Seventh-Pittsburgh, Fort Wayne and Chicago Railroad for eighteen hundred and seventy-four.

Eighth Atlantic and Great Western Railroad for eighteen hundred and seventy-four.

Ninth Alleghany Valley Railroad for eighteen hundred and seventy-four.

Tenth-Illinois Central Railroad for eighteen hundred and seventy

As the data whence the inferences (see page eight, beginning with first line) of the minority committee are drawn, they will be interesting to examine.

A careful examination proves the showing to be deceptive, as comparisons with the earnings of the Central Pacific Railroad, and with respect to some of the roads above named, entirely untrustworthy. The showing for the Central Pacific Railroad Company on page eight is not correct.

As it will be readily conceded that a dollar in coin with us is no more than the equivalent of a dollar in currency with Eastern railroads, I make, for the purposes of comparison, the following correct exhibit in coin, and include under head of operating expenses the items covered by that term in the exhibits for the roads with whom the comparisons are made:

Central Pacific Railroad for 1874:

Total receipts, including leased roads.

Total operating expenses, including leased roads, gen

$13,077,173 65

5,897,652 48 10,184 71 257 838

Average charge for freight (including company's

27785

Union Pacific Railroad for eighteen hundred and seventy-four would show as follows:

Showing, that while the Union Pacific Railroad Company earned sixty-five thousand dollars per mile more than the Central Pacific, the latter exceeded the former by nearly forty-nine per cent. in the charge per ton per mile on freight, and demonstrating that the average rate per ton per mile is not a just criterion of comparison between railroads, unless their traffic is identical in kind and amount. Greater earnings per mile and a less rate per ton per mile could result only by handling more tons of low class freight or (as the rate per ton per mile decreases as the haul increases in length) by averaging a longer haul per ton. We find both elements worked to produce the comparatively favorable showing for the Union Pacific Railroad.

In eighteen hundred and seventy-four the Union Pacific Railroad hauled two hundred and eighty-six thousand four hundred and three tons of commercial coal, which could have been moved only at the minimum rates, and the average haul per ton on same road was five hundred and seventeen miles, against an average haul of two hundred and sixty-seven miles per ton on the Central Pacific Railroad. With this and the further consideration that the rates per mile of the Union Pacific Railroad, upon all the through freight interchanged by the Eastern States and California, are the same as those of the Central Pacific Railroad, the lower average rate per ton per mile and the higher gross earnings per mile, shown by the Union Pacific Railroad, compared with the Central Pacific Railroad, evinces that the rates of the former on general merchandise might have been higher than those of the Central Pacific road. An examination of their local tariff proves that they were very much higher, to substantiate which, I offer herewith (and can produce the tariff in support of it) a statement marked D," comparing the first, second, and third class rates of the Central Pacific Railroad, from San Francisco to points on the Western, Visalia, and Oregon Divisions, with those charged by the Union Pacific Railroad on first, second, and third class freight for like distances.

(See Poor's Manual 1875-6, pages 176-7, etc.)

The showing for the Erie Railway, for the fiscal year eighteen hundred and seventy-three-four, should appear as follows, according to Poor's Manual (1875–6, page 120).

Contrary to the statement of the minority committee, the item of operating expenses does include taxes.

Of the above earnings twenty million two hundred and ninetynine thousand three hundred and thirty and eighty-eight one-hundredths dollars were earned upon the three hundred and fifty-eight miles of main line, or at the rate of fifty-six thousand seven hundred and two dollars per mile.

The low average rate per ton per mile is accounted for by the vast tonnage (over twelve times as much per mile as the tonnage of the Central Pacific Railroad), of which over four million tons, or nearly one half was coal.

The showing for the New York Central and Hudson River Railroad, for the fiscal year eighteen hundred and seventy four-five, should have been as follows!

The correct showing for the Pittsburgh, Fort Wayne, and Chicago Railroad for eighteen hundred and seventy-four

the same for the first nine or ten miles of road. This distance, however, was open for teams, and very little business was done for that part of the line alone, so that it made no difference what was charged for that distance. For the first twenty-five miles of travel the Freeman bill allowed the road to charge per ton per mile in excess of the amount allowed by the Archer bill, as follows: General merchandise, twenty-four and forty-nine one-hundredths per cent.; grain, sixty per cent.; lumber, eighty-six per cent.; wood, one hundred and forty-four per cent. For distances of fifty miles the Freeman exceeds the Archer bill-on general merchandise, thirty-seven and sixtythree one-hundredths per cent.; grain, eighty-one and eighty-seven one-hundredths per cent.; lumber, one hundred and six and twentyeight one-hundredths per cent. wood, one hundred and fifty-eight per cent. For distances of seventy-five miles the Freeman exceeds the Archer bill in like proportion, and so on, through all the distances possible; as will fully appear, by reference to the tabular statement entitled "Rates per ton proposed by the Archer bill, compared with the rates per ton provided for by the Freeman bill, introduced into the Assembly December fifth, eighteen hundred and seventy-three," inserted in this report.

