As you are no doubt aware, some portions of the sea wall have been constructed for over four years. The Board has caused the entire work to be carefully examined by the Engineer of the Board, who, it will be seen from the report submitted herewith, finds every part in perfect order, and well calculated to answer the purpose for which it was intended. With the exception of a slight settling, caused, no doubt, by the compacting of the material of which the embankment is formed, the Board is aware of no change in any part of the work since its completion.

DREDGING.

When the members of the present Board of State Harbor Commissioners entered upon the discharge of their duties, there was a contract with W. H. Taylor for dredging along the city front, at the rate of fifty cents per cubic yard. Upon the expiration of the time conditioned for said contract, which occurred on the fourth of September, eighteen hundred and seventy, the Board advertised anew for sealed proposals for dredging, and on the fourth of October four bids were opened in the presence of such bidders as were there. On the seventh of October the contract for dredging was awarded to A. Black, Esquire, he being the lowest bidder, for the sum of thirty-four cents per cubic yard, who thereupon executed the contract, gave good and sufficient bonds, in the sum of ten thousand dollars, for the faithful performance of the work, and entered upon its discharge, since which time one hundred and three thousand seven hundred cubic yards have been dredged, at a cost of thirty-five thousand two hundred and fifty-eight dollars, the whole amount paid for dredging since the last biennial report being one hundred and fifteen thousand three hundred and fifty-eight dollars.

In this connection the Board would respectfully call your Excellency's attention to the exorbitant prices which they have been heretofore compelled to pay for this kind of work, and feel that they cannot do so more forcibly than by adopting the language used by our predecessors on page six of the last report, which is as follows:

ment.

"The business in this harbor has hitherto been a practical monopoly. In all instances where any considerable amount of dredging has been required the Board have solicited proposals therefor by public advertiseThe number of bidders has never exceeded two, has seldom been but one, and the minimum price has been fifty cents per cubic yard. From careful estimates of actual cost by the Engineer of the sea wall, the Board are satisfied that the work can be done at a much smaller price and yield a fair profit. Undoubtedly the true policy of the State, under all ordinary circumstances, is to open all public work to private competition. But in this instance there is really no competition, and duty requires her to protect herself against exorbitant rates. They therefore recommend that authority be conferred upon them by legislative enactment to purchase or construct, as they may deem best, a dredging machine, together with a steam tug, necessary scows, and such other apparatus as may be required to perform their dredging. If this authority be discretionary it will probably have the effect to reduce prices to the basis of a fair profit; if it does not, the Board have no hesitation in saying that the State ownership of a machine will more than pay its cost during the coming year.”

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partment of Docks of New York, for the year ending April thirtieth, eighteen hundred and seventy-one, that the price paid for dredging in the harbor of New York is twenty cents per cubic yard, in currency. We also learn from this report that the cost of dredging machines in New York is about twenty-five thousand dollars (currency), and scows, four thousand two hundred and fifty dollars (currency).

NEW WHARVES.

On the twelfth of February, eighteen hundred and seventy, the Commissioners advertised for sealed proposals to supply materials and construct a wharf along the water front on the eastern half of East Street, from the south side of Commercial Street Wharf to the north side of Market Street Wharf, an average length of one hundred and eighty-eight feet; and from the south side of Market Street Wharf to the north side of LaRue's Wharf, an average length of ninety-four feet; and from the south side of LaRue's Wharf to the north side of Mission Street Wharf, an average length of three hundred and ninety-one feet; making in all a total distance of six hundred and thirty-seven feet. On the twenty-third of the same month the bids were opened in the presence of the respective bidders, and on the twenty-eighth the contract was awarded to John Swett, Esq., he agreeing to do the work for twelve thousand five hundred and twelve dollars and fifty cents; the lowest bid made; and on the thirty-first of March succeeding, Swett executed the contract therefor, giving good and sufficient bond in the sum of five thousand dollars, for the faithful performance of said work, and on the thirtieth of April following completed the same, in accordance with the plans and specifications, and was paid.

