The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1905-05-17
NAME OF ROAD.

rates prescribed and the sum required
to meet operating expenses. These ele-
ments embrace the value of the right OF
way, in county and town, roadbed, main
tracks, second tracks and sidngs, bridges,
trestles freight and passenger depots,
shops and machinery, freight and pas
senger cars, engines. terminal taelhtles,
and all equipments and betterments.
While it is not possible to lay down
any hard and fast rule for the deterni-
nation of value. these are the elements
which common Judgment would suggest
as constituting value. and are sanctioned
by the court in the leading case of Smyth
VS. Ames as being proper considerations
for the determination of values.
Upon this basis the values Of the sew
eral railroads operating in Alabama have
been determined from all the evidence
submitted and the third column of table
No. 2 sets forth these values OF the re-
spective roads therein mentioned.
We now have the data in reference TO
the domestic business in Alabama, from
which may be determined the net result
from such business
Results From Domestic Business.
BY taking. therefore. such portion of
the gross earnings from all business as
the domestic business bears to all business
within this state, we arrive g. gross in
come upon purely domestic business. BY
adding the minimum of 10 per cent for in
creased cost of domestic business to the
percentage of operating expenses to gross
earnings from such business we arrive at
the total cost of doing domestic business.
The difference between the gross income
from domestic business and the total
cost of doing such business yields, of
course, the net profit upon such bus
mess.
Then by taking such portion of the valu-
alton of the road as the domestic bus
mess in this state bears to the whole
business, we ascertain what portion of
the value of each road is engaged in
doing domestic cuisines within this state.
Having ascertaineG the portion of the
value of the road engaged in handling do
nestle business in Alabama. and the net
profit resulting from the handling of
such business in this state, simple
calculation gives us the percentage earned
in Alabama upon local or domestic bus
mess.
the basis suggested and sets forth the
percentage of domestic business to all
business in Alabama, the valuation or cost
of reproduction per mile of the road in
this state, that portion of the valuation
per mile engaged in conducting domestic
business, gross earnings per mile from
such business operating expenses, in
for extra cost of domestic business net
earnings per mile, and the percentag
earned per mile based upon that portion
of the valuation of each road engaged in
the doing of domestic business.
In table No. 2 no deductions have been
made from net earnings for permanent
improvements, nor for reserves for bet
tcrnents. and no deduction has been
made made nor any account taken of in
terest on bonds apportoned to Alabama.
Value Upon Which Domestic Earnings
Are Computed.
Some contention IL made that the entire
valuation or a greater part thereof is
necessary for the conduct of domestic
business in this state. Just as If no inter
state business was done; and that there
fore, the earnings upon domestic bus
mess should be computed upon this ba-
sis. and that for the same reasons a like
proportion of the taxes payable in this
state should be chargeable to domestic
business. 1T Is stated that 1t requires most
or all OF the trackage, most OF the depots.
and a great part Of the power and service
to handle domestic business independent
OF any interstate business Notwithstand-
Ing this, we think 1t a fairer and more
equitable rule TO consider only such por-
tion Of the value of each road as being
devoted to the handling of its domestic
business. as that business bears TO the
entire business. and that only a like
portion of taxes payable in this state
should be ebargeable to domestic busl-
ness. The other view would place upon
earning a return upon the value OF the