been
paving reasonable dividends and have
accumulated unapproprfated surplus OF
more than a thousand million dollars
| he said. Nine Of these companies,
handling two thirds Of the traffic N
tie eastern district, last year earned
4
capital stock Eight companies han
ding two-thirds Of the. traffic in the
| southern district last year earned an
average Of 1875 per cent on their cap.-
tai stock Ten companies hand ding
two-thirds Of the traffic in the western
district earned IL per cent on their
| capital stock.
Commissioner Thorne declared it
| was true that there had been an IN
| crease in cost of supplies.
! I'VE find the average increase in the
cost of materials and supplies on two
typical railroads to be 1884 per cent
and 29.57 per cent The railroads esti-
mate these figures at approximately
~ per cent" said Mr.. Thorne.
| Short Period No Basis.
| The former Iowa commissioner point
ed out that no reliable inference can
be drawn as to the expenses or earn
ings of the railroads from a single year,
| however, much less from only few
| months. He said that in February OF
this year because OF storms and severe
! weather conditions the railroads SUI
| fered, but that in the month OF April
| the railroads handling practically SO
per cent Of the traffic Of the United
| States earned net the sum OF, $90,670,-
| 900. He suggested government owner
ship as way out Of the troubles be-
tween the shippers and the owners.
"At this time the federal government
Is attempting TO raise huge war loan
4 Of seven thousand million dollars" said
| Mr. Thorne. To-day Is most unfor-