The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1907-06-25


freight rates. vas an ideal one for
| the occasion and subject Mr.. Brown
had evidently kept IN mind the truth
that wha- 10 clear 10 the expert needs
elaboration for the laynnen in the
method n lay argument and inustra-
| ton s a result what ne has To say
| about a subject that has been much
mooted and that Is too apt 10 lose IT
self in recital of figures com bines
the Quality OF grasp Of attention with
the force and certainty Of accurate
understanding Any ono who VIII
read Mr.. Browns speech in this pa
per will find first the statement OF an
intolerable condition and then the
proof o. the Statement In addition
the address is a valuable one in that
It exposes the Sophistry on which the
abuse has been ounds and shows
that RELIEF WIFI come in the end as the
result of injustice o~verthroyn, rather
than of arbitrary seeking OF advantage
by the state as Mr.. Finley and others
would protest. While copsnanding a
reading Of the entire speech, we re-
fer here simply TO one or two OF its
pregnant points:
For instance, Mr.. Brown, after
pointing out the difficulties ex-
perienced in the attempt to ascertain
some reasonable and controlling basis
Of rate making. gives as his sober
conviction as an expert who has given
the question long study the follow
ing;
The last comes nearer the truth
OF the matter. will venture to say
no trafic manager, nor railroad man
has ever a before him a statement
showing thu. earnings of the road for
which he Is fixing rates, nor is 1T ever
a consideration. except possibly when
a new issue of bonds is contemplated,
and orders from higher Up come
TO increase the rates. He would
fix his rare at the same figure whether
the net earnings are $4,000 per mile
or s20,00U per mile.
TT is true, Mr.. President, that the
process OF rate making is a delicate
one. To make, revise and adjust
rates properly requires expert knoWl-
edge and ability of a high order. But,
sirS, my observation and Information
is that when you ask one of their
traffic managers as to the basis OF his
fixing or making any particular rate,
one Will say that rates are fixed by
competition, another by laws Of trade
and commerce, another by arbitration,
compromise and agreement; another
all the commodity will pay; another
and the honest one, why, sir, we SIM
ply get al we can.
And. OF great Importance consider
ing the present rate litigation upon
the plea of "confscation of property"
is Mr.. Browns pertinent enquiry:
Ten years ago the gross earnings
of all the railroads in North Carolina
were s12,995.125. Net earnings
s4,8O9,235. The last fiscal year
63S,552, net earnings $~S.717,116. Yet
the freight rates from the West and
East are higher and the rates in the
State only slightly less. Did YOU
ever hear of a railroad voluntarily
reducing it's regular freight or pas
senger rate? It is true that we have
a number of new depots and more
freight and passenger trains, but there
are more freight and passengers to
transport, and Mr.. Finley, the presi-
lent of the Southern railway COM
pany. will tell you traffic is in excess
of the capacity of the railroad and
one of the greatest needs is additional
track capacity and more equipment
and it Is an i~nopportune time for re-
ducing rates. But Mr.. President. the
additional capacity for this improve
ment should not be obtained from the
current operations of the property at
the expense of the shipper. He is en-
titled to reasonable and just rates,
first based on the present value. Ten
ago the capital and bonded debt
of the Southern railway ines in North
amounted to $4,000, 600
today $27 900, 900. Has this addi-
tional increase in capital been ex-
pended on the lines in this State, or
can you not see the ear marks Of
speculation? Likewise the Atlantic
Coast Line Railroad Company. ten
years ago, bonded debt was $4,000, 600,
today s17,o00,0o0. Has this addi-
tional increase been expended in i'm
proving its property in North Caro-
lima ?"
The answer to this question, which
is instant upon common experience, is
hundred per cent has not meant
anything like a corresponding increase
in the real values of the properties.
Those millions have never gone either
into construction account or equipment
account of the North Carolina roads
against which they are charged as a
basis Cor rates for the purposes of
The earnings, too, have in
IN proportion with the in
crease of capital. If the increase of
is-as it must be-fictitious the
maintenance of rates at a figure TO
give practically double the return
the investment is e%Xtortion pure
and simple. The hocus-pocus Of how
rate is doubled in proportion to
volume of business by resort to capital
in figures in lieu of money or
work is a revelation of the modern
methods of ~railroading that have
brewed what is looked upon as 4
but is in reality nothing
more than a plea for justice!
Nothing could be better than the
terse method with which Mr.. Brown
replies to President Finley's statement
that The capitalization of the road
has nothing to do withthe rate when
says: Il agree with him in par,
but l would say that the ate in the
eyes of the railway manager has right
much to do with the capitalization"
There is the milk in the cocoanut
that discloses the basis of railroad rate |
making that is expressed best in the
old phase and the ancient practice of
making the rate as high as the tariff