The news & observer., 1898-09-02
THE RALEIGH AND GASTON
SOME lNTERES TING FACTS RELATING TO
IFS HISTORY.
Or. Abbott Says its Income is Nearly Quarter
Of a Million Year. Reduction
of Rates,

ton Railroad came UP before the Railroad
Commission at It's meeting Tuesday, DR.
Abbott read the following, setting forth
his views on both the passenger and
freight rate question as il relates to this
particular road;
"l'his, 10 mo. ~ the most interesting
case which we have had before us, from
thc fact that we have been afforded
facilities io learn more Of the history
0f This road than we have of any other
road | have succeeded in obtaining q
copy Of the reports of this railroad
from thc year 1870 up to the year 1897
| have FOUND them interesting reading
as giving information bearing upon the
case. and | win call your attention to
few striking facts bearing upon the
question OF rates making.
The total earnings OF the Raleigh and
Castor Railroad, from 1870 10 1890 lii
elusive, amount to SS,091, ,G36.T5. The
average expense of operating during
this time was 53 per cent, leaving the
net earning for that period S3.S02. .469.G1
which is 13 13 per cent. per annum OF
it's capital stock. Its officers claim, by
recent statement. to have spent in bet
termentS during this time, 81. .3S7. .017.93
Deducting this from the net earnings
we have left an annual income of $115.-
020,60, which is T.66 per cent. in its cap
ital stock.
The average annual earnings from
1891 to 1897, inclusive, were $540, 60. IA
The average expense of operating dur
ing these years was 66.2S per cent. The
average annual profit from operation
was S1S7,470.05. This is II per cent. peI
annum on the capital stock.
Seventeen per cent. of the earnings Of
the road was put into betterments from
1870 to 1890, while only 3 13 per cent. OF
the earnings was put into betterments
from 1891 to 1897.
THE total cost of operation and bet
terments for the two terms was, how
ever, about the same; the cost of op-
Grating from 1870 to 1890 being 53 pei
cent. and betterments II per cent, max.
ing n total of 20 per cent: the cost of
operation from 1891 to 1897 being GG. p
per cent and bettcrments Is per cent,
making Il total of G9.G1 Is per cent
leaving not less than 80 per cent of its
gross earnings as Il net profit to go "a
it's stockholders.
'The gross earnings from 1870 to 1897,
inclusive, were $11 SIC, ,201.71: 30 per
cent. of this amounts to S3.502 500. 80,
which is more than twice the amount Of
the original capital stock.
Il he total earnings from 1891 to 1897
were S3. TS4, ,565.02, 30 per cent of which
is 81, 135, ,36950, giving $162, 2,095.G4 each
year, which is 10.S per cent. per annuni
on its capital stock
'"This road seems to have paid div
dends ON its capital stock until abor:
ten years ago. Since that time it has
been carrying an annual cash balance
of from 100000 to more than 81 ,OOO,UU0
the cash balance for the year 1897 reach
ing the enormous sum Of STAG, 6,959.41. |
will not comment on this here, rs
am not certain that ii il factor in
rate making An the above. however
is Of interest as showing the earning
capacity of this road for the past thirty
years. In rate making we have to con
slider cost aud value as well as earn
ings.
SIN reply to this complaint, Mr. ST
John has stated that the 81 100000 re-
ceiyed from the Raleigh and Castor
bonds was all expended on the Raleigh
and CASTOR road. Their chief counsel.
Judge Watts. also stated, with great en-
phasis, to this Board. that every dollar
of these bonds was expended in the con
structon and equipment of the Raleigh
and CASTOR Railroad. In addition to this,
we have the sworn statement of their
treasurer that from 1873 to 1897, inclu-
sIve. there was $1,513, 1868 expended
from the earnings of the road in better
ments. This. added TO its stock, 81,
100000, makes the total cost of the Raj
eigh and CASTOR road nincty-seyen miles,
$4.213, 16J.97--or $43, 434a70 per mile.
'"The total income from operation, as
by their last report is 5000 024.40. De
duct for taxes $13,G26.62 and we have
S206,397.7S. which is 6 per cent. on bot
| So. .439 .963, which is $773. 20497 less than
the officials say the road cost. So
that if these statements as to the cost
of the road are correct, and all the
statements are sworn to, and we are
| willing for the company to earn per
cent on the cost of its road, we must
raise instead of reduce rates; for a
rate that will not pay per cent. net on
cost Of road is unreasonably low.
Early in my career as a Railroad
Commissioner it became evident to me
that Governor Russell had entire con
fidence in the Seaboard Air Line Off
cials. for he sought their counsel and.
on | found that my present associates
had the same, or even greater conf
| dence in them. This naturally strength
ened my own confidence, and | accept
ed their reports as absolutely true. But
Governor Russell's counsel, Colonel
Hinsdale, comes in and states to this
Board that not one dollar of the 81 200
600 bonded indebtedness was put into
the Raleigh and Castor Railroad. In
vestigation confirms Colonel Hinsdale's
statement. Finding one statement in
correct, we naturally question the cor
rectness Of the other to w.t. that 81
513, 1663S from the earnings of the road
was expended in betterments. All agree
however, that the $1,5O0000 received
from the sale of the Raleigh and Castor
| stock was expended in the building and
| equipping of the Raleigh and CASTOR
road, and also that the road owes S191,
ooJ.33 equipment obligations, making a
total of 1901 .S3333 upon which the
road is entitled to earn at least g per
cent The income of the Raleigh and
CASTOR road for the year 1897 from oper-
| alton was $220,O2440. This does not in
clude the income from other sources
which amounts to about $1,000 Deduct
| interests on the capital stock and on
| indebtedness for eQuiDment and taXas