As it has been shown that the average rate per ton per mile is not a fair test of the rates charged by a railroad company, especially when making comparisons of roads, in order to afford a correct idea of the relative rates for freight charged upon California and Eastern roads, appended hereto, marked respectively E, F, G, H, I, K, L, and M, will be found statements showing the actual first, second, and thirdclass rates charged by the Central Pacific Railroad from San Francisco to points on the Western, Visalia, and Oregon Divisions, compared with the actual rates-ascertained from published tariffs in my possession-charged upon first, second, and third class freights, for like or approximate distances, by all the roads, in the exhibit appended to the minority report, except the New York Central, Atlantic and Great Western, and Alleghany Valley Railroads, whose tariffs are not available.

- Mr. Stubbs then proceeded to make a comparison between the bill under consideration and the "Freeman bill" of two years ago. He said that he believed that the "counsel for the opposite side," Mr. Cohen, on yesterday, had pronounced the "Freeman bill" an unjust and unfair measure. Taking that admission as binding, he would proceed, and by comparison show that that celebrated monstrosity bill now sought to be was even more just in its allowances than the everything together, the Archer bill provided six classes. By tables he showed that the relative charges permitted by the two bills were substantially

forced through the Legislature. While that bill classed show

TESTIMONY, OF A. N. TOWNE.

A. N. TOWNE was sworn and gave his statement as follows: The statement made by Mr. Stubbs was as full and complete as could be. I am General Superintendent of the Central Pacific Railroad Company. I will first take the Visalia Division. The earnings of that road under the Archer bill would not permit us to realize enough to sustain its operation. We have carefully computed the earnings for the month of September, one of the largest receipt months of the year, and we find that the bill would give us returns below the cost of operating that division. It has no connection south, merely a local road running through a sparsely-settled section, and produces very little business either one way or the other. The entire earnings for the month named under the Archer bill would be fortyone thousand two hundred and forty-four dollars and thirty-one cents, the earnings of a road two hundred and forty-two miles long. This amount is one hundred and nine per cent. below what we actually earned, and yet the amount named forty-one thousand two hundred and forty-four dollars and thirty-one cents would not pay the operating expenses of the road. To apply the provisions of this bill it would render the road useless and inoperative. The same may be said of the California and Oregon Division. The earnings upon that division were a little more, in proportion, than upon the Visalia Division, and but a little. Ás Mr. Stubbs has already shown you, the earnings per mile upon the Visalia, as well as other divisions of the road, is lower per mile than those of Eastern roads.

Mr. Farley Are you familiar with the running of Eastern roads? Mr. TowneYes, sir. I am.

Mr. Farley Where the traffic is many times greater in volume than here?

Mr. Towne Yes, sir.

Mr. Stanford What effect would the bill have upon the California Pacific Railroad?

Mr, Towne The earnings of the California Pacific Railroad for the entire year of eighteen hundred and seventy-five would not be suffi cient to operate the road to meet expenses under the Archer bill, within one hundred and eighty thousand two hundred and thirtyfour dollars and fifty-eight cents.

Mr. Lindsey What was the expense of operating the Visalia branch? Mr. Towne For the month of September, one hundred and seventeen thousand two hundred and forty dollars and forty-five cents.... Mr. Lindsey-How does that compare with the expense of operating the Oregon branch?

Mr. Towne I have not figured that division. I should think very favorably.

Mr. Lindsey-What are the elements which enter into the making up of the expense of running that branch?

Mr. Towne Station service, train service, locomotive service in detail, interest, taxes, rentals, etc.

Mr. Lindsey-Renewal of rails—is that included?

Mr. Towne-Yes, sir; in the track repairs embraced in the statement.

Mr. Lindsey Are the expenses of the California Pacific about the same per mile?

Mr. Towne-Yes, sir.

Mr. Lindsey-What leads you to conclude that the California Pacific would not furnish business enough to pay running expenses? Mr. Towne-By applying the rates of the bill for one month, as compared with the tariff as it is at present.

Mr. Lindsey-Has the California Pacific got all the business it can do, or is it diverted to the Western Pacific?

