The Montgomery advertiser., 1907-11-05

Railroad Company at bankrupt sale, December 1e, 1878. Sc tar as I now recall, all the other roads in existence at the time the act was passed were financially embarrAssed during the pe-
 riod named--at least Isdo not now re- call an exception. Ntgf
 As to your second charge: The Georgia Railroad wac leased to the Louisville and Nashville and Georgia Central Railroads on April I, 1881, for uinety-nine years. the iessees agreeing
 to pay a rental of seoO.00o; per annum. On July l. 1898. the Georgia Central
 f.oaisviiie ano SasSSss1s ns was a ap e. r iis ' to assume the entire lease. up to that
 date the losses. including advances to subsidiary companies and interest at 6 per cent per annum to June 30. 1907,
 amounted to $s.51s.o3o.ls of which the
 Louisville and Nashyille's one-holf was
 Sl.756.b15-os. On Juiys1, 1899. the At
 iantic Coast Line assumed one-half of
 Figures on the Loss,
 The loss to The Louisville and Nash
 Vile Railroad Company as sole lessee
 during the four years including ad-
 vances and interest at 6 per cent per
 annunn to June so.slsQ7. was s531.sss.55. to June 30, 1907 was t4,O44,S66.74, of which the LouIsyilje and Nashville's proportion was s2,2ss.s51.64. Far the eight years ended June 30, 1907. during which the property has been operated for account of the joint lessees, there was profit, after deducting advances
 of sss6.s41-s3. which. adding inter est at per cent. per annum to the losses. leaves Q net loss of $305s,224.91. The profit shown for the years 1901
 to 1906. inclusive. is apparent, but not real for the reason that the lsssees have permitted the management to use the profit in improving and adding to
 the propertye
 "To state it another way, the result of operations to the lessees shows a total loss of s4.o44,s66.74. against which there is book credit of s9Ss.64I.S3.
 The charging of interest on losses and amounts advanced by the lessees is jus- tified on the ground that should the operations at any time in the future produce 2, surplus that may warrant the lessees In taking 1t over. they would credit it against previous advances. in- ciuding interest.
 Some Discrepancies.
 You state that the lessees of the Georga Railroad made net profit on the lease last year of s2.50D.o0 a mile. and have~not made iess than $2.00o.o0 mile since sIs01.' The result of op- erations for the year ending June, 1907, shows a loss of s37.2s5.76. The mile- age operated Is S07 miles. sundry short branches not included. which, at $2,- 00o.0o pc rmiie. would be s6l4. .000--a marked discrepancy. The largest profit in any one year was for the year end- ing June 90, 1906. and amounted to s2s4.1S7.06. equal to ss5S.00 per mile- another discrepancy.
 "The investment of the Louisville and Nashville Railroad Company in the stock of the lessee company of the Western and Atlantic Railroad. which was liquidated after the expiration of
 the lease on December 27. 1890. in- cluding interest to April 90. 1898. the
 date of final payment, showed a total loss of sS02.s9o.57.
 With reference to your third charge: I quote from the statement which you are criticising as follows:
 If I am not mistaken, only one important line in the State of Georgia
 has been constructed snce the enact- ment of the legislatfon.s and there is
 good reason for believing that those
 who furnished the capital to construct that line have not received an adequate return upon their investment All oth- CT roads constructed since the enact-
 ment of the Injurious legislation have
 been built largely by local capital, and such local roads. built for the accom-. modation of the communities directly af- feeted. have in some instances been con- solidateds by the older corporations. a
 large part of the original capital hav-
 ing been lost.'
 It il. true that the benefits of rail
 transportation lines to communities
 and territory not adequately supplied
 with such facilities. are of such advant-
 age that those deserving the benefits
 can afford to invest considerable amounts which may at the time not promise to be directly remunerative. relying upon the advantages accru- ing to them. for their recompense.'
 Seaboard Recently Built.
 "On the foregoing you base the charge that I was ignorant of the fact that a large mileage oe railroads had been constructed in Georgia since the enactment of law creating a com mission with mandatory powers. The above extract shows that I made no such statement The important line that had in mind as having been con- structed during the period was the Seaboard Air Line. which has con- structed a road across the State to Att lanta. and thence acquired and con- structed line to Birmingham.
 "An examination of the annual re- ports of the Seaboard Air Line Rail- way will. think. show that the Geor- gia, Carolina and Northern has up to this date been operated at loss, which has been assumed by the Seahoard. Air Line as owner. e..
 While I have not as yet fully in vestigated the means by which the nu- merous short local lines have been con- structed, I am not at the present time advised of any exception that disproves the correctness of my statement. know that the Louisville and Nashville and Georgia Central. lessees of the Georgia Railroad. in 1884. unwisely came to the relief Of the then owners of the Gainesville, Jefferson and South. ern Railroad (Hon, 4. D. Candler, Eresident) extending from Monroe, Ga, to Gainesville, Ga. with a branch to Jefferson. Ga, by endorsing the bonds, Q large amount of local capital having already been invested; that the result was disastrous. and the ssDss to the lessees of the Georgia Railroad to this date, interest not included. has been approximately $500, ,OO0.00, with a total loss of local capital invested. ex- cept such as was invested in the en- dorsed bonds.
 'I recall that the Atlanta and Flor ida Railroad. extending from Atlanta financed by citizens of Atlanta; rous and the road was sold in 1898:
 that at the time, of sale there was out
 standing $1,955,00O of stock and bonds,
 and I persohally know that the prop
 erty was repeatedly offered for sale
 for $l ,O00 900. I do, not know what
 the Southern Railway Company, which
 acquired the line, paid. .+f
 Some Other New Roads.