REPORT.

STATE OF NEW YORK:

BOARD OF RAILROAD COMMISSIONERS,

ALBANY, January 8, 1900.

To the Honorable the Legislature of the State of New York:

Pursuant to the requirements of the Railroad Law, the Board of Railroad Commissioners submits its seventeenth annual report.

General Situation.

From statements of steam surface railroad companies reporting to this State, it appears that the year ending June 30, 1899, has been an unusually prosperous period for them. The increase in gross earnings from operation, as compared with 1898, is about six million of dollars. Under the succeeding title may be found an analysis of compilations of financial results, the figures being taken from the annual reports of the companies. From these figures it will be seen that net earnings from operation and income from other sources than operation have also largely increased. That this prosperous condition has continued and enlarged is shown by a summary (printed hereinafter) of reports of the principal steam railroad companies of the State for the three months ending September 30, 1899, which shows an increase of $7,361,566.14 in gross earnings, as compared with the reports of the same companies for the corresponding quarter of 1898. Some earnings are included in the 1899 figures which were not included in those for 1898, but these are comparatively small and are explained by foot notes in the table. The increase for three months being as it is largely in excess of the increase of all the companies for the year, may properly be considered

phenomenal. These figures are concrete proof of a fact of common knowledge-the present prosperity of the country. Such gratifying results in railroad operation have been reached notwithstanding the unsettled condition of freight and passenger rates. They have not only inured to the benefit of holders of stock in railroad companies, but have been a benefit to the public in the increased expenditures from earnings for the betterment of roadbeds and equipment. The annual reports of the companies show that they expended from their earnings over $900,000 more in 1899 than in 1898 for the maintenance of way and structures, and over $750,000 more than in 1898 in the maintenance of equipment. It was, of course, to be expected that in the existing prosperity of the country railroad earnings would be largely increased, and, perhaps, there should be but little comment made when this expectation has been fulfilled, but, in view of the competition existing among the companies and among the several ports of export of the country, it is worthy of note that the companies operating in this State seem to have kept pace with their rivals, in the securing of the increased business.

The discussion of the question of the legalization by Congress of "pooling," or some other method of securing stable rates on interstate commerce, still continues. The result cannot be foreshadowed, but, as this Board has said many times before, it would seem that a "pooling" law which would secure stable rates, with a minimum of injustice to individuals, is desirable. At the time of writing this report action has been taken by the trunk lines looking toward the advancement of freight rates to and from the west. It is claimed by the companies that they are fairly entitled to receive more return than they have been receiving for moving, at least, certain articles of freight. The matter has been brought to the attention of the Interstate Commerce Commission and is being considered by it at the time this report is written.

For the year ending June 30, 1891, (considered a prosperous period) the gross earnings from operation of steam railroads reporting to this State were, in round numbers, $169,000,000. The

gross earnings of practically the same railroads (the only large earnings included in 1899 which were not included in 1891 being those of the Lehigh Valley Railroad Company), for the year ending June 30, 1899, were, in round numbers, $220,000,000. Thus it will be seen that in 1899 the gross earnings were, in round numbers, $51,000,000 more than in 1891.

In this connection, it may also be said that the returns to the Interstate Commerce Commission show that for the year ending June 30, 1899, there is a gain in gross earnings by the steam railroads of the country of, approximately, $60,000,000 over 1898. The gain, during the same period, by companies reporting to this State, was, approximately, one-tenth of this.

Such a state of prosperity in railroad business may lead to the inception of enterprises for the construction of new railroads not needed by the community, and which apparently are foredoomed to failure. In other years it was only necessary in such times as these for a few persons to incorporate a company to build a railroad (securing the right to build, merely by filing ar ticles of association) and, with little reference to the public necessity or convenience to be served or to the amount of business that the proposed railroad could obtain, it was not always difficult to secure the necessary funds for its building. The result, in many cases, was the loss of large sums of money by the investing public through the failure of the railroad, and, in many instances, an increased burden on the fare and freight rate paying public through the acquisition of the new railroad by an existing railroad, whose facilities had been and were abundantly able to accommodate the public. Since 1892, however, the position of the State in this respect has changed, and a new railroad cannot now be built unless this Board certifies that public convenience and a necessity require its construction. The rights of the projectors of these new enterprises are fully secured by provisions allowing appeal to the courts from adverse decisions of the Board.

