except as to children 12 years of age or under, and as to these half price; and provides that the Corporation Commission may exempt all independently owned and operated lines of less than 60 miles in length, and certain newly constructed lines; (section 2) that wherever a road is owned, controlled, or operated, by lease or any other agreement, by any other road, the rate for the road so owned shall be determined by the rate prescribed by the act for the road owning or operating the other. The Corporation Commission is required to publish the rates prescribed by the act prior to June 1, 1907. Section 3 requires interchangeable books to be kept on sale at such stations as the Corporation Commission may designate, and requires railroads to honor mileage books issued by other roads. Section 4 provides a penalty of $500 against any railroad company violating any of the provisions of the act, and, makes a servant of the company guilty of a misdemeanor. The freight rate act (Pub. Laws 1907, p. 252, c. 217) provides (sec

p tion 1) that the Corporation Commission shall not, in fixing the maximum freight rates, permit common carriers to receive a greater toll for shipment over connecting lines than the sum of the present locals, less 25 per centum, and provides that, when the freight rates on any road is not so high as the present tariff, the Commission may permit the same to be increased to the present standard. The Commission is authorized to reduce any tariff of rates when, in their opinion, such reduction shall be just, but has no power to increase any tariff of rates either by classification or otherwise. Section 2 provides penalties for rebating or discrimination. Section 3: If any shipper shall make a written application for a car or cars for use in shipment of freight, if the railroad company shall fail to furnish the said cars within four days the company shall be penalized in the sum of $5 per day, until the said cars are furnished. Section 4 provides certain penalties for failure to transport freight within a reasonable time. Section 5 directs the Corporation Commission to prepare and publish the tariff of rates, charges, and tolls authorized to be charged and collected under this act.

The complainant alleges that at the same session of the General Assembly there was passed certain other laws regulating the business of complainant, and that the effect of said laws would be to greatly increase the cost of conducting its business, and make the charge more burdensome than heretofore. Said acts are referred to by their title as follows:

(1) “An act to provide for the assessment of real estate of railroad companies in stock law territory for local benefit,” ratified March 8, 1907. Pub. Laws 1907, p. 668, c. 459.

(2) "An act to prescribe the hours of service of employees for railroad companies engaged in the operation of trains," ratified March 8, 1907. Pub. Laws 1907, p. 665, C. 456.

(3) "An act to authorize the Corporation Commission to require railroads to erect and maintain union depots in towns of 2,000 inhabitants," ratified March 11, 1907. Pub. Laws 1907, p. 672, c. 465.

(4) “An act to extend and enlarge the power of the Corporation Commission,” ratified March 11, 1907. Pub. Laws 1907, p. 675, c. 469.

Complainant contends: That it has property in North Carolina devoted to the business of carriage, freight and passenger, of the assessed value for taxation of $26,134,865, and that of this amount $7,213,222.74 is devoted to the intrastate commerce of North Carolina. That the property of complainant, like all other property in North Carolina, is worth more commercially than its assessed tax valuation. That the bonded indebtedness of the complainant applicable to its North Carolina property, is $24,623,078.29. The annual interest charge on said indebtedness is $714,103.08. In addition to its annual interest charge, complainant is compelled to pay for rentals and trackage in North Carolina $481,189.99. That the part of said interest, rental, and trackage charges devoted to intrastate business in North Carolina is $329,900.89 per annum, and this does not consider any question of stock or dividends on stock. The defendants in their answer admit the passage of the laws referred to, and admit the tax valuation of the property, deny a iy knowledge of the validity of the bonded indebtedness or the amount thereof, but allege that it is in excess of the value of the property, and allege that the complainant's stock is watered, and that the amount of bonded indebtedness and the amount of stock are merely items and elements in ascertaining the value of the property, and in ascertaining what is a just, fair, and reasonable compensation in fixing the rates.

