The average earnings on each ton in Minnesota was for

The usual tables are found appended to the report in the form and in the order which has hitherto obtained in the annual reports from this office.

ORGANIZATION OF THE COMMISSION.

"An Act for the regulation of Railroad Companies," approved March 5, 1885, created (Sec. 1) a commision to be styled "Railroad and Warehouse Commissioners, to consist of three suitable persons to be appointed by the governor.

Section 2 of said act provides that within thirty days after this act shall take effect the governor shall appoint two persons who, with the then railroad commissioner shall constitute the commission, who shall hold their office until the first Monday in January, 1887, and until their successors are appointed and qualified, that the governor shall after, and within thirty days of the organization of the legislature' appoint three railroad commissioners to succeed those whose terms. have expired in January, 1887, who shall hold their office for two years, and until their successors are appointed and qualified.

In accordance with these provisions of law, commissions were is sued by the governor on the eighth day of January, 1887, to Horace Austin, John L. Gibbs, and George L. Becker. On January 12, 1887, the commissioners met and organized by choosing Horace Austin president, E. S. Warner secretary, and A. K. Teisberg clerk.

LEGISLATION OF 1887.

The act for the regulation of railroad companies approved March 5, 1885, provided among other things that it should be the duty of the commissioners "to investigate and consider, what, if any amendment or revision of the railroad laws of this State the best interests of the State may demand, and they shall make a special biennial report on said subject to the legislature."

In obedience to this requirement the Railroad and Warehouse Commissioners whose term expired in January, 1887, made such a report to the last legislature. This report contained the draft of seven laws which had been submitted to the Attorney General, and were by him. approved, under the following titles, viz. :

1. "An Act to regulate common carriers and creating the Railroad and Warehouse Commission of the State of Minnesota, and defining the duties of such commission in relation to common carriers."

2. "An Act relative to the issuing of false, fraudulent and part paid and unpaid shares of the stock of railroad companies and pro viding a penalty therefor."

3. "An Act regulating the proceedings of railroad companies desiring to increase their capital stock."

4. "An Act to provide for the taxation of persons, copartnerships, associations, carloaning companies, sleeping car companies, corporations and fast freight lines engaged in the business of running cars over any of the railroads of this State and not being exclusively the property of any railroad company paying taxes on their gross receipts."

5. "An amendment to the constitution, to be section 5 of article 10, entitled, Control of Railroads,' an act submitting the same to the people for adoption or rejection."

6.

"An Act for the taxation of railroad companies."

7. "An Act to regulate the furnishing of cars and the shipment of carload lots of freight.'

The commissioners also submitted to the legislature in this report the full draft of two laws amending the Grain and Warehouse Laws of the State under the following titles, viz. :

1. "An Act to regulate grain warehouses and the inspection, weighing and handling of grain at St. Paul, Minneapolis and Duluth, and defining the duties of the Railroad and Warehouse Commission in relation thereto."

2.

"An Act to regulate the warehousing and handling of grain at all points in Minnesota except at the cities of St. Paul, Minneapolis and Duluth."

The supreme court of the State having at the January 1887 term decided that section 15 of the act of March 5. 1885, requiring railroad companies to permit any person or company to construct and operate elevators and warehouses at regular way stations, in consideration of an annual rental of one dollar was unconstitutional. The commission in a supplemental report submitted to the legislature the draft of an act upon this subject, which was prepared especially to meet the views laid down by the supreme court in the decision referred to.

Of the acts so drafted and submitted by the commission to the legislature the first one named became a law with some essential changes and modifications. The second, the third and the fifth were also

passed. The fourth, the sixth and the seventh, and the two bills amending the grain and warehouse laws, as well as the act with reference to grain warehouses on the right of way of railroads, all failed to receive the favorable consideration of the legislature.

The act creating the Railroad and Warehouse Commission and defining the duties of such commission was approved March 7, 1887. It repeals (Sec. 21) all acts and parts of acts inconsistent therewith, and directs "that the provisions of this act shall apply to and govern the existing railroad and warehouse commissioners appointed by virtue of an act approved March 5, 1885, who are hereby clothed with the power and charged with the duties and responsibilities of this

act"

In its main and essential features it follows the "act to regulate commerce" passed by Congress and approved Feb. 4, 1887. That act controls and regulates inter-state commerce. The act of our State legislature aims to do the same thing, so far as comon carriers are concerned who are "engaged in the transportation of passengers or property wholly by railroad or partly by railroad and partly by water, when both are used under a common control management or arrangement, for a carriage or shipment from one place or station to another, both being within the State of Minnesota.

