The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-11-30
Samuel Spencer.

WIS VI 49,
and clarity Of statement than in the last
public address OF the president Of the
Southern Railway, delivered at Mont
gomery about one month ago, for the
instruction of the people of that part OF
the Union which he loved and served so
well? Consider the subjoined passages
from Mr.. SPENCER's speech to the Agri-
cultural Association of Alabama on
October IS:
Everything relating 70 the business interests OF
the people has been drawn into the arena OF excited
popular sentiment and debate. The honesty of
fducisry relations. the Accountability OF men OF
great power and great wealth to their fellow men.
the regulation aud control of so called trusts. and
OF quasi public utilities. have received the focused
attention and excited the universal interest OF
the people. Under the influences OF their aroused
and determined purpose, some gross abuses have
been uncovered. Prompted by these disclosures.
n Ia little TO be wondered al that the popular judg-
ment has become disturbed and the conclusion
hastily and unJustly reached that all important
interests merit popular suspicion and distust."
The railroad managers position his relation
ship 10 the public on the one hand. and to the prop
critics he represents. and for the successful manage.
ment OF which he is responsible. on the other-has
undergone radical changes in recent years. . . .
Al In tbs inception OF railroad construction the
public relations OF the properties were largely lost
sight OF. 50 now, In reaction. the public character
of the enterprises is almost the only thing recog-
nised or considered, and the private rights of the
owners are. In the political thought OF the day,
almost " not entirely forgotten.
Justice. however, lies between the two extremes.
These properties and their owners should be re-
CURED TO perform faithfully their public duties
under reasonable rates and practices, Under fun
publicity. without unjust discrimination and with
out favor for any interests.
" When this obligation is performed, the residuum
10 private property. entitled 10 the same considera-
ton and protection at the hands OF the public and
Of the Government asAll other private property"
There Is no legal obligation on any one 70 in
vest his money In rsilw avs or in any other proper
ties. The action of the investor must be Volun-
tary. and Inducements OF = safe and bustnessiike
nature must be presented In order 70 render the
Investment attractive. The railroad manager must
provide the transportation facilities which the
business OF the public demands. To
this he must have the necessary money. and 10
obtain It must show successful results in the oper-
alton of the property-results which will convince
the investor that his investment will be safe and
reniunerative."
Within fifteen years the cash value OF the south's
cotton crop has doubled. the amount OF pig iron
produced at her furnaces has Increased enormously.
and the product OF her coal mines has increased
more than threefold. Cotton factories have sprung
- -4.n -. a. a.. $50,
her cotton crop is now manufactured on her own
soTi than In all the mills OF New England. The total
value OF her annual manufactures now aggregates
nearly 81 SOC, 600 900. The total value OF her agri-
cultural products IL now more than 81. 200. 900. 900 per
snnum. Her railroads are no longer weak, dis
jolnted lines, but have been amalgamated into
severallarge. strong. continuous systems, so located
and 50 equipped as TO serve advsntageously the de-
mands Of her growing industry and commerce"
Fundamentally the basis Of this improved con.
dition Of the railway properties is financial credit.
With a few minor exceptions substantially all Of
TIE enormous improvements to these properties
and their equipments, costing hundreds Of millions
o, dollars. in the last decade have been made with
borrowed money. The basis OF the credit on which
ID. money was borrowed was the increased conn
denee Of the investing public In the substantial
growth and the future prosperity Of the South, and
10 the gradually increasing earnings OF her railway
properties"
" With an Increase In the price Of everything the
carrier must buy-with an increase in the cost OF
labor. OF materials. in the verdlcts OF juries In dam
age suits. IN taxes-and with decreasing rates. a
point must ultimately be reached where the car
ri.r's capacity TO meet the public demand for in
creased facilities must be substantially Impaired.
n not Destroyed. II must be apparent that II there
IL q continual increase in the units OF ex expenses. with
q continual decrease in the units OF revenue. the
financial strength Of the enterprise cannot survive
INDEFINITELY
" The underlying basis of all credit of business
enterprises Is business success. The sole source
Of such success in railway operations is earning
power from the transportation of passengers and
freight.
The rates obtained for the service rendered are
therefore the vital consideration upon which the
ultimate success Of the enterprise must depend.
" Unfortunately this question of rates has got
into the very vortex Of acute political agitation.
- With industrious effort the Impression
has been made that the carrier is subject TO no re.
susint in the making of rates. except such as Is
WuDobsu pE stdluNb ihNs anu tuhb IL can and does
sct arbitrarily in nxlng the charges for the services
winch II renders. Nothing could be further from
the truth.
" TIE STEADY decline Of rates. ever since railways
we're insuInrsted. while their power end financial
strength has increased. is Of Itself alone a slNnin-
cant II NOT . convincing fact.
WINE much OF this steady decline has undoubt-
edly besa due TO com petition aud to other causes
beyond the control OF the carriers, a much greater
portion has been due TO their voluntary and wise
efforts 10 foster new trannc and encourage the de-
veIDpment OF new territory and new Industries.
and 70 widen the markets for the products oriRlnat-
ing upon their respective lines"
capitalization can have nd practical effect upon
the rates charged In this country. Almost all
rates are the result OF active and current CONNER
cial conditions arising long sfter the capitalization
Of the carrier has been nzed. and which arc subject
70 wide nuctustions. while capitalization often re-
malns unaltered."
- II "A aid that raIInoAda ha vei the mower To mAka