value, that other property in the State-and notably farm property was systematically and designedly undervalued and assessed at two-thirds or three-fourths of its value, and that thereby these properties were unjustly discriminated against. After hearing the exceptions and all the facts and arguments offered to sustain them, the Commission was of the opinion that the assessments or valuations were not too high relatively or otherwise, and ordered that the exceptions be overruled and that the Clerk certify the same according to law. Thereupon, the roads composing the Atlantic Coast Line System, Southern Railway and Seaboard Air Line and the Western Union Telegraph Company, brought suit in the Circuit Court of the United States before Hon. Charles H. Simonton for an injunction to restrain the Commission from certifying the assessment to the different officers of the State. This matter was heard in Asheville on the 13th day of August, 1899. on a motion to continue this injunction to the hearing. Among other objections made to the assessment, the said companies insisted that the Commission did not have the power to assess or value their properties under the Revenue Law passed by the Legislature of 1899.

His Honor Judge Simonton held that the Commission did not have the power to assess or value the property of the said companies under Revenue Law of 1899, and ordered that the injunction be continued to the hearing.

A petition has been filed before Judge Simonton to rehear this judgment, and a rehearing was ordered and had at Charleston, S. C., on the 27th of December, 1899, and no decision has been announced.

All of the proceedings in reference to these suits will more fully appear from copies of bills filed by the said companies, copy of answer and affidavit filed by the Commission and H. C. Brown, Clerk, and copy of the order of the Court, which will accompany and form part of this report.

The Commission respectfully recommend that you call the attention of the Legislature at its next session to the fact that the Revenue Law has been construed by the Federal Court not to confer upon the Commission the power to assess railroad and other property for taxation in order that such amendments may be made thereto as may be deemed proper.

COMPLAINTS.

One hundred and forty complaints were filed before the Commission, all of which received careful attention, and such as were without the jurisdiction of the Commission were brought to the notice of the railroad companies and the differences were in most cases satisfactorily adjusted, the point of jurisdiction not being raised.

Only a few of the more important matters are reported herein, as it would encumber the report.

Col. John S. Cuningham, Chairman of the State Board of Agriculture, in behalf of the Board, petitioned the Commission to reduce the minimum carload of fertilizers from fifteen tons to ten tons and reduce the rate per ton. A similar petition was filed by Mr. T. B. Parker, President of the State Alliance. The railroads of the State were notified and a date fixed for the hearing. The Traffic Managers of the different roads and petitioners and their counsel appeared on the date fixed and full consideration of the matter was had, and the Commission adopted Circular No. 1, which appears elsewhere in this report. This order reduced the minimum carload from fifteen to ten tons and made the rates per ton therein recited applicable to all the railroads in the State. The rate per ton, it will be observed, is the same as the standard rate in existence prior to the date of the Commission's order. Ten tons had been the minimum carload of fertilizers of North Carolina for many years prior to February, 1898. At that last date the Railroad Commission changed it to fifteen tons. At the time of hearing before the Commission, to-wit: April, 1899, ten tons was still the minimum carload in Virginia and in South Carolina The tariff sheets of the railroads advertised ten tons minimum carload from North Carolina, South Carolina and Virginia points to all Virginia and South Carolina' points, and fifteen tons minimum carload from all points to North Carolina points. The Commission could not understand why the same roads could not furnish the people of North Carolina, who appeared to be in similar conditions to the people in Virginia and South Carolina, the same accommodations at the same rates.

Exceptions were filed to this order by the railroads, which were heard after due notice to interested parties, and after careful con

sideration were overruled. All of the railroads in the State adopted this circular at once and put the same into operation except the roads composing the Seaboard Air Line System; all of the roads of which appealed to the Superior Court from said order. The Carolina Central, however, withdrew its appeal after suit was brought by Mrs. Virginia B. Matthews in Federal Court to enjoin the Commission from enforcing this order. The appeal was docketed in the Superior Court of Wake County and was called at the next term, but for certain causes it could not then be tried; but it was agreed that Hon. Fred. Moore, Judge presiding Fourth Judicial District, should try the case in Raleigh on the 11th of December, jury trial being waived. The trial was had as agreed and Judge Moore now has the case under consideration. The Seaboard and Roanoke and the Raleigh and Gaston contended that the Commission had no power to make any rates for them on account of the provisions of their respective charters, and also that the rates as established were unjust and unreasonable. The revenue derived by the Raleigh and Gaston Railroad Company from intra-state fertilizer traffic for the season of 1899 amounted to about one thousand four hundred dollars; the rate. per ton on fertilizers is the same as that of the order of the Commission, the contention being over the reduction of carload minimum from 15 tons to 10 tons; so the loss in revenue by the Raleigh and Gaston Railroad would be infinitesimal; and the Seaboard and Roanoke is litigating over a matter that does not reduce their revenue one dollar, as the road is not affected by the order, the reports showing that there was no intra-state movement of fertilizers on this road, for the season of

