The farmer and mechanic. [volume] (Raleigh, N.C.) 18??-19??, 1907-08-27

Elimination is not being practleed
against the State In freight rates
again NJ. pence aid this Vas q
matter for the traffic department OF
he system 70 consider.
Mr.. Thorn wanted to know some
thing Newport How many
are In the place" he asked
zone hundred and thirty-four, was
the prompt response from Mr. Il
p1=hee who was on the far side Of
the room.
THAT makes no difference" echoed
Mr. Justice: Newport Is only typi-
cal of other North Carolina towns
This trade wall has been built up py
the Southern with reference to All
North Carolina points. and the dls-
elimination applies TO the large cities
as well as to the small ones
yoliey OF Pointed Questions.
Mr.. Justice stated on another track
at his ~tuncture. and spectators began
to s~traighten themselves in their
hairs. Here are some Of the ques-
tons he let GO:
"Wnat is the Southern Railways
property in North Carolina WORTH
What Is the entire bonded indebt-
edness Of the road2'
state whether these bonds were
issued for cash. and Il not what was
the consideration"
state whether losses due to negli-
gence are charged to operating ex-
~penses?"
do you know whether the South
ern Railway has expended any money
on newspapers in North Carolina"
Has there been any expenditure
for legislative purposes in North Car
olina2"
ITO be more explicit, have persons
beer especially employed at Raleigh
n other points for the purpose Of
influencing legislation"
DO you know whether any ex-
p~enditures have been made for politi-
cal in North Carolina -
eff so. the Investment was q mighty
poor one observed Mr.. F. II. Busbee
in soto voice.
All Of these questions Mr.. Spencer
made note of, and indicated that he
would try to answer those hat he
can.
States Lawyers Making Good.
There is no denying the question
that the attorneys for the State are
making the most of their Cpportuni-
ties. The cross-examination Of Mr..
Spencer was a valuable contribution
to the States case. h youthful
vice-president of the Southern i'm
presses one as a frank. STRAIGHTFORWARD
witness. He readily answered ques-
tons that came within his knowledge,
but he had many hard nuts to crack.
Some of the i~nterrogations that were
hurled at him were very embarrass-
ing, especially those relating to dis
examinations in freight rates
against North Carolina points.
1t was then that Mr.. Thorn
would jump into the arena to save
the face Of his witness The South
ems general counsel. is not without
experience, and he worked heroically
to offset the very clever line Of cross
examination conducted by Mr.. Wood
ard and Mr.. Justice. At times he
would throw out a blunt objection to
questions, while again he would tact
fully throw a suggestion for a reply
in h path Of the witness.
Profits on Southern's Business.
Speaking of the result of Mr..
Spencer's testimony today. one of the
party of North Carolina officials who
the hearing, had this to say
by way of analysis:
ut was shown by Mr.. Spencer, that
the operating expenses in North Caro-
lima for the fiscal year Of 1905, which
he testified in New York. we're fairly
representative, were more than seven
million dollars. After paying all op-
Grating expenses. the Southern Rail-
way. on this showing, could nave paid
a dividend of six per cen upon an as
sessment of sixty-f1ve million dollars.
whereas the actual assessment of it's
property was only twenty-six million
dollars. If the reduced rates had
been in operation. the Southern could
have paid a dividend of six per cent
on sixty million dollars. The conten-
ton of the Southern, and for his pur-
pose, the experts were examined, was
to show that it cost the road ninety
cents to carr a dollar on local bust
ness; that it cost sepentS-one centS
to earn a dollar on the entire system
and therefore the reduction in the
local rates is c~onfiscatory. 1t was also
contended that a very small part of
the through freight was handled on
the local trains. It develops how
ever, from the cross-examination OF
Mr.. Spencer, that while the revenue de-
rived from what is, called Interstate
shipments is credited to the account
Of Interstate revenue. that all the
expenses Of running the local trains
is charged to local business, while a
very lar~e proportion of the inter
state business is HANDLED by the local
trains. In fact. all of the Interstate
freight which goes into the State was
distributed by local trains and all OF
the interstate freight going out OF
the State was handled by local trains
to the division points,
Mr.. Spencer stated that it was inn
possible to make any intelligent esti-
mate of the difference in the cost OF
handling the local intra and inter
state passenger and freight business.
He admitted thai his calculation of
the cost of earning a dollar of local
business was based upon the fact that
1t cost the Southern seventy-one cents
to earn d dollar on its entire bust
ness. lie did not deny that the re
ports of the company showed that 1t
cost the Southern to earn a dollar
on its business in North Carolina or
its own lines 1915 per cen and if q
calculation of the additional cost to
earn a dollar on local business was
based upon the cost to earn a dollar
on the entire business in North Caro-
lima, the cost to earn a dollar on local
business in the State would be seventy
one cents. This admission, in the
minds of many peonle puts an end -
the Southern's contention. for if it
cos,S the company seventy-one cents
TO earn a dollar on its local busin ess.
then the two and ~one-Quarter cent
rate would afford the railroad ample
venue to pay operating expenses and
a dividend of more than z per cent in
North Carolina. It was also shown
from crosS-eEanlination of Mr.. spencer
that the profits on North Carolina
business are much larger than the
profits on business in other States,