seasonal passenger carriers the time of operation depends upon weather conditions, or the opening and closing of summer resorts in the territory served. School busses operate only on school days, and the so-called mail carriers, that is, auto stage operators who transport mail for the United States government under contract, and carrying passengers and freight under authority of the Railroad Commission, frequently limit their operations to service only on such days as they are required to transport the mail, in some instances, daily, except Sunday; in others twice a week, and others three times a week.

DEPARTMENT ESTABLISHED.

Since June 30, 1921, the Commission has maintained a department devoted solely to the regulation of automotive transportation, an expedient made necessary by the increase in the number of matters pertaining to franchised auto trucks and stages, and the unprecedented development of the state's newest utility service. Indicating the spread of this growth may be quoted the statistics showing that of the formal matters brought to the attention of the Commission from July 1, 1922, to June 30, 1923, the period covered by this report, 612 of the 1170 applications had to do with automotive transportation and its regulation. This, in connection with the fact that more than 21,000,000 passengers were transported during the year by auto stages, stresses the importance to the state of transportation via the highways.

This department will also handle all applications for certificates of convenience and necessity filed in connection with operation of common carriers on the inland waters of the state. The last session of the legislature made it a statutory requirement that before a passenger or freight carrier on inland waters may begin operations, a certificate of convenience and necessity must be obtained from the Railroad Commission. This law will become effective on August 15, 1923

The act does not require that carriers operating in good faith prior to that date secure such a certificate. Such carriers, of which there are 117, may continue to operate, provided their tariffs were on file with the Commission prior to the effective date of the new legislation.

TREND TOWARDS CONSOLIDATION.

Three years ago marked the beginning of a general trend towards consolidation of stage lines operating in territory more or less sectional in demands. This tendency continued during the year covered by this report. Operators of purely local services transferred their operating rights to operators covering a wider field in contiguous territory. Others sought enlarged territory, either through the purchase of existing lines or by application to the Commission for authority to operate between stated points, application being based on the declaration that public convenience and necessity required additional transportation service. Where all the facts were a matter of record in the Commission's files, ex parte orders disposed of many applications for transfer of operating rights. In a large majority of the proceedings based on a request to enlarge or create operating rights, public hearings were held, at which all persons concerned and communities interested were given opportunity to appear and voice either protest or approval of the application.

DEEP INTEREST OF PUBLIC.

The interest of the public in the development of automotive transportation is best evidenced by the fact that hearings sometimes cover a period of three or four days. Very frequently application for certificates are followed by letters to the Commission from individuals, civic bodies, and municipal officials, supporting the application. On the other hand, in numerous instances, civic bodies and communities have gone on record as opposing the grant of a certificate to a motor carrier, the objection, in nearly every case being based on a choice of rail service rather than motor, and a desire to protect local steam or electric carriers against motor competition. Road protection has also been advanced in a few instances by opponents of motor transit.

There has been a gradual spread of the field of service by auto carriers, both passenger and freight. Today the traveler patronizing the auto stage, finds every convenience and comfort. Cushioned cars, roomy to a degree considered impossible in the early days of motor transportation, well ventilated and lighted, make public motor travel a pleasure. Traversing the length and breath of California, motor stages are giving to the residents of the state a real public service, to the tourist an opportunity to view all of the wonders between the Oregon line and Mexico, and adding to the transportation of the country a service that in reality is one of convenience and necessity.

FINANCIAL REPORTS REQUIRED.

Financial reports filed by the stage and truck lines operating under the jurisdiction of the Commission tell in their totals a graphic story of the spread of their operations, and show to what a great extent automotive transportation is sharing in the development of California. The stage and truck lines are divided into two classes by the Commission's accounting department. All operating units having a gross income of $20,000 or more are listed under "Class A," and are required to file reports under headings prescribed by the Commission in its "uniform classification of accounts," just as are the other large utilities of the state. Report requirements from the esser companies, while they assemble practically the same figures, are less rigidly enforced as to detail.

Reports from 140' Class A❞ companies, covering financial operations for the calendar year 1922 show a total operating revenue of $12,596,309.59, with a total operating expense of $11,831,754.35, yielding a net operating revenue of $764,555.23. By additions from other sources (nonoperating income) totaled $1,702,119.43, the gross income of these companies is increased to $2,466,674.66. Nonoperating expenses, which include interest, federal income taxes and expenses of other operations totaled $1,770,266.51. The profit for the year of all these companies amounted to $696,408.15. During the year the dividends paid by all Class A companies reporting totaled $157,842.66. The value of "plant and equipment" is given by these companies as $9,280,880.69, with other

MAIN SOURCES OF REVENUE.

