The Montgomery advertiser., 1907-10-21
Conner and Smith May
 Hold Conference Today

those having money to lend from in- vesting in the construction of rail- roads in the State, and that for many years to come the construction of roads (ff any are constructed) will be con- fined to short local lines. the capital for which will have to be furnished by those who may be directly benefited by their construction.
 Tt is safe to assume that the citizens of Alabama having money to loan will not invest it, even in the securities of existing railways. except possibly in the underlying liens. They will not invest in the construction of new lines. obtain capital with which to create much needed additional facilities. No Big Rate Increases. The Governor refers to the fact that the Legislature passed maximum rate bill which was retroactive: that is, that on February 9, 1907. he ap- proved an act providing that the rates in effect on January 1, 1907. should be the maximum rates. and that the Louisville and Nashville. be- tween January 1 and the date the law was enacted. changed she rates Increasing some from 200 to 500 per cent While 1t is true that the per- centage of increase in one most im- portant case was pretty large. still one hundred per cent of nothing is not much
 "The largest increase in rates on traf- fic moving was from 1 IA cents per ios pounds to cents per 100 pounds an increase of i4o per cent--which was done>wftn the consent and approval of the parties directly interested. i. e., those who pay the freight. Under tho circumstances, coz 1t be honestly claimed by any one that the rate of fi cents per hundred was excessivef f "The Governor does not state that the Honorable Judge of the Circuit Court has in this instance sustained | the contention of the State, and that. in compliance with the decision and ss a iaw-abtd.ng corporation, the Louis l yille and Nashville has restored the | rates in effect on Janusly l on the property actually moving. It should | be noted that the State of Alabama l has prohibited any increase in the rates in effect on January l. 1907, regard | less of the fact that the cost of opera tion has largely increased, and is con | tinuing to increase.
 Governor Conner insists that the only way 1t cansbe shown whether tho | legislation enacted, if enforced is con- ! fiscatory, is by sxpe1iment--that the rates must be given . trjaL He does | not propose any way~in which the rail. \ ways. if the experiment rhou1d sustain their contentipn. may be reimbursed for the loss resulting therefrom. thereby inhicting ir.eparable injury.
 "On the other hand, the raiIways l contend that the enforcement of the statutes will bs confsc@tofy, ana have | instituted proceedings in the courts to l have the question decided by the irn- 1 partial tribunals created for the pur- 1 pose of adjusting such contentious, on | condition that if the final decision Is | in favor of the State, the revenue re- II fsa nf hA tAa Aw~Al H.w. l the statute shall be refunded.
 l Tt is true that Governor Conner has | described the bonds given by the rail- 1 roads as worthless. The Louisville l and Nashville and South and North
 Alabama Railroad companies are sol-
 vent corporations. and so long as they | remain solvent the payment of any
 sumed by them may be enforced in tho courts, and their obligation would | therefore seem to be sufficient; but in
 addition to this the court has required.
 and the railroads have secured the ex-
 ecution of, bond by one of the largest
 and strongest guaranty companies in
 the country.
 Dividends on Stock.
 Governor Conner asserts that the
 Louisville and Nashvilleiis paying div
 idends on $60,0O0,000 more of stock
 
 Just what is meant by this state
 ment is not clear. As the total out
 standing stock Of the Louisville and
 Nashville Railroad Company is $6o.-
 OO0,O0o the literal meaning of the state
 ment is that 1t has been paying divi-
 dends on $60, ,000, 900 more of stock than
 it was paying before any stock was
 issued.
 ''The idea the Governor evidently in-
 tends to convey is that at least a part
 of the outstanding stock of the Louis
 vile and Nashville Railroad Company
 does not represent capital invested
 This Is not true. as has heretofore been
 explained to the Governor. Whiie fl
 is true that ss.ooo,0oO of capital stock
 was issued to the stockholders as g
 stock dividend. 1t fig also true that foI
 many, many years the stockholders re-
 ceived no dividends. and that owing tC
 its limited credit and consequent dim.
 culty of obtaining much needed capi-
 tai, the owners permitted all earnings
 in excess of operating expenses. taxei
 and fixed charges, to be used in add,
 ing to the property of the company ] and in this way many millions of dol