On the twenty-seventh of August, eighteen hundred and seventy, the Commissioners advertised for sealed proposals to furnish materials and build a wharf along the water front, on the eastern half of East Street, from the south side of Mission Street Wharf to the north side of Howard Street Wharf, a length of five hundred and fifty feet. On the eighth. of September the bids were opened in the presence of the respective bidders, and on the thirteenth the contract awarded to W. H. Martin & Company, for twelve thousand two hundred dollars, they being the lowest bidders; bond given in the sum of five thousand dollars for the faithful performance of the work, and on the eighteenth of October following the work was completed and paid for.

On the expiration of the leases to Messrs. Sage and Edwards, of a portion of Front Street, and to Messrs. Green and Searles, of Battery and Greenwich Street Wharves, the Commissioners being convinced that the rents received were below the value of the property occupied by the Messrs. Green and respective parties, demanded an advance on same. Searles submitted to an agreed amount, while Messrs. Sage and Edwards refused to concede to any terms submitted by the Board. The Commissioners believing it would be remunerative, and beneficial to commerce and the State, that a wharf be constructed thereat, on the fourth of November, eighteen hundred and seventy, advertised for sealed proposals to supply materials and build a wharf along the water front, from a point commencing at the northerly line of Union Street, extending thence northerly to the northern line of Greenwich Street; thence westerly along the northern line of Greenwich Street to the westerly side of Battery Street, a distance of one thousand two hundred and twelve feet six inches from the point of beginning; thence southerly along Battery

Street a distance of two hundred and thirty-three feet. On the fifteenth of the same month the bids were opened in the presence of the respective bidders, and the contract for the work, on the twenty-fifth, awarded to W. H. Martin and Company, for the sum of twenty-two thousand seven hundred and fifty dollars, that being the lowest bid. On the second and ninth days of February two suits were commenced in the Twelfth District Court; the first by John Cowell, and the latter by Nicholas Luning et al., to enjoin the contractors from proceeding with the work. Both of these injunctions, upon argument, were dissolved by the Court, except as to that portion of the work contracted for inside of the red line of eighteen hundred and fifty-one, from which judgment the plaintiffs appealed. In consequence of the Court sustaining so much of the above injunction as applied to work on the inside of the red line, the Commissioners required the contractors to make reduction from the price originally agreed upon for the whole, in an amount proportioned to the work enjoined, which was done, and a deduction of three thousand eight hundred and thirty-eight dollars and twelve cents accordingly made.

Subsequently it was found necessary, by reason of the incomplete condition in which the work was left, and of the incorrectness of the soundings made in eighteen hundred and sixty-six, to brace and otherwise strengthen the structure, thus increasing its cost to twenty-two thousand two hundred and thirty-one dollars and fifty-three cents, which amount was fully paid.

PRESERVATION OF PILES FROM THE RAVAGES OF THE TEREDO NAVALES.

From the terrible ravages made by the teredo navales, or ship-worm, on the piles heretofore used in the construction of wharves, necessitating their renewal at least every three or four years, incurring a heavy outlay and much inconvenience, the Commissioners having carefully inspected piles on which their predecessors and others had experimented by subjecting them to the Robbins wood preserving process, and finding that the piles so treated showed no sign of decay or of having suffered from the ship-worm, on the twentieth of September, eighteen hundred and seventy, the Commissioners directed their Secretary to authorize the Pacific Wood Preserving Company to subject the piles proposed to be used in the superstructure on that portion of the sea wall between Mission and Howard Street Wharves, to their process for preservation of wood. Subsequently, the Board desiring to satisfy themselves fully as to the thoroughness of the treatment, instructed their engineer to make an examination of the piles subjected to the process. This he did by boring with a small augur to the heart of the pile, preserving the chips produced by such boring, and having the same subjected to a chemical analysis at the hand of Ezra S. Carr, Professor of Chemistry in the State University. A detailed account of Professor Carr's analysis is given in the following letter:

1st. A large portion of the soluble nitrogeneous (albuminous) matter has been removed, thus diminishing the natural tendency of the wood to decay, and facilitating the penetration of the vapors from the coal tar. 2d. The coal tar vapors have penetrated from one to three and a half inches from the surface, their presence being decidedly indicated in some instances at the latter depth. The well known preservative character of these vapors, and the repugnance of that scourge of our harbors, the teredo, to them, indicate the value of the process when faithfully conducted. Respectfully yours,

It is yet too soon to form a positive opinion as to the value of the process, but the Board is encouraged to hope for the most favorable results. The Board has been much embarrassed in the discharge of their duties by the anomalous condition of portions of the water front. Individuals owning lots on the water front covered by water, have constructed thereat wharves and docks and claimed the right to receive and ship goods over the same, and collect dockage from vessels.

