The Montgomery advertiser., 1906-10-26

iron master at Birmingham to market his product in the, Northern states. m competition with those of Pittsburg and Chicago. situated In the very heart of the consuming territory. and in Flu rope in competition with the furnaces of England and Germany. with .nelr cheaper labor and their closer prox- imity to the purchaser.
 Without such rates. fixed as they were and are by competition of mar kets. Birmingham could never have successfully lighted her furnaces. ..
 The cotton mill industries Of the South. which now represent an invest ment of nearly $250,000.oo0 and whose products find a market not only in ev- cry State of the Union but & m Gubope hoan developed, and became prosperous as they have if the transportation rates for those products had heen arbitrar- fly made even on the same relative basis as those still charged in New England and in England upon exactly the sama articles.
 The much greater distance of the Southern mills from the large consum, !, Ing markets had to be overcome and 1t was overcome largely by relatively lower rates of transportatfon
 These are two illustrations which you will recognize at once.
 The same principle applies In thous- ands of others. and the result for the entire country Is scale of railway charges which has challenged the att
 
 world over as being the lowest In ex- istehce.
 By many the fear is honestly. enter tained that the question Of rates IS carrier. If this were true. 1t would follow that company with large capitalization would charge high rates. while a company with small capital izatiOn might charge low rates. ihe fact is that the rates of all carriers serving the same or competitive sec tions are. and of necessity must be, in practical accord. for otherwise the could escape bankruptcy. would soon absorb all traffic and drive the others out of business.
 Capitalization can have no practical effect upon the rates charged In this
 Almost all rates are the result of active and current commercial condi- tions. arising long after the capataii- and which are subject to wide huctua- tions. while capitalization often re- mains unaltered.
 Adjustment of Rates.
 Theories have been prSponnoea rom many sources. high and low. for the adjustment of rates on bas's or ai- lowing the carrier to earn fair in- terest upon the cash investment or upon a fairly ascertained value Of the property. Such theories seem fair and eoujtable and plausible until they are examined. Possibly they might be ap- piled to single railway enjoying monopoly and serving section With those of any other. When applied 10 the vast railway system of this coun- try comprising 22O.00o miles of rail- way and serving thousands of com mercal and industrial centres, each struggling to widen the distribution or it's products. such a method of adjust ment becomes utterly impracticable Conceive simple case at Nour own doors Montgomery has three lines or railway to the coast at savannah; You all know that the rates by all must be the same. Is 1t supposable TOT an instant that the cost of these seV- eral lines was the same or that their value is the same today?
 If the rates of transportation should be adjusted by some arbitrary power, so that each should earn only acertan interest upon its cost or ascertalned value, would not those rates be diner- ent from each other? If they were different, could the line having the higher'rate secure any traffic?
 If 1t secured no traffic, what would become of the arbitrary dictum that it should earn the interest on it's cost or value?
 Again, the question of skill and pru-