from Buffalo, as well as the canal-tolls. That, at its lowest, we will say is but one ceut per bushel for a hundred miles of lake and canal transportation.

The lakes furnish ample room for navigation; no "monopoly" on them. The Erie Canal is furnished by the State of New York for any one to use that chooses to build boats and run them. In 1862, the grain received at Buffalo was 58,642,344 bushels. The tolls collected on all the New York State canals was $5,188,943 for that year. The grain receipts and shipments continued to decrease until 1869, when the shipments by canal were down to 37,014,728 bushels, and the canal tolls fell off to $3,778,501. Railroad facilities had multiplied so rapidly and railrates became so much reduced by the operation of through lines of cars that the State found it necessary to reduce the tolls on the canal to keep pace with the general reduction. The grain trade again increased via Buffalo until 1872, when it was 58,447,822 bushels, 194,522 bushels less than it was ten years before, and the total tolls collected was $2,116,531 less than in 1862, while the total tons moved was only 6,673,370 tons in 1872.

The boats on the canal in 1862 registered an average of about 141 tons each. They now average about 250 tons each. Therefore, while there has been no enlargement of the Erie Canal, the old smaller-sized boats have passed out of existence to a certain extent, and they have been replaced by a class of boats nearly double their size, so that, while the capacity of the canal itself has not been very much altered, the capacity of the boats has so changed that the tonnage of the canal has grown from some 4,500,000 tons a year up to a capacity of 11,000,000 tons a year. That part of the business, of course, continues only through the season of navigation and only reaches New York and the towns tributary to the canal and Hudson River.

The development of the business of the country is such that the produce has to reach the interior of New England and to be brought to lake towns and kept there in store in large quantities through the winter at high and continuous costs to the producer or the man who has to hold it.

It therefore became necessary that the producer and the consumer should be brought closer together during the winter-months as well as the summer-months. In order to do that and to furnish business for the railways, it became necessary that through-lines should be established for the purpose of taking this property from the nearest railway station, where it is produced to the party who consumes it in the East. Therefore that business, in order to compete with the low prices of water navigation, had to be done without the cost of handling at the end of each company's road. If the one company hauled it a hundred miles, it was at the expense of unloading and putting it in the next company's car and hauling it two or three hundred miles more, and re-handling until it reached its destination for one or two thousand miles; the handling alone to and from the different companies' cars would be more than the water-navigation charges.

Therefore these companies arranged among themselves, by which each road would put in a certain quota of cars, and form a through-line, by which the business could be done through one management. Those cars belong to the roads, and they are placed in the hands of a manager to manage the business for the joint interest of all the roads. The cars are not owned by outside parties; they are not operated by outside parties, but are the joint co operation of all lines together through one management. When a line-bill is made at Saint Louis for Boston, the en

tire charges are shown; a tissue copy of that bill comes to my office. We there make up the earnings of the lines; we settle all over-charges, losses, and damages, or anything connected with the lines, and prorate it over all the lines, and there is no man outside of the railroad companies themselves who receives one farthing of profits growing out of the business. It simply facilitates the handling of the property from the place of production to the place of consumption.

In the month of November last, I think the "Blue Line" cars run on 124 different roads for that one month. A car loaded here for San Francisco passes through without transfer or handling, and the mileage for that car is reported to me clear through to the Pacific coast. The company owning that car gets credit for the mileage for its own line through my accounts, and the mileage balances are settled with the railroads each month upon the clearing-house system.

Whatever balances there are over and above what they ought to have made as their pro rata share of the total miles, is paid them in money from my office once a month. Therefore these lines have become such a necessity to the country that it would be utterly impossible for it to abandon them. The farmer of the West, if he lives at a railway sta tion, can order his car, and put his four hundred bushels of corn into it, and send it to any man he likes in New England, at the current rate of freight, which has been gradually reduced from time to time, until at the present time, or through the summer months, when it gets down to about 20 to 22 cents a bushel. Instead of the property going in vessels by large quantities, where he has to provide a capital for this large quantity, and provide storage for it at its destination, taking the chances of the rise and fall in the market, and the insurance, he simply sends four hundred bushels at a time from the place of production to the place of consumption, and the next day, or the same day, he can draw against that four hundred bushels, to buy another car-load, so that his daily wants are constantly supplied through the means of these through-lines. Therefore the nature of the business, so far as New York is concerned, has become somewhat changed.

