The Montgomery advertiser., 1906-06-19
Letters to the Editor.
coMER AND ASSOCIATES.
The Difference Between the President of the Railroad Commission and the Associate Commissioners,

of the Railroad Commission and the Associate Commissioners.
 Editor of The Advertiser.
 While the President Of the Alabama Railroad Commission Is constantly and vigorously explaining to the people of | the State his reasons for desiring a cd he recommends for their reduction, 1 the reasons of the majority of the commission for opposing reduction of freight rates on local business are | Is matter of vital importance to the prosperity of the State, and should be clearly understood by the people. If freight rates are made so low that the earnings of the roads will not amount to fair return upon the capital in- vested in their construction and equip
 ment no money can be obtained for
 the extension of existing roads, or the construction of new ones. Of course the development of the State will re- auire more railroads. but money will 1 less reasonable interest is in pros- l pect.
 Who can tell US what the earnings of 1 the railroads in Alabama must be to pay a fair interest on the cost of re- producing the railroads7 No one but the commissioners. They are the only people with the power to probe into the
 secrets of railroad construction and management, and who are able to se-
 cure accurate information upon the
 subject This labor the commissioners III ODGQteuG0 lO lHSiI
 requirements. have performed. Last year they made a general investigRt ton Of all freight tartfs, the seVeral raH-
 roads operating in the State having freight rates should not be reduced. Then data were obtained from various
 reports filed with the commission, in accordance with the provision of our law, setting forth operations for the fiscal year ending June 30th, 1904 from supplemented statements filed by the and from much oral testimony, under oath, taken in that investigations; and | the conclusion of the majority of the
 commission was set forth with all tho clearness and force of a syllogism in an opinion written by Mir. w. T. Sam | ders. and was to this effect: Tn view of the evidence. and of the law govern ing, this Commission, in thF Judgment of its associate members, is of the opins | lon that the earnings show by the seY- 1 eral railroad companies operating Tn fair return upon the legitimate value of the property employed in the crea- tion of these earnings, and to reduce
 local rates in this State at this time would deprive the carriers of earnings that compensation contemplated in the act creating the commission, and de. claring by the courts to be their just reward, and would operate to retard and check the improvement of rail-
 road facilities and service In. this State"
 state RallrOad commissions are com trolied by the decisions of the federal supreme court, for the interested par ties have the right of appeal to the
 courts from the decisions of the com missions. In the opinion to which l refer MT Sanders set forth, that in the Nebraska Maximum Rate Case the su- preme court had decided that the reas- onablenesS or unrea condolences of .ates
 prescribed by the State for the trans portation of persons and property who'll | ly within its limits must be determin- ed without reference to the interstate business done by the carrier or to the profits derived from it." The Com
 missioners first tabulated the gro earnings per mile on all business done by the thirteen railroads doing busi- ness in the State. and the operating ex- penses per mile, including taxes, on all
 business in Alabama; then they as- certained the percentage ofNthe domes- tic or local business of the several roads to their entire business; and by
 taking such portion of the gross earn ings from all business as the domes- tic business bears to all business done
 in this State they arrived at the gross income Oh purely domestic business and by adding the minimum of 10 per
 cent. for increased cost of domestic business tc the per centage of operat- ing expenses to gross earnings from | such business, they arrive at the total
 cost of closing domestic business The difference between the gross increase | from domestic business and the total l yielded, of course, the net prof | its upon such business. Then by taking such portion of the valua- | tion of the road as the domestic bus | mess in this State bears to the whole | business, they ascertained that portion | Of the value of each road which Is en- gagged in doing the domestic business. | Having ascertained the portion of the | value of the road engaged in handling | domestic business in Alabama. and the | net profit resulting from the hand l llng of such business they found the per centage earned by each road upon | local business done in this State. From | those tables showing the valuation of | reproduction of such road per mile. | and the portion used for domestic ser
 vlce of the per centage of all domestic
 business; the gross earnings per mile. | operalinR expenses including 10 per | cent for extra cost of domestic busi-
 ness, etc, etc, it was ascertained that l the highest earning in Alabama upon
 domestic business for the fiscal year
 ending June S0th. 1904, was four and
 nine-tenths per cent, and that the aver 1 age earnings for all roads was about | two and six-tenths per cent; and that | fin four instances there were no earn | ings at all but actual deficits.
 The four roads whose expenses ex- | eeeded their earnings were the Norlh- | ern Alabama Seaboard Air Line (M