save many thousands of dollars annually to the shipping and mercantile interests. We will mention a single instance which has come under our observation.

Three carloads of machinery were consigned to parties in San Francisco via the South Pacific Coast Railroad from Santa Cruz, distance eighty-five miles to the foot of Market Street. The freight charges were $55 50. The cost of transferring it to the North Pacific Coast Railroad, only one block away, was $55 50 also. The same cost for seven hundred feet in San Francisco as for eighty-five miles by railroad. This case is not the only one where the transfer across the city and from wharf to wharf has cost as much as the movement charges by rail for a distance of fifty to seventy-five miles.

An improvement of this character, under the management and control of an experienced roadmaster, appointed by the State, would, when once constructed, be of great service to the people of the interior, by enabling them to forward their eastern bound products without breaking car lots, and a great convenience to the various railroads, by permitting an interchange of cars.

We need not go into details to prove the cumulative benefits to be derived from such an improvement. Seeing the great need for it, we have only to call your attention to the matter to secure such consideration as its merits require.

In this connection we may also call attention to those roads running in connection with ferries. None of them should be permitted to land at other places than ferry slips.

A railroad terminating in San Francisco in connection with its ferryboat, should provide proper accommodations for the safety and comfort of its passengers, and we repeat what our immediate predecessor said upon this subject, under the head of service:

The service, considering the small volume of business of some of the roads, is generally good. The condition of the roadway and bridges is excellent on those roads having a sufficient amount of traffic to pay for maintenance. For the improvement of the service of those roads which run in connection with ferries to San Francisco, it is recommended that they be required to land their passengers at ferry slips, with passenger-ways separated from those of freight. Waiting rooms also should be provided, in which travelers may find comfortable shelter while waiting the arrival and departure of the steamers.

THE ECONOMY OF CONSOLIDATION.

In the multitude of arguments, pro and con, advanced on the railroad question, considerable has been said against the policy of consolidation. For the benefit of those who have not studied the subject as thoroughly as they would desire, we present the following comparative illustration between the Central Pacific system, which is under one management, and the roads of Massachusetts, which are controlled by sixty-four different managements. The number of miles of Massachusetts road reporter is 2,667; the number of miles of road operated by the Central Pacific Railroad Company, is 2,644. The facts and figures of both are for the year 1880. The average cost of the standard gauge roads of Massachusetts is given at $57,057 80 per mile; equipment, $6,613 90; making the total average cost, $63,671 70. The variations of cost per mile range from $24,353 25 to $92,068 30. It will be seen that the miles operated by the Central Pacific and leased lines, and those of Massachusetts, are so nearly the same as to make no material difference in the estimates. The following table is so simple and clear that all will understand it:

By the above it is shown that the gross earnings per mile of the Massachusetts roads were 69.86 per cent greater than those of the Central Pacific, and that it cost them 97.12 per cent more than the Central Pacific, while their net income per mile was 31.12 per cent greater. Their passenger earnings were 17.11 per cent per mile; their freight earnings were 32.80 per cent per mile, and their dividends paid to stockholders, 74.30 per cent per mile greater than the Central Pacific and leased lines, which paid but 2.60 per cent dividend on the aggregate investment, while the Massachusetts roads paid 5.04 per cent; the aggregate capital of the Central Pacific and leased lines, being only 8.62 per cent greater than the roads of Massachusetts. The cost of operating the Central Pacific was about one half the cost of operating the Massachusetts roads. When the fact that the eastern roads obtained labor, fuel, and all kinds of supplies far below the price paid for these necessaries by the Central Pacific, is taken into consideration, a strong argument in favor of consolidation is presented. The people of Massachusetts pay for the maintenance of sixty-four organizations while the patrons of the Central Pacific pay for but one. Despite the remarkable showing in favor of the Central Pacific system, there are no complaints made by the patrons of the Massachusetts roads.

NOTE.-Dividends paid on the Central Pacific stock, six per cent; but, including with the Central Pacific that of side and leased lines, which amount to but 8.62 per cent more than the mileage of the Massachusetts roads, reduces the showing to 2.66 per cent as against the dividends of 5.04 per cent paid by the Massachusetts roads.

REDUCTION OF FARES AND RATES.

Since the organization of this Commission the aggregate reduction of fares and rates over the roads of the Central Pacific system within the State have been very considerable. There have been material reductions in the charges of other transportation companies, but the Central Pacffic is the only one that has supplied us with information sufficient in detail to enable us to make an approximate estimate of the total amount saved to the people by these reductions. Upon the principal products of California, among which may be enumerated barley, beans, brandy, wine, cattle, flour, corn, wheat, hogs, horses, hops, green fruit, wool, mill stuffs, oats, rye, potatoes, and sheep, based on the tonnage of 1880, there were reductions, as compared with 1879, of 13.67 per cent., and in 1881, as compared with 1879, of 22.69 per cent the reduction, in round numbers, being $588,800 74. On the Central Pacific proportion of through freight charges for the years of 1880 and 1881, as compared with 1879, there is shown a reduction of $1,428,798 37, which, with the reduction of local freight, shows a total saving to the people within a period of two years, of $2,017,599 11. If the rates of 1879 had remained unchanged up to the close of 1881, shippers would have paid on transportation over two million dollars more than they have paid. The figures show a saving on freight alone of more than one million dollars per annum. The managers of the Central Pacific system assure this Board that the proportion of reductions for 1882 will be largely in excess of that of the two previous years. The reduction in the way of special rates, such as round-trip tickets, commutation tickets, etc., of passenger fares, during the years 1880 and 1881, is estimated to be equal to that on freights for the same period. Here, then, is a saving to the people

of nearly four and a half million dollars in the short space of two years. Within the year 1882 the shading down of both fares and rates has been very marked. The reductions of the revised freight tariff of the Central Pacific Railroad, which went into effect June 1, 1881, and which included grain, flour, live stock, alfalfa seed, and wool, have already saved to the producers many hundreds of thousands of dollars.