While there is the same amount of property, or more property, moved, it is not moved through the same channels, and is lost sight of, because it is done in a smaller way, and passes into the hands of the consumers without being reported through the ordinary channels of reporting such receipts and disbursements. The effect of that system of doing the business has been such that the railroad capacity has been taxed at certain times very largely, and some considerable fault has been found with the management of railroads, in consequence of facilities not being furnished to do the business. The great trouble will be found to be at the destination. When you arrive at New York with large quantities of grain, and the consignee here expects to receive the identical grain that is in that car, he must as a matter of necessity provide a barge for its being taken out. Suppose we have fifty cars of No. 2 Chicago spring wheat coming in here to fifty different consignees, on the same day, and they expect the same wheat, you will have to have fifty barges to discharge it, while if that could be done by inspection, as it is done in Chicago and every other large lake port, those fifty cars of grain could be discharged with the proper facilities, such as we have in Detroit, in fifteen minutes. They can discharge six cars in one elevator at Detroit, sweep the cars and move them out, in four minutes. There are six places to drop the grain into, and it is done by steam shovels. That would give you the use of the cars immediately to return, and give you the use of the tracks to

move more on; the difficulty is not in the moving of the cars over the lines, but it is in receiving the property when it reaches its destination. The inspection of the grain at New York, by which this property can be discharged rapidly, would obviate a very large proportion of the trouble that we now labor under. The charges upon the property after it arrives here to go from the cars to the barge, from the barge to the elevator, from the elevator back to the barge, from the barge to the ship, is more than one quarter of the present charge from Chicago here. That is an item, that has a very large share of expense attached to it, which should be avoided. That is, of the present rate upon the same property by lake and canal from Chicago to this port.

By Mr. SHERMAN:

Question. How many cents a bushel?

Answer. It would be about 4 cents a bushel, the weighing and altogether. Large warehouses at convenient points for railway cars to discharge at a cheap rate of storage, elevating and storage, so that a man could afford to hold his property at New York or Boston or the sea-board towns, rather than the western towns, would equalize the business to a very great extent and hold the property here instead of the West. The parties holding the grain at the West, where it is in store at a cheap rate of storage, particularly that which is destined to the sea-board, hold it for a favorable turn of the market. When the price goes up one or two cents per bushel, everybody wants to ship the same day. Now it is utterly out of our power to carry all the property in one day or two days, but if they will spread that over the time, the capacity to move that property on a daily average of movement has never yet been exhausted.

The tonnage of the canal alone, with double locks of suitable size, is equal to 11,000,000 of tons a year eastward bound in the two hundred days of navigation. Their entire tonnage for 1872 on all the canals of New York State, both ways, was only 6,672,000 tons. The capacity of the railroads to move to the sea-board, to all the different points, is estimated at about 30,000 tons per day.

The capacity of the water-routes, by canal, the Saint Lawrence, the Mississippi, and the other water-communications to the sea-board, is equal to about 75,000 tons per day, so that if the business was equalized, it makes a capacity to move, if it was equally distributed over the time, equal to 105,000 tons per day. Take that for a year and you have a tonnage equal to seven and a half tons for every man, woman, and child of the whole United States west of Buffalo.

There are about 67,000 miles in the whole United States. The mileage of these railroads now exceeds the mileage of the railroads of all Europe combined. The tonnage of all the railroads amounts to about 225,000,000 of tons per year. But to speak of this particular locality, the grain region, which we are now discussing, to transport property from the west to the sea-board. There is now in operation in Ohio, Michigan, and western States and Territories north of the Ohio River and east of the Rocky Mountains, Missouri, Kansas, and Colorado, and north of them, 28,778 miles of railroads owned and controlled by about two hundred different sets of men as stockholders, represented through their boards of directors, many of them coming into direct competition with each other for a comparative limited traffic. These roads, with their equipments, have cost an average of $50,550 per mile. The total earnings, less actual working expenses, give an average of 2.83 per cent. on all the capital. But as nearly one-half of the entire cost is

represented by bonds bearing from 7 to 10 per cent. interest, it will be seen that some roads do not, because they cannot, pay even the interest upon their bonds, much less dividends, to their stockholders, while at the same time they open up the vast resources of the country and bring the farmer into immediate connection with the consumer through available markets at a comparative trifling cost, which has more than trebled the value of his productions, as well as his real and personal

estate.