The passage of these two acts, one by Congress and the other by the State legislature, simultaneously, each creating a commission clothed with similar powers and charged with like duties and responsibilities, the one having charge of inter-state commerce, and the other the control and regulation of local commerce within the State of Minnesota marks the commencement of a new era in the relations between common carriers and the public.

With these laws in force, and with a federal commission organized under the act of Congress, and a State commission created by the State law, each within its proper sphere acting in harniony and in the same general direction, there are no questions arising affecting the policy of common carriers to the public which are not clearly under the jurisdiction of the one or the other.

While the congressional act and the state act are in their essential provisions for the most part in harmony with each other, and are expressed in almost the same words, yet there are some important differences to which the attention of the people of the State should be called.

The inter-state commerce law prohibits passes and free transportation except that common carriers may give free carriage to their own

officers and employes, and may exchange passes or tickets with other railroad companies for their officers and employes.

The State act provides (Sec. 2), subdivision (a), "that all charges made by any common carrier, subject to the provisions of this act, for any service rendered or to be rendered in the transportation of passen gers and property aforesaid, or in connection therewith,

shall be equal and reasonable, and every unequal and unreasonable charge for such service is prohibited and declared to be unlawful;" and in subdivision (b) of the same section, declares against undue or unreasonable preferences, in both cases using the language of the inter-state law regarding the same subjects. By virtue of these enactments in the federal law, passes and free transportation have been effectually cut off, so far as inter-state commerce is concerned.

But our State law effectually nullifies these benificent provisions copied from the inter-state law, by a proviso in section one of the act, that "nothing in the provisions of this act shall be construed to prevent common carriers, subject to the provisions of this act, from issuing passes for the free transportation of passengers."

Upon this subject of passes and the free transportation of persons, the Railroad and Warehouse Commissioners, in their report for the year 1885, remarked as follows:

"It is also a question to be considered how far the issuing of passes, so largely in vogue, affects the revenues of the road. Every passenger who pays his fare has the right to protest against the issuing of any pass, as the paying passenger pays some proportion of the fare of the non-paying passenger. This opens a discussion of the pass system, which now maintains throughout the United States. The total abolition of the system would add to the revenues of the roads, equalizing burtherns, and would increase the revenues the State derives from the taxation of the gross earnings, and would tend to reduce passenger rates the country over. It is to be hoped that Congress will fully consider this question in the proposed national supervision of railways." (Report 1885, page 22).

Again in 1886 the commission reaffirms and reiterates its views as given in the report of 1885, with reference to the injustice of the pass system, (page 15, report 1886), and declared (page 23) that discrimination in rates of freight or fare are not consistent with right, justice, and the public welfare.

The inter-state commission, in its first annual report, thus characterizes this sort of discrimination:

"The evils of free transportation of persons were not less conspic

This, where it ex

nous than those which have been mentioned. tended beyond the persons engaged in the railroad service, was commonly favoriteism in a most unjust and offensive form. Free transportation was given not only to secure business but to conciliate the favor of localities and of public bodies, and while it was often demanded by persons who had or claimed to have influence which was capable of being made use of to the prejudice of railroads, it was also accepted by public officers of all grades and of all varieties of service.

In these last cases the pass system was particularly obnoxious, and baneful, for if any return was to be made or was expected of public officers, it was of something which was not theirs to give, but which belonged to the public or to constituents.

A ticket entitling one to free passage by rail was often more effective in enlisting the assistance and support of the holder than its value in money would have been, and in a great many cases it would be received and availed of when the offer of money, made to accomplish. the same end would have been spurned as a bribe.

Much suspicion of public men resulted, which was sometimes just, but also sometimes unjust and cruel; and some deterioration of the moral sense of the community, traceable to this cause, was unavoidable while the abuse continued.

The parties most frequently and most largely favored were those possessing large means and having large business interests.

The general fact came to be that in proportion to the distance they were carried those able to pay the most, paid the least, for the poor man had seldom any ground on which to demand free transportation, while the rich man was likely to have many grounds on which he could make it for the interest of the railroad company to favor him, and he was sometimes favored with free transportation, not only for himself and his family, but for business agents also, and even sometimes for his customers. The demand for free transportation was often in the nature of blackmail and yielded to unwillingly and through fear of damaging consequences from a refusal. But the evils were present as much when it was extorted as when it was freely given."-(Report of Inter-State Commission for 1887, pages 7-8.)

The Inter-State Commission in thus treating of this discrimination and evil speaks of it as a thing of the past, which has been overcome by the beneficent law under which the commission was created And so as far as inter-state commerce is concerned free passes are no longer issued.

The act creating this commission contains the same enactments in