The main sources of revenue of the Class A carriers were as follows:

Class A companies spent $1,150,758.60 for fuel for power and $219,712.49 for lubricants and other supplies. Damages to freight and baggage cost the Class A companies $43,874.45 and injuries and damages cost them $185,316.94. Salaries and expenses of general officers reached a total of $422,498.37, and salaries and expenses of general office clerks totaled $341,665.05. To passenger car operators (drivers) $1,316,191.70 was paid and to freight car operators $745,643.74. Express, baggage and mail car operators were paid $262,429.95. Superintendence of transportation cost $189,987.49. Station employees cost $423,716.30; garage, labor and expenses totaled $382,274.23.

The Class A companies or operators transported during the year 18,721,485 passengers and 444,943 tons of freight. The passenger car mileage totaled 29,723,980, and freight car mileage 3,754,510. To transport these travelers and goods the companies used 975 passenger cars, 625 freight "cars" and other equipment (trailers, etc.) totaling 291 vehicles.

OPERATING INCOME AND EXPENSE.

As a whole the operations of all the large companies were profitable, or at least showed an excess of operating income over operating expense, the companies that did not meet operating expenses being very few. Listed below are a few of the large Class A companies, with figures taken from their annual reports:

†Household goods, between San Francisco and Los Angeles and intermediate points.

The carriers operating as carriers of freight and passengers did not show heavy profits, according to the reports filed by the following, although a few did well:

The 573 "Class B" or small companies, comprising the motor stage and truck lines whose revenues did not exceed $20,000 in the calendar year report a total investment in cars and shop equipment of $1,922,681.35. The total revenue of these companies for the year 1922 amounted to $2,953,040.35. The sources were as follows:

The expenses of these lines totaled $2,490,970.98, giving a net revenue of $462,069.37. The chief items of expense of the small companies were as follows:

The small carriers transported 2,500,443 passengers from January 1, 1922, to December 31, 1922, and 220,483 tons of freight. In this operation 641 passenger cars were used, 334 freight and 44 other vehicles, such as trailers, wagons, etc.

Recapitulation of the reports of the Class A and so-called small companies, shows that revenues from purely motor operations totaled $15,549,349.94. The operating expenses of all companies, totaled

MILLIONS INVESTED.

Of the Class B carriers, 86 operated in the red as did 34 of the Class A carriers. The investment in physical propert es represented in the operations of the 713 automotive carriers in the state, according to their financial reports, shows a total of $12,317,089.20, divided as follows:

The number of passengers transported during the year by both large and small companies reached a grand total of 21,221,928. The equipment used by all companies, a recapitulation of their reports shows, totaled 1616 passenger cars, 959 freight cars and 335 other vehicles, such as trailers, wagons, etc.

NEW LEGISLATION.

A legislative enactment of the session of 1922-23 reduced somewhat the extent of the jurisdiction of the Commission over motor freight carriers. The Crittenden bill, which becomes a law on August 16, 1923, provides that motor freight carriers engaged in transporting farm products from farm to farm, and from farm to warehouse, creamery, shipping point or other initial point and articles of husbandry to or from a farm shall be exempt from the provisions of the Auto Transportation Act. The Crittenden bill also provides that each application for a certificate of public convenience and necessity, or for an order authorizing the sale, leasing, assignment or transfer of an existing operative right must be accompanied by a fee of $50.

Approximately 70 motor freight carriers will be affected by the provisions of the bill exempting carriers of farm products, but as many of them also transport general freight, they will still require a certificate or permit.

Other legislation (Breed bill) enacted into law the Commission's general order requiring motor vehicles to come to a full stop at rail crossings. It provides for registration of all motor vehicles, fees for such, etc. It also provides a gasoline tax of 2 cents a gallon. The provisions of this bill, which is known as the Motor Vehicle Act, cover all motor vehicles, and is not part of the act under which automotive common carriers are regulated.

Taxation of motor carriers is provided by the Duval bill, taxing common carrier stages 4 per cent of their gross receipts. Collection of this tax devolves upon the State Board of Equalization, which is also authorized to issue the license plate required to be carried on each vehicle operated by a common carrier over the highways of the state.

COMMISSION AIDS TRAVELERS.

During the year covered by this report the Commission, though without jurisdiction in the matter of loss and damage claims, was able to give