different managements, it is found that a uniform or maximum rate would not so seriously affect one railroad as another, that in some cases revenues would be remunerative and to other railroad managements such uniform or maximum rate would result in loss and perhaps lead the more unfortunate roads whose lines are not through districts densely populated into the hands of the sequestrator.

Again, there must be considered not only the location of railroads with reference to density of population, but the expense of operation such as high grades and expensive construction and maintenance.

A railroad company may have been constructed across the plains of Nebraska to the foothills of the Rocky Mountains and be able to carry into Denver its passengers at 2 cents per mile, from which it would derive a substantial profit, but how about the railroad whose lines are constructed through the canyons and over the passes of the rocky mountains and other natural barriers attaining an alti tude of many thousand feet above tide, where the cost of construction and operation is many fold greater than on the plains? Certainly equity demands that the railroad whose construction is most expensive and whose cost of operation is high, should be permitted to charge a greater rate per passenger per mile than the other road that is built and operated under more favorable conditions.

While such disparity of conditions may not exist to that extreme extent in Pennsylvania, yet these conditions are here in great force and equity demands their consideration in any legislation that is to be placed upon our statute books fixing maximum or uniform rates.

In making these suggestions they are not meant to oppose in the remotest degree the establishment of a flat rate of 2 cents a mile for the transportation of passengers, the only purpose being to suggest a few obstacles which are difficult of being passed, or problems which are not easily solved if the legislative action is to be based upon equitable principles.

It seems difficult to establish a flat or maximum rate, or indeed a uniform rate at 2 cents per mile, based entirely upon the receipts per passenger per mile. If there is a departure from these considerations as a basis upon which to predicate legislative action, to the broader field based on the income of transportation companies from all sources including the receipts from transportation of commodities, the interest on bonds, and the dividends on stocks, and no heed is to be given to whether passenger traffic is found remunerative or whether it is conducted at a loss, then a 2 cent rate may possibly be the more easily justified, but even then the restrictive features of rate legislation, fixing a maximum price per passenger per mile would fall perhaps as a gentle burden upon some railroad companies and as a severe and perhaps injurious one on others.

If at the coming session of the Legislature this problem shall be solved with fairness to the people and to the railway security holders, there will have to be a display of wisdom, a considerate action, which is not always found in the preparation and passage of our laws as they are seen upon the statute books of Pennsylvania.

In conclusion, if sincere and earnest study and consideration of all phases of the rate problem as applied to the different railroads of the Commonwealth, shall lead to the conclusion that a 2 cent maximum rate would not be equitable and fair to some of the railroads, then there should be given to the Bureau of Railways of the Department of Internal Affairs the power to pass upon the question whether on some roads the carrying of passengers at 2 cents per mile would be injurious or ruinous, and if so found, then to so adjust. rates on such roads on such a basis as will insure fairness and prevent loss and the infliction of wrong upon such corporations.

Passenger Earnings Per Mile of Road.

Referring again to Table G, it is found that the passenger earnings per mile on the Baltimore and Ohio for the year covered by this report were $3,400; on the Delaware, Lackawanna and Western $9,261; on the Erie $5,193; on the Lake Shore and Michigan Southern $7,560; on the Lehigh Valley $3,236; on the New York Central and Hudson River $10,079; on the Pennsylvania $8,612; on the Pennsylvania Company $6,000; on the Philadelphia and Reading $6,949, and on the Pittsburg, Cincinnati, Chicago and St. Louis $6,273.

FREIGHT TRAFFIC.

Tonnage of Freight Carried.

Passing from the consideration of the number of passengers carried, the compensation for the same and the deductions therefrom, the more important feature of railway transportation is that relating to the transportation of commodities which make up the products of the country and constitute its commerce.

Tables H and I contain classifications of freight as follows: First, products of agriculture; second, products of animals; third, products of mines; fourth, products of forests; fifth, products of manufactories; sixth, merchandise; seventh, miscellaneous shipments, and eighth, number of tons of freight carried earning revenue.

Products of Agriculture.

For the year ending June 30, 1901, under the above classification relating to agriculture, the total tonnage was 40 millions; in 1902

about 344 millions; in 1903 about 37 millions; in 1904 about 36 millions; in 1905 about 35 millions, and for the year covered by this report the total amount of such products is 40,137,225 tons.

The varying conditions denoting the transportation of the products of the farm are disclosed in the figures above given with reference to the transportation of these commodities in each year named. It is a somewhat remarkable feature of transportation that with the increase in passenger traffic, which has been of a decisive character, the tonnage from products of agriculture was less for the year ending June 30, 1906, than for the year ending June 30, 1901.

In the products of animals, the products of mines, of forests, of manufactories, in merchandise and in miscellaneous shipments there is a most decisive advance in the tonnage. Why a reduction in the tonnage representing the products of agriculture? It is claimed by some writers that there is a strong tendency to consume the products of the farm on the farm, as in the feeding and fattening of cattle, the cattle alone being shipped to market. Other causes have been assigned the reliability of which cannot be established or well refuted by any data disclosed by the reports of railroad companies to this office, but whatever causes may be given, it does not seem possible that there is any falling off in the actual production of farms in Pennsylvania.

