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

It is difficult to understand the theory upon which the conclusion was reached that railroad put in Class 1 by the statute because of it's bad To- cation, poor business, cost of produc- ton, maintenance, etc.-and which on that account is justly allowed To charge more for service than a road more favorably situaSed-should auto matically have it's income lessened and it's charges reduced because 1t had been purchased by a first class rail- road, and it's classification as to rates altered to its own hurt by the action of third party over which it had and has no control, and wnose act in pur- chasing or leasing the road did not and could not possibly alter in any way the relation of any of the things upon which any just classification alone must rest.
 Section of the Eight Groups Acts does this, and the result of 1t is, in these cases, that the Nashville, Chatta- nooga and St. Louis railroad which is rated by name in said acts as belonging to Class 2, is ranked in Class 1, because the Louisville and Nashville Railroad company owns majority of It's stoc:, when in fact it does it's interstate busi- ness at loss and when it ranks ninth on a basis of highest net earnings on all business.
 
 have no relation to the quality of a road or the cost of transportation or change or affect in any way the ele- ments of the cost of the services ren- dered in the transportation of pas sengers or freight, and any classifca- tion on a basis of stoc. ownership IS inherently and obviously wrong. But Section 2 of the act Is now q matter of secondary importance. The original classification embraces by name the various railroads of the state, and the witnesses examined, all of whom were familiar with the characteristics Of all of the roads were unable to discoy CT any basis whatever having a rela- tion to differences between their con ditions which could have been adopted by the legislature for it's classifica- ton. They testify that there does not exist any facts or fact in the nature, condition or history of complainants roads which could justify the classi- fcation of the statute. They show that the Louisville and Nashville Tn Alabama consists largely of branch lines which are unproductive as com- pared to other roads allowed to charge from IS per cent to 45 per cent more than it. That it ranks fourth in net earnings per mile on all business and Is classed "1' by the statute, while other roads, such as the Alabama Great Southern, ranking third In net earnings per mile, is classed 70"
 It is further shown that the net earning basis is not a rational on1 for classification, since 1t offers a premium for bad mana cement Roads may be alike in all particulars and yet the management may make one prosperous and the other insolvent Good management therefore should not cause a difference in the rates allowed
 And, besides, the net earnings per mile of all business includes inter- state commerce, which may create all the difference in that regard between the roads, and of course such dis- ferences thus arising cannot be the basis of classification for intrastate rates. And the same argument ap- plies to classification on gross earn ings per mile. It Is shown too that the difference of the cost of con struction and of aneenance cannot have been the basis of classification since other roads costing less to con- struct and maintain than complain ants are put in classes and and allowed to charge from 15 per cent to 9 per cent more than complain ants which are put Tn Class 1. It is shown that the Louisville and Nash vile and South and North Alabama railroads are we'll and prudenily man aged, and render service, and cost relatively more to construct, and now cost more to maintain than other roads but are compelled by the statute classification to charge less than such other roads; and that the Nash vile, Chattanooga and St. Louis railroad which ranks in every physical and earn ins feature as to intrastate business below the roads in Classes l, and ,, is forced to charge rates on the basis of being in Class l, thar Is to say, from l5 per cent to 25 per cent less than the roads in Classes ? and 3.
 The administration of these rate statutes, after their passage by the legislature and by It's consent under the direction of the governor and through the orders of the railroad commission of Alabama acting in con- Junction as the administrative officers of the state, has been unjustly dis criminatory against complainants. A number of the railroads in the state filed similar bills to those of complain ants attacking said raee statutes on the same grounds as complainants' bills But afterwards such roads entered into agreements with the governor of the state, that upon the dismissal of the bills of such complaining roads they should be put in classes more favorable for charging rates. These agreements were carried out and under them roads
 
 to complainants' in all characteristics upon which roads might be reasonably classified for rate making, such as cost of construction, cost of maintenance, earnings gross and net per mile, were further classified more favorably for rate charges on freight business than they were fin the statutes themselves and were allowed to charge 2& cents per mile for passengers, while com. plainants having the characteristics as to such matters inferior to the favored roads, were forced to ,harge only 2ls cents per mile for. passengers, and freight rates from 15 per cent to 25 per cent lower than sucr roads. These agreements were made in consideration cf the abandonment by the roads having the benefit of them of the right to liti- gate in the courts of the country the constitutionality of said rate statues. There was and could be no legitimate reason or consideration moving between said favored roads ana the state or its officials which could justify a classifl- cation for rate making to the prejudice Of the complainantS. Complainants be- ing competing carriers any classihca- ton which places equal roads in un- equal positions or unequal roads Tn equal positions as to freight or re- verses the natural relation of roads 10 the disadvantage of ccmplainants in fringes their constitutional right to tho equal protection of the laws All tnts was done in these cases to the prej- udlce of the eomplainants by the clas : sitication of the rate statutes and the administrative application of the policy Of the statutes through the governor and the railroad commission of the state of Alabama, contrary to tho constitu- tion that neither enac;..lent nor admin istration shall infringe on thc right and privilege of equaiity before the Inuc Nh s11fficianf rensnrn OF l.Nn,1sn fn,.