The herald and news. [volume] (Newberry S.C.) 1903-1937, 1907-08-27
PEACE OVERTURES REJECTED.
Southern Railway Declines Governor
Glenn's Proposals.-Hearings
Are Continued.

Washington. August 23.-Overtur-
,es. tentatively made by Gov. Glenn
Of North Carolina for the suspension
of the present hearing in the North
,Canolina rate case until after the
question of the jurisdiction of the
United States Gircuit Court Judge J..
c. Pritcharl has been determined by
the supreme court Of the United
States. were rejected today by conn
sci for the Southern railway. The
plan Of the governor, as outlined by
special counsel for the state, was to
suspend the present inquiry because
the expense attached to it. but the
Southern railway argued that in Or
der to expedite the adjustment of the
controversy necessary facts IN rela-
ton to the cost Of doing business in
North Carolina should be gathered
pending the settlement Of the JurlS-
diction Of the courts.
Hal 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 Prltch-
80" have been postponed to-
day indefinitely As it is, the hear
ing was ordered to proceed ana the
indications are that it will continue
for a week Or more. Having trans
ferred the hearing from New York,
judge Montgomery started taking
testimony today in the office Of the
first vice president Of the Southern
railway.
H. 3. Spencer, vice president OF
the Southern. was the only witness
heard and he had not concluded when
adjournment was taken. During the
forenoon he answered many questions
concerning the cost Of operating in
North Carolina and the earning on
all classes Of business. At the after
noon session Speaker Justice Of the
North Carolina legislature took
charge of the cross-examination and
inquired closely into the actual cost
Of earning dollar on all classes OF
business in the state. Mr.. Spencer
could not estimate accurately the cost
of earning a dollar in intrastate busl-
ness, but said that it cost about 65
cent on all business in North Carolina
to earn dollar for the year ending
June 30, 1906. These figures apply
to net earnings as figured by the IN
terstate commerce commission and
do not. include taxes, interest on
bonds or Indebtedness Of any kind. or
expenditures from net earnings Tor
bette1ments.
Mr.. Spencer said that the average
earnings per train mile on the South
ern system on passenger business are
about $1.O3 or $l.O4 and the passen-
ger earnings in North Carolina, in
cluding mail and express business,
are about $l.25. The average earnings
on all business in North Carolina are
larger than the average for the entire
system. said Mr.. Spencer, for the rea-
son that North Carolina is "choke"
through which the business Of the
entire system is "funnelled.'
The witness gave the gross earn
inos on North Carolina business as
$12.O43,727; the gross operating ex-
pen<es for the same period as $1.17S,-
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
considerable volume Of interstate
business handled on North Carolina
local trains, and in factpractlcally all
of such interstate freight except that
originating at division points or des-
tined for such points. 1t was coneed-
ed that this to some extent tended to
increase the cost of carrying local
freight. Tie reason given by MI
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 handling.
Opposing counsel engaged in some
sharp exchanges over an effort on
the part Of Mr. Woodward, special
counsel for the state; to have the
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