(That) the provisions of this section shall apply only to the chartered and projected line of railway from the city of Fond du Lac, in the state of Wisconsin, northerly to Escanaba, in the state of Michigan, and the chartered and projected line of railway from Marquette, in the state of Michigan, westerly to Ontonagon, in the same state: *

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SEC. 2. And be it further resolved, That the commissioner of the general land office be, and he hereby is, authorized and directed to cause a patent, in due form of law, to be issued to the Chicago and Northwestern Railway Company, in pursuance of a resolution passed by congress granting the same to the state of Wisconsin, approved April twenty-five, Anno Domini eighteen hundred and sixty-two, and and act of the legislature of Wisconsin, approved June sixteen, Anno Domini eighteen hundred and sixty-two, granting the same to said company for eighty acres of land of the Fort Howard military reserve, as the same was surveyed and approved by said commissioner on the eleventh June, Anno Domini eighteen hundred and sixty-four.

Approved May 20, 1868.]

JOINT RESOLUTION to extend the time for the completion of the West Wisconsin Railroad.

Be it resolved by the senate and house of representatives of the United States of America, in congress assembled, That the time fixed and limited by an ac entitled "an act granting lands to aid in the construction of certain railroads in the state of Wisconsin," approved May five, eighteen hundred and sixty. four, for the completion of the railroad from Tomah, in the county of Monroe, to St. Croix river or lake, between townships twenty-five and thirty-one, be, and the same is hereby, further extended for a period of three years, to the West Wisconsin Railroad Company, a corporation established by the laws of the state of Wisconsin, and which, by the law of said state, is entitled to the land grant made in the second section of said act: Provided, that if said railway company shall not have completed said railroad from Tomah to Black River Falls on or before the expiration of one year from the passage of this resolution, this act shall be null and void. Approved July 13, 1868.

Act of July 27, 1868.

AN ACT amendatory of an act entitled "an act granting public lands to the state of Wisconsin, to aid in the construction of railroads in said state, approved June 3, 1856."

Be it enacted by the Senate and House of Representatives of the United States of America, in Congress assembled, That it shall and may be lawful for the legislature of the state of Wisconsin to dispose of the lands granted, and which may have enured and been certified to the state of Wisconsin under the act of congress approved June third, eighteen hundred and fifty-six, to aid in the construction of a railroad "from Madison or Columbus by way of Portage City to the St. Croix river or lake, between townships twenty-five and

thirty-one," and commonly known as La Crosse and Milwaukee Railroad, for the benefit of the Wisconsin Railroad Farm Mortgage Land Company, existing under and by virtue of the laws of Wisconsin: Provided, however, That this act shall apply only to such lands as may be due the state of Wisconsin for the portion of said road already completed.

Approved July 27, 1868.

An act making appropriation for sundry civil expenses of the Government for the year ending June thirtieth, eighteen hundred and seventy, and for other purposes.

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Be it enacted by the Senate and House of Reprecentatives of the United States of America in Congress assembled, * and such construction shall be given to the joint resolution number thirty, approved twenty fifth of April, eighteen hvndred and sixty-two, as shall not abridge the grant under the act of June third, eighteen hundred and fifty six, for a railroad from Fond du Lac northerly to state line, and the Chicago and Northwestern Railroad Company may select their lands along the full extent of the original route of said road as filed under the said act. Approved March 3, 1869.

EXECUTIVE AND LEGAL DOCUMENTS.

LETTER OF ALEXANDER MITCHELL,
President Chicago, Milwaukee and St. Paul Railway Company.

TO THE GOVERNOR.

MILWAUKEE, April 28, 1874.

