The CHAIRMAN. That is because of the fact that if the trunk line did not wish to use this cross line, which is the line you are speaking about, they would have to go to their terminal and common junction point and then come back over the same direction.

Mr. YOUNG. Precisely.

The CHAIRMAN. Making a circuitous route.

Mr. YOUNG. Yes, sir; and resulting in a great loss of time.

Mr. SIMS. Does this refer to carload shipments or broken ship

ments.

Mr. YOUNG. I think this refers to carload shipments, but I do not know but what, to some extent, it would also refer to broken shipments, especially at the regular terminals. If it came to Superior, Wis., where the Chicago, Milwaukee & St. Paul and the Northern Pacific run out from that point and use the same terminal, even broken shipments, I imagine, might be diverted.

Mr. SIMS. It would certainly be easy to send carload shipments

across.

Mr. YOUNG. Yes; there is no doubt about that.

As to No. 4, this railroad, the Midland Continental had a net operating loss for 1916 of $10,695. In 1917 that had increased up to $17,671, and in the year 1918 it had increased to $25,546.

I think you will understand that that is a pretty serious deficit for a short-line road only 72 miles long, and either their revenues must be increased by permitting them to get all the business that naturally and properly belongs to them or is routed over their lines or else they ought to be given permission to go out of business without any restrictions.

Mr. WATSON. In what way do the officers raise the money to meet these deficits?

Mr. YOUNG. I have not been informed as to that, but my impres sion is

Mr. WATSON (interposing). You can not have a deficit of $10,000 and $17,000 and then as high as $25,000 without some method of meeting this amount.

Mr. YOUNG. My impression is the chief stockholders have put their hands in their pockets and made it up in the hope that the railroads would soon get out of Government control and that they would have an opportunity to get their rightful share of business.

The CHAIRMAN. Was the line built practically with local capital! Mr. YOUNG. The chief stockholder, I understand, lives at Racine, Wis. I do not know anything as to that except what I have seen in the newspapers. My impression is that it is a Mr. Bull connected with, perhaps, some thrashing machine company or some manufacturing concern.

The CHAIRMAN. Is it the J. I. Case Thrashing Machine Co.!

Mr. YOUNG. Yes; but all I know about that is what I have seen in the newspapers.

I want to say that this particular road serves a lot of farmers and villages living along it, and it would be somewhat of a calamity to those communities to have the road torn up. I am not able to detect anything at all in this letter that looks like a threat. They simply state the facts, and I think you will realize, gentlemen, that when men of comparatively moderate means are running a short-line railroad like this and running in the hole every year that they must face

this question of going out of business unless they can get some relief in some other way.

Mr. DENISON. Did they ever make more than their expenses?

Mr. YOUNG. I do not know. I suspect that before the year I mentioned-1916-they were making a little money, but probably very little because the road is new.

Mr. WATSON. In the case of many of the short-line railroads the stock and bonds are owned by very few, and the large salaries frequently paid to the officers enable them to partly meet the operating expense, and that is the way many of the short-line roads have been maintained. Is that the case with your road?

Mr. YOUNG. I do not know as to that. I imagine the salaries on this road are very meager.

As to the amount of business they might be doing, I think that when you read this letter, which will be in the record, you will find that he states:

We do not receive 60 per cent of the freight routed over the Midland Continental account of diversions via the larger lines.

And I think it is fair to assume that if they got that 60 per cent the road would be solvent or at least self-sustaining, and perhaps pay some small return to the stockholders.

Mr. SIMS. In that connection, Mr. Young, stating 60 per cent without giving any idea of the entire volume of business, does not convey very much information or how much of this loss or deficit is due to an increase in wages and increase in cost of supplies-that letter may explain it; does it or not?

Mr. YOUNG. No; but I am sure they are willing to give you that information.

Mr. SIMS. So therefore you do not know whether if all the routings they asked had been given them they would or would not have had a deficit.

Mr. YOUNG. I gather from the tone of this letter that if they got all the business routed over their lines, that the business would be sufficiently profitable for them to continue in it.

