In view of the depression in business, it is surprising indeed, as well as gratifying that the railroads should have enjoyed an increase in passenger earnings in 1908 over 1907. This may be due in part to the legislation prohibiting the issuance of free passes. But in connection with this it is well to point to the statements made by the officers of one of the railroads in connection with the results of reducing the passenger rates in Alaba:a in 1882 from 5 cents to 3 cents. At that time it must be remembered that no legislative restriction was enacted as to the issuance of free passes. Yet the railroad officers in accounting for the increase in passenger earnings explained that about 5 per cent was gained from the withdrawal of passes and the remaining gain of 10 per cent was the result from stimulating the traffic by lower rates.

It is certain, therefore, that the stimulating effect of the lower tariff combined with the protection given to the railroads in their revenues, has brought about the earnings of larger returns in the aggregate than would have been earned under the pre-existing system.

The gross earnings from operation of the six railroads making effective the legislative rates, show an average decrease of 11 per cent, while the five retaining the old rates show an average decrease of 6 per cent. The tonnage of one of the roads first mentioned was largely made up of lumber, which amounts materially for its excessive decrease in tonnage, and consequent small gross earnings. The mills in its territory have been to a large extent idle during the past year. If we elininate this road from our calculations, the remaining five roads would show a decrease of 7 1-2 per cent average as compared with the year 1907.

A comparison of the net earnings from operation cannot here be intelligently made on account of changes

in accounting to conform to the requirements of the Interstate Law,

The Commodity Rate Act was passed by the Legislature to remedy two sources of discrimination. One, to secure to the citizens of Alabama similar rates for like services as given to citizens of adjoining states by the same railroads; the other, to reduce the great disparity between through and local rates and prevent the absorption of all the profits of home productions which restricts intra-state traffic and thereby retards state development.

The Commission has visited more than two-thirds of the counties, as required by the law, which went into effect May, 1908.

We have to report a decided improvement in the reiations between the railroads and the people. Many of the evils which served as sources of irritation to the public have been stopped by the railroads. One of the un derlying causes of friction was that the railroads' maragement had tended to become too greatly centralized and the evil was growing in proportion with the growth of mileage in the various systems. It was but natural that the officials far away at their home office acquired a narrower aspect of things. They neither understood the people they served nor knew their surrounding circumstances, and their indifference or lack of appreciation of conditions became more and more perceptible. Realizing this, many of the railroads have made an ef fort to change and reform some of their policies and departments, using more discretion in some places, increasing responsibilities in others, and displaying more promptness in correcting evils, thus producing the improvement.

The Commission, in its office, maintains a complete rate file to and from all points, and many shippers are

receiving benefits from this department. It is necessary also for the Commission to properly discharge its duties as required by law, to check rates and to approve all intra-state rates, and for this work have engaged a special clerk whom they designate as rate clerk. This is becoming one of the valuable features to shippers in investigating rates, discovering and adjusting overcharges.

HEARINGS AND INVESTIGATIONS.

Since our last report, the Commission has had 52 formal hearings. These have all pertained to local service and practices. We have had no cases of rate discrimination, it being generally understood the Commission had been enjoined from making any changes in the tariffs. We have, however, handled a number of cases involv ing rates by correspondence. In many instances on formal complaint of local service or practices, the railroads, without the necessity of a formal hearing, make such changes or improvements needed, when their attention is directed thereto by the Commission. We have some few complaints made to us of conditions over which the Commission has no jurisdiction. Such as conditions of crossings of public roads, settlements of damage, etc., which the Commission adjusts, if possible, otherwise the parties complaining are referred to local authorites.

DECISIONS AND ORDERS.

We transmit herewith copies of orders and decisions of the Commission. We have three orders of the Comission in the courts. The Mobile depot case, which was referred to in our last report, the Commission has

never been able to have this case progress further than the initial step of a temporary restraining order in the Federal Court. The other two in litigation are on actions brought by the Commission in the City Court of Montgomery for penalties, on account of the failure of the railroads to put into effect the orders of the Commission.

CAR SERVICE.

There has been very little complaint for failure to supply cars. The railroads seem to have ample equipment for moving traffic and are giving much better service in this particular than for some years.

ACCIDENTS.

The reports of the railroads show that deaths by accident have occurred during the past year to 125 persons, and personal injury to 1,823. Of the above number there were 2 passengers killed; 126 injured; 51 employees killed; 1,540 injured. The number of passengers handled during the year were 8,578,183. There were 9,962 employees engaged in conducting transportation.

STATISTICS OF RAILWAYS.

We will omit from this report the mass of statistics filed with the Commission by the railroads. We append, however, condensed extracts of some of the important features for 1907 as well as 1908 for easy comparison. We also include, where practical, comparative statements of tonnage with a classification showing under what head the decrease or increase occurred as compared with 1907. The main line mileage in the state has increased 104.94 miles during the past year.

RIVER TRAFFIC.

After much investigation, the Commission, on April 6th, 1908, adopted a tariff schedule for boats plying the Alabama and Tombigbee rivers. The original Commission tariff has been amended by changes, or additions, as conditions justified. Barge rates have also been adopted which offer interior river points very low cost of transportation from the gulf. Efforts are being made at some few places to improve wharf facilities. This improvement is necessary before competitive points can receive great additional benefit from river navigation. No tariff has been adopted for the other rivers except as were already published by them. There were certain competitive points on the Tennessee River from which boats declined to receive cotton, but this has been remedied without suit or hearing.

SUMMARY.

The gross earnings of the railroads in the state are not so great as in the preceding years, but their reports show it is not from causes confined to the State of Alabama. The general depression has affected every business, and the earning of the railroads have not declined more than those of either the industrial, commercial or agricultural interests.

One system, the Seaboard Air Line Railway, has been placed in the hands of receivers during the past fiscal year, but this did not result from operation in Alabama, as disclosed by their annual reports.

With adjustment of their expense to trade conditions, the railroads are gradually assuming normal conditions. During the past year the Illinois Central, by the construction of thirty-seven (37) miles of main line and by