The Birmingham age-herald., 1912-04-20
MILTON II. SMITH ISSUES
 FORMAL STATEMENT ON THE
 STATE RATE CONTROVERSY

every dollar this company receives un- der the statutory freight rates It's prin- cipal competitors receive under the same statutes S1 20. In the case of the Alabama Great Southern, the Frisco and central of Georgia systems, they receive $f .15 for every dollar received by this company for exactly the same service. This un- just discrimination is one of the reasons the. court gave for holding ythe statutes void.
 Lower Than Competitors
 Tt is a fact shown by the evidence in the cases which have lately been deter mined in the company's favor that the ay craze freight rates of this company are on the whole much lower than the average rates charged by its competitors Tn this state and other states through which it operates. and this policy of charging low CT rates by comparison with its competi- tors was adopted and was in force many years before the rate statutes in this state were ever enacted, and it has been per sistently followed to this day. So much so that even upon the articles embraced in the eighth group acts when considered as a whole, notwithstanding the increase which goes into effect on the 2oth inst, the voluntary rates of this company on an average are still materially lower than the rates of it's loading competitors.
 Not the Same as Georgia Rates
 Another persistent misrepresentation is that the rates fixed in Alabama are simply the Georgia rates, to which it is claimed this company has quietly submitted for many years, and it is therefore estopped from complaining in this state. AS mat ter of fact the population of Georgia IS much denser than the population of Ala bama and the character of freight hauled in that state yields much higher re- AL. Irls h anf hauled In this state. In fact, 1t is more than double that received in Alabama. But the rates themselves charged by this company in the state of Georgia, and all lowed to be charged by order of the rail- road commission of that state, are rea- lively higher than they are in Alabama. 'The evidence in the cases recently tried shows without contradiction that the av- craze of all rates charged by the Louis- vile and Nashville railroad in Alabama was materially lower than the average of all the rates charged upon all railroads in the state of Georgia. This persistent misrepresentation has no other basis of fact to rest upon that. the circumstanee that the railroads in the state of Georgia are classified. For example: Class in Georgia includes such roads as the Vest ern and Atlantic from Atlanta'to Chat tanooga and the Atlanta and West Point from Atlanta to Wes. Point, Ga. The population is dense and the volume of business done upon those two lines is ex- ceedingly large, being nearly twice as great as the average volume of business on the Louisville and Nashville lines in the state of Alabama. The entire rail- road mileage comprehenHed in Class 4 in Georgia Is less than one-eighth of the railroad mileage of the state of Georgia, and yet the comparison is made not with the average of all lines and of all rates in the state of Georgia, but simply with two or three short lines where the volume of traffic is practically double that of tho Louisville and Nashville lines in Alabama. and where operating conditions are more faN orable than in this state.
 Passenger Rates
 with special reference to passenger rates this company repeats what it has recently said through it's general coun- | sel, that 1t cannot voluntarily continue 1 the 21s cent rate in Alabama unless It extends the same rates in the states or
 Tennessee ard Kentucky. and indeed in
 all the other six states in which 1t does
 business south of the ohio river. This re- | duction would also have to be extended to the interstate traffic in the same contin- gency. The loss to the company would be more than $1,OOO,000 per annum. If the statutory freight rates were likewise kept in force, the company would sustain an enormous loss from that source also. This loss would equal and probably eN- ceed the loss in the passenger business. The patrons of this company have fur ing every year of it's operation since 1t came into this state in 1872 enjoyed on the whole lower average Freight rates than the patrons of any other important road operating In this state. This was a voluntary policy on the part of the eola- pany, adopted freely by it for the pnr- pose of stimulating traffic and aiding in the development of the state. The result of this policy is shown by the splendid and prosperous communities which have grown up along it's lines. The record shows that these communities have grown in population and wealth relatively faster than any other portion of the state.
 Tt has been the constant aim Of this company to improve and extend it's fa- cilities in order that it might render cliff cieid and prompt .service. If is today en- gagged in and has authorized the expendi- ture of more than S5, ,250000 to complete the double tracking If It's lines from Calera, Ala. to the Tennessee state line. II is engaged in a similar work all the way to1 Nashvlle: tho total representing an au- thCrized expenditure of more than sl2000.- 0oO It is doing this in order 10 move the traffic more speedily. more safely. and
 
 mensely to the advantage of the com munities served by this company; but the investors in the securities or this company must be reasonably assured that they will receive a fair return unon this additional investment. It is impossible for the company to earn fair anu rea sonabe return upon it's present invest
 pent supplemented by these aGditlonal expenditures if it's freight and passenger rates are to be reduced by several million dollars per annum or to any material ex- tent
 The evidence in these cases shows without contradiction that taking all the brsiness. both interstate and intra 'state. hG1dled by this company and the South and North Alabama (Which is operated as one of it's divsicns) for the past five ,ears, which include three prosperods sears and practically two years of Il se- we're lanie, but which on the whole were the most prosperous m the history Of the company, the earnings did not exceed per cent upon the valuation of the prop erty as found by the state tax conlmis- sion Of Alabama Are the wholesale and retail merchants of this state who fur nlsh very large portion of the patronage of the company willing to accept per cent upon the value of their property. as foiind by the assessing authorities. as d fair return upon the capital invested in their respective businesses? Are if6w5- paper IT en. some of whom have been ,spe- ci31ly critical of this compeny al this time, willing 10, accept from all their busi- ness a return of only 5 per cent upon the value of their property as thus aseer- tained?
 "The truth is that the profits derived by this company from its interstate .jusi-
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