Savannah morning news. [volume] (Savannah) 1868-1887, 1884-12-14
MAI. VILLAGES ARGUMENT.


upon the capital stock of 81, 500 900. Surely the
President of the Central Railroad and Bank
ing Company deserves that better things
should be said of his management than he
saws for himself. as quoted in the above ex-
tract.
But this is not all that is to be said in COM
mendatiOn Of this valuable property. Its
earning power is wonderful as will be seen
by the following table of cash earnings made
in the five years under the commissioners
rates and paid to the stockholders:
For the year ending in 1880 cash
paid to stockholders ............. SAP, 1916 90
IN 1851 '..'........ 562,3oS 5O
In 1857 ..........-..... S15.S96 W
In 1888 ...... Observation-Disclosures. $4,000 90
In 1888 Observation-Disclosures. 726.00 90
Aggregating Observation-Disclosures SO, 49,, 63O 81
The estimate in the above table includes the
interest paid on the certificates of indebted
ness.
1t is true that during the year ending Sept.
], 1884, the gross revenue of the Central Rail-
road Company has decreased about 100000 as
compared with the previous year. But an
analysis of the reports will show that this de-
crease is upon through business, over which
the commission has no Jurisdiction, and the
pre- entlaw of the State cannot interfere with,
and not upon the local business, rates upon
which are fixed by the cOmmi sion.
The following statement establishes this
fact:
The decrease in gross revenue in 1884 as
compared with the previous year from
$4,000, while the local passenger business for
the same period increased $30,9l5 80. This
simple statement of facts, taken from the re-
ports of this company now of file in our Of
flee. sufficiently answers the charge made by
its President as above quoted.
PRESIDENT RAOUL'S REPLY.
President RaOul's reply was made on Thurs
day Hes said that Major Wallace had not
quoted him correctly when quoting him as
saying that the Central Railroad Company
was likely to go into bankruptcy in the next
five years. President Raoul stated what he
did say las appears in the beginning of this
artcle) and said: i base my conclusion
upon the following facts and 1gur, pertain
ing to the Central and Southwestern Rail
roads. The commissioners rates were put
into effect during the last three months OF the
fiscal year ended Sept. l, 1880, and though
affecting the earnings but little, l begin with
that year.
EarnIngsover operating expenses 81 ,5oS,652 70
Fixed charges. OBSERVATION-DISCLOSURES. 707, 1893 90
Net for owners ................$ so. 253 70
Which equals about 1898 per cent upon the
capital stock.
Train mileage ......... ........ 3. OPS 400 miles
Earnings over operating expenses. 81 1867 ,O29 %
flAeu charges. ........-.......-.... 1885 80
Net for owners Observation-Disclosures G5IIe3 "a
Which equals about So per cent upon UPON the
capital stock.
Train mileage -. 900. .2,4l7,7O0 miles.
1882.
Earnings over operating expenses.sI, OaI, 289 65
FlXed charges ,0l0,926 so
Netforowners. ...........S 1O2f8I5
Which equals about l4-l0O OF / per cent
upon the capital stock.
IRAN mileage. .....-...... - 525,1S9 miles,
Earnings over operating expenses. s., 269, 1876 81
Net for owners. ...-..........S Dos, 500 %
Which equals about ~ per cent. upon the
capital stock.
Train mileage 49,. ...........2, $50 0lS miles
Earnings over operating expenses ,OO7, 472 80
FlNed charges. .-............... 1910, 45l 90
Net deficit for owners .........$ 62,97S 81
The large Earnings Of 1880 were d1 1e ta t Gs
large crops and the general prosperity of the
country. and to the fact that the reductions
made by the commission were only in opera
| ton during three summer months. The small
| earnings of 1884 were due in part to small
crops but chiefly to the fact that we were
feeling the full force of the reductions in rates
made during the past four years. The tram
| mileage had steadily increased during all this
| time, indicating that the volume of business
| has increased, or the character of traffic has
! changed, so as to involve heavier expense in
| conducting it.
| The fixed charges increased for 1882 on ac-
| count of the issue of certificates of indebted
| ness.
Leaving out the certificates of indebtedness.
| and estimating the percentage OF interest
| earned upon the original capital, the company
| earned:
| In 1880 about ........ .-......... l02a per cent
| In 1881 about Observation-Disclosures. S23 per cent
In 1882 about. .................... 81 per cent.
In 1888 ABOUT. '.''..'''''''''.... % per cent.
| In 1851 ABOUT 3 Der cent.
! Testing the opinion | have advanced nv
! this rule, yet feel no encouragement tomod-
! ify my conclusions.
! wish here to emphasize the fact that these
frtIrn nd Tnyr 1Ol raiR
| based on the operations Of the Central
| and Southwestern Railroads, as rail-
roads only, eliminating all the outside
| property, such as ships on the ocean, railroads
| in other States, and the banking business
| with which it is sought to confuse this ques-
| ton. These properties were here with their
| values and their debts when the Railroad
/ Commission was created. l assume that the
intention of the law was to permit them to
! make fair interest upon the capital expended
upon them without considering the amount of
| property the company owned outside of the
! State. 1t is not question Of the wealth of
the corporation. or of the outside resources OF
the stockholders, but the question is what is a
just and reasonable rate for the users of rail-
roads to pay, and what is a reasonable return
upon capital invested in a specific property
and how to adjust and harmonic these two
necessarily conflicting interests, and TO do
justice to both.
The figures given you by Major Wallace,
showing the net earnings of the roads from
1879 to 1894, are not accurate. The net earn
ings of the roads from 1880 to 1884 are IS I72-
SIS, instead of $6,27S,937 as stated by him.
difference of $l06, 4l9 in favor of the PROPOSE
ton he is seeking to prove. This would make
the earnings average 1924 SOB year,
SLY. 1863 more than the average annual earn
ings for the FIVE years ending 1879. N0twith-
standing the past five years have been
period of uneXampled prosperity to all other
interests, the railroads have only moderately
increased their earnings over the preceding
five years, which were years Of great de-
preston.
Mai. Wallace saws: "The average net reve-
me per annum for the first five years was
Sl,057,254, and that for the second five years
was 81, 255,7S1, which is an increase in the av-
erage net revenue per annum OF over per
cent If Mai. Wallace meant what he seems
to say-that the annual increase in revenue
has been at the rate of per cent. per year
from the average per year of the five years
ending in 1S79-and he was not mistaken,
would not be pleading for the interest of the
owners OF this property to-day. For, to use
his own words, the average earnings from
1875 to 1879 have been 81, 0J7, 2S4 per year.
= ght per cent. per year increase from this for
amount to 81, $685. 81, while IN point of fact
they only amounted to $1007, 472 80.
Maj. Wallace goes into an elaborate state
menJ OF the cash the Central has paid to its
stockholders from the earnings OF the property
outside the state Of Georgia. ] fail to see
what this has to do with the question at issue.
His figures and arguments, however, go to de-
mOnstrate that he, as a Commissioner to exc
cute the law of the State, which commands
just and reasonable rates to be made, is
taking into consideration as an element in
fixing these just and reason bic rates, the
properly owned and operated by the COM
pany outside the State of Georgia,
and that he feels justified in depressing
rates on a railroad in Georgia to point that
makes it impossible for it to earn anything
for its stockholders because that company
owns property outside of the State, the profits
upon which will enable it TO assure its SOL
vency. One of these properties, the Ocean
Steamship Company, has proved to be of in
calculable service in advancing the CONNER