Q. Have you given any attention to the probable effects of the improvement of the Mississippi River, and opening the mouth of that river?

A. Yes, sir; that is a matter that has come directly under our observation, and a matter in which our company is directly interested in this wise: I hold this, first, that the water-channels from the West to the sea-board are always to be the cheaper line of transportation; that the cost upon the railways can never be brought so low as it may be brought by water.

By Mr. NORWOOD:

Q. In what proportion?

A. I will say this, roughly: Assume 45 cents a hundred as the cheapest rate from here to New York by railway, that is, $9 a ton; now we reduce it to bushels of corn, because I have the price of corn fixed in my mind-45 cents a hundred for 56 pounds is 25,2 cents a bushel. Now, as against that low rate, vessels can carry corn from here to Buffalo and make as much as railroads do, at 5 cents a bushel; and the party who owns a barge which did tow two other barges last year says that at 5 cents a bushel he can run his barge, pay all expenses, and get 7 per cent. interest on his money, at from 4 to 5 cents a bushel. Now the ordinary rate through the canal for corn is 11 cents; that makes 16 cents. Of course we must add the charge for handling at Buffalo, which would be a cent a bushel; that makes 17 cents; and, if you please, add another cent for insurance, and that makes 18 cents a bushel. Now, 45 cents a hundred from here to New York is 25 cents a bushel. I will say that relative difference can be maintained; that is to say, if conditions can be brought around by which rail transportation can be reduced by the reduction in cost of rails and coal and labor, that the same items of expense can in the same manner be reduced on the lakes in the cost of the vessel and the cost of running. I say that 18 to 25 cents is perhaps the relative rate from here to New York.

Then, again, if our neighbors here in Canada carry out the system of enlargement, of first the Welland and then the other canals to Montreal, I believe that, as against 18 cents to New York, we can put corn in Montreal (assuming 5 cents from here to Buffalo) at 7 cents more from Buffalo to Montreal, or 9 cents at the outside; or 14 cents as against 18 cents to New York. Now, those, to my mind, are the relative prices by water to the Atlantic sea-board.

As against that, I will assume that from the center of the corn-raising district on our line from Ceutral Illinois it costs 10 cents a bushel, which is about the rate to Chicago. It costs the same rate to Cairo. We will assume Cairo, then, as a shipping port to the sea-board, equally well situated with Chicago; that being so, the price from Cairo to New Orleans is now 14 cents. That is the price to-day; but it is also 14 from here to Buffalo. Now, as against the 5 cents to Buffalo, which is put as the maximum, you can safely put 7 cents from Cairo to New Orleans as the price in these large barges. Then you have 7 cents a bushel to the sea-board, for New Orleans is at the sea-board if that canal down there is completed. You have 7 cents a bushel to New Orleans as against 14 cents to Montreal, and 18 cents to New York by water or 25 cents to New York by rail. There is that 18 cents a bushel difference in the cost to New Orleans as against the cost by rail to New York. Assuming 6 cents to 7 cents to be a fair ocean freight, 7 cents being enough under any of the present conditions from New York-from New Orleans they want 50 per cent. more-they would want ten-pence halfpenny,

or 21 cents. The difference would be three-pence halfpenny, or 7 cents7 from 25 leaves 18. You have got a gain really from Illinois to Liverpool of 18 cents as against New York by rail, or by water to New York we have 4 cents cheaper than by rail to New York. I have not taken insurance into account in that.

Now, there is this thing about New Orleans: Our shipments there for two years past (last year and the year before) were about a million to a million and a quarter bushels of corn, about two-thirds of which was exported. Last year there was something over a million and a half altogether from New Orleans; but of course you have the statistics for that; and of that exportation during the whole of last year, the sales in Liverpool and the condition were fully up to the condition of grain shipped at the same time from New York. In other words, this climatic difficulty, which is by some claimed to be a great bar to shipments by New Orleans, last year was not, and we suppose it simply because the corn of year before last was thoroughly ripened. We assume here that when the corn-crop is mature and perfect it can be shipped to New Orleans even in the summer with perfect safety.

By Mr. NORWOOD:

Q. If it is not well matured, would it not be damaged by the other route?

A. I think the Montreal route is a better route than the New Orleans route, so far as damage is concerned; but I think the New Orleans route at present fully equal to the Erie Canal. I think that the temperature along the Erie Canal is probably higher during the summer than it is in New Orleans; not the average, but there are days together during which corn afloat on the Erie Canal would be subjected to a greater heat than in New Orleans or in the Gulf of Mexico.

Q. Does the moisture of the climate have any effect upon it?

A. Not when any large quantities go; but when the corn itself is moist, then the heat of the atmosphere and the water together creates damage.

