The Birmingham age-herald., 1908-10-28

anu AbnQSAAiAs AAA AAAi 1AbSsAho bA tAAe Mississippi and Ohio rivers that have existed in 21 years.
 The railroads oft-repeated reasons for these advances in rates are as follows:
 l. The great increase in cost of labor and materials has made operating eXpen- ses so great that higher rates were neces- sary in order to give any return upon the capital invested in the railroad plants.
 ?. Additional facilities are necessary; more equipment more tracks and better terminals have to be constructed if the business of the country is to be cared for and such additions and betterment are impossible unless railroad revenues are increased so as to furnish these funds, or give a basis for promised dividends that will enable the railroad to secure the needed money by loans or through the sale of securities.
 8. Since last October and during this year of panic tonnage has so decreased that railroad revenues above operating expenses are not sufficient to pay fixed charges, and it is, therefore, necessary to have more money out of each ton carried if they are to continue to pay their labor and at the same time escape bankruptcy.
 The Alabama railroad commission care fully considered these statement and searched diligently for the facts enter ing into the present situation in Alabama
 They came to the conclusion that 1t was unreasonable and unfair to the manu- facturers. producers, merchants and con- sumers of this state to levy upon their shipments any higher freight tax than that already existing, consequently the commission is resisting, through the con- stituted channels, these raises.
 These matters are the business of all the people of Alabama and the comnls- sioners are the employees of the cltzehs to transact the business in this depart ment I want the people of the state to understand fully what the commission is endeavoring to do and their reasons TOT such vigorous opposition to present raises in freight rates as has been undertaken. The commission has answered the state ments of the railroads thus:
 1. That while labor is higher paid than formerly its production in railroad units of ton miles moved is also greater, and there is no such increase in the pay of labor as will warrant the raising or Als- bama rates. That the increased cost or materials used by railroads is largely TOT those things that are trust controlled and sold to the railroads by the men, their associates or agents who largely own or control the securities of the rail- roads. If these people can largely over capitalize, as has been done in many cases, the railroad property, while through a trust which they control push ing up the cost of what the railroads must buy to the point that all transpor= tation earnings are absorbed, and then make the shippers pay an addiuonai freight tax, in order to pay railroad divl- dends there will be a never ending se- quence of increased transportation, de- creased net revenues and increased freight rate.
 In my first article, using the Alabama Great Southern as representative of Ala bama conditions, I showed that in 1880, of all transportation expenses labor cost 5s per cent; while in 1907, labor cost only AS per cent.
 In 1890, of every dollar earned in trans in 1907, S7 s-1O cents.
 We answered further that the railroads serving Alabama, and especially this sec tion of the state, have prospered under the old rates I will take the Louisville and Nashville as an example, since they
 fba tot nQnaHiQllV in the movement of food stuffs from the west, and show some conditions. The table below gives in evaporated and con centrated form the general earning and development of the Louisville and Nash vile fGilroad for the eight years, June 90, 1900, to June SO 1907:
 June 30, 19O0-Bonds and stocks outstand- ing, $145, ,O2O, ,66o; cost of road and eauip- ment, S115, 5,15l,s76; stocks and bonds owned' materials, supplies, advances to suosi- dary companies, s32. .1660S5.
 June 30, 19O7-Bonds and stocks outstand- ing. s1Ss, ,6S1, 300; cost of road and equip- ment $171, ,757, FPS; stocks and bonds owned. materials, supplies, advances to subsidiary companies, s45 444,17s.
 Bills payable, s650o,oOo
 Increase. 1907, in bonds and stocks out standing, $50, 110,O4o; increase cost of road and equipment, s56 O23,S52; increase stocks and bonds owned, materials, supplies, ad- vances to subsidiary companies, slS,2Is IA
 Current assets, June 30 net balance, lsOO, s1s2,SSs; 19O7 $S, ,484, I'll; increase, sS,252,322
 Improvements and extensions to the property and equipment during the eight years, 1900 to 1907, 1o,S44, ASA.
 Of the s43,61O,S40 increase in stock and bond liability, s5.OOo.Oo0 was for new stock issued in 1902 I don't know what cash this sale covered into the treasury, since I find the record reads only that it was "sold by authority of the board of di- rectors." But say that this brought cash at par or s5,OOo,OOo. We have total of $50 11O,S4o coming in from sale of securities during that period, while the road spent for the items above tabulated, S56, 023,S52, SIS. .27S, LA, s3252,S22 $15,S44, 4S4-total. &s, 3ss, ,so2, or s3s2s7.96 more than they re- ceived from the sale of securities. If the x3S. .2S7, ,962 was not produced by earnings, where did it come from?
 During this period the property was kept up to full standard by charges to operating expenses for renewals, repairs, etc, and the following language is com mon to all officers annual reports to the stockholders:
 There has been charged to operating expenses -, which charge fully per