Mr. SIMs. I am in hearty sympathy with the object and purpose of the letter, but it does not seem to be definite as to just how much of this deficit, or loss, has been due to increased cost of operation and how much due to lack of business being routed as stated in the letter.

Mr. YOUNG. I do not doubt that Mr. Stebbins would have given that information if he had at all expected it would be desired by the committee.

Mr. SIMS. The short lines, I think, generally, have complained that the increase in wages with them was relatively greater than with the trunk lines due to the fact that they were not paying as high a scale of wages before the other lines were taken over by the Government, as they have been compelled to pay since in order to hold their men.

Mr. YOUNG. I thank the committee very much for the courtesy of being permitted to speak here this morning.

The CHAIRMAN. The committee is obliged to you, Mr. Young.

The CHAIRMAN. Mr. Brinson, the committee will be glad to hear you now.

STATEMENT OF MR. GEORGE M. BRINSON, REPRESENTING THE MIDLAND RAILWAY, SAVANNAH, GA.

The CHAIRMAN. Give your name and address and whom you rep

resent.

Mr. BRINSON. George M. Brinson; the Midland Railway; Savannah, Ga.

The CHAIRMAN. You may proceed and make your statement without interruption.

Mr. BRINSON. Mr. Chairman, so far as that goes I am not anything of a speaker. I can not stand up and think to save my life, and never could. This is just one thing I have not done. I have done everything else in the world I could for my little road except come here and talk to you, and I felt I ought to do that, whether I create any impression or not. I felt I ought to come here and tell our experiences during the war.

I have got 88 miles of railroad running out of Savannah in a northwesterly direction; that is to say, we run to a point known as Stevens Crossing. We completed it there along about the time this Government went into the war, or a little after. We were not able to get equipment, especially locomotives, during the war on account of the fact that during the war we could not get locomotives at all, and since the war the price has been so high that we could not afford to pay for them, and we have been in a deuce of a fix, with lack of equipment and the abnormally high prices for labor and fuel and supplies. That has just about broken our backs. We are almost strictly a local proposition running out into a new territory; pioneering, as it were. We have three competitive points, and while we have lost a little business to those points by reason of freight being diverted from us, that has not been the worst trouble with us. For instance, Pineora is a junction point with the Central Railroad. Statesboro is another junction point with the Savannah & Statesboro and Central Railroad, and Garfield with the Georgia & Florida. More or less freight has been diverted from us, but that is not the worst of it. The worst of it with us was the lack of equipment. We did not get started quick enough before the war began, and then we could not get it during the war, and since the war the prices have been so abnormally high until we did not feel as if we could stand it, and we have been and are in a pretty close condition. That just happens to be our fix. If we had been equipped before the war began it would not have fallen quite so heavily upon us, I do not believe, although we would have lost money. Just as sure as the sun rises in the east and sets in the west that day we have lost money and there is no help for it.

It looks to me that operating a little railroad is no place for preachers' sons. I do not believe there is ever going to be any chance again for little railroads in this country, and it seems to me that some plan whereby the little railroads at some value could be taken over and put into some of these big systems and let the little fellows out-it seems to me that is about the only hope I see for the little railroads in these United States. I am not a quitter. I own this railroad. It is about all I do own, and I personally would like to get something out of the wreck, but I do not see how I can do it

as the matter stands. Unless rates are raised and unless conditions are made more tolerable for the short-line railroads, I do not see how any of them can get along unless it may be some railroad that drags empties up to a coal mine and lets them run down by gravity. Those people might get along because they have a cinch, but as for the little railroads who go out and do a local business pure and simple, whenever these railroads are turned back and big railroads, frightened to death at conditions-heretofore, under the arrangements that little railroads were able to make with the big railroads they connected with, they kind of looked upon them as a big, strong, able brother, you know; now, when it is "dog eat dog and every fellow out for himself," the little railroads, in my judgment, are simply going to be overwhelmed. They are going to be "kivered up," so to speak. There is not going to be anything left of them.

Mr. SIMS. What is your suggestion, in a practical way, as to what should be done in the way of legislation?