It appears to the Commissioners that it was clearly the intention of the law to place the entire water front under the control of this Board; but this intention is not so clearly expressed in the law creating the Board as to place the matter beyond question, and parties have availed themselves of the fact to dispute the authority of the Board in some instances. Should such a construction be placed upon the law by the Courts as is contended for by interested parties, the action of the Board would not only be greatly embarrassed, but the interest of the State would be seriously effected. In this connection we call your Excellency's attention to an Act to provide for an open canal through Channel Street, in the City and County of San Francisco, more particularly to the proviso in said Act, which reads as follows: provided, that nothing in this Act shall be construed as conferring any right or power on any person whatever to demand or collect tolls or wharfage.”

Property owners in possession of lots along the line of said canal are daily receiving and shipping a large amount of merchandise, and owing to the interpretation of said proviso, but in violation of the Act organizing this Board, are collecting dockage, wharfage and tolls, as they assert, for the use of their property on the line of said canal, and denying the authority of the Board to interfere with them.

We would therefore respectfully suggest that such legislative action -be had as would remove all doubts and ambiguity on this subject, placing the entire water front under the control of the Board.

TRANS-CONTINENTAL RAILROAD.

The building of a railroad across the continent, which has been completed since the last biennial report was submitted, has necessarily decreased the revenue before that time received by this Board. Large quantities of freight, for which there were originally no facilities for transportation save by water, are daily deposited by the various railroads terminating there, and a deficiency in the receipts of the water front, in proportion to the quantity of freight thus brought by the railroads, has been consequently experienced.

This falling off of freight hitherto landed has lessened the value of

leasehold property along the line of the water front, and necessitated a corresponding reduction in the rents hitherto charged.

The Commissioners are in peaceable possession of all the wharves along the city front, except that portion between Third and Fourth Streets, along the line of the canal through Channel Street.

They have not made any new leases for a term of years, being satisfied that it is not for the interest of the State so to do. Wharves in the hands of private parties compete with those under the control of the Board, and if profitable to the lessees must divert a part of the revenue from its legitimate purpose. Besides, owing to the great falling off in the revenue of the water front, it has become apparent that the bulkhead or sea wall cannot be constructed within any reasonable time from the proceeds of the water front, as contemplated by the present laws. This fact, it is believed, will induce the Legislature to devise some other plan to provide the funds necessary to insure its early completion. The Board therefore deem it advisable to keep the wharves, dock, etc., as far as practicable under their immediate control, so that the Legisla ture may not be embarrassed in their action.

In December last the Board adopted important changes in the rates of dockage, wharfage and tolls. Owing to the fact that in the old schedule tolls were levied, not upon the goods themselves, but upon the vehicles in which they were moved, the rate of tolls were not only uncertain, but in many instances very unequal, while the dockage charged upon vessels was considered oppressive. The schedule adopted by the Board, as will be seen by comparison with the former rates, reduced the dockage upon vessels from twenty to twenty-five per cent., and made the tolls chargeable upon the merchandise per ton, at a lower rate than previously established. The schedule also discriminates in favor of a few articles of home production.

At the time these reductions were made, the Board were of opinion that they had no power under the law to make greater changes. They are satisfied, however, that in time a further reduction will be desirable, and the power of the Board should be extended so as to authorize said reduction, when compatible with the interests of commerce.

In conclusion, the Commissioners would respectfully call your attention to the accompanying reports of Mr. T. J. Arnold, Engineer, and the Hon. Thomas P. Ryan, special counsel of the Board; also, the annexed financial statement, exhibiting a full report of the receipts and disbursements of this office from the date of the last biennial report to July first, eighteen hundred and seventy-one.

Respectfully submitted,

JOHN J. MARKS,

JASPER O'FARRELL,

WASHINGTON BARTLETT.

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TABULAR STATEMENT.