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

counsel for the respondents. It cae- not be said what share of these common expenses shall be apportioned to an in- trastate ton or passenger being trans ported, it may be in the same train ana car with interstate tons and passen- gers. The solution of ,ne question has heretofore been made to rest entirely on the experience and testimony of ex- perts as to the relative difference in cost of the two services, and in every case in which the questioh mas arisen the witnesses have, while agreeing on the fact that local or intrastate business is more costly than through or inter- state business, varied very widely as to the amount of such differences. The variation is from 10 per cent to 500 per cent against the intrastate business Smyth vs, Ames, supra. It was pointed out in Chicago. etc, vs. Tom1.- kins, 176 U. S. 179. that any solution of the question on a gross revenue basis without regard to the difference in the relative cost of the two services was an absurdity. So the difficulty was at tempted to be overcome by putting a load, as it is called, on the intrastate revenue to equalize it for the purpose of comparison with the Interstate. And the amount of this load was determined by the opinion of the witnesses who guessed at it scientifically or otherwise, leaving a very unsatisfactory task to the court in fixing on the proper amount
 Appreciating the unreliability of any solution of the question of differ ence on any revenue basis the Louis vile and Nashville hsilroad company undertook to ascertaN-- the difference on the basis of the comparison of the actual cost of conducsIng each bust ness, and at great expense took an d<
 particular item of r-portatfon for a period of week or -lore over their lines in Alabama, allocdting such cost when possible and -pportioning fs when impossible of al;ocation between the interstate and intrastate business. It was shown that the period selected was a fair and average period of busi- ness. By this method, which is called the unit of service basis, the actual relative cost of doing the interstate and intrastate business was arrived at The plan and method of the opera tion is explained in the report of tho master in the Louisville and Nash vile case at pages 165 to 195. Of course, as pointed out in the report, the proportion of the actu-i cost of many of the accounts of expense allotted to the two services was necessarily based on the judgment of opinion of the Of
  allocation in such cases was possible. And for this reason there would neces- sarfly be room for saying, s to the con- clusion or result, that however honest, 1t contained to that exs-nt the inherent fnf1rmity of opinion proof. But it hap pens that the results are confirmed in several ways which remove all uneer- tainty as to thesir accuracy and just ness in these cases.
 The Louisville and Nashville has 12 divisions of it's line in Alabama in which separate accounts are kept of the inter- state and intrastate gross earnings, and of the actual expenses of such divisions without separation between interstate and intrastate traffic. These accounts gre shown in Exhibit w A. C. CT.
 In some of these divisions the inter- intrastate. An analysis and comparison Of the earnings and expenses of the in- trastate divisions, and of the earnings and expenses in the interstate divisions reveals the fact that just in proportion as the intrastate traffic exceeds the in- terstate business in the divisions the cost of earning a dollar on all business increases. and that the difference be- tween the cost of earning a dollar in the interstate business is greater than that shown in the results of the appli cation of the unit of service basis. Mas ter's report, IA and N. case, pp. 161 to 165. By the unit of service basis the result is that 1t costs at least 25 per cent of the revenue more to earn a dol far of intrastate revenue than 1t costs to earn dollar from all business. Rec crd L. and N. case 1900.
 The complainants in the Louisville and Nashville case and the South and North case. show also by aIgebraical calculations founded on equations taken from accurately kept accounts of the earnings and expenses of their roads that the excess of earning a dollar in intrastate business over all business is S2 per cent of the revenue in the Louis vile and Nashville case. and in the South and North case. 26 per cent Of tha revenue. This is explained and shown in the Louisville and Nashville case. Record, p. 1900 to 1908, Masters Report ] 65, and in the South and North case, Record CTS, Masters Report 169 These combinations make the result on the application of the unit of service basis perfectly reliable as showing that tho intrastate business and all business IS certainly not less than 20 per cent of the revenue of intrasta;e commerce.
 Equalizing the intrastate business with the interstate business on this basis. and taking the proportion of the whole values of the property indicated DN lut pIODOIllDH OI Ine revenue each thus equated, to The whole reve- rue. the proportionate share of the in terstate and intrastate of the whole property devoted to the service of the public as a common carrier, is shown in the report of the master under in quiry IS in each case, in the Louisville and Nashville case at pages 115-116, and in the South and north case at page v.
 Tho r1tr rat in nf i,,oo of to these values for the years 1906. 1907, 190s., 1909 and 1910 is shown in the masters report under in. quiry 2S. From the report it appears that the Louisville and Nashville rail- road had the net income or less on it's intrastate business as follows for the years named:
 For the year ending June 30, SOC, net profit, .3S per cent.
 For the year ending June 30, 1907. net loss, .95 per cent
 For the year ending June 30 1908 net loss, S.97 per cent
 For the year ending June 3O, 1909. net loss. 91 per cent.
 For the year ending June 30, 1910. net loss, .s2 per cent.
 See Masters Report, 211, PIP
 And that the South and North Ala bams railroad had the following net in- come or loss on it's interstate business for the years named:
 For the year ending June 30, 1906. net loss, .53 per cent.
 For the year ending June 90, 1897. net loss, .46 per cent
 For the year ending June 30, 1908, net loss, .J9 per cent.
 For the year ending June 30, 1909. net loss, 40 per cent.
 For the year ending June 80, 1910. net loss, .025 per cent
 Masters Report. D. 150.
 These percentages are those on the