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Show RIPLEY'S IIS ARE PESSIMISTIC Thinks Earnings of Santa Fe May Shrink Considerably Next Year.v SUCH IS THE STATEMENT IN RATE CASE HEARING Auditor JBailey and Statistician Pcabody Aro Also on The Stand. CHICAGO, Aup. 30. President E. P. Riploy, o tho Santu Fe Bystcm, on tbc witness stand todaj' beforo Spcciul Ex-aminor Ex-aminor G. M. Brown of. tho intorstato conuncrco commission, in support of tlio contention of tho railroads that higher rates aro just and right, declared that waRes paid b' the railroads havo increased in-creased larjjcb', making operating expenses ex-penses a greater burden. President Ripley also declared that the outlook for next year is uot good, and that general conditions arc so considered con-sidered in the' .judgment of merchants and those fami'linr with tho trend of events. Mr. Riploy said ho thought it not improbable that noxt year' tho earnings earn-ings of the rond may shrink so that they would no more than pay the dividends. divi-dends. . Tho pessimistic views of tho president presi-dent of tho road came iu the direct examination ex-amination by Attorney Frank l'on, counsel for tho interstate commerce commission, aud followed questions concerning con-cerning what proportion of each dollar earned by the road was returned to tho public in tho shape of wagos for labor aud in. operating expenses. Pessimistic views. "We aro likely to sec a decrcaso in our gross earnings i the next twelve months," said Mr. Ripley. "What do you attributo that to?" askfd Mr. Lyon. . . "I attributo it to general condihons of business," was the reply. "Aro tho general conditions of business busi-ness bad?" "I would not say they are bad; they aro not as good as they were a year ago," said Mr. Ripley. "What is tho trouble? Have you any idea?" , . "Well, T am not a professor of political politi-cal economy and I do not care to vun turo an opinion," was tho response. "I. do not care to vouturo an opinion as to what the trouble is, but think the consensus amoug tho merchants and others in this room is that the condt-tious condt-tious aro not as good as they wero a year ago, and L do not. expect to sec as largo earnings as wo saw last year." Reverting to the subject later in the hearing under cross-examination by Attorney At-torney Clifford Thorne, representing likestock shippers in Iowa, Mr. Ripley admitted that for ton years the Santa Fe had paid dividends. "I havo nothing to prove that they will not bo paid next 3roar, or that we shall default on our .interest," said the president of the road. "This last year, which was thu largest in gross earnings wo ever had. wc kept up the property and earned 8.S per cent on our capital stock, but 1 can sec expenses ahead of me for this coming yoar enough to war-ran, war-ran, mo in the belief that wc will not any more than earn our dividends; wo might possibly earn our 6 per cent dividends. divi-dends. In other words, 1 think it is not improbable that our earnings may shrink to a point whore we will not earn any more than our dividends." Refers to Increased Expenses, Mr. Ripley explained that b3r increased in-creased expenses ho roorrod to improvements, im-provements, and iir. TliorriQ commented: com-mented: "So, reduced to its ultimate analysis, you think you arc entitled to increased rates in order to build up theso facilities, facili-ties, is that correct?" "n order to keen up with the times and do what the public expects of us," replied Mr. Ripley, "And make improvements abovo what you did last year" asked tho cross-examiner. "Certainly, any railroad that fails to do that isvbou!id"for the slide." Mr. Thorne: "You think that ought to ho paid out of the operating expenses?" ex-penses?" Mr. Ripley: "Most certainly I do." Special Kxnminor Brown shut oil" questions touching tho bond issue for the Kansas City depot by saying: "Tho question of the Kansas City depot has nothing to do with this general proposition."' propo-sition."' J n the course of tho hearing, the railroad rail-road introduced a tabulation of the in-lorest in-lorest on the slock after the payment of bond interest for the vears iSSHi to 1010. On cross-examination, Attorney John T. Atwood. of Kansas Oitj, representing represent-ing a group of shippers, took up I lie discussion of some of the exhibits offered of-fered by the railroads, and called at-' tontion to an item of $70.',000 appro-1 priated for fuel reserve in 100S. Mr. I A I wood compared the amount with much smaller figures for a similar charge in other years. Mr. Atwood: "Let me ask vou if tliis disposition of funds, more than three times that of tho good year 1909 to this fuel reserve, was done because there was iu the nund of the management manage-ment tho idea that it would help to make his lean showing to bo employed as an argument before tho commission now?" Mr. Ripley: "1 do not think it had any influence. It certainty did not with me." President Ripley was questioned concerning con-cerning tlio capitalization of the subsidiary sub-sidiary linos of tho Santa Fc system, which, he said, was included in the estimate es-timate of $579,000,000 that would bo required to reproduce tho system's properties. Fiom the figures at his command President Ripley declared that ho was unable to snv whether the Santa Fe makes or loses in the operation of most of the subsidiary roads. W. E. Bailey, general auditor of the system was the next witness, and lie at once plunged into an arr;i3' of figures showing tho increase in wages paid by the system now over what was spent in former years. Mr. Hailey declared that by applying the wage scalo of employes in 1901 to the employes of tho road in 1910 the system would have saved inoro than $0,-ifOO.OOO, $0,-ifOO.OOO, while the actual inereaso in the amounts paid for labor in 1010 over 1901 was $21,7;")0,000. Estimates Labor Charge. The difference in the figures showing tlio increase is accounted for bv the greatly increased number of employes. ' Mr." Bailey declared that it would bc practically impossible to differential c between the amounts expended for labor la-bor solely for operating expenses aud for moneys spent, for labor expense i t lie betterment of tho roadway, lie estimated es-timated the direct labor charge as from 15 to 50 per cent of the operating expenses. ex-penses. When .lames Poabody, Santa Fc sta-listician, sta-listician, was called to the stand. Attorney At-torney Norton for the railroad introduced intro-duced in evidence a number of tabulations tabula-tions of comparative figures covering a period of vears. The statistician declared that, from .100:; to 1910, taking 1903 us 100 por cent, freight earnings decreased to 12 per cent and freight operating expenses increased to 170 per cent The figures wore for the lines east of Albuquerque. Under tho head of necessary expenses for the years 1911 and J912. Mr. Pea-bodv Pea-bodv declared that tho Santa Fc system sys-tem would require the expenditure of $00,500,000, the items, of expense including: in-cluding: Terminal yards, $1,000,000; track elevation. $3, 300,000; station buildings, $1,500,000, and other expenditures expendi-tures in lesser amounts, among which wero listed right, of way and station grounds, grado revision and docks and wharfs. It is said tlio testimony concerning tho Santa Fo will bo concluded tomorrow tomor-row morning and tho Rock Island system sys-tem is scheduled to present its caso immediately im-mediately afterward. |
