The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1905-05-09
PROFITS OF |. & n.
NOT EXCESSIVE
Milton H. Smith Writes Rail-
road Commission
MUST HAVE FAIR RETURN
Says Low Earnings of 1894 Are Not
Fair Year With Which to
Make Comparison
In 1905.
MUST HAVE FAIR RETURN

Montgomery May S.-(SpecaL)-In
letter addressed to the Alabama railroad
commission, President Milton II. Smith
has given number of figures regarding
the value and financial condition of the
properties of the system, end the report
that it had been receiving excessive reve-
nues for service rendered. The full text
OF the letter follows:
Louisville and Nashville r. r. Co,
Presidents Ice,
Louisville Ky, May g. 1906
Alabama Railroad Commission, Montgom-
cry, Ala:
Gentlemen-At the hearing on yesterday
inquiries were made as to the financial
condition of the Louisville and Nashville
Railroad company, the tenor of which
was to the effect that it was receiving
an excessive revenue for services rem
dered. Attention was called to the fact
that the gross earnings for the year end
ing June 30 1S94-2955.9S miles-were $751;,
97i, 336.93. and Tor the year ending June
80, 190i-36}LS niles 36 943 1872. 70.
1t is, | think apropos to call your at
tention to the TACT that the earnings for
the year ending June 80, 1S93-2955.5 miles
were $22. 4O3, 639.25, thus showing a decrease
for the year ending June 80 1894, of SO, AZ
302.32. No dividends were paid to stock
holders from result of operations of that
year or for several years thereafter, and
to avoid default it was necessary to re-
duce the pay of all of the officers, en-
ployes and agents of the company 20 and
10 per cent, which reduction was continued
in effect for between five and six years,
such officers agents and employees 10y
ally serving the company for reduced
compensation, and the stockholders during
the same period receiving no return on
their Investment.
During this period of depression, the
amount expended by the Louisville and
Nashville Railroad company for material
and supplies was reduced to a minimum.
The operating expenses and taxes for the
year ending June B. 1894, amounted to
$12, 46I 143. &c. and for the year ending June
80, 1904, $26 063, PAS 20, which is conclusive
evidence that the increased prosperity
of the company as evidenced by its i'm
proved financial condition, has been par
ticipated in by the communities which 1t
served The increase in revenue is alto
gether due to increase in traffic such in
crease in freight traffic having been Sc
cured at a material decrease in the aver
age rate per ton per mile received for
transporting property. The enormous in
crease in traffic is conclusive evidence
that the rates for the transportation or
property have been adjusted so as to
promote and create traffic, which would
not have been the result had they been
excessive.
| also invite your consideration to the
fact that the Louisville and Nashville
Railroad company employs a very large
number of citizens of Alabama, and that
such citizens are of the best element
officers agents and employees of the com
pany must be sober. intelligent and indus
trious they must pay their debts. Neces-
sarily their example exercises beneficial
influence in all communities served by the
company. They have the respect of other
citizens, and are entitled to the same
consideration as other citizens. the only
distinction being that they are not per-
mitted to hold public office while In the
employ of the company.
1t is hoped that contingencies VIII not
in the near future, render a cessation of
dividends to stockholders. or a reduction
in the compensation paid employees, but
that stockholders may continue to receive
a reasonable return ON their investment
and employees reasonable compensation
for services rendered. / remain, very re-
spectfully, NJ. Fl. SMITH,
President.