The amount of business done by a railroad is the gauge by which the value of its service must be measured. The capacity of a railroad for carrying purposes is very great-in almost all cases far beyond the demand upon it. The trains must be run even though they carry light loads. The freight cars must go out for the products of the farm without regard to the small quantity of goods sent out from the city. The cost of hauling empty or but partially loaded cars over a road is but little less than hauling them loaded. The amount of service required to operate a road with a business limited to one third its capacity is out of proportion with that of a road doing a business equal to three fourths its carrying capacity. Hence it is that the cost of service decreases in proportionate ratio with the volume of traffic. The business of the Central Pacific and its leased lines is increasing year by year, and the effect is the marked reduction in the cost of service, as stated above. The shading down of rates is a consequence of an increasing volume of business. This shading down approximates a net saving to the shipper of nearly two and a half million dollars per annum during the years of 1880 and 1881. It will exceed this sum for 1882, and we may reasonably expect a proportionate reduction during the years to come. Full harvests, flourishing manufactories, and successful mining operations, are far more reliable guarantees of cheap transportation than may be hoped for from ill-digested legislation or the arbitrary action of this or any other Board of Railroad Commissioners.

THE WHEAT GROWER AND THE RAILROAD.

We have thought that a few comparisons between the cost of moving a staple-wheat, for instance-from the point of production to the place of shipment, or to market, before there were railroad facilities, and now, would be of interest to the farming portion of our population. The beneficial results of extensive railroad communication upon our agricultural and manufacturing interests, are visible on every hand. The average of cultivated land has greatly expanded within the last decade. The average annual export of wheat for 1881 and 1882, was 32,000,000 bushels; while the average per year for the four years ending with 1881, was but 21,000,000. These figures show that, within the past five years, the increase in the average product of wheat in California has been remarkable. The area of fruit orchards and vineyards has also expanded beyond what was thought possible a few years ago. The commerce of San Francisco has kept pace with the growth of the material interests referred to above. The railroad has contributed very materially to the accomplishment of these results, as will be seen from the following details: Solano County is one of the large wheat producing countries. Along one side of this vast wheat field runs the Sacramento River. Beside Suisun Bay, which penetrates the county from the south for a distance of ten or twelve miles, there are navigable

sloughs of Main Prairie and other localities, all supplying a means of outlet for wheat on its way to the San Francisco market. Despite these advantages we find that before the era of railroads, the average haul by wagon of the wheat from the field to the water was ten miles, at a cost of two dollars per ton. The cost of shipment per vessel alone was about one fourth more than is now charged by the railroad for delivery at the ship's side or the warehouse in San Francisco harbor. There was often difficulty in getting the wheat moved from where it left the farmer's wagon. Solano County now has two railroads running parallel with each other and with the river, each distant from the other an average of ten miles. The average haul per wagon is now three miles, and the average cost of moving a ton of wheat from the field to the station is seventy-five cents, a net saving of one dollar and twenty-five cents per ton. The annual average of the wheat yield of Solano County is estimated at 125,000 tons. The railroad saves the producer one dollar and twenty-five cents per ton on the first movement of his wheat after it is sacked. If you multiply 125,000 by 125 you will see that railroad facilities save the Solano County wheat grower a large sum annually on the first movement of his products. Throughout the Sacramento and San Joaquin Valleys the haul of products has been shortened and the cost decreased in a greater or less degree by the railroad. The reader will of course see that the cost of moving material of all kinds from the city to the country has been reduced in proportionate ratio.

TWO GREAT COMPETING ROUTES.

When an all-rail route by way of Fort Worth, Texas, enabled the Southern Pacific Railroad to carry California wheat to New Orleans, the tonnage from San Francisco to England declined from $17 to $12 per ton. The quantity of wheat dispatched by rail to Liverpool via New Orleans was small, but it demonstrated as a fact what had before been a mere supposition. It did more than this-it convinced the skeptical that when the Southern Pacific controlled and owned a through rail between this city and New Orleans, a large share of the wheat of California would reach Europe by a new and short route, over which the cost of transportation would be so much less than the cost by ship, that the product of the California farmer could successfully compete in the Liverpool market with the wheat of the Northwestern States. The Southern Pacific road will be completed before this report is placed in type; and, in time for the crop of 1883, the road will have so far perfected its arrangements for moving a large share of our export wheat overland to New Orleans or Galveston, where it will take ship for Liverpool and other European ports. Until the road is finished and the necessary preparations made, the Company will be unable to definitely state the probable rate at which California wheat will be moved to New Orleans by rail and thence by ship to England. The one fact only can now be stated, which is, that before it was known that wheat could be sent via New Orleans, the freight from here to Liverpool ranged from $17 to $20 per ton, and now is but $12. This fact will impress the grain producers of California. The rate is now but $12 per ton by ship, and there is no doubt. but that the price will decline to $7 per ton when the railroad is fairly ready to compete with the ships. At present the saving to the producer is $5 to $8 per ton. For the years 1878, 1879, 1880, and 1881, Cali