The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1907-08-24
RAILWAY REJECTS
STATE OVERTURES
Governor Glenn Wished
to Defer Rate Inquiry
for a Time
WOULD DECIDE
JURISDICTION
Hearing Goes On and Evidence
is Adduced as to Cost OF
Local Freights and Earn
ings Of the Southern
in North Caro-
lima.

WASHINGTON D. c.. August 23.--
overtures, tentatively made by Cow
ernor Glenn. OF North Carolina, for the
the North Carolina rate case until after
the question OF the Jurisdiction of
United states Circuit Judge j. c.
Pritchard has been determined by the
Supreme Court of the United States,
were rejected to-day by counsel for the
Southern Railway. The plan of the
Governor. as outlined by special coun-
sci for the State, was to suspend the
present inquiry because of the expense
attached to IT, but the Southern Rail-
way argued that in order to expedite
the adjustment of the controversy
necessary facts in relation to the cost
of doing business in North Carolina
should be gathered. pending the settle
ment Of the jurisdiction of the courts.
Had the Southern Railway consent
ed to the plan the present hearing be-
fore Judge Walter A. Montgomery,
who was appointed master to take
evidence and report to Judge Pritch-.
ard, would have been postponed to-
day Indefinitely. AS 1t Is. the hearing
was ordered to proceed, and the indi-
cations are that 1t viii continue for n
week or more. Having transferred the
hearing from New York, Judge Mont
gomery started taking testimony to-
day in the office OF the first vice-pres-
ident Of the Southern Railway.
II. b. Spencer, vice president of the
Southern, was the only witness heard,
and he had not concluded when ad-
journment was taken. During the
forenoon he answered many questions
concerning the cost of operating in
| North Carolina. and the earnings on
all classes of business.
AT the afternoon session Speaker
| Justice, of the North Carolina Legis-
lature. took charge of the cross -axami-
/ nation and inquired closely into the
actual cost of earning dollar on all
classes of business in the State.
Railways Earnings Per Mile.
Mr.. Spencer could not estimate accu-
| rately the cost of earning dollar on
intrastate business, but said that IT
Icost about SIS cents on all business In
North Carolina to earn a dollar for the
year ended June 30. 1906. These fig
ures apply to net earnings as figured
| by the Interstate Commerce Commits
sion. and do not include taxes, interest
on bonds or Indebtedness of any kind
or expenditures from net earnings for
betterments. Mr.. Spencer said that
| the average earnings per train mile
on the Southern system on passenger
business are about sl03 or $1.04, and
the passenger earnings in North Caro-
lima, including mail and express busi-
mess. are about s125. The average
earnings on all business in North Caro-
| lima are larger than the average 70,
the entire system said Mr.. Spencer, fol
the reason that North Carolina is q
Choke" through which the business OF
the entire system is "funneled.''
Earnings in NORTH Carolina.
The witness gave the gross earn.
inss on North Carolina business as
s1204S.127; the gross operating ex.
penses for the same period as s7,77s.-
/ 1913. but could not give the amount OF
taxes paid during the period. nor the
assessed valuations of the property.
Mr.. Spencer admitted that there Is
a considerable volume of interstate
business handled on North Caroline
local trains. and. in fact, practically
all Of such interstate freight except
that originating at division points ol
destined for such points. It was con.
ceded that this to some extent tended
to increase the cost of carrying loca
freight. The reason given by Mr.. Spen.
4 Ger for the high cost OF handling loca
freight was that there is less ton
mage on local trains. more wear or
the equipment, and, more labor re
quired in the handling.
Virginia Evidence at Issue.
Opposing counsel engaged in som
& sharp. exchanges over an effort on .th
Il part tof Mr.. Woodard, special counse
4 for the State. to have the witness ad
nit that he had heard that the Virginia
J State Commission concluded. from
J thorough Investigation. that local bust
} ness Of q railroad costs no more thai
through business. The witness woul
not admit that he had heard anythin,
! of the kind, nor that the decision coul
! have been of value If one had bee
4 reached, for the reason that the inves
= ttgation had been "one-sided."
ii Mr.. Justice cited a number of case
; and quoted many rates in an effort t
show that the Southern Railway an
3 other railways transacting business i
J North Carolina have discriminate
against cities in that State in favor O
!, Virginia cities, making lower rate
i from Lynchburg, Va. to North Caro-
r lima points than are made between tw
. or more North Carolina points of les
. distance.
The hearing will be resumed 10
morrow.