600 IOWA DEPARTMENT OF AGRICULTURE 



its equivalent was used in the examination of Mr. Kruitschnitt on direct 

 by his own counsel. This exhibit shows that there was a deficit appar- 

 ently coming in the final figure; but it further shows — and anybody is wel- 

 come to examine it after I am thru at his leisure — that in order to pro- 

 duce that deficit he had to show the deficit of the' Atlantic coast line 

 steamers belonging to the Southern Pacific. In other words, in order to 

 show the inadequacy of railroad earnings in the west, about which Kruit- 

 chnitt was testifying, he used the steamship lines running around the 

 Atlantic seaboard to the Gulf. 



One thing further it shows, and this I want you to remember, there 

 is one item called "equalization of maintenance," of $5,000,000. That 

 equalization of maintenance does not appear in the year 1919, but does 

 in 1920. If you eliminate that bookkeeping figure of equalization of 

 maintenance, that company earned more in 1920 than in 1919. Second, 

 if you eliminate the Atlantic steamship lines — that is the heading on the 

 exhibit itself, "Atlantic Steamship Lines" — it will further show that it 

 wiped out the deficit completely and made a very substantial net profit. 



With regard to this matter of service and the sources of your infor- 

 mation. We have heard a great deal about the weak lines and the short 

 branches and how hard it is for them to make both ends meet. I hold 

 in my hand some exhibits and an extract from testimony of a nine-mile 

 branch line in Oklahoma that was involved in a case I had this last year. 



In this case the railroads presented a petition to the Corporation 

 Commission to the following effect: That by reason of the present scale 

 of passenger and freight rates, the Sapulpa and Oilfields Railroad is able 

 to maintain frequent passenger and freight service for the benefit of 

 shippers and passengers of said line; that by the continuance of said 

 rates the St. Louis and San Francisco Railroad Company will be enabled 

 to continue said service; but if it is required to reduce said rates to 

 the basis of two cents per mile on passenger traffic and a corresponding 

 rate on freight traffic, the St. Louis and San Francisco Railroad will not 

 be able to continue such service. 



They further got a petition signed by the citizens of Sapulpa, asking 

 that the arbitraries be continued and that the higher rates be granted. 

 Hearing was held before the commission, at which time was presented a 

 petition signed by practically all of the business men of the town of 

 Shamrock, asking for the continuance of the present rates. The attitude 

 of the signers was undoubtedly influenced by the fear that a reduction 

 in rates would also mean a reduction in service. 



During the progress of this little case, which involved a reparation 

 claim of $40,000, I put on the stand the man who built the road, and he 

 swore under oath that it cost $157,000 to build it; that the first year was 

 a boom year, there having been a large development of the land; they 

 paid dividends to the amount of $60,000, and had left $165,000 net. Then 

 they sold it to the Frisco Railroad for $157,000, plus 10 per cent, making 

 $172,000. Cost plus 10 per cent. (Laughter). 



Then I asked him to produce a statement of the balance sheet sub- 

 sequent to the acquisition by the Frisco, and I happen to hold that in my 

 hand. For the year ending December 31, 1918, they made $115,641 net; 



