importance of these annual inspections can not be overestimated. It is essential to an adequate knowledge of the property which the Commissioners are called upon to value, and brings them into a close relation and sympathy with their work. They are furthermore thus given a convenient opportunity of coming in contact with the shippers at important points, and having their views upon the management of railroads, thus facilitating the consideration of complaints and grievances frequently brought to the attention of the Commission.

The inspection this year was as thorough as existing conditions would admit of, but the Commission found the contingent fund at their disposal grossly inadequate to cover the cost of the tour. After drawing upon their private funds to a considerable extent the Commission were compelled to discontinue the inspection without visiting and examining a few of the shorter and less important lines. The inadequacy of the contingent fund was due to the fact that the Commission this year insisted, against the protest of the railroad officials in nearly every instance, upon paying their fares, in compliance with that well advertised provision of the new Constitution. However, the new corporation bill, which will no doubt become a law at an early day, provides for the payment of the necessary traveling expenses of the Commission, and the inspection the coming year can, therefore, be made more thorough and satisfactory.

The railroad officials extended to the Commission the use of their observation cars on the inspection tour, and evidenced a disposition to furnish all information that could be desired. relative to their properties. The Commission were aided in making careful notation of each piece of property by the reports made by the companies to the State Auditor, copies of which were furnished for use on the trip.

While there have been virtually no new railroad lines built or extensions of great importance made during the past year, the general physical condition of the railroads has been much improved by costly work in the way of stone and gravel ballast, new ties, new and heavier rails, culverts and trestles renewed or filled in, new iron bridges built, tunnels enlarged and secured by perfect masonry, safety devices adopted and new rolling stock.

The best pieces of road bed inspected were the Louisville and Nashville main stem, Henderson Division, of the L. and N., Kentucky Central main line, and the Maysville and Big Sandy. These lines are in a high state of physical perfection. The greatest improvement of any line, however, was the Cincinnati Division of the L. and N. In the past two years a vast sum of money has been expended upon rock ballast, new ties and rails, easement curves, trestles and bridges, on this line. There is a great difference in the sense of security of the passenger, as well as in the cost of operating this division since these improvements were made.

In point of superior rolling stock equipment, safety devices, gradual abolition of grade crossings and heavy and substantial work on tunnels, the Cincinnati, New Orleans and Texas Pacific leads, and its general physical condition is very fair. Extensive improvements are being put upon the Louisville Southern, and mistakes of original construction rectified.

The heaviest work and most radical improvement now being made on any line is that on the Chesapeake, Ohio and Southwestern, and it must be said, none needed it so much. This important line had been allowed to run down to a wretched condition, but the work of replacing the old fifty-pound iron rails with heavy steel ones, the great number of new ties with rock. and gravel ballast being supplied, and the rebuilding of trestles. and bridges, will, by the fall of 1893, make this a thoroughly first-class line; and such is the declared intention of the management.

The Ohio Valley, which is now owned and operated by the Newport News and Mississippi Valley company, will also receive immediate attention in this respect. It was in a low physical condition at the time of inspection, although an important iron bridge across Tradewater river had been rebuilt, and the motive power and rolling stock improved. In the opinion of the Commission the trestles on this line can not receive too early attention. The line south of Princeton recently leased to the Ohio Valley by the L. and N. (being 20.5 miles of what has heretofore been known as the Clarksville and Princeton division of the L. and N.) is in remarkably good condition for a line having no stone or gravel ballast. New 58 pound steel rails

were laid upon this line just prior to the transfer. The extension from Gracey to Hopkinsville-ten miles in length-one of the few pieces of new road built in 1892, was only finished August 1st, and had not been ballasted at the time of inspection.

The Paducah, Tennessee and Alabama Railroad, for a new line, is in remarkably good condition. It is ballasted, in part, with a fine quality of gravel found upon its own right of way. The same gravel is being shipped in large quantities to Illinois and Missouri, and used for ballast on railroads in those States. The P., T. and A. has been extended to Lexington, Tenn., where it intersects the Tennessee Midland, a railroad owned and operated by the P., T. and A. people. Solid trains are being run between Paducah and Memphis via these lines. It is the ultimate intention to extend the P. T. and A. to Birmingham, Ala. This company has built an incline from the river at Paducah, and has formed such traffic arrangements with the Paducah and St. Louis road, which has its terminal opposite Paducah, that the bulk of the freights now transferred across the Ohio at this point are between these two lines, thus seriously interfering with the business of the Paducah Union Depot Company, which established a few years ago a connection with the St. Louis road by river transfer.

