Evening star., 1907-08-24
RATES IN NORTH CAROLINA
INVESTIGATION RESUMED IN
THIS CITY.
Vice President Spencer Of the South
ern Railway Examined as to
Earnings and Outlay.

The North Carolina rate case hearing,
transferred from New York. was resumed
here yesterday before Walter A. Montgom-
cry. appointed by United States Circuit
Judge ]. c. Pritchard to take evidence.
H B. Spencer, vice president of the South
ern railway, testified concerning the cost of
operating trains in North Carolina, and
the gross earnings on state business, but
the great proportion of questions concerned
details of making shipments, industrial con-
ditions at all of the important points in the
state, taxes paid by the Southern, assessed
V luation of property, names and mileage
o. the various corporations making up the
Southern system Mr.. Spencer was re-
quired to make notations with view to fill
ing replies.
Ex-Governor Aycock, Speaker Justice Of
the North Carolina legislature and F. A.
Woodward, special counsel, conducted the
examination for the state, and gave indf-
cation that the investigation will be ex-
haustive in every particular.
Asked concerning the relative cost Of
equipment Mr.. Spencer said that between
per cent on locomotives, 57.37 per cent on
box cars, 1888 on fiat cars, and 1926 on
coal cars. The great increase on fiat and
coal cars. he said. was due to the subetitu-
ton Of steel for wood in the construction.
Mr.. Spencer said that the cost of running
a passenger train in North Carolina Is
from 80 cents to $1.14 mile, and that the
average earnings per mile on local passen-
to IS cents a mile. Most Of the intra-
state travel, he said, is on local trains. Mr..
Spencer said that 1t cost from three to
three and O half times as much per ton to
handle intra-state freight in North Carolina
as the average for the entire system.
On cross-examination Mr.. Woodward
asked the witness to give the gross earn
ings of the Southern system In North Caro-
lima for the fiscal ended IllV 10 1&6
Mr.. Thorn protested, saying that for in
formation of that character a traffic man
should be put on the stand, but the wit
ness finally was permitted to consult a
statement handed him by the controller of
the system. He gave the gross earnings on
North Carolina business from this state
ment as s12O43,727: the gross operating ex-
penses for the same period $7,77S, 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 a con-
siderable volume Of interstate business ham
died on North Carolina local trains, and in
fact practically all Of such interstate
freight except that originating at division
points destined for such points. 1t was
conceded that this to some extent tended
to increase the cost Of carrying local
freight. The reason given by Mr.. 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.
GIenn's overtures Rejected.
Overtures, tentatively made by Gov.
Glenn of North Carolina for the suspension
of the present hearing in the North Caro-
Ina rate case until after the question Of
the jurisdiction OF Judge Pritchard has
been determined by the Supreme Court Of
the United States were rejected by counsel
for the Southern railway. The plan of the
governor, as outlined by special counsel
for the state, was to suspend the present
inquiry because Of the expense attached to
it. but the Southern railway argued that
in order to expedite the adjustment Of the
controversy necessary facts in relation to
the cost of doing business in North Caro-
lima should be gathered pending the settle
ment Of the Jurisdiction of the courts.
Had the Southern railway consented to
the plan the present hearing before Judge
Walter A. Montgomery, who was appointed
master to take evidence and report to Judge
Prtchard. would have. been postponed to-
day indefinitely As it is. the hearing. was
ordered to proceed, and the indications are
that it will continue for week or more
Having transferred the hearing from New
York Judge Montgomery started taking tes-
timony yesterday in the office of the first
vice president of the Southern railway.