The Washington times., 1907-08-16
OPERATING COSTLY,
DECLARES SPENCER
AT RATE HEARING
Vice President of Southern
Asserts Expense Is II
Per Cent.
President Barr of Seaboard
Denies Gentleman'S
Agreement Exists.

NEW YORK, Aug. 16.-The taking OF
testimony in the North Carolina rail-
road rate case was resumed this morn
ing before Special Master W. A. Mont
gomery at the offices Of the Southern
Railway Company, 80 Broadway. The
State corporation commission Is repre-
sented al the hearing by former Chief
Justice James z. Shepherd, Of the North
Carolina superior court; former Con-
gresham T. a. Woodward, former
Judge r. w. Winston, and State Sena-
tor Walter E. Daniel.
The attorney generals interests are
looked after by E. J. Justice. speaker
of the North Carolina house of repre-
sentatives. and former Gov. Charles B.
Aycock Franklin Mcneil and Henry
{. Brown, chairman and secretary re-
Fpectively of the North Carolina corpo-
-ation commission, attended the hear
ing. The railroads lawyers are Alfred
p Thom, F. 2. Busbee, and Walter l..
Hines
At the hearing yesterday. Mr Justice
read a statement which made it plain
that the state authorities had no inten-
tion, by appearing through counsel in
the present proceedings, to acknowledge
the right Of the Federal court TO grant
the injunction. Mr.. Thom contended
that the appearance Of Mr.. Justice and
Mr.. AycOck at the instance of Governor
Glenn, made the State party TO the
suit. and was practically a waiver OF
the States right not TO be sued.
Denies Waiver of Rights.
Mr.. Justice denied that any such
right had been waived. The attorney
general had been sued ana IL was the
duty OF the governor to see that he was
represented by counsel
Vice President H. B. Spencer. Of the
Southern, and ]. NJ. Barr, formerly
president Of the Seaboard Air line, were
the only two witnesses examined yester-
day
Mr.. Spencer testified that, owing TO
an increase in the price OF material and
in wages, the operating expenses OF
railroads in the South had been steadily
growing larger. The operating expenses
of the Southern, he declared, are now Il
per cent Of the gross receipts.
Mr.. Spencer said Il cost more 70 oper-
ate local freight and passenger traffic
IN North Carolina than in almost any
other State trayersed by the Southern.
Mr.. Barr, before he was president Of
the Seaboard Air line, served as an Off
Ger on the Chicago. Burlington, and
Quincy, the Union Pacific, the Chicago,
Milwaukee. and st. Paul. the Norfolk
and Western, the AtchisOn, Topeka and
He corroborated what Vice President
Spencer had said about il costing more
70 operate local than through freight
trains,
Policy of Southern in South.
Mr.. Justice wanted know of Mr.. Barr
IL it was tho policy OF the Southern rail-
way TO maintain a monopoly by threat
ening to make reprisals on other rail-
roads that contemplated entering its
territory.
Il don't think so,'' said Mr. Barr.
''Wen. did not you say at one time
that the Seaboard Air line could not
build into Greensboro. ". c., for fear
that the Southern would make repris-
als?"
7 did"
WAS there a gentleman's understand
ing between the two roads in regard to
this2'
Mr.. Barr objected to answering that
question, but when the master ruled !
that 1t was relevant, he said there was |
none.
Wasn't there an understanding that /
II the Seaboard did enter Greensboro the |
Southern would make reprisals?'
ing"
Do you know" said Mr.. Justice.
that local business was handled so
poorly along the Southern lines in North |
Carolina that it drove business bouses 4
OUT OF the State and prevented others Il
from locating in the State, which would 4
nave supplied goods for the local de- Il
NO II