The Montgomery advertiser., 1908-12-08

ton facilities that already existed.
 "The railroads of the United states in the South and west have been pro- tected and constructed. and to a great extent financed. by men whose inspi- ration was a firm belief in an unseen future and whose assets were largely composed of hope and an uniying faith in the future development of their country.
 Now the future demands for in- creased transportation facilities in the South are plainly indicated by past records showing the growth of produce tive activities and the constant tn- crease of tonnage to be moved.
 ''If these requirements are to be met, demand and supply must move forward hand in hand. Additional tonnage will justify increased facilities. and in creased facilities will stimulate still greater tonnage.
 During the past twenty-five years the total products of the South, from agriculture. forest, mines and mAnu- factures. have increased in valuation over 25 per cent. During the last i've years Of this period, ending in 1906, the increase has been 50 per cent.
 Progress of RaIireads.
 "rhe common failacy that when a railroad was opened for the transpor- tatIcn of tTafic It was completed has long since passed away. at lAast in the minds of intelligent men.
 The railroad of today Is no sooner completed as q single track. than 1t be- comes necessary to provide industrial spurs; additional or enlarged termi- nals; replace it's temporary structures by permanent ones; widen It's excaNa- tIons. strengthen It's embankplents, provide passing tracks. additional shop facilities. enlarged passenger and freight stations, warehouses, elevators, docks and wharves at water terminals. additional tracks, heavier rail, rock ballast. elimination of curves. reduc- tion of grades, block signals. elimina- ton of grade crossings, heavier en- zines, larger and better cars. to the end that the constantly growing re- quirements and exactions of modern traffic conditions may be met: all of which requires increased expenditures. which it is easily seen could not in any event be provided for out of earnings.
 During the next ten years. the rail- roads of the South will require $l,000.- 0o0, ,0O0 to enable them to fully provide for the increased demands for trans portation facilities, an average of SiOO. .0oo. .ooo per annum. Including the estimated increased mileage and the present capital investment, tho result ing average capitalization would amount to $53.0 per mile, being $20,- 900 per mile under the present average capitalization of all the railroads of the United States today, which Is s73.- 900 per mile. t
 Needs of the Future.
 Affecting the requirements of the railroad sltuatioH in the South by the expenditure of a round billion dollars during the next ten years as outlined above. would make the total invest ment in Southern railways at the end of that period 33.000. .000, ,000 on an csti- mated mileage of 56,000.
 "It would acquire average earnings of Ss,000 gross per mile per annun. with operating expenses at 70 per cent Of the gross. to yield sufficient net in- como th provide a return of per cent on this total investment.
 "whefi these figures are compared with the present average gross earn ings ot the railroads of the United states. of $f1,400 per mile per annum, with an average cost of operation of s7,757 per annum. resulting in a ratio of operating expenses to gross earn ings of 6s per cent. the above estf- mates appear reasonable and conserve tive.
 Even if this expenditure Is made, and tke results predicted obtained at tho end of the ten year period South mately 25 per cent short of yielding the present average gross earnings per mile per annum of the railroads of the United States today.
 ITO provide funds to meet these ever growing and incessant demands for ad- ditional facilities. the railroad compa- nles must necessarily be large borrow CTS.
 "The prosperity of the South in the next decade, and in those to follow af- ter, depends upon the ability of the owners and managers of Southern rail- ways to foresee and provide for future necessities, and upon the promptness with which the work is accomplished.
 Adverse LesIsIatiOa.
 The ability of railroads to construct these improvements which are so es- sential to the future prosperity of the South, depends upon the willingness of capital to furnish the necessary funds for the purpose.
 While legislation may control and regulate the returns upon invested capital. there is no process by which 1t can compel that investment originally While investment is easily retarded 1t Is difficult to attract.
 There is probably no form of capi- tai investment more open to attack or more liable to depreciation through un- fair or unwise legislation than the investments of today.
 While the speaker is a firm believer in the principles of governmental con trol and supervision over the corporate entities which have been created by the people and for the people. 1t must not be forgotten that every shield has It's reverse and that the exercise of such control and supervision must nec- essarily be along the lines of right and justice, which no mere legislative enactment can change. Any variance brings its own reward. which frequent ly spells disaster.
 The power to control. regulate and supervise necessarily carries with 1t re- sponsibilities from which there can he no escape.
 Every tax. every restriction. every requirement. which costs money or re- duees revenue to our Southern rail- roads Is tax which must ultimately be paid by the communities which they serve.
 The prosperity of the Southern raIi- roads and the prosperity of the South are irrevocably bound together, and the needs of the South are identical with the needs of the railroads
 The basis of securing capital must necessarily be the ability of the bor- rowsr to inspire confidence In the lend CT that his capital will ultimately he returned to him intact and that ha will receive regularly and promptly ad- ;