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Show House Committee Is Stirred by Sensational Allegations Made ' by Author of Rail Plan. Names Systems Which, He Declares, Gave Shares and Are Col- l lecting the Dividends. : WASHINGTON, Aug. 12. The rail-'.. rail-'.. road brotherhoods, through their coun--' sc-1, Glenn E. Flumb, today laid before ; the house interstate commerce commit-'" commit-'" tee their .'.harge3 of corruption in the management of railroads under private control. The charges vrere that many .- of the great railroad systems had been " plundered systematically by the finun-', finun-', cial interests and that the railroads illegally held millions of acres of pub-; pub-; lie lands. Eighteen representative railroads of the country, the brotherhood attorney asserted, issued stock aggregating , $450,414,000 between 1900 and 1910 as " bonuses, and paid millions of dollars - in dividends on these bonuses. These V. game railroads, he further charged, "were controlled in whole or in part by the Morgan interests, the Eoekefel- ler interests and the Gould interests." ; Coupled with the charges which came just before the house committee closed its hearings on organized labor's bill ,: for elimination of private- capital from railroad ownership, wuj the demand by "- Mr. Plumb that congress make a thor- - ough investigation of the matter, so . the American people may know to ,.:"what extent it is sought to subject them to exploitation," under the other ;. plans proposed for future disposition of the railroads. ; NO INTIMATION OF ' COMMITTEE COURSE. There was no intimation as to what course the committee might take in re-gard re-gard to the request for an invesrtga--tion. Chairman Eseh indicated that to go into the charges would be like trav-" trav-" eling over old ground, as they had been threshed out long ago. Plumb told the j ' committee that he either had the evi- j ' dence to support every charge or knew 1 ' where it could be obtained. j r A. B. Garrci-jn, former head of the I ; Order of Eail"ay Conductors, declared ; .with utmost fiankness that if a vote j were taken tod;iv the country probablv would reject org-iized labor's plan. He . explained, however, that this would be j - .-due to general suspicion against new thing?, and he predicted that it would be indorsed and adopted in the not distant future. The opinion was expressed by Mr. Garretson that there had been no fair i test of government operation of rail- j roads, because the railroads since being taken over had been operated by of- j fieiais who were opposed to government j ownership and wanted to demonstrate that it was not best for the country. CONCLUDE REARING ON PLUMB PLAN. V.'ith the filing of Plumb 'b charges,! the eoirimittee concluded hr-anns on j his plan for public ownership and era- : , vloyze operation of tho railroads, and viill take up later the pi&ns to be of- j fered by security holders and railway j executive?, both of which, labor of- ! Ccials testified, are more radical than j that framed by Mr. Fiurnb and indorsed ! by the brotherhoods. It probably will j be a month before the committee can ! maJ:e a final report. I Mr. Plumb charged further that "these ' ra ! ". r o a :-; , which have f, o i r. r: r e a f. e '1 their I-rorer:y Investment at the expense of :''.).'- s.-e r.f)V r-rrr '':)' r in v.ho'e i (Continued on Page 3, Column 4.) I ACCUSED OP HAVING j EXPLOITED RAILROADS; (Continued from Page Two.) j or !n part by the Morgan interests, the ' Rockefeller interests and the Gould In- terests. "On behalf of all of the employees o , these systems of transportation and the public." said Mr. Plurnb, "we demand . that congress shall make a thorough in- i vestigation of the charges) herein set forth that the American people may know , to what extent it is sought to subject ' them to exploitation under the plans ' proposed to this committee of congress, plans which would make lawful the fix- ' ing of rates based on the now unlaw- , ful aggregate property investment ac- I count3 of these systems." I RAILROADS NAMED BY WITNESS PLUMB. j Specifically, Mr. Plumb charged that the ; Chicago, Burlington & Quincy, the Chi- j cago, Milwaukee & St. Paul, the Chicago , : &. Northwestern, the Great Northern, the 1 Illinois Central and the Southern Pacific railroads gave away in bun uses to their j stockholders more than $250,000,000 during I I the ten-year period mentioned, and 'that the actual dividend disbursements on this 1 excess capital for the year 1913 alone j amounted to more than $11,000,000." He also alleged that the Pennsylvania, Baltimore & Ohio, New York, New Haven & Hartford, New York Central & Hudson River railroad, Boston & Maine and the Delaware & Hudson company "issued new stock for $101,000,000 less than its market mar-ket value, or gave away this enormous amount in bonuses to stockholders and that the dividends paid on these fictitious fic-titious stock Issues in 1913 alone amounted to over 54,317,000." Plumb's statement to the committee embraced eleven separate charges. The first was that the nearly completed survey of the entire transportation system sys-tem contained In the reports of the valuation valu-ation division of the interstate commerce commission show ed that the actual cost of reproduction new was but 50 per cent of the aggregate property investment accounts ac-counts of the railroads. HINTS AT MANIPULATION BY RAIL MANAGERS. Another charge was that when the cost of reproduction new approximated in amount the investment account as stated to the commission by tiie carrier it would bo found in most instances that this approximation ap-proximation was because vast surplus earnings had "been expended on or ploughed into the property in such way that the actual cash investment, including includ-ing the surplus earnings, has brought the level of cost of reproduction new up to the property investment account." Investigation of a recent statement by President Underwood, of the Erie railroad, rail-road, that payroll expenses of the railroad rail-road had been increased under federal control to build up a political machine, would show. Plumb said, that if there had been wastefulness of money in swelling swell-ing payrolls, "it had been at the instance of railway managements to make- the expense account under government control con-trol appear extravagant and wasteful." Plumb also charged that when the roads were taken over by the government they were in sucli depleted condition as to maintenance and repairs that it had required re-quired "hundreds of million of dollars advanced ad-vanced by the government to place them in effective operating condition." Another charge was thai in making the expenditures the railroads, "operated and controlled by men under the influence of Wall street directorates" spent vast sums in unusual expenditures for maintenance main-tenance and supplies to place the properties prop-erties in perfect operating condition against the time of their return to private pri-vate ownership. "I charge." continued Plumb, "that the records disclose that an area of land exceeding 296,873 square miles had been given by the United States government and the various states to our railroads to aid in the construction of our national highways," adding that "the value of the grants so made have either been appropriated appro-priated to the private property of the railway promoters or they have been capitalized as a part of the value of these proper! ies upon which the gran lees now demand of this congress the right to exact ex-act returns from the public'' Chairman Eseh said after the statement state-ment that some of the charges had been covered in previous investigations. T le did not indicate whether the committee j would ask authority to make an invest!- i gation. |