The semi-weekly messenger., 1907-08-30
Of 4. H.PLANT
In Hea,lng Of North Carolina
Rate Case
ConAestsoller of the Southern Occupied
tsta0i all Day-Discussed Net Earn
iaps OF Road 10 Assessed Valuation
Figures He Used Were of Mini
mum Expenses.

washington, august 20 ne near
ing of the North Carolina rate case
before Special Master Walter Mont
gomery was resumed at the Southern
railway offices today and Comptroller
occupied the witness stand throughout
the day.
The Testimony dealt mainly with the
higher cost of operation in North Car
olina than in ottf.r states.
Mr. Plant stated that the total cost
of operating inrTt--state passenger Craf-
fic for the year ended June 80, 1905
was S2,f.6, As, and the total earnings
in North Carolina were s1971-GBS a
ret loss of ab0 1t Ass 900. The average
passenger ira ffic revenue per train
mile, he said, was SO cents, wai1e the
earnings, including state and inter-
state and ma3i and express, were S1.31
per nile.
The minimum cost of opera ton in
earning 81 ,ron the intra-state traffic
he said Wa ''s.8995. That represents
the cost OF earning one dollar on in
tra~ state business in North Carolina
fol the :feecal year 1906 exclusive of
taxes or b6tterments or interest on in
Ve5tments"
MIR. Plant said that so far as he had
been able to determine by careful ex-
animation the cost Of operation had
been greater thus far in 1907 than in
1906 III Doth freight and passenger bus
mess.
MY investigation said he, demon
strates that to earn one dollar of
local revenue in the state of North
Carolina is twice as expensive as il
is to earn one dollar on interstate busi-
ness
The figures I use is of minimum ex-
penses and very low minimum at
that. The average cost of handling a
ton per mile in North carolina is not
less than three times as great as it is
on the system generally"
Mr.. Plant stated that the tax vaTua-
ton of the Southern railway property
in North Carolina for 1906 was s26,-
~154, ,S65.
Has there been a recent increase I'm
tnat assessment?''
Il have been SO informed" repfier
Mr. Plant. 1t is now $33, 1862 ,268'~.
The witness discussed the proper
ton of the net earnings of the road
to the assessed valuation, Indicating
that under the present earnings ala =
*Iszz valuation ought not to exceed
is9,3345, 1856.
He said that the gross revenues on
intrastate traffic in North Carolina for
1906 were $3,324,62
Mr.. Plant explained that dur
ing the year ended June 30th 1906
$S04,850 was charged to capital ac-
count in North Carolina for improve
ments and equipment while on the,
Whole system The amount charged tG-
the same account was $2,S70,196. He
said that the expense of keeping the
property up to modern standards if
North Carolina during the year VIII
be- S1s7,945.
This amount added to the state tag
es Of $500, ,G51 aggregated a total SUM
not capitalized of s467, ,496.
The total net earnings in North Car
olina for 1906 were s324,754. Mr.. Plant
testified that if the proposed rate was
put into effect on this basis of the busf-
ness Of 1906, the total net returns
from intra-state business in that state
would amount to only s28, 007, mot al
Iowing anything fer the payment Of di-
gt2dends.
The earnings he s5aid, would be only
ings during 1906 amounted to 1-2
paY cent
tDhlrinf the last nine7 months Mr.. Plant
Indicated, 1he operating expenses OF
the system had increased to such an
extent that the expense Of earning a,
was 9A053 cents Under the |
old rate he explained, 1t1e road would |
have Fs170,766 remaining on the intra- |
state traffic.
Under the new rates aad conditions |
the minimum reduction OF revenue to |
the old road weuld be $yS9,3 9,375, with |
out computing any interesteOr dividends |
OK taxes.
In response to an inqua=y by Mr.. ]
Thorn Mr.. Plant said:
There is no method known by which |
the cost to do. intra-state business can
be determined with mathematical ac-
curacy'''
The local business he added, |
"oosts far more than the system busi- |
ness" y
A maximum of traffic is carried on |
through trains while on local trains |
a minimum of traffic is handled.
Mr.. Plant explained that there were
a great many local lines in North Car
olina, and that the local traffic gener-
a1Iv wac local