RAILROAD REVENUES AND EXPENSES HEARINGS BEFORE THE COMMITTEE ON INTERSTATE COMMERCE SIXTY-SEVENTH CONGRESS FIRST SESSION PURSUANT TO Senate Resolution 23 DIRECTING THE COMMITTEE ON INTERSTATE COMMERCE COMMERCE COMMISSION OCTOBER 13 AND 15, 1921 Volume III Printed for the use of the Committee on Interstate Commerce WASHINGTON GOVERNMENT PRINTING OFFICE 20): The C -dor RAILROAD REVENUES AND EXPENSES, THURSDAY, OCTOBER 13, 1921. UNITED STATES SENATE, COMMITTEE ON INTERSTATE COMMERCE, The committee met, pursuant to call, at 10 o'clock a. m., in room 410 Senate Office Building, Senator Albert B. Cummins (chairman) presiding. The CHAIRMAN. The committee will come to order. The chairman feels that he should say that in view of the death of Senator Knox the meeting to-day will have to be a very short one; and that, no doubt, accounts for the failure, as I am informed it does, of some of the members of the committee to be here. We have met this morning to begin, at least, the testimony of Mr. Warne. Mr. Warne, will you take the chair? Mr. MCNAMARA. Mr. Chairman, I would like to make a brief introductory statement if there is no objection. The CHAIRMAN. The committee will be glad to hear from you. STATEMENT OF MR. P. J. MCNAMARA, VICE PRESIDENT AND NATIONAL LEGISLATIVE REPRESENTATIVE OF THE BROTHERHOOD OF LOCOMOTIVE FIREMEN AND ENGINEMEN, 101 B STREET SE., WASHINGTON, D. C. Mr. MCNAMARA. Mr. Chairman and members of the committee, it being customary for appropriate personal information to be presented about a witness appearing before this committee in order that the members may be able to judge of his qualification, I wish to say that Mr. Frank J. Warne, from 1894 to 1902, was a student and, in the later years of the period, an instructor in the Wharton School of Finance and Economy and the Graduate School of the University of Pennsylvania, specializing in economics, finance, and transportation. The degrees master of arts and doctor of philosophy were conferred upon him by the University of Pennsylvania, the former in 1898 and the latter in 1902. He was senior fellow in economics at Pennsylvania in 1902, and from 1903 to 1906 research fellow in economics at that institution, serving also during these three years as editor of the Railway World. Since 1910 he has been a practicing economist and industrial counsellor, with professional offices in Washington, D. C., specializing in transportation, industrial, labor, statistical, and like economic problems. In 1912 he served with Prof. Frank H. Dixon, now professor t of ds of economics in Princeton University, as one of the two statisticians to the Federal Board of Arbitration appointed by the Pre the United States to consider and decide the wage and labor of the Brotherhood of Locomotive Engineers in its concerted movement against the railroads of the eastern territory. In the following year he represented the Order of Railway Conductors and the Brotherhood of Railroad Trainmen in the preparation and presentation, of evidence before the Federal Board of Arbitration appointed by the President of the United States under the Newlands Act to settle the concerted wage movement demands of these two brotherhoods upon 52 of the more important railroads of the eastern territory. In 1914 he represented bituminous coal shippers of Pennsylvania and Ohio in the preparation and presentation of evidence and as an expert witness before the Interstate Commerce Commission in opposition to the increase in freight rates asked by the railroads of the eastern territory, this case being known as the Five Per Cent case. In 1915 he was an expert witness for bituminous coal shippers before the Interstate Commerce Commission in the Lake Cargo Coal Rate case and the Fifteen Cent Advance Rate case. He has been consulting economist to various State railroad commissions on matters of railway finance and operation, and has appeared as a witness on railway transportation problems before various committees of the House of Representatives and the Senate of the United States Congress. In the 8-hour day movement of all the railway employees engaged in the operation of trains against all the railroads of the country in 1916 he represented the Order of Railway Conductors and the Brotherhood of Railroad Trainmen in the preparation of evidence in support of their contention for shorter hours of