The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1897-10-12
THE LEASE HEARING
A Railroad Expert on the
Witness Stand.
THE TESTIMONY IN FULL
MIR. AVIRETT SAYS HE WILL
PROVE LEGAL FRAUD.
The State Seeks to Prove that the Directors
Were Deceived as u the Earnings of
the North Carolina Road by
False Statements.

New York, Oct. 11.-(Special) the
lease hearing before Commissioner Bra
man today the State made a vigorous
fight with expert testimony. Ernest G.
Moore, former Auditor of the Denver,
Texas and Gulf Railroad, who exported
the Union Pacifc's books, detecting en-
ormous frauds therein for the govern
ment, was on the stand almost the en-
tire day and his testimony and that of
| the shipping clerk of the Mergenthaler
Company, proving freight shipments at
special rates over the Southern Railroad
| to the Tribune occupied the entire seS-
| sion. Mr.. Moore was asked by Mr..
Avirett the following questions among
others and made the answers thereto
| set out herein:
Il ask you if you do not consider that
where a railroad processes to have only
| $4,000 worth of equipments and pur-
chases no new equipment that it is very
singular it showed in a single year $119,-
600 spent in order to maintain that same
equipment and at the same time spend
| S104,510 for car mileage balances and
II do"
Il ask You if on n road 223 miles long
with gross earning of 81, 225 000 year
it is not remarkab bic that so large a sum
as S256,0O0 should be spent in n single
year for the single items of ''mainten-
ancr of equipment" car mileage bal
ances and hiring of equipment
Very remarkable. indeed.
Il ask you if you know of any other
railroad owning 223 miles whose gross
earnings are not more than S1,225 900,
which spends more than one-fifth of it's
entire gross earnings in Il single year for
maintenance of equipment, ear mileage
balance and hiring of equipment if it
owned any equipment at all of its OwnY'
80 - not if its books are honestly
kept"
Il ask you if you do not consider that
a railroad whose gross earnings in a
year decreased from $1,251 ,495 to ST.
DID,, 1913 should not show some decrease
in its operating expenses"
81 do"
Il ask you If as general proposition
when gross earnings decrease operating
expenses should not also decrease?
They should"
Il ask you If when gross earnings de-
crease $4,000 in a single year there is
any excuse whatever for an increase in
the operating expensesW
None, unless betterments have been
placed on the SYSTEM
Il ask you if when the maintenance
OF way account is almost stationary there
should not be decrease in operating
expenses if earnings decreascF'
~ think So"
II ask You If when then the gross
earnings decrease $4,000 in year on
road 223 miles long you can under
stand why it is that the expenses of con-
ducting transportation should increase
$4,000 in the same year,
Il cannot"
Il ask you if when railroad is oper-
ating another railroad under a lease
such rs this and it is shown that there
has been a large increase in the operat-
ing expenses of the road which is being
operated, and a decrease in the operat-
ing expenses of the road doing the oper-
ating, you do not consider that it is evil
dence that the operating road is charging
upon the road it is operating a greater
proportion of expenses per mile than it
is operating itself?"
"It is"
IT ask you If the gross earnings of the
Southern Railway Company as whole
for the year 1895 being $4,131 per mile,
as stated by President Spencer, and the
gross earnings of the North Carolina
Railroad division for 1895 being $5,451,-
900 per mile it does not make as a mat
ter of arithmetic u difference in gross
earnings for that period per mile in ia
vor of the North Carolina Railroad of
81, 320 a mileY'
at does"
81 ask you if, in other words, this does
not show that the North Carolina Rail
road division of the Southern Railway in
the year 1895 was earning $1,32O per
mile more than the average earning per
mile more than that of the Southern |
Railway system"
''It was.''
81 will ask you if multiplying this sum
by the length of the North Carolina Rail |
road (223 miles, it does not show that
this 223 miles of the North Carolina
railroad was earning $294,000 or there
abouts more than the average of the
same length of mileage in the Southern
system as a wholeW
at does"
Il ask you i'll other words if this does
not show that the Southern Railroad 40
essee received from the operation oF
his 223 miles of railroad nearly s9o0
100 in 1895 more than it received from,
he same number of miles Of average
Dad in its system?'
1T does, and more than shows i+n
Il ask you if the net earnings nor r,ilo
# the Southern Railroad system ne on
verage for 1895 being 1920 per mile,
nd the net earnings of the North Caro- >
ina road for 1895 being $1.643 a mile. d
does not show that the net earnings {