The Birmingham age-herald., 1913-06-12

LIZ ~ 1Ns AO1111O
Editor The Birmingham News
have read with interest editorial your issue of the
eighth instant entitled Judge Grubb's Decision Should
Stand Uncontested and while appreciatng of the
commendatory expressions regarding the Louisville &
Nashville Railroad Company, disagree with the aver
ments upon which assume you base your conclusions
and advice.
You say: 'The amount of money involved in the half
cent lower rate is tre comparatively. That great sys
tenn readily afford the loss Had you been advised
of the facts would not sure have reached such
conclusion The loss actually sustained by the Louisville
Nashville Railroad Company in the State of Alabama
from June 1, 1909 to January 81, 1922 months dur
ing which period compelled by the order of the
Federal Court put the reduced rates passenger traf
c on trial while the merits of the being adud
cated-amounted to $640,128.15, average of
$240000 reduction in net revenues the cost of
conducting the traffic at the of 12 cents maximum
being the at the rate of cents per mile maximum
CapltaiZng this per cent basis you will find that
the loss of net earnings equal to the interest
S6000000 This is but small part of the loss in
that must result from reduction of the rates in Alabama
If the rates in Alabama reduced corresponding reduc
tions must be made in the other States in which the
pany operates south of the Ohio River in all of which it
is receiving maximum of 3 cents per me including Ten
Kentucky and Georgia We estimate the loss that
would result from such reduction to be not less than
S1OOO00O per year. net which capitalized at per cent
is equal $25O00O0O The capacity ability of the
company to interest money to be borrowed would
be reduced fully 50000O0 and its credit impaired to
that extent And, unfortunately this is not ALL The
adoption of the maximum of % cents per mile for the
transportation of ntrastate passengers will necessarily
enforce reduction in the interstate rates AS illus
traton: The Louisville Nashville receives for the
transportation of passengers between Louisville and
Nashville $3.50 single trip. At % cents it would
receive S460 reduction of 80 cents per passenger II
per cent in net earnings Assuming the net earnings
be 40 per cent $220the for the system dur
ing the last fiscal year 80 per centhe reduction is
equal to Al per cent of net earnings.
Should Not Impair Roads Credit
1t is OF great Importance to the communities served by
the Louisville & Nashville Railroad Company that its
credit be not impaired but strengthened far pos
sibe This is of special portance to the people of Ala
bama Ii the traffic continues to (Which necessarily
the country served by increases in wealth and
populaton expenditures must be made in the
near future. The line from Louisville to New Orleans
must be reconstructed and second track created This
necessitates practically building line and from in
vestigations made it will result in the building of dou
ble-track line from some point Birmingham to the
Tensas River at Hurricane Station shortening the line
nearly 40 miles, also, incidentally shortening the line to
Pensacola. Other similar additions must be made in
Eastern Kentucky East Tennessee and Georgia. including
an extension of the present line the Louisville Nash
vile Railroad to Atlanta The line in Illinois and Indiana
also be reconstructed Large expenditures
being made and the capital pay for them has been
vded but considerable part of it has been secured upon
what deemed onerous terms, indicating that the
credit of the company is somewhat impaired; and the
future outlook is such that the management will not
ter upon any additional extensons-the board will not
authorize further expenditures capital account await
ing the result of the present threatening financial cond
tions.
1t not improbable tnat all extensions and additions to
property only of the Louisville Nashville Railroad
but of the railroads of the country may be suspended for
an indefinite period When this is done-that is when
the very large expenditures being made for additions and
extensions of railways including the construction Of cleo
trio railways, is checked stopped altogether because
of the difficulty in raising additional capitalize general
business of the country must necessarily be greatly de-
pressed and there possibly be repetition of the
ditions that prevailed in 1907.
Attacks Cause Anxiety and Uncertainty.
Capital invested in railways, and in many other public
utilities and industrals is being attacked from so many
directions that it anxiety and uncertainty Per-
sisent and determined efforts being made to reduce
the revenues of the railways well as other forms of
industry Taxes are being increased annually and de-
termned efforts being made in some States to quad
rupe them Cities States and the United States are wy
ing with each other in enactng laws and enforcing reg
laons increasing the cost of operation reducing the
net Of the railways Notice has been served by
the highest officials Of the United States that an attempt
to reduce costs by reducing wages not be made Such
notice is intended especially to apply to industrial organ
zations. 49,,
If the net of the railways be reduced by re-
ducton of rates. increasing taxation and increase in la
Dor costs (which to be proceeding without restrc
tion) how long will it be before the convergng lines