work, and was the statistical represent fative of these two organizations on the 8-hour day commission appointed by President Wilson in 1916. Additional evidence of the fitness and qualifications of Dr. Warne to appear before this committee in its examination of the vital and pressing transportation problems is indicated in the fact that he is the author of the following books on economic subjects. The year, in parentheses, is the date of publication: Railway Operation and Finances (1913); Exhibits Before the Board of Arbitration in the Concerted Wage Movement of Conductors and Trainmen (1913); Intercorporate Railway Stock Ownership (1914); Interlocking Directorates of the Railways of the United States (1914); Exhibits Before the Interstate Commerce Commission in the Matter of Rate Increases (1914); Railway Tonnage (1915); Railway Mileage (1915); Railway Revenues (1916); Coal Production and Shipments (1915); Lake Cargo Coal Shipments (1916); Ohio Interstate Coal Rates (1916); Railway Rates on Cement (1917); Railway Revenues, Expenses, Income, and Surplus (1917); Cars in Railway Freight Service (1917); Factors in Railway Operation (1917); Rate Increases in Official Classification Territory (1916); Warne's Elementary Course in Chartography (1917); Warne's Book of Charts (1916); Chartography in Ten Lessons (1919); The Slav Invasion and the Mine Workers (1904); The Coal Mine Workers (1905); Immigration and the Southern States (1905); The Immigrant Invasion (1913); The Tide of Immigration (1916); Industrial Relations (1920); The Workers at War (1920). The CHAIRMAN. Mr. Warne, we are conducting this examination under oath. Will you be sworn? Mr. WARNE. Certainly. TESTIMONY OF MR. FRANK J. WARNE, 302 MILLS BUILDING, WASHINGTON, D. C. (The witness was duly sworn by the chairman.) The CHAIRMAN. Mr. Warne, will you please state your name, occupation, and relation generally to this subject? Mr. WARNE. My name is Frank J. Warne. For the past 10 years or more I have been conducting professional private offices in Washington having relation to economic, industrial, labor, transportation, and statistical problems. Mr. McNamara, in his summary, gives the cases in which I have appeared as an expert witness before the Interstate Commerce Commission and before boards of arbitration and committees of Senate and House, and also as representing various State railroad commissions in a consulting capacity. I do not know that it is necessary to repeat what Mr. McNamara has said in his state ment. The CHAIRMAN. You are familiar with the terms of the resolution under which we are proceeding? Mr. WARNE. Yes. The CHAIRMAN. You will understand that its general purport is to ascertain in the first place whether the railroads have been economically and efficiently managed and operated; and then, whether in the future there are ways in which economies can be secured so that the high freight rates, or the rates now prevailing in the country, can be reduced. Mr. WARNE. Yes; I understand that. I would like to state, Mr. Chairman and gentlemen of the committee, that Mr. Carter, president of the Brotherhood of Locomotive Firemen and Enginemen, and who is also in charge of this presentation of evidence on behalf of 400,000 employees engaged in the operation of trains on all the railroads of the United States, is very desirous of appearing personally before your committee in the capacity of representing the four trainmen's brotherhoods. He has prepared a statement, which he has handed to me on the understanding that if it is possible after I finish my testimony he will appear personally, and if that is not possible your committee will be requested to give its consent to my reading his presentation, with the further understanding that he will hold himself ready for cross-examination at any time. The CHAIRMAN. That will not only be possible, but the committee will be very glad to hear Mr. Carter personally, as well as any others who represent the brotherhoods. Mr. MCNAMARA. Mr. Chairman and gentlemen of the committee, I will add that it is the expectation of the four executives of the four railroad brotherhoods that they will be here to make statements, or that statements will be made through their representatives. The CHAIRMAN. It was understood in the beginning that they would be before the committee, and, as Mr. McNamara may recollect, |