bodies. He attended the principal meetings of the committee, and, under its direction, mainly conducted the examination of witnesses. J. H. Martindale, Esq., of Rochester, appeared for the State Millers' Association and the agricultural and manufacturing interests in the interior of the State.

It is due that the committee express its obligation to the Chamber of Commerce and the Board of Trade and Transportation, and especially to Charles S. Smith and F. B. Thurber, of the com mittees representing those bodies, for their co-operation and assistance, which contributed largely to the success of our work; and also to Mr. Sterne for the able, painstaking and thorough manner in which he performed the duties assigned him. His previous study of the subject and fund of information possessed were a very material aid in prosecuting our labors and developing facts sought for.

The railroads were represented by the best legal talent - Judge William D. Shipman representing the Erie, Hon. Chauncey M. Depew, Frank Loomis, Esq., and A. P. Laning, Esq., the New York Central. Other interests and individuals were also represented by different attorneys at various stages of the proceedings.

Your committee commenced taking testimony June 12th, in the city of New York, held several sessions in that city, as well as in Rochester, Buffalo, Ogdensburg, Utica, Albany and Saratoga, taking only such adjournments as were necessary thoroughly to prepare and digest the evidence for the ensuing meeting, and closed their investigation December 19th, having taken in all more than 5,600 pages of testimony.

The investigation has been as complete and exhaustive as, during this period, it could be made. The railroads, though frequently objecting, have complied with all the requirements of the committee. They placed their books at our disposal, and the evidence adduced is mainly obtained from the books and the officers of the companies examined. It, therefore, admits of little contradiction on the part of the railroads.

The entire answer of the roads was submitted by Mr. Blanchard, Assistant President of the Erie, who reviewed all questions raised by the investigation and testified both as to facts and as an expert. The instrumentality of their reply was well chosen. Mr. Blanchard's comprehensive grasp of the subject, added to his thorough knowledge of detail, his clearness and cogency of expression, rendered him exceptionally competent to discharge the duty assigned him.

It has always been recognized as one of the paramount duties of the State to provide means for the inter-communication of its people and an exchange of commercial productions. This was originally the turnpike; which continued as the only means of inland communication until the ease and facility of water communication suggested and brought forth the canal. Connecting, by an artificial, navigable water-way, two natural bodies of water, was a long stride in advancing commerce. Its importance in public estimation can easily be realized by recalling the exultation that crowned the completion of the Erie canal, or by marking the prominence accorded in history to the man who conceived its construction. Its actual importance may be realized by marking the growth of our metropolis, as this new-born artery poured into her harbor the products of the west. But another and grander advance was in store. The railroad burst upon the scene. Crude, experimental, at first distrusted by capitalists, it turned in its infancy to the State to ask maternal support. It asked not in vain. It was given every concession by the legislature. It grew up under the fostering policy of the State. Strengthened by bounty and armed with the power of eminent domain, it went forth, extending its tracks until we find our State grid-ironed by railroads, comprising within its limits 5,550 miles, and within the United States, in December, 1878, 81,841 miles. Along these iron rivers flow the currents of commerce that formerly sought an outlet through the rivers of nature these iron rivers that span the country, toying with nature's obstacles as with a myth. They, too, have fountain heads; you could count them on the fingers of your hands and have fingers to spare-heads that give direction to the currents of commerce that flow along to the sea, gathering in their tributaries and swelling their volume as they go.

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It was originally supposed that only passengers and not freight, except in the most limited degree, could be carried by rail. Restrictions were accordingly thrown around the passenger traffic, and it has been, at all times, and is to-day, carefully guarded and regulated by positive statutes. The roads were forbidden to carry freight in opposition to the canal; and later, when they the railroads now forming the New York Central — were found carrying freight, they were required to pay to the canal fund a sum equal to the tolls exacted for a similar carriage by canal. This restriction was soon removed and the railroads left to their own management, practically unrestricted and uncontrolled as to carriage of freight, and remain so to-day. True, April 14, 1855, a law was passed

creating a board of railroad commissioners. But this was found an inconvenient interference with railroad plans, and so the roads paid the commissioners the full amount of their salaries for the term for which they were created ($25,000), to silence their opposition, and then procured the repeal of the law creating the commission, in April, 1857. (Testimony, p. 2,724.)

In discharging the duty it owed to commerce and the public, the State either had to construct railroads on its own account or authorize corporations or associations to do so, clothing them with the prerogatives of the State for that purpose. In view of our costly experience in State management of various institutions, and the extent to which the managers and attaches of those institutions become factors in our politics, there is no doubt the State acted wisely in committing the construction of railroads to associations of citizens. There is no doubt of the wisdom of lending State aid to encourage railroad building during its incipient and experimental period. It grew, however, into an abuse. The State has contributed in aid of railroads in round numbers, $8,000,000, and various localities by donation and investment in stock and bonds, nearly $31,000,000; (See Exhibits, pp. 3 and 238-43) for which unwise action so many localities are now suffering. Mr. Vanderbilt correctly states the relation of railroad corporations to the State, as follows:

"The railway corporation is organized primarily, for the benefit of the people of the State and the pecuniary consideration is secondary, but necessary, to induce the citizens of the State to assume the performance of the duty of the State."