The complainant contends that the effect of the act in respect to freight rates, and of the act in respect to passenger rates, whether taken separately or together, would, if enforced, as will appear from the figures stated in the bill, be to deprive the complainant of its property without due process of law. The complainant contends that under the laws of North Carolina the Corporation Commission is charged with the duty of making just and reasonable rates for the transportation both of freight and passengers; that it is charged with the duty of making full investigation of every element which enters into and constitutes one of the things required to be considered in fixing such rate; that prior to March 2, 1907, the Corporation Commission, after full investigation as required by law, made and established a passenger rate for complainant's lines of 314 cents per mile for first-class fare and 234 cents per mile for second-class fare, and established the present standard tariff of freight rates, and provided that, where there was a haul over two connecting lines, the rate charged by such common carriers should be the sum of the locals, less 15 per cent. Complainant contends that these rates are in the main reasonable and just, and that the same were fixed by the body charged under the law with that duty, and, wherever they are unreasonable and unjust, they are too low, and should be increased.

"The complainant contends that its existing rate fabric is upon the whole property adjusted, not only in its relation to intrastate tariff, but in its relation between its interstate rates and its intrastate rates in North Carolina and in other states. It admits that there may be cited a few instances needing correction, but alleges that they are negligible, and not to be considered in this matter; that the present rates do not yield more than a just and reasonable return upon the value of the property used in the service; and that the rate charged is not higher than a just and reasonable compensation for the service rendered, whether considered on the basis of a fair return of the money invested or in respect to the service rendered. The complainant contends that the effect of the act in respect to passenger rates and the act in respect to freight rates, whether taken separately or together, if enforced, would be to so reduce the return to complainant for the service rendered that it would deprive complainant of its property without just compensation, without due process of law, and deny to it the equal protection of the laws, and would interfere with interstate commerce. Complainant contends, if the rates mentioned are put into effect and enforced, they would reduce the revenue of complainant upon its intrastate business about $300,000 per annum; that the effect of this reduction would be to leave to the complainant only about $29,000 net earnings from its intrastate business, assuming that the costs of operation did not increase; and that the number of passengers and tonnage remained relatively the same. Complainant contends that this would be true not allowing anything for the interest on the bonded indebtedness, or for the payment of trackage or rentals, that it could not pay the interest on its bonds, much less pay any dividends, and that this return would be only .39 of 1 per cent. on the assessed valuation of complainant's property devoted to intrastate business. The complainant contends, further, that owing to the increased and increasing cost of operating expenses, occasioned in part by the legislation of the state of North Carolina, and in part by the general increasing price of commodities, that this small balance would be wiped out and a deficit would be left, even though complainant should continue to use, as it has done in the past, the utmost economy in the management of its property.

The complainant contends that section 3 of the act in respect to freight rates, which requires complainant, at any time, upon the written application of any shipper, to within four days furnish such shipper with car or cars as demanded, and, the complainant fails to furnish such cars, it shall be liable for a penalty of $5 per day, until said cars are furnished, is unconstitutional and void, for that the requirements are peremptory, and no exception is made on account of the inability of the carrier to comply with such request, although its cars may be in other states, may be actually engaged in interstate commerce, or may be prevented by an accident, congestion of tariff, or other causes beyond the control of the complainant, and is such a regulation as cannot, under the law, be made, and is a regulation depriving the complainant of the right to use its cars in fair and just proportion according to the demands made upon it, both for interstate and intrastate business; that said section is unconstitutional and void, for that it undertakes to classify the said roads in the state without any just and reasonable basis for such classification, and denies the equal protection of the laws in violation of the fourteenth amendment. The complainant contends that the said acts in respect to both freight and passenger rates by a system of enormous fines and penalties, therein sought to be imposed, closed the doors of the courts to complainant, and makes the terms upon which complainant may enter the courts so unequal as compared with other suitors, that it denies to complainant the equal protection of the laws and due process of law, in violation of the fourteenth amendment.

Complainant contends that section 3 of the act, in respect to passenger rates, requiring the complainant to keep on sale mileage books, which shall be good in the hands of the person named therein on all the roads in the state on which the fare is the same, or less than the fare on the road of the company selling such books, and requires the complainant to redeem such mileage books, or mileage sold by another company, in payment of transportation, is unconstitutional and void, for that the regulations are so unreasonable and unjust as to deprive the complainant of the right to use its property in the conduct of its business, and such laws are not within the power of the General Assembly to enact, but impose unjust and unreasonable burdens on complainant, and deprive it of its property without due process of law. Complainant contends that the classification of railroads as attempted both in the freight rate act and passenger rate act is unjust, unreasonable, and unlawful, as having no just and proper basis on which to make such classification, and is in violation of the fourteenth amendment of the Constitution of the United States.

