tion, which was conducted on the Commission's own motion into the reasonableness of the rates of one of the large water companies, resulted in a decrease of the former rates of approximately 10 per cent. In the course of the Hydraulic Division's investigation of public utility affairs during the last fiscal year, 37 appraisals of property were made, ranging up to $1,401,250, with a grand total of $6,091,611. During the fiscal year the Hydraulic Division was called upon to make investigations, inventories, appraisals and reports upon two public utility water systems which municipalities had desired to acquire under eminent domain proceedings or otherwise. These investigations required exceptional accuracy and care in order to avoid a reversal of the Commission's findings of compensation in the Supreme Court. The rapid growth of the state and the difficulty in securing material have made it extremely difficult for the utilities to provide adequate facilities for supplying consumers. While these conditions will without doubt be remedied to a very large extent within another year, the result has been that the Hydraulic Division was called upon during the last fiscal year to investigate and recommend methods for improving conditions of service in 23 formal proceedings, besides a vast number of matters which were cared for through informal action. Of late years there has been a decided tendency on the part of municipalities to acquire public utility water systems, and many such transfers have been authorized by the Commission. The rapid growth of the state, previously mentioned, has, however, resulted in the establishment of a large number of new plants to provide for the supplying of water to residents of new tracts and subdivisions. RATE WORK IMPORTANT. Extremely important work was performed by the Rate Department which has charge of all tariffs filed by the following ten utilities: Steam railroads, electric railroads, street railroads, water carriers, express companies, aeroplane companies, cold storage warehouses, miscellaneous warehouses, wharves and automobile carriers. There are 1353 of these utilities in the state and the filing and checking of the tariffs involve a tremendous volume of detail. Under the provisions of the Public Utilities Act carriers must publish rates on thirty days' notice, unless authorized to make the same effective on less than the statutory notice. They must secure from this Commission authority for every rate increase and also secure authority to publish rates in exception to the long and short haul provision of the state constitution. During the fiscal year this department handled 1872 requests under these provisions of the law. The railroads of the United States were under control of the federal government from December, 1917, until March 1, 1920, but from March 1, 1920, until September 1, 1920, the federal government granted the railroads the same rate of return as they had been receiving during the period December, 1918, to March 1, 1920. After March 1, 1920, the railroads were privately controlled, but no rates could be reduced prior to September 1, 1920, without the authority of the Interstate Commerce Commission. During the federal guaranty period the Interstate Commerce Commiss on conducted an investigation, and in order to comply with the provisions of the Transportation Act of 1920, issued an order, in August, 1920, increasing within the United States all freight rates by 25 per cent and all passenger fares by 20 per cent, and these increases went into effect August 26, 1920. Because of the prosperity due to the war conditions, which still existed at that time, the increases were not severely felt by the shipping and traveling public, but as the changes due to war conditions gradually relaxed it became apparent that some readjustment would have to be made in the transportation rates. Therefore, on July 1, 1922, all freight rates which had not been reduced by 10 per cent or more since August 26, 1920, were reduced 10 per cent. In other words, this reduction took from the carriers one-half of the increased freight revenue authorized in August, 1920. In addition to this general decrease in the freight rates the Commission has made a large number of reductions both by formal and informal action. During the year ending June 30, 1923, consideration was given to 463 informal and 108 formal adjustments. The most important formal proceedings involved the class rates between Imperial Valley points and Los Angeles; commutation fares on the San Francisco, Napa and Calistoga Railway; the oil rates from producing points on the Sunset Railway; establishment of the weekly transferable pass on certain street railways in southern California; readjustment of the paddy rice rates; readjustment of the passenger fares on the Pacific Electric Railway; and the elimination of certain arbitrary refrigeration charges against meat and packinghouse products. At this time there are on the docket of the Commission many important freight rate proceedings requiring a large amount of very careful investigation. For almost a year a great amount of the time of the Rate Department has been devoted to the Express Rates case which involves a readjustment of the express charges of the American Railway Express Company, not only within the State of California, but throughout the United States. In order to assist in this work the Commission assigned its assistant rate expert to the case, who has been cooperating with the Interstate Commerce Commission, and in connection with that Commission has held hearings throughout the United States. This proceeding has not yet been finally submitted but it is one of vast importance to all patrons of the express service. The Commission also, during the year, has taken an active part in the proceeding which involves the surcharge now being collected in connection with Pullman sleeping car transportation. AUTO STAGES AID DEVELOPMENT. Automotive transportation is proving a decided factor in the development of the state. Most significant are the figures compiled from records of its automobile department and filed with the Commission by the common carriers of the state over which the Commission obtained jurisdiction by the passage of the Auto Stage and Truck Transportation Act, which became effective May 1, 1917. There are 713 of this type of carrier. They give service in all parts proving no barrier. Automotive transportation in many cases has preceded the modern road building program of the state; invariably it follows construction of the paved highway. Widened field of service has been followed by equipment changes and betterments on a par with the demands of the public. The big lumbering bus and the ordinary touring car doing duty as an auto stage, are giving way to specially constructed