aforesaid, then, and in that case, said Secretary shall immediately proceed to print such schedule and order, and to serve printed copies thereof on the parties to be affected thereby, and shall keep a record of his action in the minutes of said Commission.

LEGISLATION SUGGESTED.

This standing order relates to the office work of the Commission, and to its most important duties. It conforms to the simple and definite methods of the Constitution, which terminate in orders and decisions. But there is, also, the statute of 1880, Chapter 59, Section 11, which imposes upon the Commission the endless mechanical labor of preparing "printed schedules" of the rates of fares and freights it establishes or adopts, and is an unreasonable and ungrammatical supplement to the Constitution. It makes the Commission, in the matter referred to, a sort of one clerk inconvenience to the companies subject to its jurisdiction, without their force or facilities for doing the work required, and to the manifest detriment of all concerned. And, while acknowledging accommodating . waivers of the cumbersome service required of the Commission, they are regarded as pertinent admissions of what the law should be. It is, therefore, respectfully urged that Section 11, supra, be so amended as to require of the Commission only those constitutional determinations, known as orders, or decisions, in compliance with which the company or companies to be affected thereby, shall be required, within a reasonable time, to tabuľate, print, and post the necessary schedules.

REFORMED RETURNS RECOMMENDED.

In this connection, and for reasons which will be made apparent by an examination of the stereotyped annual statements of railroad companies, filed in this office, copies of which will be found in this volume, it is recommended that the several transportation companies owning or operating railroads in this State, be required to make verified returns and reports of all matters touching the ownership and operation, the condition and management of their respective roads, at such times, and in such manner and form, as this Commission shall prescribe. And the Commission should be empowered and required, with due regard to the convenience and established regulations of said companies, and each of them, to prepare, in time for use, blank forms of such return or report, and to change and amend the same as shall be deemed expedient. By this method of bringing returns to the point and purpose for which they are required, it will be possible to substitute more important information for stale repetitions, signifying not much if anything; and the reasonable requirements of the Commission, for the habitual courtesy of railway officials.

JURISDICTION OF FOREIGN CORPORATIONS.

It is only by due process of law that any official act of this Commission can be supported or enforced. The validity of every order, decision, and proceeding rests upon jurisdictional facts of record, the first of which is service of process upon the proper party. If it be a foreign corporation, having its principal place of business in another jurisdiction, and operating a railroad in this State, it is required by the Act of April 1, 1872, to file, in the office of Secretary of State, an appointment, designating, by name and residence, some person upon whom process may be served. As for all the purposes of such appointment, it should be made a record of this office, it is recommended that any foreign corporation, operating a line of water or rail transportation in this State, be required to file in this office a written appointment, duly made and authenticated by its corporate seal, designating some person, residing in this State, upon whom all legal process and official papers may be served. It should also be required to show, by a statement in said appointment, or otherwise, whether it is operating such line of transportation as owner or lessee, and if as lessee, the terms and conditions of its lease.

NEW POWERS AND DUTIES.

Thus far the Commission has only outlined "such further powers" as are clearly contemplated and authorized by Section 22, Article XII, of the Constitution. They go to the exercise of powers already possessed, as means to an end. In a power conferred, with the means necessary to its exercise, is implied the correlative duty to be discharged. But an official duty without corresponding advisory or other power, if supposable at all, can subserve no useful purpose. Hence, to confer upon this Commission visitorial supervision over the railroads of this State, corresponding to that of like tribunals in other States, involves the imposition of new duties, coupled with appropriate advisory or administrative authority. The power and duty to "establish or adopt rates of charges on railroads," has never been extended to their general management. If done at all, it must be by further legislation, the expediency of which is the only question to be determined. It has two sides, and if this Commission could not consider both with the dispassionate fairness of an impartial judge, it would be unfit to exercise the contemplated power.