I returned the first of this week from the other side, and I made particular inquiries at Liverpool and at Cork about the conditions of the cargoes from New Orleans. I found in Liverpool a tendency to favor the New York route; that is, they say the New Orleans business is uncertain. But my information there was obtained from large dealers who were at the same time interested in the lines of steamers from New York. One of the gentlemen was a director in the National line. Now, at Queenstown and Cork they told me that while they had some cargoes from New Orleans that were in very bad condition, yet as a whole the New Orleans cargoes were in pretty fair condition; but they did not there say they were better than the cargoes from New York.

By Mr. DAVIS:

Q. Why do you assume 7 cents as the charge from Cairo now, while you say it is really 15 cents?

A. I say this: that the charge now from Cairo is 14 cents, and so the charge was week before last 14 cents. Now, I say, as against the 5 cents which we allow from here to Buffalo as the lowest freight, we may count on 7 cents from Cairo to New Orleans as the lowest. I wish to keep the same comparison.

Q. You assume that the mouth of the river

A. Now, the situation in regard to that is this: They cannot count on over 18 feet of water at the mouth of the river. That being so, they

cannot run a vessel to New Orleans that will run economically as against the New York harbor. The vessels running into New York draw from 21 up to 24 and 25 feet, and they say that in constructing these steamers, to construct them of large size, which they must do to carry freight cheaply, they cannot do it on this shallow water. Now, that being so, I think it is absolutely necessary to insure 23 and 24 feet of water in New Orleans; and if that water were there, I believe to-day that our shipments of corn by the way of New Orleans to Europe would be, instead of a million bushels a year, six or eight millions. Of course I cannot say that is absolutely so, but I think it would be so. And I think for the country west of the Mississippi River there would be greater advantages than to the Central Illinois people, who have these low rates to the sea-board. As you go West they are higher, of course, and the country bordering on the Mississippi and Missouri could find an outlet south at relatively greater advantage than could Central Illinois. Q. Is there now any proper convenience at New Orleans for transfer?

A. They charge there 2 cents a bushel for the first ten days. They have one elevator at New Orleans, its capacity being, I think, about 600,000 bushels. I am not absolutely certain about that; but they charge for receiving in that elevator, holding ten days and delivering, 2 cents a bushel; and in addition to that they have one floating elevator, probably as good a one as there is in the country. The charge by the floating elevator for transferring from the barge into the ship I do not know. It ought to be done about as cheaply in New Orleans as it is done in New York. There is no reason why that service could not and should not be done for about the same price.

Q. In your estimate there you take into account, as I understand the question of my friend here, the insurance and the difference in freight? A. No, sir. I remarked that, in making the difference of freight 50 per cent. at New Orleans over the price at New York, I did not include the difference in insurance.

Q. What would that be?

A. I am not sufficiently advised to give you accurately the difference. It would be something, but no very large amount, per bushel.

Q. Have you given any thought to the Virginia routes going up the Ohio?

A. No, sir, I have not, for the fact that with reference to water communication there I have not that information which enables me to form any judgment. I am not as well acquainted with the face of the country as I ought to be, to be able to give an opinion on that route.

By Mr. NORWOOD:

Q. Have you had occasion to consider the question of water communication from the mouth of the Mississippi River along the line of the Gulf and across the peninsula of Florida to the Atlantic?

A. No, sir, except with reference to the outlet from the Gulf. I have always supposed this: that while the route by Florida is not a very good one for sailing vessels, steamers can always pass; and the difference in time in going around or through is so slight-I had not supposed that it was of such importance as to require my attention; but of that I am not probably fully acquainted. For sailing ships I suppose, at times, it is quite dangerous; but steamers can get round there at all times safely. Mr. CONOVER. It is very unsafe, even for steamers.

Mr. NEWELL. I have in the last two years spent a little time in New Orleans, and have talked more or less with captains of steamers and

sailing vessels, but not on this subject; but I have never heard them mention the passage around the capes of Florida as being very objectionable. The chief stress they lay is upon the fact of the difficulties of the bar; and that really is the great reason why the port of New Orleans has not been a very large shipping port for all time past.

By the CHAIRMAN:

Q. I was going to ask you, if these things are correct, why is it that so little freight comes by the way of New Orleans?

A. For the simple reason, as I said to you, that vessels that can be run cheaply have got to be vessels of upwards of 20 feet draught of water. Such vessels cannot come to New Orleans with any certainty of getting in. In fact, in the last four years, there has been only one time when there has been 20 feet of water that I know of At one time our agent in New Orleans telegraphed me as a great fact that there was that day 21 feet of water on the bar; but it was probably a high tide and an exceptional circumstance.

