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Show President of Denver &. Rio Grande Railroad Says Proposed Reduction Reduc-tion in Carrying Ra".e on Coal Would Not Prove of Help to Public Pub-lic in General. LARGE CONCERNS WOULD BENEFIT Declares Smelting and Similar Big Companies Only Would Reap Better Bet-ter Profits; Thinks Request Re-quest for Reduction Is Unjust in View of High Prices. Ouehalf of the benefits from a reduction re-duction in coal rates, as provided in section 21 of article i of the public utilities bill, would go to increase the already al-ready inflated profits of the smelters and big business corporations, and would not materially benefit the. general coal consumer, according to testimony given yesterday before the judiciary committee commit-tee of the senate by H. U. Mmlge, president presi-dent of the Uenvcr & Kio Grande Rail- t road company. President Mudge assorted that the proposed maximum rates provided by the utilities measure were not fair to the D. & I!. G. and that they would not accomplish any benefits to the pub-lie. pub-lie. "The bulk of the benefit would go to the smelters and big business corporations," corpo-rations," ho said, "and not 10 the general gen-eral domestic consumer." He' declared that the proposed maximum rate would add to the already increased incomes of the big companies .25u,0u0 a year. Against Maximum Rate. President Jludge of the Eio Grande and Fred Wilde, Jr., freight traffic manager of the Rio Grande, were both beforo tho committee yesterday morning morn-ing in opposition to the utilities bill, especially es-pecially as to the section prescribing a maximum rate on coal. Senators (J. L. Olson and Don B. Col ton were the only members of the committee present at the morning session, and the railroad people, represented by Attorney K. JI. Allison, wanted to postpone the hearing uutU today. Tho chairman, Mr. Olson, thought this would bo impracticable, and it was finally decided to proceed and to have the testimony of the railroad officials taken in shorthand and transcribed tran-scribed to be rend by the other members of the committee todav before the bill is taken up by the senate this afternoon. President Mudge first took occasiou'to deny having mane a statement to F. A. Sweet of the Standard Cna company to the effect that he thought a rate of $1.25 a ton on coal to Salt Lake from the Utah mines was a re.ionable rate. He said he had never made such n Kt:1f..' ment. or any statement that could be , construed to mean such a thing. ' In (support of his statement he presented pre-sented a telegram from A. K. Sweet, vice president of the Rio Grande, in which he stated that Mr. Mudge had not made I such a statement to Mr. Sweet in an interview at which A. 1",. Sweet was present some time ago. Mr. Mudge said he has noticed in the Salt Lake papers that he had been quote. 1 by Mr. K. A Sweet as having made the statement in question, and he desired to deny it. Declared Unfair. Then In relation to the pi-r.pnerj max, mum rales of the- utilities bin. he denlare,! they w.,uM be unfair to tlu- Kio Grande Din present rates, he declared Hie no higher than they are in other at'ate ' ,-. nd not ho hitch as sonic fixed ,v ulihties cciiinjissi. nis. Ilo declared that the snides and difficulties diffi-culties (,f operation in Gtah would make a cent-.i-mCe rate in UUh unreiuini-r-ative entirely. "It sperns to me that this is an inopportune inoppor-tune lime to reduce Iho revenues of the Itio Grandu or any otV-r mad. when all supplies and every tiei-i-s.-di v ni h raiii-n:,d are at su'h an aiivaia-r.i price." said Mr MivlB. "Thev have I U' reas.-d In pn. u fioni r,e per '-cut tn p...- rem. (Jnn-do!a (Jnn-do!a cars have iit.-u-a ted in j-.ri.p fr.nn ?ie00 I., Jutno In Ihr.-r. years a ml ' nieta Is of all sort have incieased from ji) per cent to lf.n per cent.. ' iinf-kaif of the rnrha-tini, ifIH , js propo.-'ed la make in the rates on coal would Ito ha.'h I" thn smellers ;1 h(i ntl .r big busin.rss cons 11 mr r-s ivhirh are alrvadv reaping hlr haivst.,- Circaih Hie advanced (Continued on Page Three.) F UTILITIES MEASURE OPPOSED BY MUDGE i ! (Continued from Page One.) prices of their products, and would not materially benefit the average consumer. There would go back to the coffers of these concerns not less than 5250,010 a year, out of the moneys that now make up the revenues of the railroad. This would not go to the public or the average consumer." I Mr. Mudge told how the price of engines en-gines had advanced $17,000 per engine. 1 He admitted he might have said, when he first came to the Rio Grande road, that 1 he thought $1.60, the present rate on coal in Utah, was too high, but lie did not , ; know conditions then and was not com- , petent to express an opinion. Now, he said, he knew that it was not too high a : rate. j He declared that the road 1ms spent for equipment and improvements more than the surplus earnings of the road for 191B. I He gave the gross operating revenue as j $24.890,0S4.37, the operating expenses as I $14,739,410.47, the net revenue as $10,-I $10,-I 150, 673.90, from which, he said, was to be deducted taxes to the amount of $1,091,-; $1,091,-; 461.30 and other charges that reduced the actual net revenue of the road to $3.S16.-0SS.O1, $3.S16.