The Montgomery advertiser., 1907-01-23

provided. except by the sale of addi- tional bonds,
 Tt will he impossible to sell addi- tional bonds for improvement pur- poses until the net income of the com pany Is sufficient to pay the interest on all of its present bonds, including the income boads. and the interest upon any additional bonds which may be Issued for improvement purposes,
 There can be no objection to the is- sue of additional bonds for this pur- pose because the property Of the company cost more than It's present capitalization and as a matter of jus- tice the present owners of the prop srty can not be called upon to sac rifice income upon their investment to create new facilities which should earn more than enough to pay the ad- ditional interest upon an additional issue of bonds to cover the cost of these facilities
 Facilities, Not Laws.
 For months past no railroad in this territory has been able to handle the business offered AThis has caused con- gestion and many delays and incon- yeniences, and even losses to the pat rons of the railroads. and has involved the railroads in heavy losses by rea-
 
 bushes under the many difficulties with which they are confronted This state of affairs cannot be cured by statutes, orders of courts or of raiiroaod commissions.
 Without additional facilities it is impossible for the railroads to handle the present volume of businessprompt- ly. and while Legislatures may enact laws, and courts and railroaod com atuO frfw Anm% tions will continue until facilities are increased; in the meantime. railroad managers may be jailed. and penalties may be put upon th railroads for failure to accomplish physical impos- abilities until they are bankrupted.
 But, however drastic the measures against the railroads may be. these will not assist in the slightest degree in the creation of facilities that are now insufficient for the prompt and eco nomical handling of business. This can only be accomplished by large ex- penditures of money, and this money canot be provided except by issuing additional bonds; bonds can not be sold unless the earnings of the railroads are sufficient to guarantee the payment of interest thereon.
 Labor or Service Must Suffer.
 Attention Is called to the fact that AhCi O dHo UuJ tWO utAlDl6 IIeTnS Tn the cost of operating railroads. These are labor and service. At present the rail- roads are powerless to make any inn pression upon wages; the demand for labor in every department exceeds the supply. reduction in expenses can be accomplished alone by a reduction in service. which must inevitably be resorted to when the railroads find, as they will find. under any reduction in Alabama in passenger rates. that they can not get back a dollar in revenue for one hundred cents expended in the cost of maintenance and operation.
 Certainly Alabama has been very prosperous during the past ten years, and, like every other Southern State. her development and prosperity has been dependent, to a large extent, upon her railroads.
 "The earnings of the Central on it's intrastate business in Alabama for the fiscal year 1904. gave a return of only 1.10 per cent upon It's value. This was judicially ascertained, and found as a matter of fact by the Railroad Commission of Alabama in 1905. on a hearing involving a reduction in rates, and the Commission decided that the earnings were not sufficient to justify any reduction in rates.
 "The necessities of the Central do not permit of a reduction in its revenues, neither can it be said that the interest of the people of Alabama require such reduction"
 Before he took his seat he was asked by Senator Lusk:
 What are the net earnings of your road in Georgia ,and what are its net earnings in AlabamaT
 In Georgia the gross earnings per mile are a little less than $7,0Oo," re- piled Major Hanson. "In Alabama they are $3.600 per mile." .A
 Are your Georgia rates higher or lower than your Alabama ratesg' Sem ator Lusk then asked.
 ''The interstate rates are higher in Georgia than they are in Alabama, and the intra-state rates are lower in Geor- gia than they are In Alabama" re- sponded Major Hanson.
 Exhaustive Statement by Smith.
 Major Hanson was followed by A. R. Smith, Third Vice President of the Louisville and Nashville Railroad. Mir. Smith was the youngest of the prom inent railroad men who appeared before the Commission. He Is only thirtv-six years old and looks much younger.
 MT. Smith had with him a carefully prepared and exhaustive statement of railroad conditions in Alabama, and the bearing pending legislation had up- on these conditions.
 The statement had many arrays of figures and tables to establish the ar guments it made. One of the tables conveyed the fact that the net earn ings per mile on the lines of the Louis- vlIle and Nashville were Ill mills This was lower than the average in the United States and lower than the aver age of the Southern States.
 MT. Smith alluded briefly to Senate Bill l6 He was Of the opinion that it would fail of it's purpose of making a material reduction in the rates of the railroads of the State.
 The statement contained. too. a pres entation of the improvements of the Louisville and Nashville and the ex- tension Of it's branch lines.
 Long Haul and short One.
 HIrhnr. hah rInEad Sannh ...t-