The Montgomery advertiser., 1908-01-22


the afidavit made By the Chief Engf-
neer. The total valuation Of the lines
| OF the Louisville and Nashville, ts4,-
$4,000. That was not the capitaliza-
ton OF the Alabama property OF the
road. It was the exact valuation, the
amount II would take to reproduce u.
Enect Of New Rates.
| The figures given by Colonel Stone,
and those which attracted the most
attention, were those in which he por-
trayed the effect of the new rates II
they had been In forcs~d during 1907.
He declared that IL the rates named in
| the lilo Comm odity Act and the. Two
and-a-half Cents Passenger Act" been
In force in 1907. the South and North
would have had no return on its prop
| erty In Alabama, but what was more
there would have been an actual de-
| felt of s12s,s55.22. The value OF the
/ property OF the South and North de-
voted to intra-state business was put
at s5,442.525. The deficit~for the year
on this poreprty II was contended would
amount to 2.ss per cent. OF that val
uation.
Quoting from the supplemental bill.
Colonel stone declared that X the
Eight Group Acts" and the ''Two-and-
4 a-haif Cents Passenger Act" had been
| In force in 1906 the expenses and taxes
| Of the company's intra state business
4 would have exceeded It's income oy
si25,747, producing deficit OF 2.21 per
i cent.
passenger rate act and the commonly
| let had been in fbrce in 1907 on the
south and North. the operating ex.
| penses and taxes would have eNceedeo
| the income by s2ie,t26.5S, producing
a deficit of 4.2s per cent. on the val
/ uation of the property OF the ROAD oe-
voted to intra-state business.
Il r ed
| the conditions which existed at pres
| emit taxes and operating expenses pro
4 duced n deficit of IS per cent Oh tne
| value of property devoted TO lntra
state business. He contended iurtnes
that had the passenger rate ACT anu ~
the eight group act been in torce IN
1907 the deficit in interstate income
| wo,g,d have been $206,267.l5 on the
| valuation Of the property devoted 10
intrastate business.
| on the lines of the Louisville ana
Nashville proper, the figures given
were equally as astonishing. me
/ Bile of figures he gave In the case OF
each road he said were carefully COM
| piled by expert ACCOUNTANTS. based up
/ on the actual business of the road UNI
der existing conditions. He summed up
| thes figures given by saying that IL
act and the eight group act rates had
been in effect on the lines OF the Louis
VILE and. Nashville in 1907 the defcit
| would have been $411,525.36.
A Startling Condition.
Colonel Stone produced figures to
show that on the basis Of the passen-
ger act and the commodity act, applied
to the operation Of 1905. the company
could have obtained only 81 Of one per
cent on the value Of tho road and
equipment In Alabama devoted TO in
trastate. traflc. The value of that part
of the property was fixed at si6,405,-
900. Under existing rates II was set
out that the road received in net earn
ings only ass per cent on that valua-
tion.
Colonel Stone pointed out that it was
alleged in the supplemental bills that
/ If. the passenger rate acts and the
group acts had been the per centage OF
net earnings on the part of the prop
erty devoted to intrastate business
would have been only per cent. II
was argued, in other words, that one
quarter of a cent a mile on passenger
| rates on the lines Of the Louisville and
| Nashville In Alabama would have $780,
900 more per Annum.
Colonel Stone submitted that the road
was entitled to earn a fair and rea-
sonable return on the money invested
In Alabama. He quoted decision after
decision to show that this principle had
been repeatedly upheld in the courts OF
4
show that the courts had declared that
a reasonable return was an equivalent
j to the legal or statutory rate which Is
per cent In some States and and
| per cent in other States He quoted
| other decisions, showing that the road
| IL entitled to reap the same income as
that Of money invested in other enter
| prises in the same community in which
| the lines of the roads are operated. In
this connection he read q number of
ahidavits made in Montgomery by
bankers. merchants. farmers, real es-
tate men and men engaged in other
businesses. These afi1davits set forth
that these particular lines of business
brought In return of from 10 to rs
! per cent.
Colonel Stone took occasion to deny
statement mado by anti-railroad
speakers in Alabama. that the extern
sions Of the road were charged against
the operating expenses. The Louis
Vile and Nashville had never followed
such policy. Its extension and i'm
provements have always been charged
| to capital stock.
UmauSt CIassificmtions.
4 Colonel Stone devoted himself par
| ticularly to what he said as the unfair
| and unjust classification of the Ala
bama roads. He pointed out that all
| the roads which had come under at the
| demand OF the Governor had been put
| IN y lOW GLASS; anu htiOWSu 10 ChAEkH-
a high freight rate while the roads
| which were asking their rights in
court were put either In the first or
| the second class and where they were
allowed only to charge low rate. He
asked where the line Of demarkation
| had been drawn. 1t was drawn, be-
| tween the roads which had surrender
ed and the roads which had not sur
| rendered. He read the decision of the
\ Supreme Court In the Kansas Stock
Yards case to show that such a classi-
fication Is arbitrary and unjust? He
dealt here with the question of equal
| protection of the law promised by the
| Constitution and he asked II equal
| protection OF the law in this classifica-
| tion has been vouchsafed to all rail-
roads in the State.
Judge Weakley is to answer Colonel
Stone. He began his argument yester
day afternoon but was hardly well
| into It before the arrival of the hour
| of adjournment. He denied that the
State conceded that the Governor had
| the right to fix either rates or classi-
| fication. The State, he said had never
commended that. The giving of a rate
| he said under the present law was a
matter for the Railroad. Commission.
The Governor had no power in it and
whatever agreement the Governor had
made could not be properly brought
into court.
He contended that the Legislature