Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-09-08
DEMANDS THE BOOKS
Speaker Justice Springs a Sur
prise at Railway Hearing.
SALARIES PAID OFFICERS
North Carolina Official Charges Com
pany With Subterfuge.
ALLEGATION IS RESENTED
Counsel Thorn Declares That It Is Ut
terly Without Foundation-A
Spirited Colloquy.
ALLEGATION IS RESENTED

Speaker Justice Of the North Carolina
house of representatives, leading counsel
for the state of North Carolina in the
Southern railway rate hearing case now
going on here. sprang a surprise on the
railway officials yesterday at the hearing
before Judge Montgomery, the master in
chancery, in demanding that the Southern
Railway Company's books be produced in
order that certain points along which Con-
troller Plant had testified might be verified
by an expert accountant in the presence OF
Mr.. Justice. Mr.. Plant and Judge Mont
gomery.
Mr.. Justice said that his object In secur-
ing the books was to show that the South
ern Railway Company. by a subterfuge. was
concealing the amount of salaries paid to
the officers of the company. Mr.. Plant de-
clared that he would allow no accountant
to go into his office and make dragnet
investigation of his books. Judge Montgom-
cry ruled that counsel for North Carolina
could see any entries made on Mr.. Plants
books verified in the presence of the master
and Mr. Plant himself. but that the books
could not be opened for public inspection.
Salaries From Auxiliary Lines.
These developments were brought about
as the result Of a question Mr. Justice put
the Southern Railway Company and Of
some of the lines in which the Southern
owns stock were receiving salaries from
such lines.
Mr. Plant testified that on the Mobile and
Ohio, the capital stock Of which Is owned
by the Southern Railway. and whose prin-
cipal officers are Southern Railway officials,
some Southern officials did receive salaries
from that road. but on a number of other
lines in which the Southern was Interested.
and whose officials also were officials of
those lines, they did not receive any salaries
from such roads.
1t was then that Mr.. Justice declared his
object was to prove that the Southern Rail
way Company, by subterfuge, was con-
cealing the amounts paid to the officers of
that company. Counsel Thorn of the South
ern Railway, with considerable feeling. re-
sented what he regarded Mr.. Justices
ell declared that 1t was ut
terly without foundation. was offensive. and
that it could not be justified in legal ethics.
Mr.. Justice replied that Mr.. Thom's lam
guag was unethical and offensive. but Mr..
Thorn declared that he used the language
he did because Mr.. Justices language was
to him exceedingly offensive.
IF Col. Andrews and Mr.. Finley, by the
vote of the stockholders of the Southern
Railway Company in other roads. or by the
influence of the Southern in other roads. are
paid salaries by them, Mr.. Justice declared.
then the southern in consideration of that
fact gets the services of those gentleman
at less than what 1t otherwise would have
to pay, and we are entitled to know it.
wealth No Standard Of Rates."
To this Mr.. Thorn objected, saying that
the only question involved was whether
there were any undue expenditures made
by the Southern out of its treasury in
spect to its operations. He declared that
the Southern might be the owner Of half
the continent and might be rolling in wealth
from its outside Investments and still that
would have nothing to do with the justice
of its rates.
Mr. Justice reiterated his demand for the
production of Mr.. Plants books and that
his testimony be verified. To this sug-
gestion Mr.. Plant replied warmly that he
would not permit expert accountant or
any one else selected by any one to go into
his office and make a dragnet investigation,
but that he would be willing to go through
his records and submit details in respect
thereto to any question MIR. Justice had
propounded in relation to the facts to which
he had testified.
Judge Montgomery settled the disputed
question by declaring that Mr.. Plants testi-
mony could be verified in the presence Of
himself and Mr.. Plant. At this point
recess was taken.
At the close of Controller Plants testi-
mony, l.. H. Green. for seven years gem
eral freight traffic manager of the South
ern railway, took the stand.
In response to a question from Counsel
Thorn of the Southern railway he testified
that the freight rates in North Carolina
were not unreasonably high. first. because
they were made by the North Carolina
railroad commission; second. because they
had been reduced materially by the COM
mission from time to time; third, because
the cost Of handling had increased: fourth.
because they did not yield an unreasonable
return; fifth, because they were lower than
any other form of land transportation;
sixth. because they We're lower than the
states through which the Southern runs,
and, finally. because the people served by
the Southern railway in North Carolina are
generally prosperous.
When asked by Mr.. Thorn whether there
was any basis of local combination rates
in the south as low as that required by the
recently enacted North Carolina state
statute, Mr.. Green replied that the North
Carolina law required much greater re-
duction than any other state served by the
Southern. In South Carolina the rate was
only 20 per cent, while in other states 1t
was 10 per cent.
After going into detail concerning the
mountaineering OF the Southern, now in
progress of construction. Mr.. Thorn asked
the witness If there were any substantial
difficulties in the way of getting capital
to make those improvements
Mr.. Greene replied that there were and
that the work could not be done from the
earnings of the company.
'Loan Supply Choked Off,"
I'm order to obtain capital for these i'm
provements." Mr.. Thorn asked the Witness
what must the company show as basis
to attract investors to lend money!"
1T must show prosp erous and profitable
results and operations In other words, 1t
must give assurance of fair and safe re-
turn upon its Investments. replied the
witness
DO you know whether 1t is possible now
to obtain money for new railway enter
prses in the south?' the witness was
asked
My information is that it Is not pos
sible''
Has it been necessary on that account
to discontinue any improvements and post
pone others indefinitely on the Southern
railway"
Yes replied the witness
After going somewhat into detail con-
corning the cost of freight carriage OF
various food products from New Orleans
Cincinnati and Louisville to points on the
Southern, the hearing was adjourned until
tomorrow