The Birmingham age-herald., 1903-07-05
TABLE 8.

Frisco l leo pTONs M. and O...... ........ ........ prox. M, J. and K. G.. .......... l-3 prox. N, C. and St. L..... ........ l l-s prox. Atlantic Coast Line ...... .. l-3 prox. seaboard Air Line ............ s4 prox. Southern ... ...... .... ...... 7-l2 prox. Western of Alabama ....... 2 prox. N. of Alabama ...... .......... Ia prox. M. and B.... ...... ............ 4-l5 prox. c. Short Line ...... ...... prox. | B. and Att. ....Deficit of S9,o62 prox. In. S. and N......Defieit of AIS prox. Chat. Southern ....Deficit of 4,eeo prox. Cost of Local Business 10 Per Cent
 Higher.
 It further appears beyond controversy that the cost of doing local or domestic business Is greater than the cost of inter- state business The evidence as to. this additional cost Is varying, but we can safely adopt the percentage sanctioned by the Supreme court of the United States in the Ames case, namely ten per cent for the additional cost of local business. This rule neeessitates the further reduc- ton of the percentage of earnings upon domestic business, shown in table three. by ten per cent, and we have then arriv- | ed at the basis which the law and the courts declare to be the correct one for the determination of the action of this 1 commission.
 But were we permitted to view the case i in the more favorable light of the earn l ings from the combined interstate and l instrastate business, the question would 1 still arise as to whether those earnings reveal that the railroad companies oper- | ating in Alabama are deriving from their business more than "a fair and just re- turn on their value, including appurten- anees and equipments"
 | tf5y hot while the average capitalization per mile | of railroads in the United States as a small returns. The larger the capitaliza- l 900 .O0) dollars, the highest capitalization In Alabama Is that of the Southern Rail- l way company at about sixty-one thous- and ($61, 900 .0O per mile, upon which 1t l earned for 1902 one and three-fourths per cent upon its entire business, and about seven-twelfths of one per cent upon It's domestic business.
 What Is Fair and Just Return2 As to what is "a fair and just return" there may be and is some latitude for va- riation of opinion. One phase of the ques- ton which can not be ignored is, what in- terest Is capital legally permitted to earn l in Alabama It is well understood, how ever. that large capital is satisfied with companies doing business in this state
  ed The funded debt, stocks and bonds of railroad companies, representing their cost l of construction, Improvements, equip Ements, earning capacity, the amount nec- essary to reproduce the road, and the ac- | tual value of all Of the property used for the convenience of the public, mounts | easily into the millions, and 1t cannot be contended that this amount of capital should reasonably expect to earn a per I, ftfaf and FaTn or for smaller sums to earn.
 Only 2 Roads Earn Over Half Legal ln- terest on All Business in Alabama. l With the exception of two roads, how ever. that of the Louisville and Nashville, and Western of Alabama, no railroad within this state, as 1t appears from the above tables one and two, earned for the fiscal year 1902 upon it's entire business in the state more than one-half of the legal rate of interest which obtains in Alabama. Only five others show an earning of as much as one-half of the legal rate of in- tcrest or per cent A few show actual deficits and the remaining earnings vary from the fractional part of per cent to less than per cent.
 Per Cent Highest Earning on Do
 mestic Business.
 With the interstate business eliminated from consideration, as this commission is required to do under the law governing It. 1t will readily be seen that the above earnings, where any earnings at all re- main, will be reduced in the highest in- stances to per cent, or just one-fourth of the legal rate of interest in Alabama, and this commission does not hold that such an earning Is above the flair and just return" guaranteed to the railroad companies doing business In this state by the constitution of the United States, and the state of Alabama, as well as the act of February, 1903, clothing us with the powers which we possess, and to which we must look for guidance.
 Especially would this seem 10 be the proper ruling at this time, when 1t is recalled that the above earnings are taken from the records of admittedly the most prosperous year in the history of the rail- road companies in this state, namely, the | year 1902. If not exceeding a 2 per cent earning upon the investment, in the high l est case is shown for the most prosper ous year in the life of a railroad, it would be manifestly unjust to establish rate which would yield materially smaller per cent should the present continuing prosperity not endure, and necessarily much smaller per cent under adverse | business conditions.
 Railroads Not Required to Give Same
 Rates in All States.
 | r4 l.. .,a4 -,, feiata,,t o,o,,o,anf nor apcwer