The Bamberg herald. [volume] (Bamberg, S.C.) 1891-1972, 1907-04-11
THE EFIX|NC OF RATES
Resultant of Economic and
Commercial Forces.
DECLARATION OF FINLEY
liuht Thrown on Absorbing Question
by President of the Southern
In Banquet Speech at
Greensboro, NJ. c.

At the annual banquet Of the Mer.
chants and Manufacturers Club at
Greensboro, N. c., Wednesday night,
". w. Finley, president of the South
ern railway, responded to the toast
North Carolina and Its Relations to
the Railroad Problem" He said in
part:
The interests of railway, and OF
the people dependent on it for trans
portation, are so completely identical
that | have no hesitation in saying
that every legislative proposition that
is inimical to the railroads will be
found, on careful examination, to be
equally inimical, in its ultimate ef'
fects. to the interests of the people
of the territories served by their
lines"
Mr.. Finley gave examples of the
competition OF producing localities;
OF markets, o. carriers, and OF com.
modities, to show that railway charges
are the outgrowth of economic laws
and commercial conditions.
No rate" he said, can ever, with
proper consideration for the business
of the country or Of the carriers, Do
made independently of these economic
interests-by legislation arbitrarily
fixing the rate. In a broad sense,
therefore, the management OF a rail-
road is powerless to fix its rates. 1t
must accept the rates that are the re-
sultant of economic and commercial
forces. which are as absolutely be-
yond the control of its managers as
are the tides Of the ocean.
THAT this is tEle, is further shown
by the fact that many railroads have
never been able to pay dividends on
all of their capital stock, while 9TH
ers are unable to pay any dividends
at all, and still others are not able
to pay interest on their bonded IN
debtedness. If railway could adjust
its rates to it's capitalization there
would be no reason why any road
should not earn dividends on it's capt.
talization, and thus forever abolish re-
ceiverships and bankruptcy.
Referring to the argument that
rates are kept up ir order to pay
dividends on wal r>d stock, and II
these payments are not made earn.
ings could go to improvements. Mr..
Finley said that this was an entire
misconception Of the financial situa-
ton, and he greatly feared that an ex-
aggerated idea of the earnings ana
wealth of the carriers was at the
bottom of much of the exasperated
public sentiment and hostile legisla'
tion.
The Southern railway, since its
organization, twelve years ago." ne
said, spent, or contracted to sepnd,
and is in the act of spending, more
than s26,000,0O0 for additions to it's
facilities and for capitalized better.
ments and improvements. This means
that on it's present mileage 1t has
spent, or thus has contracted to
spend, within fraction Of fourteen
thousand dollars per mile; whereas
if every cent Of it's net earnings after
the payment of interest and without
paying one penny to surplus, had been
expended for these purposes, it would
have amounted to only about thirty.
six hundred dollars per mile upon its
present mileage. The fact is, that
proper dividends should be paid in
order to create the credit on which
a carrier can provide itself, in the
money market with the means to add
to it's facilities in those particulars
which are essential not only 70 its
own interest as a carrier, but to the
interest of the public at large