The Cairo bulletin. (Cairo, Ill.) 1???-1928, 1907-04-04
PtOPLE SUFFERB BY
WAR ON ROADS
PRESIDENT FINLEY, OF THE
SOUTHERN, DECLARES IN.
TEREsTs IDENTICAL.
COST JUSTIFIES RATES
He Says in Showing Errors In Over
capitalization TsIk--Earnings
Are Exaggerated, He
Thinks.


Greensboro. N. G., April 2.--At the
annual banquet OF the Merchants and
Manufacturers Club, to night. W ~.
| Finley, president OF the Sosthern Rail,
way. responded to the toast North
carolina and its II lations TO the Rail-
road Problenss.'
After disees sizing The interests nf
North Carolina In improved railway
transportation and pointing ont the
need of additional railway construc-
tion in the state. MIR. Finley spoke
OF the identity III the interests of The
public and the railways and showed
Iwhat would be the effects upon both
of some of the proposed legislation.
He said:
"The interests OF a railway and of
the people dependent upon y for
transportation are SO completely
Identical that | have no hesitation IN
saying that every legislative provost
ton inimical 10 the railroads will be
found on careful examination, M he
equally inimical, ia its ultimate q
fects to the interests Of the people q
tho territories served by their llne4
Mr. Finley said that while the ca'i
talization Of each railroad mnst be
considered on its merits hc was com
pinced there was serious popular ea
ror in supposing that there Is an9
considerable oyer-captalizaiinn q
railroads in the United States.
Cost Justifies Rates.
He pointed out that some Of he
arguments as TO over-capitalizatof OF
lwere based an estimates of avcra.e
| cost OF construction that might bs
ample for lightly built and ilgnty
equipped roads in level OF nearly
level country. with few bridges ana
tunnels and without expensive city
terminals. Continuing. he saiai..
When the ontire facilities sof the
carriers ave considered, Including
rights Of way through cities and
towns. aud elsewhere, terminals,
yards. ruadbed tracks. tunnels, struT1
lures and equipment think u VIII
be admitted by all persons ACQUAINTED
with the cost OF railroad construction
that the property Of these carriers
could not. generally speaking, be re
produced at co,t equal to their ca"i-
talization. But, leaving aside the
question as TO whether the railroads
lof this country are over-capitalizef
II wish TO say to you that the IDEA
that rates are controlled by capital
IA a.
ton. Capitalization may affect the IN
ltIinsic value OF company's securi
| ties and thus affect the investing pun.
llic. IT cannot control a carriers
rates and hence cannot affect iha
shipping public"
lie supported this statement bY
quotations from President Hadlcr OF
Yale. and from Chairman Knapp g
the interstate commerce commis~oN
MIR. Finley gave examples 10 show
that railway charges are the ou'
growth Of economic laws and cpH
mercial conditions.
Economic Laws Govern Rates.
No rate" he said, "can ever with
lproper consideration for the business
lof the country or Of the carriers be
made independently Of these eco
monte laws-not by Legislation arhi
trarily fixing the rate and not by
Capitalization Of the carrier likewise
arbitrarily fixing the rate. In broa J
sense. therefore the management ~
a railway is powerless to fix us
rates. + must accept rates that ars
tho resultant Of economic AMI com
mercial forces which are as abs
lutely beyond the control OF lis mar
ayers as are the tides OF the ocean
That this is true Is further shown by
the fact thai many railroads hsve
never been able "a pay dividends ON
Ian of heir capital stock while others
arc unable to pay any dividends at
Iall If railway could adjust is
lrates To- its capitalization there woulf
be no reason why any ruad should
lno' earn dividends on its csp'iai'11-
ltirn and thus forever abolish rfe
c, lverships and bankruptcy
In all the discus sion about The
supposed relations between raiirusd
capitalization and rates. have l'e7H
unable Ia find that any one has ai-
tempted a. formulate a conrFehct
sive and practicable scheme FOR ba =
ing rates on capiializsfion an
4 convinced If anyone stpulI sesi usiv
J undertake % work ont sach scheme
he would find lt 10 be absolutely IL
lpracticsble One Of Two couiDctiii'
railroads may BE- q line constru ted
Through comparatively level country
a. relatively small c1st and the Other
may be constructed through
mountainous country a. verY heavy
cost The capitalization u the mona-
tain line may properly. 10 tao aE
three times as great a. that 81 the