The semi-weekly messenger., 1907-08-27
Will Show Cost of Operating Rail-
road in State
Hearing of Case Was Resumed-'lce
President Spencer of Southern only
Witness Examined - Ahs"oiou
Many Questions Concerning COST
of onerating in North Carolina.

tentatively made by Governor Glenn
of North Carolina, for the suspension
of the present hearing in the North
carolina rate cae until after tn
question Of jurisdiction Of the United
States Court Judge Pritchard has oeen
determined by the supreme court Oh the
United States, were rejected TO-DAY ny
counsel for the Southern railway. 1Ae
plan Of the governor as outlined Dy
special counsel for the state, was to
suspend the present inquiry because
of the expense attached TO it, but the
Southern railway argued that in order
TO expedite the adjustment or the con-
troyersy necessary facts in relation TO
the cost of doing busines in North car
olina should be gathered pending the
settlement OF the jurisdiction OF the
courts.
Had the Southern railway agreed to
the plan the present hearing before
Judge Walter A. Montgomery, who was
appointed master TO take evidence ana
report to Judge Pritchard, would have
been postponed today indefinitely. AS
il is. the hearing was ordered to pro-
ceed and the indications are that it Will
continue for Il week or more. Having
tranferred the hearing from New York,
Judge Montgomery started taking tes~
timOny today in the office of the first
vice president of the Southern railway.
H. 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 legislature, took
charge of the cross examination and
inquired closely into the actual cost
Of earning a dollar On all classes Of
business in the state.
Mr. Spencer could not estimate &C
curately the cost of earning a dollar
on intrastate business and said that
it cost about 65 cents on all business
in North Carolina to earn a dollar for
the year ended June 80, 1906.
as figured by the interstate commerce
commission 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 $1.03 or
I ho ioh ~ h
Carolina, including mail and express
business, are about $1.25. The average
earnings On all business in North Car
Olina are larger than the average for
the entire system, said Mr.. Spencer,
for the reason that North Carolina il a
Choke through which the business
of the entire system is funnel
ed
The witness gave the gross earnings
on North Carolina business as $12, 043,-
727; the gross operating expenses for
the same period at $7,77S,793, but could
not give the amount of taxes paid dur
ing the period or the assessed valua-
tiOn OF the property.
Mr.. Spencer admitted that there is
a considerably volume of interstate
business handled on North Carolina
local trains and in fact practically all
of such interstate freight except that
originating at division points Or des-
tined for such points.
It was conceded that this to some ex-
tent tended to increase the cost of
carrying local freight.
The reason given by Mr.. Spencer for
the high cost of handling local freight
was that there is less tonnage on local
trains, more wear on the equipment,
and more labor required in the hand
ling.
Opposing counsel engaged in some
sharp exchanges over an effort on the
part of Mr.. Woodard special counsel
for the state, to have the witness ad-
nit that he had heard the Virginia
state commission concluded from a
thorough investigation, that the local
business of railroad cost no more
than through business. The witness
would not admit that he had heard any
thing of the knind nor that decision
would have been of value if one had
been reached, for the reason that the
investigation had been one sided.
Mr.. Justice cited a number of cases
and quoted many rates in an effort
to show that the Southern railway and
other railways transacting business
in North Carolina have Disseminated
against cities in that state in favor of
Virginia cities, making lower rates
from Lynchburg, Va, to North Caroli-
ma points than are made between two
or more North Carolina points of less
distance
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