The mistake was in not providing proper safeguards to protect the public interest and hold the roads to a strict accountability for their transactions. Thus, through the laxity of our laws and the want of governmental control (measurably excusable, considering the unforeseen possibilities of railroad development at the time of the enactment of those laws, bnt no longer pardonable in the light of the evidence herewith submitted), have crept in those abuses hereafter mentioned, so glaring in their proportions as to savor of fiction rather than actual history.

This investigation must prove of value to the railroads as well as the public, for, while disclosing their mismanagement, it will clear up and dissipate many erroneous impressions in relation to supposed abuses.

ALBANY BRIDGE.

The charge so often made, that the Albany bridge is largely the private property of prominent railroad officials and makes enormous dividends by charging three dollars a car for freight and ten cents per passenger for all traffic crossing it, is erroneous. Such charges were attempted but competition compelled their immediate abandonment; and now all the bridge earns from freight crossing it is the mileage proportion (two miles) assigned to it as forming a part of a continuous line. No separate books are kept of the freight or passenger traffic of the bridge. It is owned, three-fourths by the New York Central & Hudson River Railroad, and one-fourth by the Boston & Albany Railroad; and these roads keep the bridge in repair, in proportion to their ownership.

The fare from East Albany to New York is $3.00; from Albany to New York $3.10—a virtual charge of ten cents for crossing the bridge; but the latter charge is strictly legal, the Hudson River road, under the general law of 1850, having the right to charge three cents per mile for passengers. (49 N. Y. Reports, 455.) Separate books are kept showing the amount of receipts from foot passengers only by the bridge company. (For particulars see Testimony of E. D. Worcester, p. 1097.)

FAST FREIGHT LINES.

The Red Line, Blue Line, White Line, Canada Southern, Great Western, Hoosac Tunnel, Erie & North Shore Despatch, and all other fast freight lines running over roads in this State, except the Merchants' Despatch, are organized for the purpose of constituting a through line between distant points, as follows: The various roads which are to constitute the through line furnish a number of cars in proportion to their mileage, form an organization, appoint officers to solicit business and manage the affairs of the line. Each road receives a specified mileage per car (three-fourths of a cent), and bears the expense of the organization and shares in the profits of the line in proportion to the cars furnished, each road retaining absolute control over the rate of transportation on its line. The object of these organizations is to enable a through shipment of goods to any point, however remote, without breaking bulk. They are known as co-operative lines; and are organized in the interest of the public. and in the interest of good railroad economy.

The Merchants' Despatch is a non-co-operative line. It is a part

nership or association having a capital of three millions of dollars, represented by thirty thousand shares, twenty-seven thousand of which have been issued, and twenty-five per cent paid in on each share of stock issued. The New York Central & Hudson River owns between twelve and thirteen thousand shares, the American Express Company six thousand five hundred, the Lake Shore & Michigan Southern three thousand, the Cleveland, Columbus & Cincinnati Road one thousand shares, Springfield & Cincinnati Short Line between four and five hundred, Great Western of Canada one hundred and fifty, W.' H. Vanderbilt twenty, W. K. Vanderbilt one hundred and fifty and holds one hundred and fifty as trustee-about 24,000 shares held by different railroads and three thousand by individuals. It furnishes 3,451 cars, and gets three-quarters of a cent per mile for each mile any of its cars run, and five per cent on fourth class and special classes and fifteen per cent on all other classes of freight handled, for soliciting business.

As to soliciting business they do precisely the same that the agents and officers of the co-operative lines do, with this difference, that it pays its agents and officers out of its commissions, while the agents of the co-operative lines are paid by the respective roads constituting the line. The Merchants' Despatch was formerly owned by the American Express Company, and is an off-shoot of that organization. It retains all the agencies for soliciting business which belonged to that company; and it is claimed that its organization is more effective in securing freight for transportation than any of the co-operative lines. It has paid ten per cent dividend for the past four years, and twenty-five per cent of the capital only having been paid in, it amounts to an annual dividend of forty per cent. It is in evidence that the New York Central, by reason of its large ownership of stock in the Merchants' Despatch, earns more for its stockholders on the business done by this line than it would under the co-operative system. What it gains, of course, the western roads lose; and such a state of affairs cannot last long. There is nothing to prevent all this stock finding its way into individual hands. However properly this particular company may be managed; it is wrong in principle, and admits of all the abuses that have been formerly practiced upon stockholders through similar organizations. This is not the opinion of the committee only, but of good railroad men well. (See Testimony of G. R. Blanchard, pp.