Mr. BRINSON. I believe that Senator Cummins's plan of putting the railroads into zones or into large systems is about the only way that the little railroads will ever get anything for the money they have invested in them. Maybe I am too pessimistic, but I have had two years and a half of it, and of course, every ewe thinks her lamb is the whitest, and every man thinks his troubles are the greatest, and I may be unduly pessimistic.

Mr. SIMS. You have had experience, though, on which you base

that statement.

Mr. BRINSON. I have; yes, sir.

Mr. DEWALT. Was your railroad taken over by the Railroad Administration?

Mr. BRINSON. That reminds me, if you will excuse me for the interpolation of this statement, of Mr. Windom, who is a mighty good fellow, president of the Central Railroad and now Federal manager of the Central Railroad; Windom was just kind of laughing at me about being taken over by the Railroad Administration under a short-line contract, and I said, "Windom, the difference between me and you is that you are in the bosom of Uncle Sam, and I have a slipping hold on his left hind leg." That is about the way of the short-line contract.

Mr. DEWALT. That does not answer my question. Were you taken over?

Mr. BRINSON. Yes, sir. I thought you would understand that by what I said. We were taken over under a short-line contract.

Mr. DEWALT. Under that contract, were you not able to meet expenses?

Mr. BRINSON. Oh, no; the contract, if I may say so, really meant about this, in fact, where the big railroads did not need the cars and they were standing about on sidings, not in use, we could get them. When the big railroads needed the cars they would say to us, "We are 300 or 500 or 1,000 cars short to-day and we can not give them to you." The purpose and intent of that contract, as I understand it, was that we were to share and share alike. It has not been true in our case. We have not shared and shared alike. We have got them just when they did not need them.

Mr. SIMS. Mr. Brinson, you present a case that is very serious and one that should be considered by the committee. If existing short

lines can not continue to operate without loss, how can we expect to have any new construction of the same character of lines to open up new territory.

Mr. BRINSON. You never will in these United States.

Mr. SIMS. As you live in the South, and I do, too, we have a similar knowledge. Does not the future development of the South, south of the Ohio and east of the Mississippi Rivers, largely depend upon new construction of feeders or short lines for the development of localities where no trunk line is likely to go or to be hereafter constructed.

Mr. BRINSON. Yes, sir. In other words, the short-line railroads. are pioneers. They go out into the new territory where the population is thin and where taxable values are low. They build up the country and they enable the people to increase their property valuation and to my mind, although it sounds a little ridiculous, that is the reason I am in the short-line railroad business. I built three or four little railroads, and on each one of them I came out fairly well, but I built just one too many, just one.

Mr. SIMS. How can we expect anyone throughout the South to put any capital into a new enterprise of that sort if those already in existence can not maintain themselves. That is the saddest feature of all of it.

Mr. BRINSON. I can not conceive of how any man under cond itions as they now exist could be foolish enough to go ahead and build a new railroad into new territory, unless it were necessary for the individual to build the railroad in order to get his own stuff out or something of that kind; that is, build a short line to a sawmill or something of that sort where he owned a lot of timber or a lot of coal, and build what you might call a tap line.

Mr. SIMS. Or a plant facility.

Mr. BRINSON. Yes; exactly, but what I started to say just now that is the reason I am in this business now, and for a hard-headed business man to say it, it might sound foolish to you all, but to my mind there is nothing in the world like building a railroad out through a new territory and seeing it grow and prosper and feeling that you helped them to do it. That is the kind of thing my wife does not understand.

Mr. SIMS. Is it your theory or your thought that we can, by legis lation, force the trunk lines connecting with these short lines to purchase them and pay their property value, or how do you expect to secure the sale of such roads to the trunk lines? What power have we got to force that, especially as they are already losing proposi tions?

Mr. BRINSON. If you have not the power-and I do not know whether you have or not-because I do not know much about the legal part of it; in fact, I do not know anything. You see I have had my nose so close to the grindstone all my life that it has been like a cat chasing its tail, going around in a ring all the time, but if there is no balm in Gilead, if there is no way to help the little railroads, then they are in a sad situation.

Mr. SIMS. Could we or not authorize a rate over the short line that would, of itself, permit the short line to live, if the rate was not so high that it would practically prevent the use of it by the shippers?