Southern

Railway

Name of road, etc.

Percentage of operat
ing expenses to
earnings.

Net earnings.

Net earnings per mile of road.

Total mileage

operated.

1899 25,353,686 16,500,526 65.09 8,853,160 1.646 5,958.68 1903 42,338,243 29,786,069 70.35 12,552,179 1.761 7,136.98

In the "total operating expenses" in the above table "A" are included expenditures which result in the permanent improvement or betterment of the property of the roads, such as, expenditures for right of way and station grounds, real estate, grading, tunnels, bridges, trestles and culverts, rails, ties, crossings and cattle guards, telegraph lines, station buildings and fixtures, shops, round houses, turntables, water stations, fuel stations, grain elevators, storage-warehouses, docks and wharves, electric light plants and electric motive power plants, gas making plants, and miscellaneous structures. There are also included expenditures for equipment in the way of locomotives and cars of all kinds.

In the following table, "B," are shown for the years ended June 30, 1901, 1902 and 1903, expenditures by the roads named for permanent improvements or betterments and also for lo comotive and car equipment, which expenditures are included in "total operating expenses." The expenditures for the former are under the heading "on account of construction," and for the latter under the heading, "on account of equipment."

TABLE B

There was a long period of business depression in the South during which the roads not only could not make improvements in their equipment, roadbed and other property, but were also unable to maintain their various properties in proper or first class condition. When that period passed away, unusual expenditures were required for new engines, new car equipment, the replacing of wornout rails and in other ways necessary to put the roads in good condition and enable them to handle their largely increased business.

The expenses of the saw mill business have increased in like manner as the expenses of the railroads. There has been an advance in the cost of nearly everything that goes into the manufacture of lumber, such as labor, feed for stock, oil, stumpage, etc.

12. The financial condition of the principal defendants appears to have steadily improved for a number of years up to and including the year 1903, in which the advance in rates complained of was made. They were comparatively prosperous at the date of and for years prior to the advance.

The Southern Railway Company has declared dividends for each year from 1897 to 1903, both inclusive, ranging from $543,000 (1 per cent on $54,300 of preferred stock), in 1897, up to $4,500,000 (72 per cent on $60,000,000 of preferred stock) in 1903. That road also reports surpluses of from $464,013, in 1898, to $2,100,897 in 1902.

The Louisville & Nashville Railroad Company has declared dividends for each year from 1899 to 1903, both inclusive, ranging from $1,848,000 (about 32 per cent on $54,912,520 of common stock), in 1899, up to $3,000,000 (5 per cent on $60,000,000 of common stock), in 1903. That road also reports surpluses of from $40,204, in 1899, to $2,987,195, in 1903.

The Atlantic Coast Line Railroad Company has declared dividends for each year (except year 1900) from 1894 to 1903, both inclusive, ranging from $318,399, in 1894 (511⁄2 per cent on $323,500 of preferred stock, and about 5 per cent on $7,021,950 of common stock), up to $1,714,075 (5 per cent on $1,744,100 of preferred stock and 5 per cent on $36,

650,000 of common stock), in 1903. The surpluses reported by that road are from $86,875, in 1894, to $1,293,983, in 1903. In 1900 no dividend was declared, but there was a surplus reported of $2,152,406.

The Nashville, Chattanooga & St. Louis Railway Company declared dividends ranging from $100,000, in 1899 (being 1 per cent on $10,000,000 of common stock) to $400,000 in 1895, 1896, 1897 and 1898, being 4 per cent on $10,000,000 of common stock. For each year from 1900 to 1903, that road reported surpluses ranging from $566,907, in 1900, to $823,480 in 1903.

The Georgia Southern & Florida Railway Company declared dividends for each year from 1897 to 1903, ranging from $27,360 (being 4 per cent on $684,000 of preferred stock) in 1897, up to $99,240 in 1901 (being 5 per cent on $684,000 of preferred stock and 6 per cent on $1,084,000 of preferred stock), in 1903. For each of the years 1902 and 1903, it declared a dividend of $77,560. The surpluses reported from 1896 to 1903 range from $9,657 to $107,060 in 1896. The surplus for 1901 was $24,165; for 1902, $41,448; and for 1903, $77,968.

The Seaboard Air Line Railway Company has declared no dividends, but reports surplus of $252,676 for 1901, $769,331 for 1902, and $754,431 for 1903. The Central of Georgia Railway Company declared no dividends but reports surpluses for each of the years from 1899 to 1903, both inclusive, ranging from $58,888 in 1899 to $203,506 in 1903. The Macon & Birmingham Railway Company has declared no dividends and reports a deficit for each of the years from 1894 to 1903, both inclusive, ranging from $29,099 in 1902 to $96,715 in 1894. The deficit reported for 1901 was $34,313, for 1902, $29,099 and for 1903, $45,949.

13. No special equipment in the way of cars is furnished or required for hauling lumber. Box cars, flat or open cars and gondolas, which are used in handling other traffic, are furnished by the carriers for hauling lumber. The proportion of box and flat cars (the latter including gondolas) used varies with the different roads and depends upon the length of the lumber. A

large amount of lumber, because of its length, cannot be shipped in box cars and requires the open or flat cars. Of the lumber shipped west, it is estimated from 50 to 60 per cent goes in flat cars. The flat car is the cheapest car built by the roads and it costs somewhat less and is easier to load than a box car. The rates on the flat cars, while now the same, were formerly higher than on box cars; having been at one time higher by 7 cents and afterwards 3 cents. The difference in rates is stated to have been made because box cars are more adapted to other freight besides lumber than are open cars and fewer of the former therefore return empty. Much the larger portion of the box cars come south loaded with grain and merchandise. A large proportion, estimated at from 85 to 100 per cent, of the flat cars return south empty.

It is necessary that open or flat cars of lumber be equipped with standards, braces and supports, for the purpose of protecting the load and train, and this equipment is required to be furnished and attached to the car by the shipper. The witnesses for complainants and for defendants vary widely as to the cost of this equipment. Where the Master Car Builders' Association rules as to the nature or equipment and character of lumber to be used are complied with, the cost per car including value of lumber, labor, nails and freight on weight of equipment, is approximately $3.50 per car. The standards and other equipment have to be removed at the end of the trip and it is necessary that the shipper attach new equipment for each shipment. This equipment is not required where box cars are used. There are similar requirements as to the equipment of open or flat cars used in shipping other commodities which are shipped in those cars, such as furniture, carriages and machinery, &c.

14. Shippers of lumber endeavor to put into or on the car all it will hold, but it is seldom practicable to load a car to its full stenciled or marked capacity. The loading of a car to capacity depends upon the car furnished, whether it is of the proper length or not, and upon the lumber, whether it is green or dry. The box cars that are furnished for the movement of lumber are built primarily to handle grain and merchandise and cannot be loaded with lumber to their full capacity unless