The New York herald., 1921-10-12
REVIVAL IN SOUTH
SEEN BY HARRISON
Head of Southern Railway Ex-
poets Profitable Operations
Despite Slump.

Renewal of business activity in the
South justifies the hope that a trans
portation system serving that section
may once more look forward to profit
able operations, declared Fairfax Har-
rison, president of the Southern Rail-
way. in his annual report to it's stock
holders.
In keeping with preliminary figures
published last May, the roads income
account for 1920 showed net corporate
income Of $1,716.14S. equal to sass a
share on its $50, 100000 preferred stock,
contrasted with $1.7S share. after d.
vidends or per cent. on the preferred.
earned on $12o.000.000 common stock in
1919. The poorer showing was ascribed
to increased operating expenses and
taxes and to shrinkage in business.
| Referring to the suspension Of the
dividend on the Southern's preferred
stock, Mr.. Harrison said that the first
ambition Of the management is to ac-
complish An early restoration of that
disbursement. Owing to inflated costs
OF construction, the uncertain bust
ness outlook and the prohibitive cost OF
capital the company made no important
additions to it's property in 1920.
"The rate increases authorized by the
Interstate Commerce Commission effec-
tive September 1. 1920. conspicuously
failed to produce the result sought by
the transportation act---i e., the stabli-
ization Of railroad income on basis OF a
| fixed percentage return annually on the
| value Of railroad property" said Mr..
| Harrison. TT is difficult to escape the
| Judgment that the remedy was applied
| too late; that so long as the business OF
the United States shall continue to be
| subject In the future, as 1t always has
been in the past. to alternate periods OF
prosperity and depression, no regulation
| of railroad rates can be successful which
does not permit the accumulation and
conservation of surplus earnings OF boom
times against the need Of hard times.
"Such policy would make 1t possible
| in periods of lean traffic accompanying
| industrial depression to afford business
the stimulus toward recovery of lower
charges for transportation. The policy
| actually followed made it necessary to
raise rates at q time when every one en-
gagged in industry knew that depression
was imminent. Whatever else 1t may
have been. it was not good business
The report gave a detailed account Of
the Southern's settlement of claims and
counterclaims with the United States
4 fS1liTOaQ AdInlnlsJdtion LOT tHc USE VI
its property in the period Of Government
control. AS finally concluded the settle
ment gave the company $6,000.000 In
cash and s2.412.00O three-year notes
which were left In the hands of the ad-
ininistration as @ result of its effort to
finance the note maturity Of March.
1919. OF the cash received $1,000 900
was paid by the company to the War
Finance Corporation In part payment Of
loan of s7.s55.270 negotiated in the
Federal control period.
| Although no earnings report was yet
available covering the operation OF the
| Southeastern Express Company. which
handles the express business over the
| Southern Railway and the Mobile and
Ohio. Mr.. Harrison said its returns were
entirely satisfactory to the railway COM
panies and seemed ample to justify the
decision to inagurate those operations.
At the annual meeting of stockholders
Yesterday in Richmond Jasper G. Bacon
of Boston. Guy Cary OF New York, Fair
fax Harrison of Belvoir, Va, and Henry
w. Miller OF Washington were reelected
directors for term of three years
Stockholders Of the road number 1887
according to the report.