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REPORT.

To the Honorable Legislature of Wisconsin:

The Railroad Commissioners have the honor to submit their annual report covering the operations of the railroads of this State, so far as the same can be determined, for the year 1875, together with an account of the Commissioners' proceedings under the law, and the results of their further inquiries into railway transportation and the proper relation of transportation companies to the government of the State.

1.-DOINGS OF THE COMMISSIONERS.

RE-CLASSIFICATION OF ROADS AND RATES OF FARE AND FREIGHT.

Chapter 273, laws of 1874, assigned the railroads of the State to three general classes, A, B, and C. To class A were assigned the Chicago, Milwaukee & St. Paul Railway, the Chicago & Northwestern Railway, and the Western Union Railroad. The Wisconsin Central, the West Wisconsin, and the Green Bay & Minnesota railmads were placed in class B. All other roads were to be included in class C. Roads operated by any company under a lease or other contract were to be treated as if owned by the company operating them.

In addition to the restrictions put upon the roads by that law, provision was made as to transportation of passengers, that no A company

should charge more than three cents a mile per passenger, no B

company more than three and one-half cents per mile, and no С

company more than four cents a mile. As to the transportation of freight in seven special classes-D, E, F, G, H, I, and J-rates were prescribed in the law which could not be exceeded by com

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panies belonging to classes A and B; while companies in class C were permitted to make any charges in those classes not exceeding the rates actually in force on their respective roads on the first day of June, 1873.

The four general classes, 1, 2, 3, 4, embracing merchandise, were only so far interfered with as to provide that the rates on freight included therein, under the Milwaukee & St. Paul Company's classification of June 15, 1872, should not exceed the rates actually charged for carrying such freight on June 1, 1873.

The Commissioners, whose appointment was provided for in the same act, were empowered to make certain changes in the classification of rates, and were required to make formal publication of this classification when perfected.

During the year 1874, complaint was made by nearly all companies of the insufficiency of the rates allowed them. The B companies so far convinced the last legislature of the justice of their complaint that on the 2d day of last March, there was approved a law, to-wit, Chapter 113, laws of 1875, so changing the classification of roads as to make but two classes-class A and class B. Class A was to include the same roads as before, and class B was to include all other roads. As to rates, companies operating A roads were to be governed by the rates prescribed in the law of 1874, and all B companies, although limited to the maximum passenger rate of four cents a mile, were to enjoy the privileges of charging their own freight rates of June 1, 1873, as the C companies had been permitted to do under chapter 273, laws of 1874.

Subsequently, however, and but a day or two later, the legislature (of 1875) passed a law (Chap. 334) changing the freight rates chargeable by all A and B companies; apparently not bearing in mind the fact that, under the provisions of the law just enacted, (chapter 113) the classes A and B had been made to include all the roads in the State.

As this conflict between the laws approved March 2d and March 5th was not discovered until after the adjournment of the legislature, the Commissioners found the task of re-classification under chapter 273, laws of 1874, as amended, somewhat embarrassing.

After due deliberation, they performed that duty, however, on the 17th of March issuing in printed form, for the use of the public and of railway companies, the Classification of Roads and Rates

of Fare and Freight found on pages 1 to 4 of the "Official Papers," accompanying this report.

APPLICATION OF THE AMENDED LAW.

1. As to through rates.

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One of the difficulties of enforcing the law of 1874, in respect to rates, grew out of the fact that, while the law required that in case of freight passing over two or more roads “ the distance for carrying such freight shall be computed from where it is received,"—evidently meaning from where it was first received, there was no provision requiring the companies owning the connecting lines to pro-rate the charges. Because of this omission, several of the companies assumed that they severally received the freight coming from other lines at the connecting point, and on this basis computed the distance and made their charges.

In this way it sometimes happened that a shipper was charged the high rate allowed for the first haul two or three times over, the aggregate sum being considerably larger than the sum of old rates paid before the passage of the law.

This defect in the law of 1874 was remedied by section 2 of chapter 334, laws of 1875, which provides that when freight so passes from one road to another " the amount received for such transportation shall be divided between the companies as the officers thereof may agree," and that where such agreement is found impracticable the terms of such division of receipts shall be settled by arbitration in the manner in said section prescribed.

