it secured for townsite privileges, it was approximately sufficient to grade the road. This road is being actually constructed with a cash outlay out of the pockets of the company at not to exceed $10,000 per mile, notwithstanding this is as well constructed road of that maximum grade of any road in the State of Oklahoma.

The State is confronted with the contention of railroad companies, which is based absolutely upon false statements, that their property cost from forty to sixty thousand dollars per mile. It is the duty of the State and the Commission will gladly co-operate in bringing about such reasonable charges for service as will pay a liberal interest on the money invested in railroad property, together with all other expenditures necessary in the establishment of these properties, but to pay interest on amounts from two to three times in excess of the actual money invested is unreasonable and can never be maintained by the railroad companies unless they can induce some Federal Court to render opinions based upon false promises. There is at this time a concertive action by all railroad companies in the United States to secure in some way a high and unreasonable value of their property in all rate or public service hearings. The actual reproduction value of the railroads in Oklahoma will be given careful and due consideration by the Commission during the next year.

EARNINGS OF RAILROADS IN OKLAHOMA.

The earnings of railroads in Oklahoma exceed those of any adjoining state, as indicated by the following:

The St. Louis, Iron Mountain & Southern railway, entire system, earned $2,884.93 net per mile of road, and on that part operated in Oklahoma, earned $4,533.98 net per mile of road, or 57 per cent greater in Oklahoma.

The Gulf Colorado & Santa Fe, entire line, earned $1,111.66 net per mile of road, and that part operated in Oklahoma, it earned $5,454.88 net per mile of road, or 369 per cent greater in Oklahoma.

The Missouri, Kansas & Texas, entire line, earned $2,066.60 net per mile of road, and for the State of Oklahoma, $3,248.56 net per mile of road, or 56 per cent greater in Oklahoma.

There are some of the other roads which have a very large branch mileage in Oklahoma, it is true do not make as favorable a showing as the above. Taking them all on an average they are earning from twenty to twenty-five per cent more in Oklahoma than in adjoining

states.

THE POLICY OF THE COMMISSION.

It will be the policy of the Commission during the next year to press the matter of investigation and regulation with such degree of rapidity as is consistent with safe, reliable conclusions. With the value of the railroad ascertained and the information secured by virtue of the accounting order, together with the other means of information now in the office of the Commission, we have but little doubt that freight rate matters can be adjusted during the next year. The policy of railroads making extreme high local rates and very low interstate rates, works a very great hardship on the local interests in Oklahoma. Experts have testified that it costs from two to eight

times more to haul freight locally in a state than interstate. They have sworn that it costs twenty-five to fifty per cent more to transport passengers within the State than it does if the passenger crossed the state line. The Federal Courts are giving this kind of testimony apparent serious consideration. These fallacies must be exploded and the co-operation of the various commissions west of the Mississippi River are now directing their attention to that end. This theory is only supported by testimony of men called experts employed by the railroad companies. No persons other than such employees have been found willing to risk the future remorse of conscience in testifying to such statements.

The Missouri and Arkansas Rate Cases were lost because the Federal Courts listened to this increased cost story of doing state business over interstate business, and if the Federal Courts finally hold that it costs from two to eight times more to do state business than interstate business and from twenty-five to fifty per cent more to do state passenger than interstate passenger business, it will practically mean the elimination of state regulation of railroads. State rates from two to eight times more than interstate rates will not move state commodities-that is, they will be so high that such commodities can not move. This is one of the schemes through which this new nationalism is sought to be invoked, that is, have the Federal Courts lay down such rules in their decisions that will have the effect of eliminating state interference. It is the doing by the judiciary indirectly what it can not do directly-something similar to the old "fine and recovery" of real estate in the early ages.

This may give you some idea of the vast work that is before the Commission.

LEGISLATION.

Some of our large daily newspapers in both political parties have been printing what purports to be news from railroads and other public service utility owners, when in fact these papers are paid so much a line. This has gone to the point that many false and malicious statements have been published to the great detriment of the State of Oklahoma. It was claimed through this source that the attitude of the State would drive capital from the State, notwithstanding the roads are making more money in Oklahoma than in any other state in the Union and more miles of railroad have been built. We recommend a law making it a felony for the newspapers to publish anything written and paid for directly or indirectly by any railroad or public. service utility owner without stating that it is paid advertisement, and by whom paid.

