which were apt to cause accidents, and when such were found to advise the railroad official in charge, and if proper repairs were not promptly made to wire the chief inspector, who would take further action. During the past year 1,568 locomotives having defects of the above-mentioned character, 1,052 of which were defective wheels, have been reported to the Commission and to the railroad officials. It is extremely gratifying to state that a large percentage of the railroad officials appreciate this action on the part of the inspectors and take prompt steps to remedy the defects to which their attention has been thus directed.

PANAMA CANAL ACT.

The Panama Canal Act provides that from and after July 1, 1914, it shall be unlawful for any railroad company or other common carrier subject to the act to regulate commerce to own, lease, operate, control, or have any interest in any common carrier by water with which said railroad or other carrier does or may compete for traffic. It authorizes the Commission to determine the question of fact as to competition or possibility of competition either on the application filed by the carrier or upon the Commission's own motion and to extend by order the time during which such service by water may continue to be operated beyond July 1, 1914.

The Commission has been gathering information as to existing conditions affected by this act, but the first and only application from a carrier for relief thereunder was recently filed.

In order to avoid congestion immediately preceding the date set in the act, the Commission has issued a circular to all carriers announcing that applications for extension of time during which such water service may continue to be operated beyond July 1, 1914, must be presented to the Commission not later than March 1, 1914.

VALUATION.

By the act of March 1, 1913, the Commission is required to value the property of all common carriers subject to the act to regulate commerce. The valuation act provides that this work shall be begun within 60 days, and that a report shall be made to each regular session of Congress showing the progress made.

For the purpose of executing the provisions of this act the Commission organized, within the 60 days, a division of valuation, corresponding with its divisions of statistics, accounts, tariffs, etc. Since, after the initial valuation has been made the Commission is required to keep the same up to date, this division will be permanent and will embrace an important part of the work of the Commission. The act provides that an inventory shall be made of the property to be valued, and that the Commission shall ascertain and report the

cost of reproduction new, and the cost of reproduction less depreciation. This requires the identification and examination of the property by the engineers of the Commission and is a work of great extent and detail. For the purpose of executing this provision of the act the United States has been divided into five sections, by States, each section embracing approximately 50,000 miles of railway, and so distributed that work can be conducted both during the summer and the winter months. These divisions are as follows:

Eastern district.-Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Maryland, Delaware, District of Columbia, Virginia, West Virginia, and North Carolina.

Central district.-Michigan, Wisconsin, Minnesota, Iowa, Illinois, Louisiana, and Arkansas.

Western district.—North Dakota, South Dakota, Nebraska, Colorado, Kansas, Missouri, Oklahoma, and Texas.

Southern district.-Ohio, Indiana, Kentucky, Tennessee, Alabama, Mississippi, Georgia, South Carolina, Florida, Panama, and Porto Rico.

Pacific district.-Montana, Wyoming, Utah, Idaho, Nevada, Washington, Oregon, California, Arizona, New Mexico, and Alaska.

The Commission has appointed five principal engineers, one of whom has been placed in immediate charge of each of these divisions. The five together constitute an engineering board which will formulate general plans for the prosecution of the work and supervise the execution of those plans, thus securing the necessary uniformity.

We have also appointed five other engineers, known as district engineers, one of whom has been assigned to each one of the above divisions. The district engineer will be constantly in his district and will have general charge of the work in the absence of his immediate superior.

Headquarters have been established in each district as follows: eastern district, Washington; central district, Chicago; western district, Kansas City; southern district, Chattanooga; Pacific district, San Francisco. The principal engineer, the district engineer, and their engineering staff will be located at these headquarters.

Unless exception is made by Executive order, all persons employed in this valuation work must come through the Civil Service Commission. It was our first thought to apply for an Executive order covering a sufficient number of engineers and accountants of different grades to at once begin work in the field and in certain railroad offices, but upon consultation with the President this plan was abandoned. An Executive order was issued for the appointment of a director, an advisory board of not more than five members,

the five principal engineers and the five district engineers above referred to, and also for a chief accountant and a superintendent of land appraisals, but all other engineers and accountants must be obtained under the test of a competitive examination.

The Civil Service Commission at once made arrangements for the necessary examinations, but, although we are satisfied that this work has been pressed with all possible diligence, a considerable time has necessarily been occupied in the preparation of eligible lists. There were nearly 6,000 applicants for the position of senior engineer alone, and each one of these papers must be carefully examined and marked. In fact, the roll of engineers of the higher grades was not available until October 23; the junior roll, including engineers of lower rank, was opened on November 20.

The act requires the Commission to ascertain and report the original cost of the construction of these properties to be valued, the amount of money which has gone into them, and the sources from which it has been derived; all of which will require the employment of many trained accountants. While the Commission hopes to avail itself to a limited extent of accountants already in its own employ, whose special fitness for this work has been demonstrated, still in the main this accounting force must come through the Civil Service Commission. These examinations have been held and the roll is substantially completed.

