The semi-weekly messenger., 1907-05-31
THE RAILWAY RATE SUITS

railway rates in this state under the
acts of the last legislature has devei-
oped a peculiar state Of affairs. lhere
are two suits pending in the circuit
court of the United States Tor the
eastern district of North Carolina IN
volving the validity Of the acts or the
legislature, in which Judge Pritchard
has issued temporary restraining orders
returnable before him at AsheVllle
against putting the acts into eHect.
Ono of these suits. that Of the Southern
Railroad Company, is to enJon the
enforcement of the law, and the otner
is nv certain stockholders Of the At
Iantic Coast Line Railroad Company
against the directors Of that company
and the corporation commission lor
the purpose of compelling the first
named defendants to test the validity
of the acts in the courts and TO re-
strain the other defendant from en-
forcing the law in the meantime, the
directors having declared their deter
mination to submit to the order or the
corporation commission, when mace
putting the new rates into effect.
In the Coast Line case the plaintifs
sua in behalf of themselves and 'ali
other persons similarly situated ana
thew seek the relief demanded on the
ground that the acts of the legislature
arc void. In this complaint they set
out several reasons why those acts
should be so declared. The prlnclpal
one is that the proposed reduced rates
are So disproportionate to the earning
capacity of that part Of the system ly-
ing in this state that to enforce them
will amount to practical contiscation
of the plaintiffs property. 1t must De
horne in mind that these acts, the
powers of the corporation commission
and all proceedings in reference there
to apply only to that part of the sys-
tenn. which lies in this state and only
to the intra-state traffic Of the COM
pany. gTlSs4k
In their complaint the plaintiffs set
out a number Of facts which they NAM
tain demonstrate the correctness OF
their contention. AS this is going to be
one of the most important law SUITS
ever tried in this whole section OF the
country. because of the legal ques-
tions and the immense value OF prop
erty involved we win, as briefly as
possible stare some of the facts on
which the plaintiffs in their complaint
RELY to demonstrate the unreasonaole'
ness of the rates prescribed by tne
arts of the legislature, in order tha
our readers may understand the nature
of the contention, bearing in mlno' a
already stated, that these facts relate
ONLY to intra-state matters and condl
tiCns.
In the matter of passenger serVlc
the complaint states that tn
intra-state gross earnings for the yea
ending June SO, 1906, were S727,7lO.59
that the operating expenses inclden
to this service amounted to S579,I66
Sc To the expense account OF TN
service must be added its proportion
ate part Of the taxes paid to the state
which is approXimated at $26,831 l.
leaving a net balance Of only $121,
1929 from the cOmpany's intra-stat
passenger service. The value of tn
entire property of the company of a
sor+s in the state is at least 24,516
All which is the value ASSESSED upo
the property of the company by IN
state for taxation, ana upon the paSl
of proportion of gross earnings 1ro1
intra-state passenger service to the en-
tire gross earnings in the state III
company has invested $2,919,966 for III
purpose of earning its passenger Te
ceipts, the net returns on this beln
Ala per cent. An Investigation OF tn
intra-state passenger business c. n
o'ompany for the year ending June 81
s9O6, demonstrates tho fact that ha
the proposed passenger rates been il
effect during that period, instead Of tn
passenger service would have been re
Quoted by not less than $136,g06.2C