The Birmingham age-herald., 1912-04-11

volved deep cuts, high fills. extensive | 1tunneling and the construction or cost l ly bridges over large ssreams, one over
 the Alabama river at Montgomery,
 others over the forks of the Warrior l river besides across many creeks For
 some distance above Birmingham to Decatur, and some 20 niles below Bif-
 mingham, the line Is one of the most
 difficult of construction and mainte-
 nance. if not the most difficult of any
 road in the state. A considerable part
 of the road is double tracked. | The Louisville and Nashville rail-
 road which operates the South and North Alabama railroad as one of its
 divisions, has, Independent of the South and North. mileage of 1064.24 in
 the state and altogether in this and
 other states 1906 62 miles of road con stituting one great system. Ihe road
 of the Louisville and Nashville in Ala
 bama, however, consists in large part of branch lines doing mostly local busi-
 ness, which in so far as 1t is intra-
 state, is unremunerative. A large part
 of it's tonnage Is of rnw materials for
 iron furnaces and is carried at rates
 lower than any in the United States. These low rates were established and existing long before tn- passage of the
 rate statutes now in qeustion, and had
 their origin in the policy and neces-
 sity of supplying the iron industry with raw materials at rates that would en-
 able it to compete in the markets of the world with that of other sections hav- | ing such transportation or other ad- vantages over Alabama as would drive | it out of the markets or suppress the manufacture of iron in Alabama. This
 policy met with great success in Its ob :
 ject, but gave little profit to the road
 except in the building up of the coun- | try and the consequent general increase
 of business to it and other roads. The Louisville and Nashville railroad in Ala bama today, including lss many branch roads, is not first class road as whole in any respect, though 1t is first i ella ss in its main line extending through the state from the northern border to Montgomery, Mobile, Pensacola and New 1 Orleans.
 In reference to the question of value with the view of rate regulation, the
 most reliable test ordinarily, is the cost of the reproduction of the road as it exists I say "ordinarily" because l there may be instances which is not the case here, where by reason of paral- | leling the road by a new road, and di- lverting its business or from other causes. it's value may be far less than what it will cost to reproduce 1t at the | time of the inquiry. The orlSinai cost of road may in some cases re- feet light on, or even determine, the present value, as when it is of very recent construction. But ordinarily IL | is of little assistance In that regard, since many items of value may be dona- 1 tions by the government or by indiVid- uals, as is the case of the South and North. or the road may have been built | long before the. period of inquiry a. greatly less or greatly higher prices than those prevailing at the time Of 1 the inquiry Or its original cost might be involved in obscurity and may 1n- clude the cost of abandoned or destroyed portions of the property, which should not figure In the inventory for the present time or the road may have been bought at a forced sale in times of panic at a nominal price or inflated times at corresponding price; or, the road costing little originally, may have de- veloped from many contributing causes into being property of great value. Ana in every case, after finding the original cost, when possible to De done, the ques- ton would still have to be solved as Ito whether such original cost is the the same as the present value, which would invove the determination of the present value for sucn comparison in- dependent of original cost, and in no other or better way than on reproduc tion values.
 The market value of ponds and stocks Wn11G SneuulDB III SO-slc tdotH IitSi ite on the question of present value, can not except in a very slight measure, indicate what that value is as a matter Iof fact. The market value of stocks and bonds merely shows the public es- innate of the value of the whole prop perty contributing to the income. which may IS in the case of the Louisville and Nashville railroad, embrace millions of dollars of property not used as com lmon carrier. And this public opinion
 is also open to influences of stock job ping manipulation and artificial book Keeping, without the advantages of sworn inventories and the precise testi- mony of competent and disinterested witnesses on exact inventories of eX isting property A road may have small amount of stock compared to it's property as in the case of the Louis vile and Nashville railroad, and it may have no bonds or a large amount of bonds against its property and the two combines may not, with premiums or discounts taken into consideration. indi- cate with any accuracy the present values of the property invested in the business and used .as common car rier. Therefore, while looking at all collateral matters rehecting light on the subject, the court regards the re- production cost as the final test of pres ent value.
 QHutT luQuiiN 10 LII iiit fooulu anu North case the special master reports at rage 72 ct seq., the cost of reproducing the railroad and other properties. after deducting s32S419 from complainants' figures, for the years named as follows;
 Year ending June 30, 1906, s20,041,- 714.S4.
 Year ending June 30, 1907. s21.O77,- .210.17.
 Year ending June 90, 1908. s22,O7.- o03.12.
 Year ending June 30, 1909, $22,151,- 500 S6
 Year ending June 30, 1910, se3.S7o.- 752.27
 Under the same special inquiry IS ar page t12 ct seq, in the Louisville and Nashville case the master reports the cost of reproducing the railroad and other properties including equipment used as a common carrier. after mak- ing deductions from cumplainants' es- inmates of s674,673.92, for the years named, as follows:
 Year ending June 30, 1906, 31,25S.-
 Year ending June so 1907. s43,Os9,- $40 60s
 Year ending June 30, 1908. s4o,soo,- S49.22.
 Year ending June 30, 1909. s41,1ei.- 742,6S.
 Year ending June se. 1910. s41,44s.-
 4S2 S9.
 The respondents urged before the master all the objections now set up in the exceptions filed to his reports as to these values, and they were mo- ticed seriatim, discussed and disposed of by the master as shown in his re- ports. After considering the exceptions. approve and confirm the findings of the master on the questions on values