The Birmingham age-herald., 1911-02-24
PROPOSED ADVANCE
 IN CLASS FREIGHT
 RATES IS DENIED
CONTINUED FROM PAGE D

 that these carriers were entitled to addi- tional revenue, that they ought to ob- tain it from an advance of these par ticular rates"
 Commissioner Prouty discusses at length the question whether the defend- ant carriers are justified at this time In demanding additional revenues from the public for the services which they are rendering.
 In answering the question in the nega- tive MT. Prouty conceded that the in- crease In the labor accounts of the roads during the last year have been from 5 to per cent of their pay rolls, aggre- gating for the 41 lines approximately $35 900 year. The opinion holds, how ever, that the carriers have not, by show ing that the increase in wages more than equals the increase in rates, made out the reasonableness of the proposed ad- vanced rates. "because," 1t is indicated, 1t appears that during the year end ing June 90, 1910, the net earnings of these railroads aggregated s51, ,0O0.0 900 more than during the year 1909.''
 While 1t is admitted that this is not conclusive against the propriety of the advances, 'it does show that we cannot conclusively presume from an increase in operating expenses that there should be a corresponding increase in transpor- tatlOn cndrBeS
 Must Practice Economy It is laid down as a principle that "no general advance in rates should be per- mitted until carriers have exhausted
 every reasonable effort toward economy in their business, and the opinion is expressed that the railroad operators
 have not given to this subject the at tention which it deserves. After consid-
 ft111U no n hnW fa r
 freight rates properly can' be increased
 on account of the extremely expensive
 Improvements required by the passenger
 service of the lines and analyzing thor
 oughy the financial and operating meth-
 ods of several important eastern roads,
 including the Pennsylvania, New York
 Central, the Baltimore and Ohio and the
 Lake Shore and Michigan Central the
 opinion concludes:
 "It seems plain that they have not sus-
 tained the burden which the statute casts upon them Of justifying the pro- posed advanced rates, in so far as that Justification depends upon the necessity for greater net revenue.
 There is no evidence before us which establishes the necessity for higher rates.
 Before any general advance can be permitted it must appear for reasonable certainty, that carriers have exercised proper economy in the purchase of their supplies, in the payment of their wages and in the general conduct of their busi' ness. There is no testimony tending to show the cost of reproducing these prop critics It is plain that a physical valu- etion would introduce into the calcula" ton new element which might lead 10 different conclusion. Based on Facts
 "The conclusion reached here. extends, therefore, no further than the facts upon
 which 1t is based"
 In his preparation of the operation of the western case, Commissioner Frank lin K Lane made an optimistic review of the situation of the American railways. In the beginning he shows that through the regulatory law and it's enforcement "the railroads have been protected agains. each other and as a result the revenues of the carriers have increased under regu- lation and their dividends and their sur plus have increased as in no other period of our history. In the last 10 years tho railroads of the United States have bor- rowed more than four and one-half bill lion dollars, or twice the amount of tho national debt at the close of the civil war.