The governor and lieutenant governor of South Carolina, and several federal and local law enforcement officials have been guests of Southern Railway at that company's hunting lodge in Charleston, S.C. Southern President L. Stanley Crane acknowledged yesterday.
Addressing a question from stock holder Evelyn Davis at Southern's annual meeting here, Crane said that Southern was subpoenaed to bring certain documents to a federal grand jury studying whether Southern acted improperly when it entertained government officials and shipping customers.
Because frail freight rates are regulated by the Interstate Commerce Commission, money spent on entertaining shippers is construed by some to be an attempt to subvert regulation.
At congressional hearings earlier this month, ICC auditors testified that the rail and trucking industry spends an estimated $1.5 billion annually to entertain potential customers in those heavily regulated industries.
Because truck and rail companies can't compete on price, they attempt to attract business by spending large sums sending representatives of various shippers to retreats, of lavishing them with gifts, the authors said.
And at those hearings, the staff of the antitrust and monopoly subcommittee of the Senate Commerce Committee also released a report detailing an ICC investigation revealing that Southern had entertained more than 70 government officials and shippers at its hunting lodge.
At yesterday's annual meeting, Crane denied that the company did anything improper. "We have not done anything in violation of Federal or ICC laws" he said. South Carolina Gov. James Edwards and Lt. Gov. W. Brantley Harvey Jr. have been guests of the railway, but quickly added that no congressman have visited the hunting lodge.
Crane said that state and federal officials had been guests, and that Southern had provided the names to the grand jury.
But he defended Southern's policy of inviting law enforcement personnel from jurisdictions through which Southern passes to the lodge "for the purpose of discussing mutual problems." Crane cited Southern haveing the lowest number of loss and damage claims of any railroad as proof that those sessions benefited stockholders.
Besides the hunting lodge, known as Brosman Forest, Crane said Southern has a fishing camp near Palatka, Fla., and a beach resort on the west coast of Florida. He said the lodge is made available to Southern management employes at all levels "on a first come, first-served basis," for nine months of the year. During the other three months, the facilities are used for business.
Operating costs for the lodge are $1 million annually, Crane said.
Crane said that Southern was now the industry leader in net income as a percentage of total income. That figure was 9.2 percent for Southern in 1977 compared to a 1.4 percent industry average.
In respone to stockholders' questions, Crane said Southern will continue its steam train excursion program, which said cost the company $50,000 last year. He said the program, which runs day or overnight trips on old stream engines, has brought the company considerable "goodwill" from the community.