Mr. NORWOOD. I think they can only count on 16 or 17 feet.

Mr. NEWELL. Yes, sir, and they carry vessels jumping them at 18 feet. Now that fact strikes me as the great reason why there has not been a larger business there. Of course the cotton is bound to go out from there, and it generally pays a better freight than most any other class of produce. That being the case, they can afford to send ships to New Orleans to carry cotton that they could not afford to send to carry

corn.

By Mr. NORWOOD:

Q. They can afford to pay lighterage on that?

A. Yes, sir. At Mobile the cotton, as I understand it, is loaded from the docks. I was not aware that they lightered very much in New Orleans. I had the impression that they got their vessels to the draught they thought they would get over, and then took them down and jumped them over, as they termed it.

Q. Do you understand that there are any serious difficulties between Cairo to New Orleans?

A. There are no serious difficulties as a rule. A year ago last spring the water was very low, at the time the river was blockaded with ice between Cairo and Columbus, for two weeks. That has occurred only once before since 1855. I was at Cairo in 1856, the 1st of January, when the river was blockaded up there, and I understand it has not been blocked since that time until the year before last. The water sometimes gets low, but at the time I refer to there was 4 feet 10 inches of water only on the bar below Memphis; but that was a very rare occurrence. Now the Mississippi Valley Transportation Company have built some thirty-eight barges for the carrying of bulky grain and other produce down the river. Some of the lighter ones carry 35,000 bushels of grain on 9 feet of water. At the rates at which they have carried it in the past, I assume that you can carry that grain at less than the price I have named, of 7 cents ordinarily.

Q. It was stated by the president of the Rock Island road this morning that out of the fifty-odd roads in the State there were but four that gave any interest.

A. The Burlington, the Rock Island, the Chicago and Alton, the Chicago, Burlington and Quincy, and the Illinois Central pay regular dividends. The Northwestern pays dividends, but spasmodically. They have paid no regular dividends, except on their preferred stock. As I

understand it, they paid their interest on that for some years back without any interruption, but they pay no dividends upon their common stock regularly. Now, the statement that there are but four roads paying dividends is, in that sense, correct. In addition to the Northwestern I do not know of any other road in the State that has paid a dividend for the last four years.

Q. Are there fifty-odd roads in the State?

A. I cannot tell you; but you will find in Poor's Manual a statement of all the roads, and, as a rule, his statements are correct. He takes a great deal of pains in making them.

Q. I understand you that your local freight, not from competing points, is perhaps more than double what it would be from competing points? A. Yes, sir; that was the case last year. That was the immediate cause of this complaint, as I stated.

Q. Has that been remedied?

A. That has been changed. We have now, under the statute of last winter, regulated our tariff so that we are nowhere within this State hauling freight a greater distance at a less price; in other words, we comply with that law with reference to freights originating and delivered within the State. With reference to freight originating out of the State and carried over it, we hold that that law has no application, and act accordingly. But this immediate cause of complaint of discrimination is removed by our new tariff of July last.

By Mr. NORWOOD:

Q. I will ask you the question I asked Mr. Walker this morning, and get your opinion. Why do capitalists continue to invest their money in railroads that pay no dividends?

A. I do not know that I can give you the absolute reason, but I will give you my idea of it. In 1868 this State had about 3,300 or 3,400 miles of railroad. It has now 6,400. This gain of 3,000 miles of road has been made chiefly in this wise: In 1868 the legislature authorized municipalities to vote aid to new railroads. The municipalities all over the State, led on by speculators-people in the business of building railroads-voted aid to a large extent, generally, all over the State, the aid ranging in one case as high as $8,000 a mile in local bonds, for which the railroad companies were to give the stock. Now, these gentlemen say: "Here is a railroad wanted; we can go on and get this local aid; we will go along the route and get the vote, and if we can get $5,000 a mile in local aid, that is very well." They go to work and do it, and then go to a railroad contractor and say, "Here is this large profit to be made in the building of this line." The contractor goes to a banker in New York, with whom perhaps he is associated, and says: "If you can place the bonds of such a railway to a sufficient extent to build that line, we can pocket the profit of this local aid-these local bonds." They do it; and European capitalists five or six years ago, not having acquired as much experience as they have now with the value of this property, were eager to take these bonds at a low figure. They were placed at a low figure, and money enough was raised to construct the line out of bonds, and the contractors simply took as a profit the local aid. Now, that, really, to my mind, is the reason why these roads have been multiplied to such an extent. The individual profit made by the contractors in building them has urged the construction of them.

Another thing I will say in connection with that, as my opinion. The produce of the State, the tonnage to be moved upon the railways in the State, locally has not increased 50 per cent., while the mileage