The sun., 1907-08-16
FORTH CAROLINA FIGHT here
>TITE GOES on DISPUTING FED
ERtL COT RT JURISDICTION.
insIsis an Setting That on the Record he
fore Any Testimony Is Taken. Lest APP
pearances for ITS OnicisIs at All should
BE Constr rs an Acknowledges

North Carolina's fight with the Southern
hallway for 21+ cent passenger rate was
'aken up in this city yesterday, when half q
dozen lawyers from that State marched into
the Southern's offices at so Broadway and
uegan taking testimony before a Master
IN Chancery appointed by Judge Pritchard
or the United States Circuit Court. Upon
the report of the master will depend whether
ar not Judge Pritchard will issue perma-
nent injunction against the North Carolina
corporation Commission and the Attorney
General restraining them from enforcing
the new rate law. The temporary injunc-
ton issued by Judge Prtchard is being held
n allegiance by agreement. the railroad
having consented to conform to the new law
pendng decision by the United States Su
prsme Court The appeal from Judge
pritchards decision will be carried direct to
the highest court.
Ex-Judge W. A. Montgomery Of North
Carolina is the master. The State Corpora
ton Commission was represented yesterday
by ex Chief justice James +, Shepherd OF
the North Carolina Superior Court. ex-
Congressman +. A. Woodward, ex-Judge
r. W. Winston and State Senator Walter +.
Dantel The Attorney Generals interests
we're protected by z. J. Justice. Speaker Of
the North Carolina House of Representa-
lives, and ex-Gov. Charles b. Aycock.
Franklin Mcneil and Henry c. Brown.
chairman and secretary respectively OF the
North Carolina Corporation Commission,
attended the hearing. The railroads. law
vers we're Alfred p. Thorn, Busbee
and Walter ID. Hines.
Only one reference was made 10 the
State rights phase Of the litigation. That
was when Mr.. Justice read a statement
which made. il plain that the State au-
thorities had no intention, by appearing
through counsel in the present proceedings,
TO acknowledge the right OF the Federal
court to grant the injunction.
Il specially appear for the Attorney
General and his assistant said MIR. Justice.
30 assert that the passenger rate law
went into effect by the operation Of the
act on July 1, 1907, and that the attempt
Ivy the Southern Railway TO enjoin the
Corporation Commission and the Attorney
General from putting into effect the pro-
visions Of the law was pretence at ac-
qniring jurisdiction by Federal court,
and that the court did not acquire jurisdic-
ron through tho railroad company bringing
snit against thoss who had nothing TO do
with the putting Of the law into effect.
Mr.. Justice went on to read into the
record that this was fraud on the courts
Jurisdiction: that the railroad company
did not sue the State Of North Carolina
and couldn't sue It or it's officers because of
he Eleventh Amendment OF the Consti-
rution Of the United States, which forbids,
and that they did not and could not enjoin
rhe State and its officers by indirection
when they couldn't do it directly.
Mr. Thorn, OF counsel for the railroad.
objected to the fling Of the Justice memo
ranclum. He said that the jurisdiction OF
the court in the matter had been argued
hcfore the Court and had been determined
adversely to the contentions In the memo
-andum. Mr.. Thom contended that the
ippearanoe Of Mr.. Justice and MIR. Aycock
At the instance Of Gov. Glenn made the
state a party to the suit and was prac-
,ically a waiver Of the States right not to
he sued.
Mr.. Justice denied that any such right
'ad been waived. The Attorney-6en-
ersl had been sued and it was the duty OF
the Governor to see that he was repre-
sented by counsel. The railroad lawyers
contend that they have sued the Attorney
General to prevent his doing certain minis
terlal acts. Mr.. Justice declared that there
we're no ministerial acts and that every
thing which the Attorney General did was
ny virtue Of his ofioe slone and not as an
individual. Inasmuch as the State acts
only through its officers the Southern's
suit was in effect suit against the State
The master allowed the statement to go
IN. but remarked that the question involved
was one on which he had no right to pass.
vice-President H. B. Spencer OF the
Southern and j. M. Barr. formerly presi-
dent Of tho Seaboard Air Line. were the
only two witnesses examined yesterday.
Mr. Spencer testified that owing to an
increase in the price Of material and in
wages the operating expenses OF railroads
in the South have been steadily growing
larger. The operating expenses OF the
Southern. he declared. are now II per cent
d the gross receipts.
The new North Carolina law. besides
prOviding for a reduction in the passenger
rate, also knocks little off the intrastate
freight rates. MIR. Spencer testified that
The operating expenses for local or intra-
state freight traffic were considerably
greater than for interstate or through
'rafic. Mr.. Spencer said it cost more
20 operate local freight and passenger
,rafic in North Carolina than in almost
any other State traverscd by the Southern.
Mr. Barr. before he was president OF
he Seaboard Air Line. served as an officer
IN the Chicago. Burlington and Quincy.
the Union Pacific. the Chicago. Milwaukee,
~nd 81. Paul. the Norfolk and Western.
the Atchison. Topeka and Santa Fe and
one or two other roads. He corroborated
What ice-President Spencer had said
about il costing more TO operate local than
through freight trains. but the expenses
were lighter on local passenger trains
han they were on through trains The
increased cost in the local freight traffic
came chiefly from the railroads = handling
Of the goods twice. Mr.. Barr estimated
hat IL cost railroad two or three times
as much TO handle local a. through freight.
Mr.. Justice wanted TO know OF MIR. Barr
4 it was the policy OF the Southern Rail-