The Birmingham age-herald., 1912-08-16
ro Our Patrons in Alabama:

them, hoping for the impartial judg ment of the good people of the state.
 We have had q lawsuit and there i nothing unusual in the successful party accepting the result of the courts de cision. although it would appear tha many people think it strange that railroad should profit by favorable decision, but should submit to all un- favorable decisions Is this feeling fair to the railroads?
 The passenger and freight rates were reduced by the legislature of 1907, and these reductions were enjoined by the United States court upon the grounds first that the rates then in effect were not sufficient 10 give a fair return upon that portion of the property in Ala bama devoted 10 domestic business; second, that the reduced rates would certainly not give this return; and third, that this company was not all lowed to charge as much as other roads in Alabama similarly situated.
 The legislature of 1907 classified the railroads, and placed the Western Rail way In class that must charge the lowest freight rates.
 The court of appeals of the United States decided that this company should put in the reduced rates, and try them, but held, if after trial 1t was found that the rates were not re munerative, then this company would be entitled to restore its rates. This decision' was not unanimous. Judge Pardee holding with Judge Jones that the affidayits and bill set ID prima facie case, but two judges, Judges Me Cormick and Shelby, held otherwise.
 Thereupon, on June l. 909, this coI,- pany put tue reduced freight and pas- senger rates into effect, and these rates remained for three years, and twenty days, notwithstanding they are, and have been proven to be en- tirely Roo low. and notwithstanding the fact that the law fixing the reduced rates was declared unconstitutional. A reduction in these rates has cost this company more than S150,0 900 in cash
 l submit at the outset that three years of enforced illegal and unconsu- tutional rates, rates too low to give this company fair return on one third of the value of its property in Ala bama, .is quite punishment and test railroads, while operated by corpora tions have individual ownership the same as other property and l ask you how would you feel if any court state or federal, should by it's strong hand, step in and tell you that the prices you are charging may be fair and reasonable, but inasmuch as there Is some complaint, you must reduce the prices and try a lower price for three years and then if you can show that the prices you were charging were not too high, you can return to these old prices? You would say, doubtless, who is going to pay me for my losses during these three years if win the case?' The court says, nobody; you must lose it." What would you then do? You would discontinue business, but the railroads cannot do this, and this company has had to stand the three years of loss without any hope of redress or recovery.
 All the property of this company, with the exception of about seven or eight hundred feet, Is In Alabama. II is popularly supposed that the court held that this company could earn a reasonable return upon the total value of its property but this Is not true
 A special master was appointed to take the testimony. and in this case 1t was Judge William $. Thorington, a man of distinguished ability high character, undoubted integrity, and free from every possible suspicion of railroad bias. I am informed that covering a practice of about 40 years, he never represented a railroad.
 The propositions presented to him were two; First, whether the reduced rates gave to this company just and fair return, not upon the value of it's entire property. but only upon that proportion devoted to state business i; second. was 1t fair to put this company in a class where 1t must charge less than other roads similarly situated?
 i hoe al na hundred and thirty miles of road in Alabama, and it does interstate business as well as domestic or intrastate business in fact, much the largest part of it's business is interstate.
 How did the special master solve the question as to the reasonableness of the rates? There is nothing new in the facts, or the law decided in these Ala bama rate cases. Many states have had similar litigation.
 In solving the question, it was neces- sary to ascertain the value of the rail- road, and the income derived from the use of this property, after which it was necessary to ascertain what proportion of the value of the railroad was used in intrastate business, and what proportion of its income came from inuastate busi- ness. This was done, and then the value of the property devoted to intrastate business and the net income of the prop erty derived from intrastate business were taken, and then it was determined what per cent this company earned from intrastate business upon the proportion Of its property devoted to intrastate business, and the result was 1.99 per cent: in other words, less than ? per cent earned upon that proportion of its property devoted to intrastate business This statement alone should be sufficient
 But, suppose we take its entire earn ings, and the value of It's entire prop erty. and what do we find shown by the proof in this case? The Western Railway under it's present ownershil has been fin existence twentY-nine years. and during that time, it's dividends will not average per cent per annuT upon the value of its property, although during that time it did pay few slight lv higher dividends upon it's stock. bu it is admitted that the Western Railway is worth more than the par value of it stock.
 There has never been a contention n 'Nthis case that there was any. water. 0 i fated values in the stock and bond IS sue of this company, and no one Will b found who is careless enough to mak such statement
 Are the people of Alabama satstie' with a return of per cent upon the val ue of their property, out of which 1t ha to pay its taxes?
 Immediately upon the converting of tn court by the special master this com Kany announced that its books of account profiles of the road, maps and all paper and data in its possession were subject | the inspection and examination or tn srate through any person whomsoeNe ..s- .f.4f l fc m