The Senate Committee on Commerce and Navigation, to whom was referred Senate Bill No. 337, entitled an Act to dispose of certain submerged and tide lands belonging to the State of California, and for the reclamation and improvement of the same, respectfully report the same back with a substitute, and recommend the adoption of the substitute. Your committee have given careful consideration to the subject of the disposition of the State's interest in the submerged and tide lands near the City of San Francisco. They find that it has been the subject of litigation and controversy as to whether these lands have been subject to location and sale under any of the laws providing for the sale of State lands. Under a decision of the Supreme Court of the United States, in which was involved the question as to whether the State has parted with her title to a certain tract of these lands, it was held that the tract in question had not been sold by authority of any law of the State. If we assume that this decision will control all similar cases of attempted purchase, then all of these lands not heretofore granted by the State through special Acts are still the property of the State and subject to disposition by the Legislature. We find that large tracts of these lands have been granted by the State to homestead associations and corporations for prices varying from one dollar and twenty-five cents per acre to one hundred dollars per acre. These grants were made with the implied understanding that large sums of money would be expended on their reclamation and improvement, and that thereby a large increase would be made to the taxable property of the State. These implied promises have not been fulfilled, at least not to the extent anticipated. It is found that the reclamation of these lands involves the expenditure of vast sums of money and the concentrated efforts of capital under some general system of improvement. Each session of the Legislature, bills are introduced which contemplate the granting by the State of larger or smaller tracts of these lands; if the bills become laws, the parties ob taining the grants pay the price fixed, receive their patents, and, as a rule, wait for an increase in value in consequence of surrounding im provements, or until some general system of improvement shall be adopted by the State. If these submerged lands were surveyed into lots and blocks and sold at auction, they would remain for years in their present condition; the outer blocks would not be filled in, improved and built upon until after the blocks nearest the high land had first been improved. There could be no system by which all the owners would be compelled to improve, and many blocks would remain in their present condition for years. If the necessities of business compelled the filling in of the lots nearest the high land, and then the adjoining lots on the outside, and after these others, the effect would be to force the mud to deeper water and thus produce the result that has been produced by a similar process on the harbor in front of the present city. If it were deemed policy for the State to retain these lands and devise a system for their reclamation, which should in the first place include a seawall, and after that the filling in of the inclosed submerged and tide lands, the reclaimed lands could then be sold at auction and probably bring the amount expended. As this would involve the expenditure of five or six million of dollars, and as we do not believe the State is prepared at this time to enter upon such a system of internal improvements, we have hesitated to recommend it. We are clearly of opinion that this land should not be cut up into blocks and lots and sold to individuals, unless they were sold with a condition that they should be reclaimed within a given time, and under a system to be approved by the Harbor Commissioners of San Francisco. The substitute bill recommended by your committee avoids these difficulties, and provides a system by which these lands shall be immediately reclaimed and made directly available for business and commerce, and thus add directly to the taxable property of the State. San Francisco, situated on a peninsula near the entrance of the safest and most commodious harbor on the whole Pacific Coast, is thereby for all time insured in the possession of the control of the business not only of California, Oregon and Nevada, but of Idaho, Montana and the other Territories that will be created from the great interior of the continent lying west of the Rocky Mountains. There are on the Pacific Coast but three navigable rivers in a distance of two thousand miles, and these are navigable but for short distances. The supplies of this vast country, away from the line of coast, must be transported on railroads. No system of railroads for the Pacific Coast is complete that has not its terminus at San Francisco. In her harbor and at her wharves the ships of the world discharge their cargoes, and through the hands of her merchants they are distributed over the coast and through the interior. San Francisco, built upon precipitous hills, affords no proper place for the terminus of the railroad system of this State, but by the creation of land on the marshes and mud flats near her border. The continental line of railroad now rapidly approaching completion, the various lines that now connect with it, and all the proposed roads, including the Southern Pacific, have been projected upon the theory of ultimate direct connection with San Francisco. At her docks will be discharged the varied productions of other countries, and over her wharves will be exported our wheat and ores. The importations intended for the interior should pass directly from the dock to the car, and our productions intended for export should pass directly from the car to the ship. San Francisco should bear the same relation to the great continental railroad and to the railroad system of the Pacific Coast, that New York does to the railroad system of the Atlantic States. She should not only invite but compel all railroads to make their termini at her docks. If from any reason this could not be done, these roads will reach the nearest practicable point on the opposite side of the Bay of San Francisco, where sufficient space can be obtained and where the water is of sufficient depth for ships. The effect of this would be to tax trade and commerce for the additional cost of handling and transportation of merchandise from the end of the railroads to and from San Francisco. Fortunately, no such reason exists. The State still has the title to a tract of submerged land near San Francisco, which, by an expenditure of less than three millions of dollars, can be made available as the termini of these roads. If the railroad system of the State and the national roads of the continent are to concentrate and end at San Francisco they must do so on these lands. There is no other point near that city that affords the space, and that can be obtained. At any other point near the city these roads might obtain lands by purchase or condemnation at an enormous cost; the grading of the hills to afford the requisite space for the accommodation of their business would require such a vast outlay and consume so much time as to be impracticable. It has been urged that these submerged. lands be surveyed and sold by lots and blocks at public auction. If this were done, and these roads are to end at San Francisco, these lands would have to be obtained from the purchasers by the railroad companies. The State would receive no more for the land than these companies should be willing to pay, while the only parties who would receive pecuniary benefit would be those who purchased at auction and compelled these companies to pay an advance on the amounts of their purchase. Your committee sees no advantage to the State in pursuing this course. We believe the interests of the State are to be best promoted by the sale of these lands to these railroad companies, who, before they obtain the State patent, shall be compelled to reclaim them. We believe this to be good policy, not only in contemplation of the future trade and commerce of San Francisco and of the State, but most conducive to the best interests of the State at the present time. The substitute bill proposes to sell these lands to the railroad companies for depots, warehouses, machine shops and other purposes connected with their railroads at a price to be fixed by the Governor, Surveyor-General and Mayor of San Francisco; of the sum found to be their value, not less than one hundred dollars per acre shall be paid into the State Treasury; any amount above this shall be expended in the reclamation of the land under a general system to be approved by the Harbor Commissioners. If in five years from the time of the acceptance of the provisions of the Act by the railroad companies they will have expended one million of dollars over and above the price of the land in reclaiming these lands, and terminating their railroads thereon, they will then receive a patent. The system to be adopted for the improvement and reclamation of these lands must be approved by the Governor, Mayor of San Francisco and the Harbor Commissioners, and must provide for basins and a seawall, and provision is made for the drainage of the city by leaving open Chan |