The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1900-02-03
ARGUMENT AS TO
FERTILIZER RATES
Begun Before Special Mas
ter Martin.
3 SPEECHES YESTERDAY
JUDGE SHEPHERD Az D MIR. POU
FOR THE STATE AND MAI.
SHAW FOR ROAD.
3 SPEECHES YESTERDAY
TODAY WILL Be CONSUMED IN SPEECHES
The Question of Valuation and of Fair Earn
ing Thereon the Subject of Some Sar-
castle Remarks by Counsel on
Either Hand.

After an hour consumed in
| taking evidence argument was be-
gun yesterday before Special Mas
| ter Martin in the fertilizer rate
case of the Carolina Central Railway.
| The whole of the day thereafter was
taken up by speeches, Judge Shepherd
| and Mr. James III. Pou speaking for
| the Corporation Commission and Major
Shaw for the Carolina Central. Argu-
| ment will be resumed this morning and
will consume all of today.
Judge Shepherd said that judicial in
| reference was asked, not because of
any radical change of the rate system,
| but merely because the Commission had
| withdrawn its consent for the Carolina
| Central to charge 80 per cent more than
other roads The highest estimate placed
upon probable loss by the road was only
$1,000, out of Il total income of $444,-
! CAT A To interfere in such case would
be for the court to take upon itself the
administrative functions of the Commits
sion The rule of the Supreme Court
il not what conclusion the court would
reach as to changing a rate as they
| might differ from the Commission upon
| the same evidence, but whether the rates
as fixed amount TO a practical contisca-
| ton of plaintiffs property. A great prin
| ciples was declared by the court when it
| said the State might regulate railroad
rates. 1t was never held by the court
| that it could interfere with the action
| of the State, on the contrary it held ex
pressly that the courts could not inter
| fere and that the only remedy for
abuses by the State wa. at the polls
| Subsequently however, i'll case Of fla
| grant abuse of the power the court de-
clared that it would interfere where the
effect of State action would amount to
taking property without due process OF
law
Judge Shepherd also said that the ex
pert witness of the road utterly ignored
the elements laid down by the Supreme
Court that formed the basis OF rate
making, in that he stated that in making
rates his idea was to pay the interest
and dividends on bonds and stocks; that
| he did not know the value of the road
and that rates were based upon the
valuation of over S6,000,000; that the
road has since been purchased by the
Carolina Central Company for 81 100000
and taking the present value of its
| stocks and bonds as shown by them the
value of the road would be only 5000
COO He also said that with this as the
value which was fair the net income
for 1898, June Bird, after taxes and Eek
penses were paid, would be S164, 0S260.
This was equal to 4 per cent on $4,000
COO, and on S3,025,000 this net income
was 515 per cent. However in view OF
such showing this could not be a case
for Federal interference, when 4 per
j., 4
good investment Deducting the $1,000
loss from $164,0S26O there would be
left S1a7. 5000. Take 100000 interest
from this and we have S37,0S2, which
is more than IT'S per cent on the pre-
ferred stock and also equals over 5 per
cent on the highest estimate of the value
of the property, $3,025.0OO.
MAJOR SHAW.
Major Shaw said that the fertilizer
rate circular was the most unreasonable
he had ever seen issued by any board
with which he had been concerned. 1t
would have been highly creditable to the
Commission to have given their reasons
for fixing the ten ton rate and their
failure to do so should be taken to mean
that they had not the information.
The net income of the Carolina Cen
tral in 1899 was S165 HIPS. The taxes
for 1893 were SIT 79400. If the Corpora
ton Commission succeeded i'll maintain
ing its rate of taxation the taxes for
1899 would be $500 After the loss
by the reduction in fertilizers the net
income would be only $10S,000 to- be
made upon 100000 or only a little
| over 3 per cent. The North Carolina
| road was permitted to make per cent
TO pay to the State and 4 or 5 per cent
for itself. Il do not say the North Car
| DINA road is shown too much favor, 4
do not think so, but l do think there
should be no imposition on the Carolina
/ Central. Let the courts say that rail
/ road shall not make 6 per cent here and
there will never be another railroad
built in the State and their ought not to
be. Adopt the same rule toward other
| corporations and where will you be? Say
to the cotton factories you shall only
make ; per cent and not another lock OF
cotton will be spun in North Carolina
Say to capitalists that this Commission
| will hold them down to ; or per cent
on investments and the State is doomed
| Everybody knows that building railroads
is risky business. / would. like to
know Of this Commission what they. con
slider Il fair per cent for a road to earn.
| All we ask is that we be allowed to
make fair and reasonable earning on
| the money we have invested. There Is
as much law for saying that only two
sacks shall be carried as for saying but
| ten tons shall be carried in car. Re
duce our earnings $1,000 and we can
not operate the road
MIR. J. Fl. POU.
Mr.. James II. Pou, for the Corpora
| ton Commission. said:
| ''To become entitled to the relief pray
ed for the plaintiff must establish two
| propositions:
| First. That the rate on fertilizer
| promulgated by the Corporation Com