New-York tribune., 1919-04-17
Western Pacific
Refuses to Accept
Government Award
Railroad Demands More
Than Double Amount
Fixed by Administration
as Stand lard Return

Making the claim that the companys
JUST compensation under the Federal
control net should be $4,557,195, the
executive committee of the Western
Pacific Railroad has refused to accept
as its standard return the average
operating income for the three test
years ended June 80, 1917, which was
S1,917,03S.
Steps will be taken forthwith by the
management to obtain an adjudication
of its claims before a special board of
referees to be appointed by the Inter,
state Commerce Commission in accord
ance with the conditions under which
the government took over the operation
of the railroads.
First Fight on Standard
This action of the Western Pacific.
which is the first important attempt
yet made by railroad to ovcrrule the
decisions of the railroad administration
in the matter of fixing earnings, is ex-
pectcd to be followed by similar pro-
ceedings from other transportation
companies. The Wabash, the Western
Maryland and the Wheeling & Lake
Erie were mentioned yesterday as be-
ing likely to formally notify the gov
crnment shortly that they also would
not accept the compensation deter
mined upon by the railroad administra-
ton.
c. NJ Levey, president of the West
ern Pacific, in presenting the claim of
that road for greater compensation
than that awarded by the railroad adj
ministration in fixing the average for
the three years ended June 80, 1917, as
the standard return, said:
This average is plainly inequitable
as a fair measure of the companys
just compensation under Federal con-
troll because,
/. During the whole of the test per-
iod the company's system was in an
undevcloped condition by reason of
its recent construction, and from March
3, 1918, to July ii, 1916, was in d
receivership and in process of re-
organization;
2. Since July u, 1916, the company
has made large expenditures for adj
ditions and betterments, for branch
not reflected in the net railway operat-
ing income for any part of the test
PERIOD"
"The test PERIOD he added, "com-
priscs the fourth, fifth and sixth years
of the operation of the railroad Dur
ing the whole of this period the system
was new enterprise, in an undo
veloped and unfinished condition, and
thus unable to provide the facilities
needed to get its share Of the business
and to meet the fierce competition to
which it was subjected.
Claims Average Unfair
"Thc average for the period is. there
fore, plainly not fair measure of the
company s just compensation. 1t should
at least, be allowed as compensation
its earnings for the last year Of the
test period, amounting to $3,112,62S,
and in addition fair sum on account
OF the earnings Of branches and feeders
acquired since July IA, 1916, and
falr return on account of other ex-
penditurcs made which have re-
duced operating expenses and none of
which is reflected in the test period"
The claim for total compensation
Of S4.557,195 was based on the follow
ing items:
T., year ended June 80. 1917 .... S3.11o.e2S
Est. net ealnings from branch
reflected 1911 e...........'.. '.''l 100 eaa.5oo
Decrease in hire of equipment
on account Of purchase OF new
equipment delivered in July, IT 235888
3 p. C. int. on new equipment CON
tracted for prior to Dec. 81
1917. but delivered in June ard
oct. of 1918 at cost of $4,12O-
600 ........-...... ......-......'... 247.2OO
Depreciation on equipment "a p.
!
tdiIy SAVING IN water service. 4O,I LA
8 ~ c. int. on S523,2s7 capital ex-
pended completed in 1918 or
: work sim IN progress. ......... 95.17o
tion material above normal on
December 81, 1917. amounting
to $30s. POS ............. 1892
Loss in express earnings March /
to June 30. 1917. 2SOo7
Annual expenses OF maintaining
corporate organization. ....... $4,000
Lawyers for the Western Pacific
stated yesterday that in the event
either the railroad administration or
the company refused to accept the de-
cision Of the board Of referees ap-
pointed by the Interstate Commerce
Commission the questions at issue
would then be taken to the Court of
Claims provided for under tie Federal
control act.
Paris Market Quiet