If reference be made to the returns of the county commissioners of the several counties of the Commonwealth, covering a period of twenty years, which are based on the sworn returns of assessors of the several assessment districts of the State, it would be found that there is a material increase in the number of acres of cleared land, which denotes an increase in the territory from which farm products are produced. Again, it will be found that there is an increase in the number of cattle, horses, mules and other stock upon the farms of the Commonwealth. These facts could hardly be true if there were, in reality, a falling off in the production of our agriculturists.

Products of Animals.

In 1901 the tonnage under the classification of products of animals was 11 millions; in 1902 it was over 11 millions; in 1903 it was a little over 10 millions; in 1904 it was 113 millions; in 1905 a little over 12 millions, and for the year covered by this report 12,693,849, there being an increase in this class of tonnage of something over 500,000 tons in the last year.

Products of Mines.

The great coal carrying railroads of Pennsylvania are the ten leading companies referred to many times in observations made regarding the serious features of transportation.

In the transportation of the products of mines it is found that the Baltimore and Ohio has carried 35 millions of tons; the Delaware, Lackawanna and Western 11 millions; the Erie nearly 20 millions; the Lake Shore and Michigan Southern a little over 20 millions; the Lehigh Valley nearly 15 millions; the New York Central and Hudson River 18 millions; the Pennsylvania 73 millions; the Pennsylvania Company 54 millions; the Philadelphia and Reading 28 millions, and the Pittsburg, Cincinnati, Chicago and St. Louis about 20 millions.

The total amount of the production of mines transported during the year on the railroads reporting to this office is 439,295,504 tons. In view of the rapid growth in the industrial and commercial affairs of Pennsylvania, especially in manufactories, it must be expected that there will be a most decisive increase in the transportation of coal, so essential in carrying on the industries within the Commonwealth.

A comparison shows that in 1901 the coal tonnage was 289 millions; in 1902 it was 318 millions; in 1903, 339 millions; in 1904, 347 millions; in 1905 394 millions, and as above indicated for the year covered by this report 439 millions.

These figures tell the story of a continued prosperity with no halting, no retarding, but a steady advance of a character and a magnitude never before witnessed in this or in any other country in the civilized world. To have transported almost 440 million tons of coal is to emblazon upon the affairs of the State and Nation a condition of prosperity which is at once astounding and bewildering. It is nothing less than marvelous.

Products of Forests.

Pennsylvania since the days of its great proprietor William Penn has been the source of not only the lumber and timber from which were built in a large degree the homes of Pennsylvania citizens, including the buildings of the great cities, but it has been also the source of supply for many of the cities of adjoining states. No more valuable primeval forests ever stood on the American continent than those which flourished in Pennsylvania before their havoc began under the devastating effect of the lumberman's axe.

In the central and north central portions of the State thirty years ago hundreds of thousands of acres of this most valuable timber were still untouched. Gradually it has been hewn down,

shaped into lumber and passed on to the markets in this and in other states and countries, so that at this day but little remains of the magnificent forests for which Pennsylvania was so noted in the earlier years of her development.

In considering, therefore, the number of tons of products of forests that have been transported during the year covered by this report, on our railroads, it would not be proper to understand that all this product came from the forests of Pennsylvania. Much of it must have originated in states far to the west or to the south and in finding its way to market it has passed over the lines of railroads in Pennsylvania. This view of the case must be true for the reason that our forests have so far disappeared that there of necessity must be a reduction of shipments from that source, and when it is considered that a somewhat marked increase is shown in the shipments of products of forests, it is reasonable to suppose that only a fraction of the total shipments originated in Pennsylvania.

In 1901 the tonnage of products of forests was nearly 24 millions; in 1902, 27 millions; in 1903, about 284 millions; in 1904, 29 millions; in 1905, 29 millions, and for the year covered by this report 34 millions.

Whatever the facts may be with reference to the proportion of these shipments of products of forests that originate in Pennsylvania, it is apparent that soon the State which was known as "Penn's Wood" will only be a reminiscence so far as its forests are concerned except so far as the rehabilitation of forests may occur under the most commendable provisions made by the State Forestry Commission by virtue of existing laws and by those public spirited citizens who are attempting to reproduce forests having regard for the future necessities of the people of our Commonwealth.

Products of Manufactories.

In observations made as to the tonnage of products of mines, it is seen how closely coal tonnage is connected with manufacturing and other industrial interests of the Commonwealth, and if, as is the case this year, there is a marked increase in the tonnage representing the products of mines, it may be expected that there will be, proportionately at least, an advance in the tonnage from the manufacturing establishments of Pennsylvania or those to whom the products of our mines are delivered for carrying on manufacturing interests.

In 1901, the products of manufactories amounted to about 773 millions of tons; in 2902, 933 millions; in 1903, 105 millions; in 1904, 96 millions; in 1905, 107 millions and in 1906, 132 millions.