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IOWA DSPARTMENT OP AGRICULTURE 



in the past ten years; Mr. Rea admitted it on the witness stand under 

 oath. During the same time they have only put in $150,000,000 out of the 

 sale of Gecurities. In other words, the American people have built over 

 twice as much of the property of the Pennsylvania Railroad System as 

 the owners themselves have built. In addition, they have paid an annual 

 dividend of six per cent, and Mr. Rea said that was a reasonable amount. 



Mr. Dawson: Are all those betterments capitalized as they go along? 



Mr. Thorne: They are put into property investment, so-called. Prop- 

 erty investment is the figure that is being urged by the railroads as the 

 basis of their advance, and they are trying to get it all in as now being 

 appraised by the Interstate Commerce Commission. 



Let me state what other large eastern railroads earned last year. Here 

 Is a table which tells the story: 



Central RailroaS of New Tork 



Delaware and Hudson 



Delaware, Lackawanna and Western 



Lehigh VaUey 



Xew York Central 



Norfolk and Western 



Pennsylvania Eailroad 



Reading Railroad 



Chesapeake and Ohio 



Buffalo, Rochester and Pittsburgh.. 



Lehigh and New England 



Rocking Valley 



Lehigh and Hudson River 



These roads as a whole, handling 72 per cent of the traffic in the 

 eastern district, made 13.88 per cent on their capital stock and 6.68 per 

 cent, or almost 7 per cent, on their book value last year. There are poor, 

 weak sisters in the eastern district, but are you going to advance freight 

 rates in order to' help the roads handling approximately one-fourth of 

 the traffic? If it is necessary to operate those weak sisters, a government 

 loan would be far better. 



I have here an analysis of the earnings month by month. It shows what 

 I stated a while ago. We prepared these and had the exhibits photo- 

 graphed. Here is another monthly statement showing that their net 

 revenues were greater each month since June 30, 1917, than during any 

 other year in their history except 1916. 



Now we had this interesting development last spring. The Interstate 

 Commerce Commission made an estimate of what the net would be for this 

 year, and the railroads made an estimate, and we made one. The com- 

 mission, with those facts before it, rendered a decision last spring. Thp 

 Interstate Commerce Commission adopted a certain method of estimating 

 the net income during the balance of the year. I will not take the time 

 to describe the basis; I will simply make this statement to yoa: Using 

 precisely the same basis, the operating income per mile of line (above 



