New-York tribune., 1907-09-08
WANTS TO SEE BOOKS.
Counsel for North Carolina Scores
Against Southern Rmlzgay.


North Carolina House of Representatives. leading
counsel for the State of North Carolina in the
Southern Railway rate hearing case, surprised the
railway officials to-day at the hearing before Judge
Montgomery by demanding that the Southern's
books be produced in order that certain points
along which Controller Plant had testified might
he verified by an expert accountant in the pres
enee Of Mr. Justice, Mr. Plant and Judge Mont-
gonoerv Mr. Justice said that his object to
show that the Southern Railway Company, by a
subterfuge was conceaIng the amount of sala-
ries paid to the officers Of the company
Mr. Plant declared that he would allow no ac-
countant II go into his office and make drag
net investigation of his books. Judge Montgomery
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
These developments were brought about the
result Of question Nj Justice put to Mr.. Plant
as to whether the officers of the Southern Rail
way Company and of some of the lines in which
the Southern stock were receiving salaries
from such lines.
Mr.. Plant testified that on the Mobile & Ohio the
capital stock Of which is owned by the Southern
Railway. and whose principal officers are Southern
Railway officials some Southern officials did receive
salaries from that road but on number of other
lines in which the Southern interested, and
whose officials also officials Of those lines they
did receive any salaries from such roads.
It was then that Mr.. Justice declared his object
to prove that the Southern Railway Company.
by subterfuge, was coneealing the amounts paid TO
the officers of that company AIr. Thorn, counsel of
the Southern Railway, with considerable feeling
sented what he regarded Mr.. Justices assllrnp-
ton He declared that il was utterly without foun-
dation, offensive, and that it could justi
fed in legal ethics Mr.. Justice replied that Mr.
Thoms language unethical and offensive, but
Mr. Thorn declared that he used the language he
did because Mr.. Justices language was him ex-
ceedingIy offensive
If Colonel Andrews and Mr.. Arnley, by the vote
of the stockholders OF the Southern Railway Com
pany in other roads by the influence of the
Southern in other roads, paid salaries by
them" Mr. Justice declared, then the Southern
in consideration Of that fact gets the services Of
these gentlemen at less than what IT otherwise
would have to pay, and entitled to know it,
To this Mr.. Thorn objected, saving that the only
question involved was whether or not there were
any undue expenditures made b. the Southern out
OF it's treasury in respect 10 its operations He de-
clared that the Southern might be the 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 produc
tion Of Mr. Plants books and that his testimony
be verified. To this suggestion Mr.. Plant replied
warmly that he would not permit an expert ac-
countant or any one else selected by any 10 so
into his Office and make a dragnet investigation.
but that he would be willing to go through his
records submit details in respect thereto to any
question Mr.. Justice had propounded in relation TO
the facts to which he had testified. Judge Mont
gomery settled the disputed question by declaring
that Mr. Plants testimony could be verified IN the
presence Of himself and Mr. Plant At the close Of
Controller Plants testimony I. II. Green for seven
years general freight traffic manager of the South
ern Railway. took tho stand Ia response to a
question from Air. Thom, hs testified that the
freight rates in North Carolina were not unTeason-
ably high first because they were made by the
North Carolina Railroad Commission; secondly De
cause they had been reduced materially ny the
commission from time to time; thirdly because IHe
cost Of handling had increased fourthIy' taat t-ey
did not yield unreasonable return Attiiy' ue-
cause they are lower than any other form or lana
transportation: sixthly, because they were lower
than the general average Of local rates IN otAe'
states through which the Southern runs, and hhiI-
~ because the people served by the Southern kali
vay in North Carolina are generally prosperous
when asked by Mr.. Thom whether there was
anv basis Of local combination rates IN the Sou'h
as low as that required by the recently enacted
North Carolina State statute. Mr.. Green replied
thar the North Carolina law required a much
greater reduction than any other state served by
the Southern which was the sum OF the local plus
e5 per cent After going into detail concerning
the double tracking OF the Southern now in process
of construction. Mr.. Thorn asked the witness If
there were any substantial difficulties in the way
Of getting capital make those improvements
Mr. Green replied that there were, and that the
work could not he done from the earnings Of the
company
In order to obtain capital for these improve
nents." Mr. Thorn asked. what must the COM
pany show as basis 10 attract investors 10 lend
It's money!"
TT must show prosperous and profitable results
Of operation. In other words, II must give assuT-
ance OF fair and safe return upon its invest
ments," replied the witness.
DO you know whether 1t is possible now to OBJ
tain money for railway enterprises IN the
South?" the witness asked
MY information is that it is not possible"
Has IT been necessary on that account to dis
continue any Improvements and postpone others
indefinitely the Southern Railway
Yes" replied the witness
The hearing adjourned until Monday.