Notwithstanding this plain and specific provision of law, several instances of its violation were brought to the notice of your Commissioners in the early part of the last season, and it was not until after considerable time had been consumed by the necessary investigations, and by explanations of managers, negotiations between companies, correspondence, (see pages 232 to 272 of Official Papers, &c.,) and personal interviews on the part of the Commissioners and the Attorney-General with the attorneys and managers representting the corporations, that an agreement was finally concluded by and between the Chicago, Milwaukee & St. Paul and the Chicago & Northwestern Railway Companies.

As to the other corporations, the principal complaints on the

panies belonging to classes A and B; while companies in class C were permitted to make any charges in those classes not exceeding the rates actually in force on their respective roads on the first day of June, 1873.

The four general classes, 1, 2, 3, 4, embracing merchandise, were only so far interfered with as to provide that the rates on freight included therein, under the Milwaukee & St. Paul Company's classification of June 15, 1872, should not exceed the rates actually charged for carrying such freight on June 1, 1873.

The Commissioners, whose appointment was provided for in the same act, were empowered to make certain changes in the classification of rates, and were required to make formal publication of this classification when perfected.

During the year 1874, complaint was made by nearly all companies of the insufficiency of the rates allowed them. The B companies so far convinced the last legislature of the justice of their complaint that on the 2d day of last March, there was approved a law, to-wit, Chapter 113, laws of 1875, so changing the classification of roads as to make but two classes-class A and class B. Class A was to include the same roads as before, and class B was to include all other roads. As to rates, companies operating A roads were to be governed by the rates prescribed in the law of 1874, and all B companies, although liniited to the maximum passenger rate of four cents a mile, were to enjoy the privileges of charging their own freight rates of June 1, 1873, as the C companies had been permitted to do under chapter 273, laws of 1874.

Subsequently, however, and but a day or two later, the legislature (of 1875) passed a law (Chap. 334) changing the freight rates chargeable by all A and B companies; apparently not bearing in mind the fact that, under the provisions of the law just enacted, (chapter 113) the classes A and B had been made to include all the roads in the State.

As this conflict between the laws approved March 2d and March 5th was not discovered until after the adjournment of the legislature, the Commissioners found the task of re-classification under chapter 273, laws of 1874, as amended, somewhat embarrassing.

After due deliberation, they performed that duty, however, on the 17th of March issuing in printed form, for the use of the public and of railway companies, the Classification of Roads and Rates of Fare and Freight found on pages 1 to 4 of the "Official Papers," accompanying this report.

APPLICATION OF THE AMENDED LAW.

1. As to through rates.

One of the difficulties of enforcing the law of 1874, in respect to rates, grew out of the fact that, while the law required that in case of freight passing over two or more roads" the distance for carrying such freight shall be computed from where it is received,"—evidently meaning from where it was first received, there was no provision requiring the companies owning the connecting lines to pro-rate the charges. Because of this omission, several of the companies assumed that they severally received the freight coming from other lines at the connecting point, and on this basis computed the distance and made their charges.

In this way it sometimes happened that a shipper was charged the high rate allowed for the first haul two or three times over, the aggregate sum being considerably larger than the sum of old rates paid before the passage of the law.

This defect in the law of 1874 was remedied by section 2 of chapter 334, laws of 1875, which provides that when freight so passes from one road to another " the amount received for such transportation shall be divided between the companies as the officers thereof may agree," and that where such agreement is found impracticable the terms of such division of receipts shall be settled by arbitration in the manner in said section prescribed.

Notwithstanding this plain and specific provision of law, several instances of its violation were brought to the notice of your Commissioners in the early part of the last season, and it was not until after considerable time had been consumed by the necessary investigations, and by explanations of managers, negotiations between companies, correspondence, (see pages 232 to 272 of Official Papers, &c.,) and personal interviews on the part of the Commissioners and the Attorney-General with the attorneys and managers representting the corporations, that an agreement was finally concluded by and between the Chicago, Milwaukee & St. Paul and the Chicago & Northwestern Railway Companies.

As to the other corporations, the principal complaints on the

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