The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1906-11-18

nent to ask you to consider. as reasonable
and intelligent business men, how these
conditions affect the ability Of the rail-
road manager to meet successfully the
high and increasing obligations on him to
provide adequate facilities for the COM
merce of the country.
There is no farmer or manufacturer in
the south who does not know the business
danger of a mortgage upon property. Hap
PLY, the distress which has come to many
of them in former years from this source
is now largely memory only, but never
theless memory, which must long be
vivid, of anxiety and struggle and priva-
ton to meet pressing obligations and
avoid total loss OF property.
mortgage upon farm or a factory or
a dwelling does not differ in principle
from a mortgage upon a railway, and the
owner of neither incurs such burden
except from necessity.
The farmer may frequently avoid such
necessity by foregoing the benefits or pos
sible profits from the engagements or i'm
provements which he desires to make.
Railway Improvements.
The improvements to the railway are
required not solely for the profit or bene-
fit of the owners of the property, but are
almost always rendered necessary by the
demands of the public for proper service
at the hands of it's quasi-ser- ant, the
common carrier. The railway owner and
officer has little choice Or option as to
whether such improvements shall be made
when the pressure for additional facli-
ties is as great as it now is in the SOUTH,
And yet, with this Irresistible pressure
upon us, the public mind has been so
warped or the subject has been so little
studied or understood by some who at
tempt to discuss it, that the issue of such
mortgages solely for such purposes has
been seriously condemned as a stock-job-
bling, stock-watering process, adopted for
private gain, and to extort additional in
terest charges from the public.
The fact is, every dollar IF the proceeds
of such mortgage bonds issued by the
| railways of the south must be spent for
| improvem ents upon southern property, for
| the necessary and better accommodation
| of southern traffic and development, by
| far the greater part going directly to pay
| southern labor for permanent and immov-
able structures upon southern soil.
| Ought the creation of such mortgages
or the sale of stock for such purposes
| to call for public condemnation? Does it
not rather merit not only public approval,
damental purpose in the re Irements of
| the public service from which the owners
of the railway properties cannot properly
shrink?
The underlying basis of all credit of
| business enterprises is business success.
The sole source of such success in rail-
way operations is earning power from the
transportation of passengers and freight.
The rates obtained for the service rem
IL ftaIo Il tirt,
upon which the ultimate success of the
enterprise must depend.
The rates charged upon pig iron from
Alabama's great iron center were never
the rates which the railways could arbi-
trarily fix. They, of sheer necessity, were
the rates which would enable the iron
master at Birmingham to market his
product in the northern states, in COM
petition with those of Pittsburg and Chi
cago, situated in the very heart of the
consuming territory, and in Europe in
competition with the furnaces of England
and Germany, with their cheap labor and
their closer proximity to the purchaser.
Without such rates. fixed rs they we're
and are by competition of markets, Bir-
mingham could never have successfully
lighted her furnaces.
Cotton Mills.
The cotton mill industries OF the south,
which now represent an investment of
nearly s250,000. 900, and whose products find
a market not only in every state of the
Union, but in Europe and the Orient,
could not have been developed, md be-
come prosperous as they have, if the
transportation rates for those products
had been arbitrarily made even on the
same relative basis as those still charged
prla nd
articles.
The much greater distance Of the south
ern mills from the large consuming mar
| kets had to be overcome and it vas over
come largely by relatively lower rates Of
transportation.
These are two illustrations which you
will recognize at once.
The same principle applies in thousands
of others, and the result for the entire
country is a scale of railway charges
winch has challenged the attention of
students of economics the world over as
being the lowest in existence.
Almost all rates are the result of active
and current commercial conditions, aris-
ing long after the capitalization OF the
carrier has been fixed. and which are
subject to wide fluctuations, while capi-
talization often remains unaltered.
| IutOTltS nave DttI pTOpOuDuSG from
| many sources, high and low, for the ad-
justment of rates on a basis of allowing
the carrier to earn a fair interest upon
| the cash investment or upon a fairly as
certained value Of the property. Such
| theories seem fair and equitable and plau-
sible until they are examined. Possibly
| they might be applied to a single railway
| enjoying a monopoly and serving a Sec
| ton of the country the products of
| which were not in competition with those
of any other. When applied 20 The vast
railway system of this country comprising
10000 miles of railway and serving thou
sands of commercial and industrial GEN.
tiers. each struggling to widen the distri-
| button of it's products, such a method of
adjustment becomes utterly impracticable.
| Conceive a simple case 1T your own
doors. Montgomery has three lines of
railway to the seacoast at Savannah. Is
| 1t supposable for an instant that the cost
| of these several lines was the same, or
| that their value is the same today?
| II the rates of transportation should ne
adjusted by some arbitrary oower, so
| that each should earn only a certain in
terest upon its cost or ascertainvd value,
would not those rates be different from
each other? If they were different, could