Complainant contends that under the said acts the corporation was, as to the act in respect to freight rates before the said act went into effect, required to prepare and publish the tariff of rates authorized by the said act, and, as to the act in respect to passenger rates, the Corporation Commission was required by said act and the laws of North Carolina to prepare a just and reasonable rate for the said railroads in North Carolina as prescribed in said act, and was required on or before June 1st to publish said rate so fixed, and the said Commission was further required to designate the places at which mileage books should be kept on sale, and that the commission was under the laws of North Carolina specially charged with the duty of enforcing the said two acts, and of the enforcement of the laws relating to common carriers, and was charged with the duty of regulating said common carriers, and had full control and supervision over such common carriers, and that the Attorney General and the Assistant Attorney General were specially charged with the duty of enforcing the laws of North Carolina, including the said two acts as against the complainant.

The complainant contends that it has the right, under the Constitution, whenever the circumstances may justify it, to increase its rates, either of passenger or of freights, when by the increased price of commodities of all kinds, including labor, the cost of operation becomes such as to make the then existing rate so low as to be confiscatory, and that it has the right, as an incident of property, and that the act of the Legislature in so far as it tends to deprive the complainant of its rights is in conflict with the fourteenth amendment of the Constitution, and is therefore void. The complainant contends that it had a right to come into a court of chancery and make defendants those representatives of the state who were specially charged, by law, with the performance of the duty of enforcing these acts, and have the validity and reasonableness and justness of the rates inquired into, and to have inquired into by a court of chancery the effect of such law upon complainant's property, and to have such property protected pending the litigation.

The defendants admit prior to March 2, 1907, the Corporation Commission, in the exercise of the power conferred upon it by law, had established a passenger tariff of 314 cents per mile for first-class fare and 234 cents per mile for second-class fare, and had established the present standard tariff of freight rates for intrastate tariff, and had provided for a reduction of 15 per centum from the sum of the locals on a joint haul. The defendants contend, however, that a reduction of the rates heretofore established, as provided for in these acts, would not be unreasonable and unjust, and say:

(1) That, while the maximum rates fixed by the Commission prior to the acts of March 2, 1907, were for passenger tariff 314 cents per mile for first-class fare and 234 cents per mile for second-class fare, yet complainant habitually sold mileage books at 21/2 cents per mile. (2) That not only did complainant sell mileage books, good over its lines, at 21/2 cents per mile, but that during the summer season—that is, between June 1st and October 31st of each year—it sold season tickets from points in eastern and central Carolina to points in western Carolina at the rate of 2 cents per mile. (3) That complainant sold tickets to ministers of the gospel at about 2 cents per mile. (4) That

2 the average of all tickets sold in North Carolina for intrastate travel was during the year ending June 30, 1904, 2.39 cents per mile, and during the year 1905 2.386 cents per mile, and during the year 1906 2.508 cents per mile, and that the average over complainant's entire system for the year 1906 was only 2.41 cents per mile. (5) That complainant, in violation of the laws of the state, carried many influential people free, and that this was done to get their business or to influence them. (6) That the complainant pays exorbitant and extravagant salaries, and paid out last year large sums in settlement with persons injured on its system, or while in its employment, and large sums for lost or damaged goods, and large sums for clearing of wrecks, and large sums for advertising its business. The defendants allege that if complainant would stop selling tickets and transporting persons at less than 214 cents, and charge all persons 214 cents, the act in respect to passenger rates would not reduce the revenue of complainant as much as complainant claims.

Defendants contend that the figures given in the bill in reference to complainant's earnings are correct. They allege that the complainant was required by law to make report to the Corporation Commission, both as to its earnings and operating expenses, that such reports were made and based on such reports, and, after hearing, the General Assembly of North Carolina passed the two acts in question, and that, if the figures given in the said reports be taken as true, the complainant would be able to lose all that it claims that it would lose under the said acts, and would have a sufficient net revenue left to pay 512 per cent. per annum upon the assessed value of that part of its property devoted to intrastate business. Defendants contend that the complainant not only earns a large revenue on its intrastate business, but considering both its intrastate and interstate business and its entire operating expenses on that part of its line lying in North Carolina, its net earnings are about 10 per cent of the assessed value of its property.

The defendants contend that the General Assembly abolished two classes of fares, and that the result of such act would be a great sav