APPEALS TO THE SUPREME COURT.

Under the present practice, a case is heard before the Commission, the evidence transcribed and then an order issued, and under the rulings of the Supreme Court, the railroad companies have one year from the date of the order to file their case in the Supreme Court. In the meantime, they can give a bond and tie up the order for one year, notwithstanding it may be very important to the public. We recommend that a law be passed requiring these appeals to be filed in the

Supreme Court within thirty days after the issuance of the order. This is not an unreasonable requirement, inasmuch as all the evidence is transcribed and nothing to do to perfect the appeal but file the bond, secure a certificate from the Chairman of the Commission, and file the same in the Supreme Court. It is very important that this law be passed at this session of the legislature.

STOCKS AND BONDS LAW.

We earnestly recommend that a law be passed conferring jurisdiction upon the Commission to limit the amount of stock and bonds to be issued on railroads and other public service property in Oklahoma.

PUBLIC DUTY.

Many controversies now arrise in which the jurisdiction of the Commission is questioned by public service utility owners, and we recommend a law conferring jurisdiction upon the Commission to enforce, by order, any public duty imposed upon railroad companies by statutory or common law.

PUBLIC SERVICE UTILITIES.

There are some public service utility owners such as gas, electric light, water works and possibly others that deny the jurisdiction of the Commission to regulate such properties. We recommend a law specifically conferring jurisdiction upon the Commission for this purpose, notwithstanding it is our opinion that the Commission now has jurisdiction and we are so acting, but a specific law will not do any harm.

ICE PLANTS.

There should be a law passed putting the regulation of ice plants under the jurisdiction of the Commission. The Commission is now assuming this jurisdiction under an Act passed by the Legislature known as the anti-trust law. A specific law upon this subject would obviate any question of jurisdiction.

PUBLIC AND PRIVATE CROSSINGS.

We recommend a law specifically conferring jurisdiction upon the Commission to require public and private crossings across railroads and electric roads.

It will be the policy of the Commission during the next year to require subway or viaduct crossings on all dangerous public roads and especially in cities where railroad companies, through neglect or otherwise, interrupt the street railway service. In Oklahoma City, people are now compelled to wait almost daily from twenty to thirty minutes because of the interruption of street car service by the crossing being blocked by railroa ds. This condition prevails to some extent in Tulsa and other places. However, at Tulsa, viaduct crossings have been ordered and arrangemnts are being made to establish the same, which will obviate to a great degree some of this difficulty.

A financial report of the Commission will be submitted to your Excellency within the next few days.

In closing, we kindly request that you examine the report in detail, which will contain several hundred pages and a full and complete statement of all work accomplished last year.

Respectfully submitted,

J. E. LOVE,

Chairman Corporation Commission.

Amount of money expended by the Corporation Commission, out of the appropriation for the period from Nov. 16, 1907, to June 30, 1909, from Dec. 1, 1908, to and including August 17, 1909.

I, J. E. Love, Chairman of the Corporation Commission of the State of Oklahoma, do hereby solemnly swear that the above account as itemized is correct to the best of my knowledge and belief.

J. E. LOVE,

Chairman.

Guthrie, Oklahoma, August 8, 1909.

Subscribed and sworn to before me, a Notary Public, this August 8, 1909.

My Commission expires March 9, 1912.

LYMON J. GRAY,

Notary Public.

I, Charles A. Taylor, Examiner and Inspector of Public Records, State of Oklahoma, do hereby certify that I have checked the accounts of the Corporation Commission as listed above and find same to be correct. I have also checked the accounts of the Corporation Commission as kept by the State Auditor and find them to agree with the accounts of the Commission still outstanding and unpaid:

Also with Vouchers No. 6 for $1.25 and Voucher No. 7 for $10.00 issued by the Commission which they desired paid out of the 1909 appropriation but which the Auditor paid out of the appropriation of 1907-8.

Also Voucher No. 561 of the Commission on the Auditor for $112.00 that a warrant for $112.50 was issued on said voucher.

When the warrants outstanding have been paid and the warrants 6 and 7 have been transfered to the last appropriation the accounts will agree with the exception of the 50 cents which was a clerical error.

Guthrie, Oklahoma, August 21, 1909.

CHAS. A. TAYLOR, State Examiner and Inspector.