The onus of showing the utility of change is always upon its advocates. That none is urged, or should be made, by reason of any pretended conflict of rights or interests between the railroads and their patrons, may be conclusively presumed. That the most moribund monopoly of a franchise for public use, worth nothing for any other purpose, has a vital selfish interest in its safety and convenience must be admitted. That the most enlightened self-interest and knowledge inspired by railroad enterprise are not sure guarantees of

careful and accommodating service, is not always to be attributed to its magnitude or hazards. That the highest order of mind and manhood, while marshaling the forces and factors of railroad management and industrial development, could sometimes profit by prudent advice and warning, is attested by casualties and accidents some of which might have been prevented. That the legal liabilities of railroad companies, for the wrong or negligence of themselves or agents, are not a sure safeguard of life and property, is affirmed in actions for damages, by the verdicts of juries, and the judgments of Courts.

Thus, upon such considerations of law and fact, as may be predicated of all railway management, the Commissions of other States have been invested with such visitorial and remedial powers and duties as have brought them into their most useful and friendly relations with railway companies. By authorized inspection and findings of fact, touching the facilities and instrumentalities of transportation, and power to advise or order repairs and betterments, they exercise a watchful and suggestive supervision, conducive to the safety and convenience of all concerned. It is thus that corporate self-government is subjected to such and so much State control as carries with it the official evidence and assurance of reasonable regulations-suitable facilities, and the safest attainable and most accommodating management. It is, therefore, recommended that the inspection and finding of facts, which would otherwise be an idle display of unofficial intermeddling, be required of this Commission; and that its general supervision of railroad and other transportation companies in this State be accompanied by such appropriate powers and sanctions as shall insure compliance with its authorized orders and decisions.

BRIEF REFERENCE TO THE SEVERAL EXHIBITS CONTAINED IN THE APPENDIX.

Exhibit A

Shows the number of meetings held by the Commission in 1885, and the members present.

Exhibit B

Summarizes the operations of the Central Pacific Railroad, and leased lines, for the years 1881, 1882, 1883, and 1884, and shows:

First-Total earnings and income from all sources.
Second-Total income, operating expenses, and taxes.

Third-Interest paid on debt.

Fourth-Paid United States and Sinking Funds.

Fifth-Total payments from income.

Sixth-New construction, betterments, etc.

The total expenditures for the four years, excluding dividends paid, was $89,515,890 92. In addition to this sum there was expended for construction and betterments of rolling stock on roads owned and operated (excluding those operated but not owned) by the Central Pacific Railroad Company, the further sum of $5,514,433 35.

It appears, therefore, that for the four years to which this exhibit relates, the Central Pacific Railroad has expended, excluding dividends, the sum of $95,030,323 27. Excepting what was paid to bondholders and to the United States, the greater portion of this sum was expended in this State, and more than $30,000,000 was paid out and expended for labor.

Attention is especially invited to this exhibit for an analysis of the gross earnings, operating expenses, and net earnings, per passenger and freight train miles for each, and the average for all, of said years. From this it will be seen that had the average for the first three continued through the last of said years, the net income from passenger trains would have been $1,791,571, and from freight trains, $1,470,146—more than it was in 1884. Whether this diminution of net income was caused by reductions of rates in both departments, or by depression of trade and business, or by both, the effect is the same, and the cause continues. If resulting from reductions, it is enough for us to say that they were not made for that purpose, but upon the theory that railroads, like steamships, steamboats, and other instrumentalities of transportion, belong to their owners, and that all alike,

whether rich or poor, are "entitled to reasonable compensation and no more." (Civil Code, Sec. 2173.) To this time-honored and codified rule of the common law the Constitution expressly refers such orders and decisions of this Commission as are "deemed to be conclusively 'just and reasonable.'" (Art. 12, Sec. 22.)

Exhibit C

Analyzes and distributes by States and Territories the passenger traffic of the Central Pacific Railroad and leased lines, for the year 1884.

It shows the number of passengers, the mileage, the earnings, the average miles traveled by each passenger, and the average charge per passenger per mile in cents, originating and terminating in each of the following States and Territories, namely: California, Nevada, Texas, Utah, Arizona, and New Mexico.