autos, fast, commodious, comfortable, and safe to a degree that is decidedly attractive to the traveling public. During the calendar year 1922 the auto carriers of the state transported 21,221,928 passengers, approximately 1600 cars being used for passenger carrying. For freight carrying purposes a fleet of nearly 1500 motor cars and trailers was in use. So rapid has been the development of transportation by auto that it is now possible to travel by auto in California from the Oregon line to the Mexican border, choice of valley or coast route being offered. Acrossthe-state service is given in the extreme north, it being possible to travel by auto (using several different stage lines) from Crescent City to Fort Bidwell, from Eureka to Red Bluff, to Nevada state line; from Oroville, Chico, Sacramento and Stockton to the Lake Tahoe and Feather River territory; from the center of population to the Yosemite Valley and contiguous territory; from Fresno and Bakersfield and other valley points to the coast and to the high Sierras. Out of San Francisco and Oakland many auto stage lines operate. Southward, "Down the Peninsula" specially constructed cars give service to the great Santa Clara Valley and by connecting lines to the heart of San Joaquin Valley, the oil fields and the National Parks. The beach territory at Santa Cruz and along the shores of San Mateo County and the so-called "big-tree" section are also served by auto lines. San Francisco and Portland, Los Angeles and San Diego are connected by auto service. Stage lines connect San Francisco and other bay district cities with the Sacramento, Tahoe, the mines section, and along the north coast, auto lines skirting Tamalpais and the Valley of the Moon, reach the famous redwood groves of the north. Out of Los Angeles and San Diego stage lines run in every direction, serving San Bernardino mountain territory, Imperial Valley, and the vast desert areas that spread over the southeastern part of the state. Many of the stage lines publish joint tariffs and so arrange their time schedules that the necessary change from one line to another is accompanied by a minimum of discomfort. As a result there are few places in California today that are inaccessible to the traveler. LEGAL DEPARTMENT. The work of the Legal Department has very greatly expanded during the last few years, and particularly during the year covered by this report. In addition to advising the Commission and its staff upon matters involving the legality of the Commission's orders and practices, the legal department is charged with the task of conducting all legal proceedings in which the Commission is interested as a party, and of handling the Commission's activities in cases before the Interstate Commerce Commission which affect the interests of the people of this state. At the end of the fiscal year the following litigation was pending: Four cases in the United States Supreme Court, seven in the California Supreme Court and one in the Superior Court of Los Angeles County. In addition, seven matters were pending before the Interstate Commerce Commission. During the year the State Supreme Court has decided thirteen cases involving the Commission, of which seven are pending on further proceedings either on rehearing in the state court or on appeal in the United States Supreme Court. Since the reorganization of the Railroad Commission in 1911, it has made 12,297 formal orders and decisions. During that same period it has been a party to one hundred and twenty court proceedings, of which seven are still pending. Of these cases only eighteen have been decided against the Commission. Included in these eighteen cases are four which were reversed by later action of the State Supreme Court; four which were test cases and although nominally decided against the Commission in reality sustained the Commission in principle; and one which is now pending on appeal in the United States Supreme Court. This leaves a net of nine cases actually lost during these twelve years, out of the 120 cases which have been handled. In other words, the formal action of this Commission in the regulation of public utilities in California as expressed in over 12,000 decisions, has been reversed in but nine cases, considerably less than one-tenth of one per cent. SERVICE INSPECTION. The scope of the work of the Service Department was increased during the year and many unsafe practices were ordered discontinued, and contributing factors in numerous accidents involving the various carriers of the state were ordered eliminated, as the result of the inspections and investigations made by this department. It is the duty of the Service Department to investigate and report upon the safety of railroad operation, and the accidents caused by such operation, and to report the results thereof to the Commission, upon which the Commission may make recommendations to the carriers for the betterment of all conditions which it finds to be unsafe or deficient. With the acquisition by this department of jurisdiction over auto stage and freight truck transportation a vast amount of work has been done in field inspection of condition of automobiles and trucks in compliance with the safety rules and operating regulations of the Commission. During the last year 1245 automobile inspections were made, and orders given for immediate correction of violations of the general orders of the Commission. A close scrutiny was maintained over dispatching methods, and carriers were required to establish standard uniform methods of operation, and to maintain a high standard of physical fitness of employees in train and engine service. Due largely to work of this department the dispatching methods and operating practices of smaller railroad carriers in California have been brought up to a satisfactory standard of efficiency. The department conducted 110 investigations into accidents on steam and electric railroads and made recommendations in many of these investigations for the elimination of faulty conditions which might much in the nature of a trouble prevention bureau, has resulted in bringing up the standard of operation of steam and electric railroads and motor transportation in California to a high average as compared with the other states of the union, and has reduced accidents, and hazard of accident, due to faulty operation, on such lines to an extremely low minimum. The report is in one volume of two parts. Part One is devoted to a description of the work of the Commission from a statistical and departmental standpoint. Part Two contains tables compiled from the annual reports of utilities filed with the Commission, in conformity with the provisions of the Public Utilities Act and the rules of the Commission. Respectfully submitted. C. L. SEAVEY, EGERTON SHORE, Commissioners. November 14, 1923. |