1899.

The Commission also established a uniform rate on cotton seed and cotton-seed hulls applicable to all railroads in the State. The Seaboard Air Line System of roads excepted to the order of the Commission directing the several roads of this system to apply continuous mileage as provided in Rule 1 of the rules governing transportation of freights to this and all other traffic and appealed to Superior Court.

As stated above, Mrs Virginia B. Matthews instituted suit in the Federal Court against the Commission and the Carolina Central Railroad, and insisted that the Commission had no power to make rates for the Carolina Central Railroad because of the pro

visions in the charter of the Wilmington, Charlotte and Rutherfordton Railroad, to which rights complainant alleged that the Carolina Central had succeeded, and insisting further that the rate was unreasonable and unjust, and especially so, as it did not allow the Carolina Central to charge 30 per cent more than the standard rate, which it had before that time been allowed to charge on fertilizers and all other freights.

Judge Simonton, before whom this suit is pending, decided the first question, namely: As to the power of the Commission to make rates against the complainant, and referred the matter to a Special Master, E. S. Martin, Esq., to take testimony and report. upon the reasonableness of the rate. The Special Master had his first hearing in Raleigh on the 21st of December, 1899, and the Commission thinks the matter will be followed up by him to a speedy conclusion.

After a careful consideration, the Commissioners are of the opinion that their action in removing the arbitrary rate heretofore allowed the Carolina Central Railroad on fertilizers was proper, and that this arbitrary rate ought also to be removed from all other freights. As a matter of fact, this road only applied this arbitrary rate to local freights; that is to say, freights originating on and terminating on that road, and did not apply it to through freights; that is, freights originating on that road and terminat ing on some other road or originating on some other road and terminating on that road, and, in fact, charged on through freights a rate much lower than the standard rate.

The average receipt per ton on through freights was 60 cents and on local freights $1.64, as shown by quarterly report for quarter ending September the 30th, 1899, of the Carolina Central Railroad Company; and as the tonnage of through freights exceeds greatly the tonnage on local freights, the Commission thinks that if the standard tariff was fairly and justly applied to local freights and a rate on through freights lower in proportion to cost of transportation than the rate charged on local freights, the revenue of this road would be greatly increased thereby.

In the year ending June the 30th, 1899, number of tons earning revenue on this road were 504,462 tons and the revenue therefrom was $444,647.44; in the year ending June the 30th, 1891, the number of tons earning revenue were 222,944 tons and the revenue therefrom was $433,640. 84. It may be claimed that this

shows that the rates have been reduced, but this is not the fact. The fact is that the rates in force during said quarter were the same as they were in 1891, and the difference in the revenue is caused by the great increase in through tonnage and a corresponding decrease in local tonnage. The through freights for the fiscal year ending June the 30th, 1899, were 383,562 tons; revenue therefrom, $235,647.32; local freights, 120,900 tons; revenue therefrom, $213,081.05. Average receipt per ton of through freights, 61 cents; average receipt per ton for local freights, $1.64. This arbitrary rate is so manifestly unjust to all persons interested in local freights that the Commissioners feel much concerned about remedying it.

The Commission established a rate for telephone service, to which the Southern Bell Telephone and Telegraph Company excepted and appealed to the Superior Court, although this company is not charging any higher rate, and at most points a less rate, at any point in the State than that fixed by the Commission. The work of the Commission for the year has been greatly facilitated by the courteous and efficient manner in which Mr. H. C. Brown, Clerk, has discharged his duties.

Respectfully submitted,

FRANKLIN MCNEILL,

Chairman.

SAM L. ROGERS.

D. H. ABBOTT.