-0SS.O1, with an expenditure for equipment and improvements of a little more than this amount. Some figures on the increase in taxes paid hy the road in the past nine years were read, showing the increase to be $361,074, or 49.44 per cent. Says Rate Is Just. When Mr. Mudge had concluded his testimony, F. A. Sweet asked the privilege priv-ilege of making a statement and asking some questions. Attorney Allison said he understood Mr. Sweet was present as a sort of prosecutor and objected unless the railroad should have the right to cross-examine him. It was finally decided de-cided that Mr. Sweet could be heard after the railroad men were through. H. W. Prickett of the traffic bureau of Utah asked Mr. Mudge if he thought a ton earning on coal of 12 mills per ton mile, as against an average earning of 10 mills on other freight, was fair in Utah. Mr. Mudge said he thought it va s. Fred Wilde, Jr., freight traffic manager, man-ager, then took the stand and gave some figures on rates. He declared that the Utah rate was fair and just. He said that when the Rio Grande took over the Rio Grande Western there was a rate of $2 on coal and that the road had reduced this rate gradually until it reached the $1.60 rate at present, which he thought fair to all. Cites Filed Tariffs. Mr. Wilde denied that there was an additional freight charge of 60 cents or any other amount on coal between Salt Lake and Ogden and read the freight tariff on coal as filed with the Interstate commerce commission to show that the rate to Ogden is identical with that of Salt Lake. He said that if the Ogden people are charged more it is through some other means than the railroad freight rates. He submitted a table of comparative rates on other roads for similar distances in support of his contention that, considering consid-ering the wide range of distances and the operating difficulties, the Utah rate on coal is fair. Chairman Olson wanted to know if Mr. Wilde thought the genera public would get any benefit of a reduction In the rates on coal. He said it was a question, ques-tion, but he had never seen the public get any benefit from rate reductions; that the coal producers always "took tip the slack" by advancing the price of coal, so that there was nothing gained by it. Ho was asked if the Utah Fuel corn-pan corn-pan v would "take up the slack" if the coal rate were reduced here. He said he could not say, but it might do so. Mr. Pricket wanted to know tf it was not common talk that the railroads controlled con-trolled rates In Colorado and if the railroads rail-roads did not have much to sav about what appropriations were made to the utilities commission of that state. Mr. Wilde said he knew nothing about this and could not answer. Sweet Cross-Questioned. President Mudge declared his belief that a differential rate on coal for summer sum-mer storage might be all right if it would work, but he had never seen a case in which it had the effect of causing coal storage. Mr. Sweet then declared that Mr. Mudge, in discussing coal rates with him at the time of their conversation denied by Mr. Mudge. admitted that the coal rates were high and that if only the coal companies and the public were concerned he would reduce them at once, but that the smelters and big corporations were getting high prices for all their products and he proposed to maintain high coal rates as Innsr as he could. Mr. Mudge asked if Mr. Sweet purported purport-ed to be quoting him verbatim. Mr. Sweet answered that he was as nearly as he couid. Mr. Sweet then made an argument to the effect that a maximum coal rate included in-cluded In the utilities bill Is necessary for the coal producer and the coal consumer. He said t he coal producers and consumers consum-ers did not want the rate too low. but wantfvl a reasonable rate that would enable en-able all to make a reasonable success. Mr. Sweet declared that the Rio Grande had made an unfortunate investment In the Western Pacific, which proved a finrmcial failure, and that the Rio Grande had been milked of ali its funds through this investment eo it had no money to i buy equipment, and that was responsible for the coal famine. President Mudge admitted that the Rio Grande had made an unfortunate investment, invest-ment, but denied that that was responsible responsi-ble for the coal shortage. On cross-examination. Attorney Allison sought to have Mr. Sweet tell the exact coMt of producing a ton of lump coal, but Mr. Sweet said he could not do bo. He sought to show that the cost was about l$1.6i a ton, which, with the freight rate. I made the total cost $3.20, while the price I in Salt Lake was $5.75 a ton. Mr. Allison asked Mr. Sweet if he : thought it was good rolicy to have a legislature fix a maximum freight rate, : rather than leave It to a utilities commission. com-mission. Mr. Sweet said he thought su in the present case, to giiard against a , shortage of coal ne:xt winter. Both President Mudge and F. R. Rv-k-wtll of the Rio Grande testified that Mr. Sweet had protested to them because the I L'tah Fuel company did not raise the price 'of coal last fall at the time his company com-pany and other companies advanced the price, and had declared that If the L'tah ; Fuel would advance the' price there would 1 be no objection to the freight rato on coal. I Mr. Sweet admitted that he had ob-! ob-! jected to the L'tah Fuel refusing to ad-! ad-! vance the prire and had said that there was no objection to the rate on coal for winter If the Vtah Fuel advanced the price, but insisted that he had urged there should be a lower rate for summer to bring about storage of coal. Judge F. C. Loofbourow, appearing for the L'tah Gas and Coke company, raised I objection to that portion of the bill giving to employees of the utilities commission ! the risrht to examine books or employees of utilities at any time in relation to matters mat-ters of import to the commission. He declared the provision as it row-stands row-stands would give them the right to make such examinations at any time of the day or night a nd would interfere with the conduct of business of the concerns. He susuested amendments to overcome this objectlonabl3 feature of the bill. |