The Birmingham age-herald., 1908-10-28
ExpIainS 7Fe Increases
 Wade H F7eight Rates


railroad property but it does not indicate that over a period of years covering the poor business of 1903-O4, and the very costly congestion of 1907, the earnings were so low as to make necessary the raising of rates, the reduction of wages or the passing of a dividend. We ansyer to the third statement of the railroads that 1t is absolutely unfair and untrust- worthy to take conditions of panic. such as have obtained in 1907-S, as a basis upon which to make rates or fix policies for the future
 The only proper basis is the average of results of a number of years as in our tables of labor for the Alabama Great Southern and earnings for the Louisville and Nashville.
 We answer generally that if the rail- roads are entitled to more earnings. other rates than Alabama rates should be raised for four reasons.
 1. Our through interstate rates are higher than the rates to our competitors. 2. Our distributing interstate rates are higher than the rates of our Georgia com petitors.
 8. The costs of hauling to and through Alabama is less than in other sections. The roads work seven days per week while Georgia does not allow Sunday freight trains. Fuel is cheaper. Alabama is the only southern state where are pro- duced 365 big crops of tonnage every year. and where cars coming inbound loaded can find daily loads outbound.
 4. The railroads hauling vast quan- titles of water-competitive business at rates of to mills per ton mile Our | cheapest business pays practically double that
 The extensions and improvements for which the railroads are working are made necessary by this cheap paying busi- ness. If that is the business that needs tracks and cars, put rate on it that will bring the necessary return: if such business won't move under an increased rate, all the better; let the waterways take some of it and use the energies and equipment of the railroads to take care of that business such as Alabama's which is paying high rates.
 If the roads have less of the cheap competition business present tracks. ton nages and equipments will profitably take care of their tonnage and show ample earnings to interest all needed capital for extensions.
 There are two phases of the rate ques- tion. The first is that relating to the earning of the investor in transporta- ton facilities. The investor wishes to get the highest aggregate rate possible and his aggregate and average charge is lim- ited by law to such rates as will produce a reasonable return upon the money in vested and service performed. He is not interested in the particular rate.
 The other phase is that relating to the shipper He is not directly interested either in the aggregate or the average rate charged over the whole property, but is affected by particular rates. The gen. eral public is indirectly affected by the aggregate rates. It is not generally speaking, the amount of the rate that affects the dealer, but it's relation to other rates.
 The merchant at point "A" may have a rate on his goods of 50c, and his con- petitor at a point "B" rate of 40c. The first merchant would actually be bene- fitted if his rate was raised to 60c pro- vided the rate from point 'B" was also put at 60c. The aggregate rate would be much increased; and if it produced more than a reasonable return to the investor would constitute an unjust tax on the public.
 We shippers of Alabama are interested in getting of parties of rates adjusted and we can never do this if our already compara atively high rates are to be con stantly raised to make up that aggregate or average to which the stockholders may be entitled, but which should be paid by those whose rates are now far below ours.
 ! 1 give below a few comparisons of Ala bama interior rates with rates charged by the same roads for the same business elsewhere. The average per ton mile rate on classes B, c, D and F, covering grain, hay, flour. meats, etc.: From Memphis to Nashville 11.2 mills; from Memphis to Chattanooga, 12.S mills; from Memphis to Atlanta, 11.4 mills.
 The average rate of the three cities from Memphis is Ills mills, and to Bir- mingham 175 mills Birmingham rate on this business 50 per cent higher than her competitors.
 Memphis is the nearest Mississippi gate way to each of these cities and the three are Birminghams strongest competitors In distributing merchandise and selling manufactured articles.
 The railroads argue that the freight rate is so small a part or the total cost Of commodities shipped that the consumer | does not have to pay increased cost on account of increased freight rate
 This is a specious and unsound argu- ment, since either the consumer or pro- ducer has finally to pay all costs Let us take a barrel of -four to illustrate our Alabama condition Wheat is produced l in the west and northwest and the through rate paid by the consumer at local stations in Alabama is made up of three diyisions-the rate from the west ] to Mississippi and Ohio river crossing; the rate from these crossings to the distribut- l ing common point, such as Birmingham and the local rate out A barrel of flour moving through Memphis to Birmingham 2ol miles, pays 86 cents and to consumer on the Louisville and Nashville at station A miles out of Birmingham, an additional charge of A cents, or a total rate of 60 cents per barrel. The same barrel can be shipped from Memphis through Bir- mlngham to Atlanta,J 16S miles longer haul, to a consumer A miles beyond At a n tn af tl.. N-..t, 1...x cents
 If the barrel was shipped to a point as Tar as 79 miles from the distributing point Birmingham, in Alabama, the through rate would be from Memphis 66 cents and through Atlanta to the Georgia consumer 60 cents. a difference of cents per bar rel in favor of the Georgian, though the railroad would haul his barrel 16S miles further.
 Before Alabama can, with good grace submit to increased rates there must be an adjustment of the parity of the | charges made by the railroads Through the federal court at Montgomery we are enjoined from attempting to reach such apparently proper readjustment, and since through this order we are made to main tain status quo on one side it seems but reasonable that total status quo should be maintained in the Alabama rate situation until all the facts are presented and the proper tribunal finally fixes our | proper relative status.
 The proposal to advance rates first came from roads in the central west but no