The rate per passenger per mile, under the Minnesota law, applicable to the Chicago and Northwestern road (Winona and St. Peter line) is 4 cents, and the rate per passenger per mile under the Illinois law, applicable to the Chicago and Northwestern road, is 3 cents.

The General Manager of the Northwestern states, in his report of last year, that the decrease of of a cent per passenger per mile for the year ending May 31, 1873, made a difference on the whole line of only $128,455.10. This upon the presumption that the travel was the same as it would have been under the higher

rate.

FREIGHT EARNINGS OF CHICAGO AND NORTHWESTERN.

The gain in earnings from freight on the Northwestern road for the year ending May 31, 1873 over the preceding year, was 14-553 per cent., while the average rate per ton for 1872 was $3.00 against an average rate for 1873 of $2.91. The average rate per ton per mile for 1872 was 26 cents, against an average rate for 1873 of 2,35 cents-showing a decreased rate for 1873 of nearly 10 per cent. from the rate of the previous year.

100

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100

The General Manager says in his report: "Had we transported freight at the same rate per mile per ton, (as the previous year) our freight earnings would have shown a further increase of $857,980.32." This is upon the presumption that the road would have carried the same amount of freight at the higher rate.

The ex

The General Manager further says in the same report: perience of this company for a term of years shows, that the general and inevitable tendency of its operations is to lower rates of compensation for all classes of service, and that the receipts of the company are to be sustained or increased only by swelling the volume. of traffic and multiplying the sources of business." [See Annual Report for year ending May 31, 1873, p. 32.]

According to the report of the Chicago and Northwestern Company on file in the office of the Secretary of State, the company carried passengers ten years ago at an average rate of 3 cents per passenger per mile. This was during the year ending December 31, 1864.

TAXATION AND GROSS EARNINGS.

It is not one of the prerogatives of this board to determine either the method of railway taxation, or the extent of that taxation, ex

cept so far as the amount of tax is affected by the returns of gross receipts under existing law. Charges have been made to the effect that the actual receipts in some cases do not correspond with the returns made to the state in other respects than those already named. The commissioners prefer to give further time to the examination of all the facts involved, before giving countenance to suspicions of so grave a character. The form of reports and methods of investigation contemplated by the commissioners will undoubtedly prove a sufficient security in the future against any real or imaginary evil in this particular.

In direct connection with this question, the propriety of taxing the receipts of colored lines, organized without the state, but receiving their earnings from business within the state, merits serious consideration. A kindred question is that of taxing the receipts in this state from sleeping cars owned without the state.

NET EARNINGS.

For reasons already explained, it has not been possible to ascertain the net earnings of the several railway companies for the year ending December 31, 1874.

The net earnings for the year ending December 31, 1873, are shown in the following table:

the net earnings for 1874 will show a relative falling off. But this has been true of the whole country; the short crops, and the general stringency of the times having borne heavily upon the transportation interest.

On the other hand, the reports hitherto made by the principal companies, warrant the expectation that the full returns for the year 1874, will show an absolute increase upon the net receipts of the year 1873, and this, notwithstanding the operation of the law during the quarter just ended, the effect of which has been to cause some reduction.

The Chicago, Milwaukee and St. Paul Company report a total loss of $120,040.82, entailed by enforcement of the law during the last quarter of the year-$66,726.27 in the freight department of their business, and $53,313.82 in the passenger department.

The Chicago and Northwestern report a loss from the same cause, during the months of October and November, of 24 per cent. on their passenger business, and 26 per cent. on freight.

That any of the roads, in times of so great depression, and under the working of a law claimed to be ruinous, should have increased the amount of their net earnings is an encouraging fact, indicating, as it does, the steady industrial progress of the state.

Your commissioners are not yet completely furnished with the requisite data for determining whether the maximum rates fixed by the law, are or are not in some cases lower than the companies can adopt with a reasonable expectation of earning under them a fair profit on the legitimate cost of their roads. On the one hand, we are not prepared to allow that the rates are ruinous, as is claimed by the railway companies, which have not hardly made, as yet, a full and fair trial of them; and on the other hand it is undeniable that those rates are considerably lower than are at present charged by a great majority of the railroads of the country, as plainly appears from the comparative statements to be found on pages 265,270 of this report, in which the tariff charges made by a number of leading roads, west and east, taken at random, are placed side by side with the "Potter Law rates.

The question will naturally arise upon making the comparison, why the other roads quoted may not bring their rates down to a level with those of the Atlantic and Graet Western and the Baltimore and Ohio roads. Possibly an examination into the condition of the Atlantic and Great Western Co., whose rates are even a

little below those of the Potter Law, would afford a sufficient answer to this inquiry. But up to this time we have no knowledge of any sufficient reason for the very remarkable differences in the charges of the several railways cited.

RAILROAD AID.

Assuming that a recognition of the aid given to railroad companies of the state properly belongs to a consideration of the general question of cost, the commissioners commenced investigations at an early day, with a view to determine, if possible,

(1) The amount of lands donated by Congress, and actually received by various companies to aid in the construction of railways; (2) The amount of bonds executed for the same purpose by counties, towns and municipalties; and

(3) The amount of aid rendered in the form of farm-mortgages. To this end, inquiries were addressed to the Commissioner of the General Land Office, to railway companies, to clerks of all county and town boards of supervisors, and all registers of deeds in counties traversed by railways, and supposed to have given aid to railroad construction in any form.

Owing to the difficulties inseparable from such an undertaking, including the shortness of time for the work, and the want of funds for such use, these efforts have not been wholly successful. The facts obtained will be found under the head of "Statement of Land Grants in aid of Wisconsin Roads," (pages 227-241), and in tabulated form, on page 242.

It is sufficient, in this connection, to say, in general terms

(1) That so far as is already learned, the total amount of aid realized from congressional land grants, is 3,343,458 acres; estimated value, at $3 per acre, $10,030,074;

(2) That we have found record of $6,910,652 in county, town and municipal bonds, paid or held for collection, and representing 36 counties and 71 towns and cities;

(3) That we have found record of 3,785 farm mortgages, distributed among 27 counties, and aggregating, in amount, $4,079,433; Thus making a grand total-the correctness of our valuation of the lands being granted-of $21,227,160.

Assigned to the roads to which they severally belong, the amounts are as follows:

Among the duties imposed upon the commissioners, is that of separating cost, receipts, easnings and debt of roads lying partly in and partly out of this state, in such a manner as to determine the proportion in each case belonging to Wisconsin. The commissioners have partially complied with this injunction of the law. But a full and accurate determination of the facts requires further inquiry. The difficulties pertaining to such an investigation will be more apparent, when we remind you of the almost inseparable relations existing between the various parts of our principal lines. The property and business of the Chicago and Northwestern Railway extends to five states and one territory. One portion of its road was constructed by the company; another portion was constructed by agents or representative companies in the interest of the general organization; another portion was acquired by purchase or consolidation, while another portion is operated under lease or other special contract, temporary or permanent. The debt contracted in the construction and acquisition of these various lines is sometimes general and sometimes local, while the receipts and expenditures are so necessarily divided and apportioned as to render the discovery of their source and cause in most cases problematical, if not impossible. The difficulties intimated are much enhanced by the fact that no state lines are usually recognized on the books of the company.