No. 8. IN SENATE, JANUARY 18, 1885, SECOND ANNUAL REPORT OF THE BOARD OF RAILROAD COMMISSIONERS ON THE RAILROADS OF THE STATE. OFFICE OF THE BOARD OF RAILROAD COMMISSIONERS, To the President of the Senate: SIR-The Board of Railroad Commissioners, agreeably to the provisions of chapter 353, Laws of 1882, transmits herewith to the Legislature its Second Annual Report on the Railroads of the State, for the year ending September 30, 1884. WILLIAM C. HUDSON, Secretary. To the Honorable, the Legislature of the State of New York: Chapter 353, Laws of 1882, requires the Board of Railroad Commissioners to report to the Legislature, on or before the second Monday in January. Agreeably to the requirements of said law, the Board submits its Second Annual Report. GENERAL SITUATION. The financial year last past has been profitable to but few railroads, unprofitable to many, and disastrous to some. The general commercial depression throughout the country has been severely felt by the lines of transportation. One of those periods of unprofitable business that occur with such singular regularity in the United States has settled upon the land. The conditions existing to-day, although not yet so serious, are similar in many respects to those existing ten years ago in the long period of depression following the panic of 1873. Over-production of almost every staple article of human consumption seems to obtain throughout the civilized world to a greater or less extent, and in no branch of business has this, together with excessive competition, been more severely felt than in transportation. The For many years four trunk lines sufficed to carry the surplus of the crops from the West to tide-water. Now there are seven. difficulties of settling the fierce rivalries between the four were great; between the seven they have proved thus far insurmountable. A war of rates has broken out, of which, at this writing, no one can see the outcome. It looks as if the struggle for existence had begun, of which the result will be the survival of the fittest; the financial death of others, with its attendant distress and loss of property. In the month of June the New York, West Shore and Buffalo Railway Company went into the hands of a receiver. The quarterly reports to this office develop the fact that for the two months and nine days preceding, the operating expenses had exceeded the gross earnings by $312,958. For the three months and twenty-one days ending 30th September, the gross earnings exceeded operating expenses by $87,337.15. The receivers of the property being under obligations alone to earn operating expenses, and with the hope of increasing the business by a radical reduction, about the 20th of October reduced the rates to the unprecedented figure of one cent per mile for the transportation of passengers. A corresponding reduction was made in freight charges. These rates have been met by the New York Central and Hudson River Railroad Company. It is needless to dwell upon the demoralization, fluctuations and loss incident to such a condition of affairs as the above. It is urged that one lesson to be drawn is the lack of wisdom on the part of the State of permitting any thirteen men who can secure subscriptions of $10,000 per mile, with ten per cent thereof paid in, to build a railroad anywhere they see fit without an expression from the State of the public exigency for the same. A railroad cannot be built without the State delegating to its promoters the highest power it possesses over property—the right of eminent domain; the right to take private property for public uses. The State itself never exercises this sovereign power except in cases of public necessity. Why should it thus delegate it to any thirteen men to be exercised for mere private gain, frequently at the expense of vested rights and grave public interests? When the State has undertaken the control of railroads by the creation of supervisory boards, and has determined to exact the highest standard of service at reasonable rates of freight and fare, it would certainly seem as if a corresponding obligation rested upon it to protect existing railroads from useless and disastrous competition by unnecessary new ones. It was, with these ideas in view, that the majority of the Board made the recommendation for the amendment of section 2, chapter 140 of the Laws of 1850, in its supplementary report to the Legislature of last year, which, however, did not meet with favor from that honorable body. A road struggling along with disastrous competition with an unnecessary parallel road, pleads poverty and financial inability to comply with every recommendation of the Board, looking to better maintenance, or more convenient operation. Even those measures absolutely necessary for the safety of travel are often neglected, and |