Evening star., 1921-05-24
EXPLAINS REDUCED
RAILWAY EARNINGS
Witness at Hearing Cites e.
feet of Freight Rate and
Waqe Increases.

Freight rate and wage increases
have reduced earnings Of short
haul railroad systems more radical
ly than they have reduced long
haul" roads earning power. Howard
Elliott. chairman of the Northern
Pacific board. said today before a
Senate investigating committee.
In general. he said. the situation
was most serious for railroads in
territory with the greatest popula-
tion.
Discussing recent reductions in the
freight charges against western lum-
ber, Mr.. Elliott said. business had
not been materially stimulated by
them. Facilities for moving lumber
via the Panama canal. he added. were
being enlarged. and this traffic was
showing tendency to leave the
transcontinental roads.
Northern Pacific Statistics.
The Northern Pacific has over 30 600
stoc ckholders, Mr.. Elliott said. answer
ing questions. and 3s.00o employees
and officers. Tn" Iarses; stockhoid-
ing is 90. .ndo shares ou' Of n.4SS.bGa.
Mr.. Elliott described for the COM
mi,;er III. recent financial operation
by which the Burlington roads dcois s
We're paid. and new bonds issued
against it for $e5o,0n0.00o. Interest
per cent to "a Per cent. Mr.. Elliott
said. and question was raised as 10
whether the Burlington earnings
would meet the charge.
IF they are not enough to do that
Mr. Elliott said. "a!l railroad business
in this country will have to come to
an end"
Senator Cummins' Statement.
Chairman Cummins said that the
railroads have been insistent in de-
manding that the Interstate Com
merce Commission be given this pow =
er to control security issues, and MIR.
Elliott said he was correct.
II am not criticising the legality of
the plan the Interstate Commerce
Commission directed us to follow" he
said. land our difficulties might have
been greater if the plan had been
made by eleven state commissions
which are involved in the Burlins-
ton territory
Tho railroads Of the country ought
to be preparing for the return OF
prosperity that is sure to come. but
they are unable to obtain the neces-
sary money" a. H. Smith. president
of the New York Central lines. de-
clared yesterday.
For twenty years the roads
haven't had sufficient income to meet
the demands Of their developments,
Mr.. Smith said I'VE ought to he
getting ready for the return OF pros
perity. I'd like to be getting ready.
so that you will not have me down
here after a while TO explain why
we can't handle the business.
Railroad rates are 'out of balance
because of the percentage system of
increases of the past year. Mr.. Smith
said. but he did not agree with sug :.
gestions that the general level had
been so high as to strangle tratfic
THAT was the best we could get,
Mr.. Smith added. The investing
public won't take them at less.
Howard Elliott, chairman OF the
board of the Northern Pacific, was
called, and began upon a statistical
presentation of operating expenses
and revenues of his company during
recent years These figures show
in a striking manner that forces b.
yond control of the owners OF the
property have absorbed constantly
Increasing proportion of the total
operating revenue" he said. in sum-
marizing the results.