Mr. Towne-It is getting all it can do, none being diverted to the Western Pacific.

TESTIMONY OF PETER DONAHUE.

Colonel PETER DONAHUE, Owner of the San Francisco and North Pacific Railroad, made a statement under oath as follows:

I have been in the railroad business for some time, and I find that this bill, now before the Senate, will cause me much injury; it will injure me to such an extent that I will not be able to operate my road. It lowers the rate so much that the reduction would make it perfectly useless to run the road. The whole length of my road, including water rights, is ninety miles. We are building a branch of sixteen miles into the redwoods, which will make the length of the road one hundred and six miles. The Archer bill includes water and land lines in the same classes, so it makes no difference, so far as the line is concerned, whether we travel by rail or by water. We have thirty-six miles of water and fifty-four miles of rail travel between San Francisco and Cloverdale. We have been building a branch road from Fulton to the redwoods, a distance of sixteen miles, and it is now nearly completed. The road is all under one ownership. The principal object in building the branch_road is to get the lumber carriage which must spring up, as well as that of coal,

charcoal, and wood. Under this bill we cannot complete and run the road. Teams now do all the hauling there, and it is very expensive. I have examined the Archer bill, and have had my freight clerks examine it. We have made a comparative statement which will be submitted. I do not know what amendments are proposed. I understand they will apply to roads under one hundred miles in length. That will not apply to us at all, for our road will be one hundred and six miles long very soon. Our road could not be oper

ated under the bill as it is. I did anticipaté extending my road this spring some thirty miles further, but I cannot do it under the Archer bill.

Mr. Farley Could you-speaking from your knowledge as a railroad man or any other party, proceed to build roads under the provisions of the Archer bill? Would you or others invest capital in the construction of railroads?

Mr. Donahue-No sane man would do it. I would not.

Mr. Gibbons Would it be a fair question to ask you about what is the percentage of profits on your road under the present rates?

A-I have never had a dollar from the road yet. Besides putting into the road all it earns, I put in also all my income from other sources. When I took hold of it, it required equipment and many improvements, and I have been doing all I could to make it a first class local road. When I went there, the country was very thinly settled. People could not get in and out of the country easily. Since our road was completed population has increased, and from the gain in value of lands, products, and the steady flow of immigration, we are satisfied that the road will soon pay very well.

Mr. Farley-Do the people of Sonoma County complain of your charges?

A. Not at all.

Mr. Graves-This bill largely reduces them, does it? A. Yes, sir.

-

Mr. Gibbons-About what percentage of reduction would there be? A.-There would be a loss to us in merchandise of thirty-one and onehalf per cent.; in grain, fifty-five per cent.; on live stock, forty-three per cent. Our water travel has heavy competition, and we have to carry goods at living rates. Schooners and opposition steamers cause that. On general merchandise, per rail, there would be a discount of fifty-three per cent.; on grain, sixty-five per cent.; wood, etc., fiftysix per cent. You will bear in mind, that the oftener you handle lumber and wood, or freight, generally, the more expensive is the carriage; and for that reason, schooners being able to carry goods direct to the ships without cartage, ferryage, etc., goods intended for foreign marts are sent that way to a very large extent. When our road was incorporated, it was intended to go to Humboldt County. I am unable to carry it there myself without assistance. The people of Ukiah City have offered me sixty thousand dollars if I will build to that place; but I don't know whether I would be justified în'accepting even that offer; for throughout the thirty miles to be run to get there, there are not many people, nor is there much prospective business. However, under the Archer bill we could not possibly think of building further. Under that bill, I have as much road as I want, and a little more. We could not pay the expenses of operating the road.

64

1 06

1:14

11..40

2.44 1.22 12 20

That makes a difference to us on merchandise, for first class freight, of thirty-one and one-half per cent.; grain, fifty-five per cent.; live stock, forty-three per cent. On lumber we now charge two dollars and sixty-two and one-half cents per one thousand feet. Archer gives us one dollar and twenty-six cents. That is for the distance from Cloverdale to Donahue. From Fulton to Donahue, twenty-seven miles, we charge one dollar and ninety-three and three-fourths cents per one thousand. Archer gives eighty and one-fourth cents. For the first twenty-five miles of road, Archer gives us more than we are receiving, but for that first twenty-five miles competition is so active that we cannot charge more than we now receive.

Mr. Stubbs then defended his statements submitted on Sunday last, the correctness of which had been assailed by Mr. Cohen. He submitted authorities to show that in all respects the figures given by him then are correct.

2.52

1.26

12.60

2.64

1 32

13.20