His Excellency, WILLIAM R. TAYLOR, Governor of Wisconsin:

"

DEAR SIR: At the last session of the legislature an act was passed entitled an act relating to railroads, express and telegraph companies in the state of Wisconsin," which assumes, among other things, to fix the tariff for freight and passengers, which the railroads of the state may hereafter charge. This act arbitrarily divides the railroads of the state into different classes, and then declares that one class shall charge one rate, another a different rate, and a third class still another rate of compensation for performing the same or similar services, and affixes severe penalties for a violation of its provisions. You are aware that this species of legislation is entirely new in this state, and in the broad and sweeping terms of this act, is practically unknown to any of the states of the Union. The right of a company owning a road to fix its rate or charges was recently held in the supreme court of the United States to be "an attribute of ownership." Yet this law wholly ignores that right, and not only deprives the owner of property of the right to fix the compensation to be paid for its use, but arbitrarily fixes one price for one and a different one for another, without any inquiry as to whether the price fixed "is a reasonable one, or will afford a fair and adequate remuneration and return upon the amount of capital invested." The obligation and promise which Chief Justice Dixon says, "spring from the act of incorporation and invitation by the state to persons to invest their money in the stock" of railroad companies, that they shall receive a fair and reasonable compensation for the money expended, is wholly disregarded.

The roads now owned and operated by the Chicago, Milwaukee and St. Paul Railway Company were all built under charters which provided that "the board of directors should have the right and power to regulate their tolls," and that the company should have the right to demand and receive such sum or sums of money for freight of persons and property as they should from time to time think reasonable. On this solemn faith and pledge these roads were built, and their right to a fair and reasonable return for the capital invested became settled and fixed, beyond the power of the legislature to abrogate or destroy. These roads are property created under the sanction of law, and are owned by the company. To arbitrarily deprive the company of them or their beneficial use, by act of the legislature, is depriving the company of its property without due process of law. It is confiscation. If it is claimed that the public interests demand this action, on the part of the state, then, I submit, it is taking the property for public use, and that just com. pensation must be made. The present company has succeeded to all the 1—R. R.—App.

rights granted to the original companies by operation of law, and is entitled to exercise them. The sad spectacle is now presented of this great state attempting to violate its plighted faith and repudiate its solemn agreement; after the roads have been built, and the money of the stockholders expended, after the improvement has been made, and the state received all the benefits expected.

I cannot believe that the people of this state desire to be placed in any such position, and am satisfied that the action of the legislature in enacting this law will be repudiated by them, as soon as its real character is understood. That it has effectually destroyed all future railroad enterprises, no one who is acquainted with its effect in money centers will for a moment doubt. That, however, I do not care to discuss at this time, as the state has an undoubted right to prevent a further extension of its railroad system if it chooses, although, as a citizen, I deeply regret such short sighted policy. But as the representative of the Chicago, Milwaukee and St. Paul Railway Company, a part of whose system of roads is in this state, and who have expended over $25,000,000 in permanent improvements therein, on the faith and credit of the charters granted, all of which is directly and seriously affected by the law in question, and must be ultimately ruined and destroyed, if this policy is persisted in and successfully enforced, I am compelled not only to protest against such unjust legislation and violation of plighted faith, but also to inform you, and through you, the people of the state, what its effect, if submitted to, will be, not only upon the company that I represent, but upon the whole railroad system of the state, and the business interests of the whole community. The entire road of the Chicago, Milwaukee and St. Paul Railway Company, as now constructed and equipped, has cost about $36,000 per mile. The portion in Wisconsin, including all our valuable grounds and improvements at Milwaukee and other points, cost about $28,000 per mile. It is capitalized at those sums respectively, in bonds and stock. The stock has never been watered, and it is believed that the road could not be produced in its present condition for a sum less than its cost or present capitalization at this time. All agree that the company is entitled to a fair return on the captal invested.

