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

investment in the state and would re-
lieve interstate business of its proper
share of the burdens. 1t is true that in
the case of the road doing both a through
and domestic business, where the COMES
tic business is quite small. the rule oper-
ates to place a very low value upon that
part of the road engaged in the domestic
business, as will be noted in the case of
the Frisco and Mobile and Ohio above
where ii appears that under the operation
of this rule only six thousand, seven hun
dred and fifty CSC. $50. 0W dollars and six
thousand dollars, respectively, per mile.
are engaged in domestic business which
sum- of course, must be considered in
adequate for that purpose. But ON the
whole the rule seems fair one. II Is
assuredly fair in every instance to do
nestle business. and i'm most instances Is
Just To the through business. According
~, table No. as above stated. shows
earnings and losses computed not upon
the entire valuation of the plant, but
~nly upon such portion Of the valuation
as domestic business bears to all bus
mess
1t will be seen therefore from table
No. that the highest earning in Alabama
upon domestic business for the fiscal year
ending June 30, 1904, is 4 $40 per cent.
and that the average earning for all roads
shown In said table Is about Clio per
cent: and that in four instances there are
no earnings at all. but actual deficits.
Are Earnings Excessive?
Are these earnings therefore, in excess
of fair and just return upon the value
of the railroads, their appurtenances, and
equipments engaged in handling the busi-
ness producing these earnings? That IS
/ The vital question to be determined by
this commission in this cause. The legal
rate of interest in Alabama Is per
cent. There is no restriction against prl-
| vate capital earning this rate of in
| terest While large capital Is generally
content with smaller returns than small
i capital. yet all capital invested in le-
, Ultimate business is entitled to its rea-
sonable earnings. Rates should be fixed
with reference to the fair value of the
property used, and service rendered, and
not merely to pay the expenses of bnsi-
ness. That some remuneration should be
J allowed is discate of common Justice
and mandate of the law. We are not
/ without guidance ~ 10 the meassre Of
| earnings allowable in such cases. In the
case of the Louisville and Nashville Rail-
I road company VS.. Brown, 13 Fed Rep.
J 9i6, the court said:
| 'frhe property is entitled to earn some
amount. and it seems reasonably clear to
i me that If entitled to earn something un-
/ der the above conditions, II Is entitled Ia
/ earn under the same conditions Il compen-
! satory amount equal AT least to the usual
! ana legal rate OF interest III tHt ioidHtS
where the railroad is situated
| Nc railroad In Alabama shows an earn
ing equal to the LEGAL rate o. interest
] In this state upon its domestic business.
nor upon its entire business, If we may
consider that All earnings, with one ex-
| eeption as will appear from lie above
table are less than onc-haf Of the legal
rate of interest In this state and range
as low as a fraction of per cent upon the
Investment rpon no reasonable valuation
of the property engaged in domestic bnsi-
ness do any Of the earnings approx
mate the legal rate OF interest in Ala
bama.
While the law limits this ccm-' ssion to
the consideration of domestic business, 1t
will nevertheless be instructive to ascer-
tain what are the earnings and losses
upon all business in the state. namely.
business between points in tn state. BUSH
ness originating ont Of the state and COM
ing into IT, business originating In the
state and going out OF it, all iaeeme from
passenger fares express receipts and
from all sources whatsoever. This may be
ascertained from table (Which see).
Values Yielding 8 Per Cent on All
Business.
Still another table has been prepared
setting forth upon shat valuation the
net earnings therein shown would yield
per cent. or the legal rate of interest In
Alabama all business. domestic and inter-
fCortjnuad IN Eiohth panel