Also, west-bound through traffic originating:

First-East of Ogden and terminating in California, Nevada, and Utah. Second-East of the Needles and terminating in California.

Third-East of Deming and terminating in California, Arizona, and New Mexico.

Fourth-East of El Paso and terminating in California, Arizona, and New Mexico.

Fifth-Total passenger traffic originating on the Central Pacific Railroad. Sixth-Total west-bound passenger traffic terminating on said road.

Seventh-Total passenger traffic on the Central Pacific Railroad and leased lines for said year.

It also shows as to the same factors of passenger traffic for the same year, the proportion:

First-Originating and terminating in California.

Second-Originating in and passing out of State.

Third-Originating east of terminals and passing into State.

Finally it shows the passenger traffic, average miles traveled and average charge per mile per passenger, on the Central Pacific road and leased lines west of El Paso, from 1872 to 1884, both years inclusive.

Exhibit D.

From the annual address by the Hon. M. M. Estee, before the State Agricultural Society, we take with his comments the facts and figures furnished him by A. N. Towne, General Manager of the Southern Pacific Railroad and leased lines. They show by the shipments east for a series of years the progressive increase in the production of green fruits and vegetables, of canned and dried fruits, of brandies and wines; and also, how these important industries have been fostered and developed by corresponding and continuous reductions in the rates of transportation. In themselves reliable and valuable, the facts and figures are invested with peculiar interest by the instructive use that is made of them.

Exhibit E.

This is a series of tabulated statements showing recent changes and reductions of through and local passenger fares by the Southern Pacific Company. By the first it will be seen that on the first day of January, 1885, this company consummated arrangements with its connecting lines from the Missouri River, to attract and facilitate European immigration to

this coast by the very low charge of $30 per passenger. The table appended shows in parallel columns the proportions and rate per mile received by the Southern Pacific Company before and after the reduction.

The second shows that round trip tickets, good from a Friday or Saturday until the next Tuesday, were issued during the past season at all terminal points to sportsmen and excursionists at reduced rates, which continued until the thirty-first day of October, 1885.

The third shows that since January, 1884, the through rates to Portland, Oregon, have been greatly reduced, and that the extension since that date of track and train service to Delta has increased the pro rata of the Southern Pacific Company. Lower rate limited tickets were also sold at Stockton, Sacramento, and Marysville.

From the fourth it will be seen that special round trip tickets from San Francisco, Stockton, Sacramento, and Marysville to Strawberry Valley, Sissons, and other Summer resorts, were sold at reduced rates, and that the increased proportion received by the Southern Pacific Company is due to increased rail mileage north of Redding.

Within this year, also, third-class or emigrant rates via Ogden, Kansas City, and other Missouri River points, have been reduced from $50 to $47 50, of which the proportions of the Southern Pacific Company, west of its eastern terminals-taking Kansas City as an example-are shown by the tabulated statement of the old and new pro rata and rate per mile.

The fifth shows the stations and reduced rates at which round trip tourists' tickets to Lake Tahoe and return by stage via Truckee, have been issued during the past Summer. It will be seen also that thirty-day excur-. sion round trip tickets from Los Angeles to Lang and return, and vice versa, are at the rate of $3 75.

The sixth relates to reduced round trip excursion rates and divisions by rail and stage to Summit, Soda Springs, and back.

The seventh is a tabulation of rates and reductions from San Francisco via Reno to Beckworth, Genesee, Greenville, Janesville, Milford, Mohawk, Plumas, Eureka Mills, Quincy, Susanville, and Taylorsville, and will show large reductions and the proportions and rate per mile received by the Southern Pacific Company.

The last reductions of through and local lower-grade rates on the Southern Pacific system, took effect on the thirteenth day of October, 1885, at which time the company commenced carrying emigrants on its express trains, and also reduced second-class passenger rates from San Francisco to Los Angeles from $18 to $15.

Exhibit F.

