owners to a good degree. Still they too have necessarily felt the influence of the numerous failures to pay interest when due, and have suffered correspondingly. They seem to have reached the lowest point in the early summer, and since that have gradually improved.

This has been the case with the bonds of our own most important roads, the quotations of which, as given by the Commercial and Financial Chronicle, together with the quotations of stocks of the Chicago, Milwaukee and St. Paul and the Chicago and Northwestern companies for the entire year just closed, are furnished herewith.

RATES OF FARE AND FREIGHT.

In this connection it is proper to say something of the rates now nominally in force. We use the word "nominally" for the reason that, although the A companies, so far as we now know, have conformed to the law in this respect, the B companies are to a large extent indulged by the public in their interpretation of the intent of the Legislature, as shown in chapter 113, laws of 1875, to relieve them from the necessity of working under the restrictions put upon the rates imposed upon the roads in class A. It is certainly a fact, and the legislature should know it, that, as the matter now stands, the B companies are not rigidly held to the actual legal rates. They feel the need of the relief they asked, and as was supposed received, from the last legislature; and in the main the people have generously given them the benefit of the doubt, if doubt was entertained, of the adequacy of the legal rates, and so have not appealed to the State authorities for the enforcement of these rates.

Further on in this report, under the head of "Accounts" and "Reports," reasons will appear why it is still impossible for your Commissioners to determine the actual cost of transportation on our several roads. And until that can be done it is impossible to determine with certainty whether any particular rates not manifestly high would yield a revenue that would pay a reasonable profit on a fair valuation of the property invested.

It was our opinion a year ago, and it is our opinion now, that the traffic on the B roads is not at present sufficient to yield an adequate income with the rates of charges prescribed for the A roads, however careful the management. Their reported doings in transportation and their reported earnings demonstrate no such capacity, and there is nothing in the circumstances of their location and business to enforce an affirmative conclusion.

As to the A roads, there is not the same ground for a positive opinion. They are operated by powerful companies, have command already of an immense traffic which must steadily grow, and although now burdened by non-paying branches, those branches are feeders and must at an early day become not only self-supporting but remunerative lines.

What these great companies will be able to do in the future, if