The Montgomery advertiser., 1907-11-13
REPLY FROM
 M. H. SMITH Answers Letter of w.
 D. Nesbitt.
 - GIVES FIGURES ON EXPENSES President of Louisville and Nash vile Discusses Question. Takes Up Various Phases Of Insorna- ton Desired By Associate Rail- road Commissioners And
 Treats Of Them In Detail. t5
GIVES FIGURES ON EXPENSES

Montsomery. Ala, Noy 12. 1907.
 Editor The Advertiser: stii
 In The Montgomery Journal of this afternoon there is published a communi- cation from Associate Railroad Com- missioner W. D. Nesbit, in. which he asserts that I have stated that ss, per cent of the increase in gross earnings for the year ending June 30. 1907, over the year ending June 80, 1906, was ab- sorbed by increased operating expenses.
 What I did say was: "of the in- crease of s5.254,s49 in the gross re- ceipts. over 98 per cent was absorbed by the increase in operating expenses. interests and taxes; that the net re- suit. after paying operating expenses interest taxes and dividends (the amount of dividends being the same in each yearl, was s102,147. Operating expenses taxes and interest were in- creased. Dividends wereNnot increased.
 Surely MT. Nesbitt will not claim that there has not been marked increase in the operating expenses of railroads; and necessarily there is an increase in the int@est charge to correspond to the increased capital invested. Every thing increases except dividends and the rates received for services rem dered.
 Mn Nesbitt desires information as to the amount charged to operating ex- expenses For additions to the property, such as new freight and other depots, double-tracking and other. improve ments. The annual report of the Louis- vile and Nashville Railroad Company shows that there was charged to oper. atting expenses, improvement account, during the year ending June 30, 1906, $2,sse.63o.4o, and during the year end- ing June 30. 1907. $z,s65.528.75.
 ThfQ that hA afn hnIH Har permitted the management to appro- priate from income the sums named to pay for additions ro property, and charge to operating expenses, their object being to strengthen the prop erty, improve the credit of the com. pany, and improve the security to inc vestors that may be induced to buy the long time obligations of the company at the lowest possible rate of interest. so that the large amount of capital required to make the additions to the property--which the trafffe, past and prospective. seems to render necessary to enable the company to transport 1t at lower cost and thus to better serve its patrons citizens of Alabama and elsewhere--Tnay be\obtained. Will Mir. Nesbitt say that. this policy should not be commended?
 MT. Nesbitt desires to know the ex-. penulLuESS TUT ISBhI eApcHSeS, prIHJlu6t etc. The last annual report shows that there was expended during the year ending June 30, 1907: Law expenses. S254,553.99; stationery and printing. $S1,5I489. Undoubtedly a portion of these expenditures was caused by the necessity of instituting legal proceed ing to prevent the enforcement of what are believed to be confiscatory laws in Alabama and endeavoring to controvert .AA khA kAoRn nA khA rga friends and patrons--the people of -Alabama-the erroneous information that has been so industriously disseni- pated during the past two or three years by those desiring preferment.
 He desires to know as to the passen- ger rates being charged bE the Atlanta and West Point and Western and Att lantic roads. The Louisville and Nash vile does not operate or manage either or these two roads. It has but small indirect. interest in the Atlanta and West Point, and its interest in the