The sun., 1908-02-21
/. L.&E.DOESNOT EXPECT RIOTS
EVEN ~ PRESIDENT ROOSEVELT
DOES on IT'S BEHALF.
President Milton ~. smith COrrects an IN
accuracy Of statement IN the Letter
~ the President OF the United states
and Tells why Economy II Necessary.

and Tells why Economy Is Necessary.
Milton II. Smith. president Of the Louis
vile and Nashville Rlilroa1 Company.
made this comment yesterday on President
Roosevelt's second letter TO the Interstate
commerce Commission:
In communication from the President Of
rho United States to the Interstate Com
,uprce Commission, issued for publication
yesterday. he directs that an investigation,
under the act OF Congress designated as the
Frdman law, or Ct Of mediation and CON-
citation. be made to ascertain whether pro-
posed reductions in the pay of employees OF
railways. and especially OF the Louisville and
Nashville Railroad Company. are warranted
by existing conditions.
As the United States Government under
the provisions OF the act to regulate COM
nerce. has through the Interstate Commerce
Commission undertaken the control OF rail-
way administration through the supervision
OF railway accounts" and as the Louisville
and Nashville Railroad Company has. in COM
plianCe with the order of the commission,
furnished IL with annual and monthly state
ments showing results Of operations. the COM
mission is in possession OF the data needed to
enable il to promptly advise as to the oOndi-
tions obtaining on the Louisville and Nash
vile Railroad Justifying g reduction in the
nay Of officers and employees
such data will show that during the past
ak years there has been material increase
IN the pay OF nearly all classes OF employees.
the last important increase OF many classes
becoming effective March /, 1907; that during
fhe Ave years ended June. 1909. there was a
material increase In the gross and net revenues
Of the company: that for the syear ended
June. 1907. there was n large Increase In gross
revenues. with slight or nominal increase
n net revenues, and for the six months ended
December. 1907. there was a small increase in
gross revenues, a large increase in operating
expenses and a corresponding decrease in
net revenues. To particUlarize:
The gross earnings for the year ended
.rine. 1907. were s4s 263 Gas increase over
previous year. S5,254.g49. Operating eX-
peuses. t35. .7sl, ,3O2; increase over previous
year. S4.s47 .s3s. leaving an increase in the net
earnings OF SiO7.iu. Adding other income
and deducting taxes. fixed charges and divi-
dends Cthe dividends being the same in each
YEAR. the net surplus increased tiO2.i47
For the six months ended December 81.
1907. there was an increase in gross earnings
Of Ssl5.s75. operating expenses, s2,542,77S
net earnings decreased 81 728s99 Adding
other income and deduCting taxes, fixed
charges and dividends lthe amount Of divi-
dends being the same in each year.. there WIS
= decrease in surplus Of 81 ,757.9l4.
The result of operations for the month OF
December was as follows: Gross earnings
decreased S6o4.o4s, operating expenses in
creased 9296. $40. net earnings decreased
1901, ,SSs Adding other income and deduct
iug charges against income-taxes. interest,
&c, not including dividends-shOws a deficit
Of 3297.9is
The result exhibited in the foregoing state
ments imposed upon the management the
duty of reducing operating expenses in every
reasonable and feasible way: and, effective
February L. 1908, the pay Of officers was re-
duced 8 and 10 per cent. and notice issued to
employees that on March their pay would be
reduced TO approximately the same as they
were receiving before an advance OF wages
effective March l. 1907.
The President of the United States assumes
that 1t is possible that there may be a con-
tention between the Louisville & Nashville
Railroad Company and its employees and
that this may result in destruction OF life
and property and public disorder. | am
confident that such an implication does the
employees OF the Louisville and Nashville
Railroad Company great injustice.
During a similar depression In 1893 the
orncsrs and employees. without exception, ac-
cepted a reduction OF 20 and 10 per cent. in the
pay they we're then receiving. which was on
a much lower basis than that in effect in
February, 1907, or the basis to which It Is
now proposed to reduce the pay 81 employees.
The officers and employees faithfully served
company
wears, aud such reduction. with other econo-
mics. including suspension of dividends,
aided in placing the company in what was
believed TO be a sound financial condition
greatly improved cTedit--which has enabled
tho management to obtain capital by the
sale Of stock and bonds with which to very
largely increase and enlarge its facilitles
TO serve the public, to greatly increase the
number employed and to very materially
Increase their pay over what may be con-
sidered normal basis. in effect prior to 1898
and restored in 1890.
do not believe that the employees OF the
louisville and Nashville Railroad Company
are now less loyal than they we're from 1893
to 1893.
am therefore justified in assuming that
they will accept the moderate reduction
proposed to be made on the ist prOX. without
protest and that the conflict anticipated by
The President OF the United States is not con-
templated by any one connected with the
company.
The plight 6f employees who retain their
employment at the rates IN effect one year
ago, which we're relatively greater than the
rates they we're receiving In 1900 ia most
fortunate compared with that of the thou
sands whose services have been dispensed
With altogether and who are enduring en-
forced idIeness with its unfortunate results.
make the following quotation from
the Presidents communication. in which he
quotes from a communication Of a confidential
character from the general manager OF the
Louisville and Nashville Railroad Company
IN the system chairman Of the Brotherhood
Of Locomotive Engineers and the chairman
OF the Order OF Railway Conductors:
One OF them. the Louisville and Nashville.
IN announcing the reduction, states that
the drastic laws inimical to the interests OF
he railroads that have in the last year or
Two been enacted by Congress and the state
Legislatures are largely or chiefly response
bile for the conditions requiring the re-
ductiOn.-
The following Ii q more extended quotation
from the same communication:
with the present business conditions
confronting US and with the drastic laws
inimical to the interests Of the railroads that
have in the last year or two been enacted by
congress and by the State Legislatures,
which have resulted and will undoubtedly
continue to result in the loss OF revenue and
increased expense. thereby greatly impairinR
the company's credit. It is clearly apparent
that there exists an urgent necessity Tor re-
jJcton In the company's expenses.