The Mobile and Ohio and Illinois Central roads had great difficulty with high water last winter and spring, but succeeded in holding their own, and are in fair condition.

The Owensboro and Nashville is maintained in excellent physical condition for a road of its class.

Much needed practical work has been done upon the Owensboro, Falls of Rough and Green River road, and exceptionally fine terminals have been secured for it in Owensboro. This line is now being extended from Fordsville, Ohio county, to Horse Branch, a station on the Chesapeake, Ohio and Southwestern road, in the same county, a distance of about fifteen miles. The new line is being rock ballasted as fast as it is built. This extension will be completed about May, 1893, when the Chesapeake, Ohio and Southwestern management will take charge of it and run solid trains between Owensboro and Louisville on a schedule to compete with the Louisville, St. Louis and Texas.

The latter line, which has been using the C., O. and S. W. track from West Point to Louisville, a distance of twenty miles, and running its trains into the Seventh street station, Louisville, is now constructing an independent line from Howard, one mile west of West Point, to Strawberry, a station on the main stem of the L. and N. eight miles from Louisville, and upon completion of the extension, the L., St. L. and T. trains will run into the Union station at Tenth and Broadway, Louisville. This extension is about fifteen miles in length, and will be finished early in the spring. It will cross Salt river at the brow of the hill, a quarter of a mile above the C., O. and S. W. crossing, and its bridge will be at a sufficient height to avoid the necessity of a draw. The general physical condition of the L., St. L. and T. is fair, the line being about half ballasted with stone. With the exception of the Maysville and Big Sandy, its grades are the lightest of any road in Kentucky. The company still maintain their boast of never having had a passenger car wheel off the track.

The Louisville, Hardinsburg and Western, now operated as a branch of the L., St. L. and T., is forty-six miles in length, running from Irvington, the L., St. L. and T. junction, to Fordsville, with spurs to Hardinsburg and Falls of Rough, two and five miles in length, respectively. This line was cheaply built and has very heavy grades, but is enabled to readily handle all the business afforded by the present state of development of its territory.

The Knoxville Branch and Cumberland Valley Division of the L. and N. are maintained in good condition, though these lines, especially the latter, show a very material loss of business as compared with last year, due to the general depression in the iron industry, and in the "boom" towns of Eastern Kentucky and Tennessee, after the speculative excitement of the previous two years.

The Middlesborough Belt Railroad has proved a great disappointment to its owners, and a considerable portion of it has been virtually abandoned for the time. The business anticipated for the Lexington Passenger and Belt Road failed in large part to materialize, warranting a material reduction in the assessed valuation of the previous year.

The Elizabethtown, Lexington and Big Sandy, since it passed into the Chesapeake and Ohio management, has been put in good condition, and the Ashland Coal and Iron Company's railroad is maintained at its usual excellent standard.

The Ohio and Big Sandy Line has been changed between Walbridge and Richardson by the building of a new road 15.70 miles in length, the route from Walbridge to Peach Orchard having been abandoned, the rails having been in large part taken up. The new line is from Walbridge to Richardson, by quite a different route. This change was made necessary owing to the faulty construction of the original line, the owners of the road finding it would be more economical to build a new line rather than incur the expense of renewing the trestles every few years on the old one. The old track between Richardson and Peach Orchard is still used, making the latter point now the last station on the line.

The Ohio, Kentucky and Virginia, extending from Richardson to the coal fields of Johnson county, a distance of 8.50, is still operated only to carry out the coal on the line, trains running about two days in the week.

The Kentucky Midland, Kentucky Union, Richmond, Irvine, Nicholasville and Beattyville, and other roads of their class, are maintained in the condition usual for such lines.

It is gratifying to be able to report that no species of railroad property in this State has been allowed to go to wreck in the past year, while the most extensive and expensive improvements have been put upon a number of lines. This in spite of the fact that some lines showed a large loss of business, and the general average traffic being about the same as last year, while investors found no encouragement to construct new lines.

CONSTRUCTION.

The actual construction of railroads in this State during the past fiscal year was quite inconsiderable, and the prospect for the coming year is but little better. The general reasons for this cessation of railroal building in Kentucky, the stringency of the financial market the latter part of 1891 and early in 1892, and the depressions in business in the sections of the State