These elaborate comparisons of charges for the same classes of freight, by careful equations of distance and weight, on the Chicago and Northwestern, the Chicago, Milwaukee, and St. Paul, the Union Pacific, the Missouri Pacific, the St. Louis and San Francisco, the Texas Pacific, and the Atchison, Topeka, and Santa Fe roads, with those on the Central Pacific (now Southern Pacific) road and leased lines, are reliable and instructive. They show that the freight rates prevailing on the Southern Pacific road and leased lines, when closely compared with those of seven leading roads west of Chicago and the Missouri River, and also with the freight tariff adopted and finally rescinded after a year's consideration, two decisions and one rehearing by the Kansas Commission, are comparatively low, and may be "set down as the accustomed reward for like services." (Coe vs. Goodwin, 19 Wendell, N. Y. 261; 2 Kent's Commentaries, 599.) "It is to be

supposed that a common carrier can afford to carry at much the same rate of as that which is exacted universally by carriers similarly situated, and which, if it has been found to remunerate them, may, upon the best grounds, be called reasonable. The word reasonable, therefore, is to be the

terion of the price which a common carrier has a right to demand." All the books, and Browne on the Law of Carriers, p. 82. "Like circumstances" construed to mean and include cases where the labor, liability, and expense of the carriage are the same. (Great Western Railway Company vs. Sutton, H. of Lords, 38; J. L. Exch. 184; Browne on the Law of Carriers, p. 258; Walf. Sum. Law of Rys., p. 317; Ransome vs. Eastern Co.'s Ky., 4C. B. [N. S.] 63.)

Exhibit G.

Briefly generalized, this is a condensed presentation of dry but instructive facts and figures contained in the annual returns to this office of twenty-five roads. It has been carefully prepared and compared with the original returns by Commissioner Humphreys, and is more convenient for reference than the full returns in their undigested form. It will be seen by reference to this exhibit, that the roads reporting to this office are generally in sound financial and physical condition, and during the year covered by the returns were participating to some extent in the peace, plenty, and prosperity of the State. They have, of course, shared in the depression caused by the short crop of 1885.

Exhibit H.

Showing incidental expenses of the Commission for the year ending December 31, 1885.

A SHAM SCHEDULE.

The Commission, in its report of last year, page 25, pricked the bubble as follows:

EXAMINATION OF COMMODITY RATES ON DISTANCE PLAN.

In May of this year, upon his own motion, without complaint or petition, Commissioner Carpenter, with the clerical assistance of Secretary Andrus, renewed investigations of grain and other commodity rates from interior points to tide-water. The method adopted was to compare tariffs on the Central Pacific system with those of other roads for the same classes of freight, and for like distances. It was done by preparing a trial sheet with distances and key, compared and scaled rates in parallel columns, and was intelligible enough for its purpose. Only the column of distances and of the rates finally established could have any place in a schedule. Some time after the preparation of this trial sheet, as one of the various methods of systematizing the study of comparative charges on different roads, and determining what they should be on those of California, it was copied for Commissioner Humphreys, and thereafter, with slight changes, for Commissioner Foote, as whose schedule it is now known. It was presented by him at a meeting of the Commission held on the twenty-ninth day of November, 1884, and together with lengthy comparative and statistical statements (vide Exhibit C, p. 39) submitted by the Central Pacific Railroad Company, was passed for consideration on the second ultimo.

On the day appointed it was taken up, and General Freight Agent, Richard Gray, being present, explained the statements prepared in his office, and at the instance of Commissioner Foote, had leave to make some additions thereto. Whereupon the Commission adjourned to meet at the call of the Chairman.

At the subsequent and last meeting in 1884, it was passed without further action. And in the absence of Commissioner Foote during the first six months of 1885, further proceedings upon it were deferred. On the thirtieth day of July, 1885, all the Commissioners being present, on motion of Commissioner Carpenter, the Central Pacific Railroad Company was notified that the Commission was ready to receive its report, touching the matters