Examinations for senior telephone and telegraph engineers closed on December 1; those for the junior roll occurred on December 3. Examinations for senior land appraisers close December 22, while those for the junior grade take place January 7, 1914.

It will be seen, therefore, that up to very recently it has not been possible to employ either engineers or accountants, except the 10 engineers already mentioned, and that certain classes are not yet available.

In the conduct of this work it will be necessary to require from the carriers such plans and maps as will identify the property to be inventoried, and also certain additional information. In some instances the necessary maps and plans are already in existence; in others such documents as exist are incomplete; while in still other cases there is practically nothing whatever of this kind. It is a matter of very great importance to determine just what shall be done in order to give the Government what it requires for the prosecution of this work and at the same time not to impose any unnecessary burden upon the carriers. Our engineers have been in repeated conference with representatives of the railroad, the telegraph, and the telephone companies which, by the act, are required to cooperate with the Commission, and have examined railroad and other offices for the

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purpose of ascertaining what information now exists and in what form. An order specifying the documents and information which carriers will be required to furnish has been formulated and will be served in the near future.

Rules for the organization and prosecution of the work have been formulated, the details have been worked out, and preparations made, so far as possible, with a view to entering upon the work as soon as the necessary expert force can be employed.

While the engineering rolls are now ready, it has not seemed to us nor to the Civil Service Commission that we could safely rely entirely upon the results of these examinations. Therefore when names are certified to us from the Civil Service Commission we inquire still further into the fitness of these persons, in view of the great responsibility of the positions which these engineers of the higher grade will occupy. Their standing in the communities where they have lived is investigated and their record with past employers. All this requires a certain amount of time.

It is also necessary, before determining what salaries should be attached to the various engineering and accounting positions which will be created, to ascertain for what compensation these men who are available from the civil-service rolls can be obtained. We also find that many of these eligibles are now engaged in other occupations, which they can not lay down upon a moment's notice. On the whole, we finally decided not to attempt to actually begin work in the field or at the railroad office until after the holidays. It is expected that actual operations will be begun early in January.

The present plan is to select a railroad in each one of these divisions which can be valued in an experimental way. An attempt will be made to choose railroads of different classes so that as great a variety of problems will be presented as possible. This initial work will be undertaken with deliberation, and no attempt will be made to unduly expand or hasten operations until the result of these preliminary studies can be appreciated. After a few months of this kind of work in different parts of the country and under varying conditions the Commission and its engineers will better understand the exact difficulties which must be met and the methods by which the work can be prosecuted to the best advantage.

To make more certain of its ground the Commission referred its scheme of organization and its plans for the beginning of this work to a committee consisting of John Skelton Williams, Charles F. Staples, Henry C. Adams, Edward W. Bemis, and Oscar T. Crosby. This committee, after mature consideration, approved our plans with certain suggestions for modification, most of which have been adopted. It will be seen that up to the present time our work in this department has been that of preparation. The Commission had hoped that

its experts would be actually engaged in the field and the office before this date, and undoubtedly that would have been true had we been free to employ labor in the open market. Nothing, however, has been really lost. The time of those engineers already employed has been well occupied, and we are now satisfied that while there has been some delay in the beginning, the engineering and accounting force finally assembled under the competitive system will be more efficient than would have otherwise been obtained. This valuation work is one of infinite detail, and these details must all be finally brought together and coordinated. Without perfect organization there can be neither efficiency nor satisfactory result. It is also a new work which must pass through a process of development. When once the organization is perfected and the nature of the work fairly understood the force will permit of an almost indefinite expansion and the work itself can proceed with expedition.

PARCEL POST.

The act approved August 24, 1912, establishing the parcel post contains the following provision:

The classification of articles mailable as well as the weight limit, the rates of postage, zone or zones and other conditions of mailability under this act, if the Postmaster General shall find on experience that they or any of them are such as to prevent the shipment of articles desirable, or to permanently render the cost of the service greater than the receipts of the revenue therefrom, he is hereby authorized, subject to the consent of the Interstate Commerce Commission after investigation, to reform from time to time such classification, weight limit, rates, zone or zones or conditions, or either, in order to promote the service to the public or to insure the receipt of revenue from such service adequate to pay the cost thereof.

Acting under this provision, the Postmaster General has applied to this Commission on various occasions for its consent to make changes. in the rates of postage and conditions of mailability in the parcel post. The first of these applications related to the rates for transportation of parcels from points in the United States to points in Alaska; the second was for permission to dispense with the distinctive parcel-post stamp; the third was for permission to consolidate the first and second zones and to reduce the rates and increase the weight limit therein; the fourth was to add books in packages weighing in excess of 8 ounces to the articles mailable under the parcel-post system; the fifth was to change the rates and regulations applicable to shipments of gold to and from points in Alaska in order to secure revenue commensurate to the cost of the service; the sixth was to increase the weight limit for the first and second zones from 20 pounds to 50 pounds and for the other zones from 11 pounds to 20 pounds and to reduce the rates to the third, fourth, fifth, and