The Birmingham age-herald., 1909-02-16

though of course. less cars were oper- ated in 1908 than in 1907 on account of traffic conditions. there being l.O2l,3S1 less passengers hauled during 1908. a decrease of 2S9 per cent, while our car miles were only reduced 1.2 per cent.
 The decrease in railway expenses of 5S8 per cent was obtained principally through closer attention to details and increased efficiency in the shops and oth- CT branches of the work, power costs having an important bearing on the re- suit.
 Electric Department.
 The decrease shown in the electric de- partment is due mainly to the power plant reductions above mentioned, in ad- dition to other curtailments which 1t has been possible to make. the total decrease being $51, ,659 08 or IS. 8 per cent.
 Gas Department.
 Close attention to all operating de- tails and judicious placing of the by-pro- ducts has resulted in a saving in the gas the principal reduction, however, being in the manufacturing costs.
 Damages.
 The most appalling condition confronts the company in regard to suits and claims dBOlnSl IL LOT udHldEt u pau OlAl uuI- ing the year 1908 a total of $213,641. 49 in damages and legal expenses which repre- sented an increase of S21,3S651 over the previous year. The amount paid out in the railway department in 1908 is 15 per cent of the gross earnings of the depart ment for that year and I find that this percentage, after a comparison with re- liably compiled statistics, is the very highest percentage suffered by any street railway company in the entire United States
 A careful investigation of the sub ject of wages shows further that this company pays a rate of wages which is largely In excess of the average amount paid by the street railway com panies doing business in the south. The car men are well trained and careful. There can be no question that our cars and equipment are modern and su- perior. The number of accidents is not out of proportion to general eXpeHlence. The trouble does not, therefore, either lie with the equipment or mana cement of your property
 The condition is all the more dis heartening for the reason that it is the fixed policy@of the company to settle all claims where the company is liable, when settlement can be effected on a reasonable basis. During the year 1908 there were a total of 1045 claims pre- scented. 731 of which were settled with . out suit. These settlements, which rep resented practically three-fourths of the entire claims, cost us $45,624, whereas our experience in the courts in cases in which we eontended we were not liable. or where the amount claimed was apparently unreasonable, cost us the sum of $16S,01749
 This condition altogether is quite the most serious that confronts the man. agement of your property. 1t cannot be ascribed to improper equipment, and it cannot be ascribed to inefficiency of the workmen, because they are well trained and well paid. The condition apparently is local. It is one which af- fleets directly your companW very seri- ously, and indirectly affects the entire community. Inasmuch as it presents a public question: I feel that it would perhaps not be altogether proper for me to venture the suggestion of reme- dies, but I do feel that l should state the actual facts, in order that the sit uation may be thoroughly understood.
 notwithstanding that in the last two years the company has paid $405 ,S96.47 have pending 400 cases in which the damages claimed aggregate $3,172, 474.
 Net Earnings.
 The net earnings for the year make a very gratifying showing in view of the decreased earnings. the increase over 1907 being $62,12760, or 71s per cent.
 Surplus.
 The loss in surplus of S13,704.02 is attributable to increased interest charges occasioned by the issuance of $551,000 additional per cent bonds and the increased burden placed upon us by the state tax commission in rais- ing our real, personal and franchise valuations, the total assessment being fixed at $5,250,0 900, s2,250,00O for prop erty and sS,OO0,000 for franchises.
 This is the first year we have had to pay the newly imposed franchise tax