During the year two commissions have been at work upon the question of the part that the State canals are to play in the

future transportation situation-one confining itself alone to the canal question, and the other inquiring into the entire subject of the continuance of New York city as the chief port of the country, including the question of transportation by canal. As stated last year, the importance of this matter is scarcely second to any which must be considered in the administration of State affairs. The total number of tons of eastbound freight carried on all the canals of the State during the season of navigation of 1898 was 2,314,050; during 1899, 2,425,292, an increase of 111,242 tons. The comparative figures for 1897 and 1898 on eastbound freight showed a decrease in 1898 of 134,311 tons. The total number of tons of westbound freight in 1898 was 1,046,013; in 1899, 1,260,759, an increase of 214,746. The comparative fig ures of 1897 and 1898 on westbound freight showed a decrease in 1898 of 123,430 tons. The total number of tons carried on the Erie canal, in both directions, in 1899 was 2,419,084. The designations "eastbound" and "westbound" include what in some instances might be considered northbound and southbound. Perhaps the most significant feature of the general railroad situation is the tendency to consolidation of large systems which have heretofore been independently operated. What the result of this will be cannot be foretold, but if the interests of the public are considered by railroad managers to be correlative with the interests of the companies, the result should not be harmful, at least, to the State. However this may be, the State may regulate its corporate creatures and conserve the interests of its people whether its decrees are issued to such creatures while separated or after they are combined.

Few complaints have been made to the Board during the year as to freight rates. Reports of such as have been received, with the action taken, will be found in this volume.

During the year, the Philadelphia, Reading and New England Railroad Company was reorganized as the Central New England Railroad Company. The South Vandalia and State Line Railroad has been abandoned. A new company, known as the Chatham and Lebanon Valley Railroad Company, has been organized

to construct and operate over the old line of the Lebanon Springs Railroad. The Dansville and Mount Morris, and the Poughkeep sie and Eastern Railroads are still in the hands of receivers. The Little Falls and Dolgeville Railroad is in the hands of a receiver. The Fall Brook, and the Syracuse, Geneva and Corning Railroads have been leased to the New York Central and Hudson River Railroad Company.

Street

Elevated and street surface railroad matters are treated in this report under the titles "Elevated Railroads" and Surface Railroads."

Summary of Business for the Year of Steam Surface

Railroads.

The gross earnings of surface steam railroads reporting to this Board, for the year ending June 30, 1899, are $5,977,508.39 in excess of the gross earnings for the year ending June 30, 1898; the operating expenses are $2,855,613.34 in excess of the operating expenses for the year ending June 30, 1898, making the net earnings from operation $3,121,895.05 in excess of the net earnings from operation in 1898. The income from other sources was $2,034,990.89 in excess of 1898. The companies paid in taxes $506,051.74 more than in 1898, and declared dividends $534,692.90 in excess of those declared in 1898. Capital stock increased $8,977,400 over that of 1898; funded debt increased $11,985,383.01 over 1898. The percentage of dividends to capital stock was 2.43 as compared with 2.39 in 1898. The average freight earnings per ton per mile decreased .032 cents. The average freight expenses per ton per mile decreased .027 cents; the average freight profit per ton per mile decreased .005 cents; the average earnings per passenger per mile decreased .03 cents; the average expenses per passenger per mile decreased .02 cents; the average profit per passenger per mile decreased .01 cents.

The reports of steam surface railroad companies for the year ending June 30, 1899, and tables compiled therefrom, will be found in the second volume of this report.

It must be remembered that in the case of such railroads as the