The Birmingham age-herald., 1912-07-14


 than per cent.
 This company invites the careful check ing of it's accounts by any interested parties upon this issue. There are no theoretical divisions here; there are nc matters of dispute uncertainty here; the findings of the state tax commission are a matter of public record; the 50 per cent rule Is a matter of positive law. It's total receipts and It's total disburse- ments are shown in it's official reports on file in the office of the railroad com mission of Alabama and in the office of the interstate commerce commission at Washington. The accuracy of these official statements is not open to contro- versy; they have never been contro- verted. We have treated the Louisville and Nashville and the South and North Alabama Railroad companies for the pur- poses of this statement as one. They have been so treated in the Alabama statutes. They are not legally the same, but the Louisville and Nashville Rail- load company owns all of the preferred stock of the South and North railroad and practically all of the common stock and that company is operated as a diVi- sion of the former, for the purposes of convenience and economy. If We sepa- rate the returns from the two companies we reach practically the same result.
 Increased Cost of Doing Business
 
 The statement has been made that this company has prospered under these rates; that it's net and it's gross earnings have been greater than ever before The justification for this assertion lies in the fact that a comparison of gross returns has been made between the year ended June 30, 1909, a year of marked depres- sion. on the one hand, and the year end- ed June 30. 1911, a year of great prosper ity and revival of business, on the other. We all know that the fiscal year ended June 30 1908, represented q period of great panic and diversity, that this period of panic and depression extended ever q large proportion of the year 1909. We know that, beginning with the lat ter part of 1909, there has been steady revival of business. We know that the volume of business in 1909 was much less than it was in 1907 We also know that great and abnormal economies were prac- ticed by this company in the years 1908 and 1909 in order to prevent deficit in it's revenues and a de- fault in it's obligations. Other roads went into the hands of receivers. This road reduced it's dividends to it's stock holders, reduced it's salaries to it's off oers and economized in it's disbursements in every possible manner, in order to make a showing, so that 1t could avoid default upon it's obligations It's gross revenues TOT the year enueu June 30, 1909, for it's entire system were s45, 425, S91.45 For the year ended June 30, 1911, it's gross operating revenues were $53 993, 74o.7S, representing a gain for the system of more than Ss,500,000 This gain was proportionately greater outside of Alabama than in Alabama, and was due entirely to two factors; one, a very material increase in the number of miles operated, and the other the return of DrOSueritV cOmparpd with tho pODdf- ton of panic.
 But the point which the critics of this road consistently overlook is shown by the reverse side of this picture. Operat- ing expenses of the road for the year 1909 amounted to $29 G27, 499 IS; for tho year ended 1911, they amounted to sS, 479,- S22. 6l. The increase of operating reVe- nues from the year of prosperity to the one of diversity was 1S.S per cent, while the increase in the operating expenses was practically 30 per cent Although the investment of this company, as rep resented by new lines and second track and increased facilities was greatly more in 1911 than in 1909, it's actual net re- turns was $2S4. 473,S0 less,
 This large increase in expenses as con- trasted with increase in revenues is not accidental. It is not peculiar to this company, nor to these years. It is world wide in scope, for it represents q higher cost of living which is universal and per sistent. It is due in the case of this company to an increase in the wages of its employees ana the cost of the ma terials which it uses. which have out stripped the general increase In It's rev enues and the persistent efforts of its management to economy.
 To show that t is not the result of accidental or temporary conditions, We have only to refer to the general history of ba he ha- ginning July 1, 1891, and ending June 3o 1911, the operating revenues increased 160 per cent but the operating expenses in- creased POP per cent: for the ten year period beginning July l, 190l the operat ing revenues increased 76.2 per cent, while expenses increased 9)5 per cent. The taxes for the latter period increased 132 per cent and for the 20 year period they increased 267 per cent.
 Moreover, the increase in revenue, al thoNgh greatly less than the increase in the expenses and taxes, was accomplished only by heavy additional expenses for new mileage. double track, heavier and more costly rails and q persistent demand for more and better facilities, all of which added heavily to the investment on which it was entitled to earn a return. The straight mileage operated alone increased l752.73 during this period.
 Difference Between Southern and L.
 & N. Rates
 Another common misrepresentation is that the Southern and other railroads in this state have accepted the statutory rates and therefore it is argued that this company ought to do the same. The underlying assumption of this statement is that the Southern railways statutory rates are the same as this company rates, but the fact, well known to MT. Conner, and doubtless equally well known to many others of the distinguished gen tlemen who are joining him in war upon this company, is that the statutory rates of the Southern railway are not the same as the statutory rates of this railroad. The fact is that upon the large | majority of articles embraced in the | eight group act. the Southern railway l is allowed to collect $l.25 for every $1.o5 , allowed to this company. It is this gross injustice that has constituted one of the 1 part of this company, It is a diserimina- tion which has no basis in law. in reason | or common justice.
 l.. & N. Rates Lowest in South
 This company asserts, and it stands ready to prove, that it's own voluntary | rates. charged by it not only in Alabama, | but in the other southern states in which | it operates, are, on the whole, materially | lower than the rates of the Southern l railway as now charged in the state of Alabama, and, in addition to this. it | stands ready to establish that it has | through the years consistently maintained