The railroads already constructed have added many millions to the wealth of the state, and perhaps no class have derived so great a benefit as the farmer. Many of the farms and much of the farming land of Wisconsin, now worth from $50 to $100 per acre, without railroads would not be worth to exceed $10 to $20. Other branches of business and other industries of the state have experienced a similar benefit from the construction and operation of those roads. Yet every one familiar with railroading in Wisconsin, is aware that no dividends were paid for the first twelve or fifteen years that the roads were in operation, and that they were unable to pay the interest on their bonds, and nearly all passed through the process of foreclosure. It is only within the last ten years that any dividends have been paid on the stock of any of the roads. The bonded debt of the companies, generally, bears only 7 per cent. interest, and amounts to but little more than half the actual cost of the roads with their equipments. During the last ten years this interest has been paid and represents an income of seven per cent. on a trifle over one-half of the cost of the property. Since the organization of the Chicago, Milwaukee and St. Paul Railway Company, in May, 1863, there has been paid in cash dividends on its stock, which represents nearly one-half of the actual cost of the property, $3,813,257 72-100, which amounts to twenty-four per cent. only for the whole time, ten and half years, and is equivalent to a dividend of only 2 28-100 per cent. per annum on the stock of the company. All the balance of the earnings over and above these dividends and payment of the interest on the bonded debt, has been consumed, in operating expenses and improvements of the road and rolling stock, and bringing the property to its present state and condition, and were necessary for that purpose. We have then, as the results of the last ten and a half years existence of the Chicago, Milwaukee and St. Paul Railway Company, one-half of the cost of the road capitalized in bonds which has received seven per cent. per annum; the other half, capitalized in stock, preferred and common, which has received 2 28-100 per cent. per annum in cash, and taking stock and bonds together, the acutual return to the investors has been 4 46-100 per cent. per annum on the actual cost

of the prrperty from May. 1863, to January, 1874. In addition to this amount, a small amount in stock has been distributed in dividends to represent that portion of the net earnings used in completing the construction of and improving the property. These stock dividends amount to 2 8-10 per cent. per annum. With these stock dividends added to the cash dividends above named, at their nominal value, and the whole amount received on the investment for interest and cash and stock dividends, amounts to only six per cent. per annum of the actual cost of the property. I submit to your Excellency, and through you to the people of the state, whether this is more than a fair and reasonable return for the capital invested in these improvements. Is it not far below such reasonable amount? The best and most careful economists admit that not less than ten per cent. per annum should be allowed on such investments. Yet less than one-half that amount has been received in cash, by this company, and the legislature now attempts to assume the regulation of our income and reduce it to a point barely above operating expenses. The company is now engaged in re-laying its road with steel rails, and when that and other improvements shall have been completed, it is hoped that moderate and reasonable dividends may be made on the actual cost of the road, and that our increased facilities may enable us to reduce the rates charged for passengers and freight.

The directors of this company have at all times had a due regard to the interests of the public and a desire to furnish transportation at the lowest possible figure, and although not receiving a fair and reasonable return on their investments, they have, for the last four years prior to 1873, steadily reduced their rates of freight and passengers, from year to year, as will be seen from the following table, showing the charge for freight per mile, and average per mile for passengers, for each year, from 1867 to 1873, inclusive:

The law in question proposes to reduce our passenger rates 25 per cent., and our freight rates about the same, thus deducting from our present tariff about 25 per cent. of our gross earnings. The same legislature also imposed upon us an additional tax of one per cent. of our gross earnings, which is equivalent to taking three per cent of our net earnings.

It is not pretended that we are now running too many trains or too great a rate of speed to accommodate the public, or that any less attention and expense can be bestowed upon our road bed and track or rolling stock, consistent with the safe operation of our road. Hence it is impossible for us to decrease the expense of operation and repair, and those expenses must remain as before the passage of the law, provided we continue to operate the road as a first class road and so as to accommodate the public. The entire reduction in our rates made by this act is, therefore, a reduction from our net earnings. The average expenses of operation are not less than two-thirds of our entire gross earnings, leaving a net of about one-third.

This act, as we have seen, proposes to take from us twenty-five per cent. of our passenger and freight earnings, and the additional tax of one per cent. of our gross earnings, all of which is equivalent to taking from us twenty-six per cent. of our gross earnings. Therefore, deducting this amount, equal to twenty-six per cent. of our entire gross earnings, from thirty-three per cent., our average net earnings on business would leave us only seven per cent. of our gross earnings, as the entire net earnings of the road, out of which must