As to railway-communication from Buffalo east, you are aware the New York Central Road are putting four tracks, the Midland Road will be completed, and while these lines are doing this business in that way, if the property could be so offered here that it could be moved equally over the road, our capacity, as I said before, is very far from being exhausted. That seems to be the vital point now, to provide a storage capacity at the East, so that this property can be moved here. Unless that is done, of course there is no necessity for any further roads being built, because the same thing would operate upon all roads. Supply and demand regulates the movement of the property. Therefore, if the price was down here and the storage was less there than here, it would remain there until the price here warranted its movement. As soon as that is done, you would have the same difficulty again. It would all want to move in one or two days. We go very far toward supplying that immediate demand, and the consequence is that we get so much property in here that all of a sudden the price goes down; they do not realize what they expected to and shipments fall off, so that our cars again stand idle, waiting for another spasmodic effort in the price to bring it forward.

Those are the difficulties that we labor under, and not the want of facilities to move it.

One of the schemes that will probably be brought before you is the Niagara Ship Canal, from Lake Erie into Lake Ontario. That question, you will see at once, should not receive any favorable attention. The moment that you get into Lake Ontario you have opened the traffic to Montreal, one of the very points that we wish to steer clear of. If the St. Lawrence is a natural outlet, and by the building of this canal into Lake Ontario, the business can be thrown into Montreal, we throw it out of our hands entirely to do the business, and out of our own commercial centers for doing it. But the disadvantages of that route are so great that it will never amount to anything, even though it was carnied through. The dangers of navigation of the St. Lawrence, of course, are familiar to navigators; and it is only about seven months of the year that that route is open at all.

When you get out to the ocean for Liverpool, you only meet the markets of Liverpool after you have got there. Therefore your grain in Liverpool, in very large quantities, is in an unsalable market, and when that market is supplied, there is an end of that business. We take it that New York is the commercial center of this country, and the ships of all nations come to New York with goods. With them they bring the orders for grain to all parts of the world, as return freight. Therefore, facilities for bringing this property to New York or Boston or Philadelphia or Baltimore is a more legitimate thing than opening a route by ship canal that would afford people entirely outside of our country the advantage of doing our business for us.

By Mr. CONKLING :

Q. Would not the dangers of navigation on the Saint Lawrence speak

in favor of the Oswego Canal route, as a part of the Niagara Falls shipcanal scheme?

A. When you pass from Lake Erie into Lake Ontario and to Oswego, how do you propose to get to New York from there until you go back into the Erie Canal again at Syracuse, through lifting-locks up to the level of the Erie Canal at Syracuse? The difference in the freight, and the cost of passing through the Niagara ship-canal to Oswego and up to Syracuse again, is considerably more than the difference in freight from Buffalo to Syracuse; therefore, you have only gone a roundabout way to reach the same point.

By Mr. SHERMAN :

Q. What is the lockage from Oswego up to Syracuse?

A. I do not know the number of locks, but there must be quite a number, because there is a large descent of the water to the lake. have got back to the same channel.

Mr. FOSTER (bystander) states that it is about 180 feet.

You

Mr. HAYES. Therefore your water communication, whether by canal or river, to all northern points must be closed the greater part of the winter, and there is no want of facilities until navigation is closed. When it is closed, then the railways are taxed to bring the property forward from the West, and it is to meet that demand that the increased railways, if any, are needed. During the summer-months there is now no lack of facilities, because the gradual increase of the tonnage of these boats has imperceptibly grown without any increase of the canal facilities that is, the size of the canal. But when the lake, and river, and canal navigation becomes closed, then we find the increased facilities needed by railways.

And right here I would say that the complaint made is, that as soon as navigation closes, railways come in and charge larger rates. Well, that is like everything else; the supply and demand regulate that to a certain extent. Then, every one familiar with the operations of railways must know that it costs a great deal more to run a railway in winter than in summer.

By the CHAIRMAN:

Q. Right at that point stop to tell us why, if you please.

A. Because there is a great deal more night-work, and also because of the frost in the road bed. Snow and ice we have to contend against delays trains. You cannot haul trains during the winter-months anything like as large through storms as you can through the summermonths. It makes no difference at all whether you have a train of ten or thirty cars; you have to have engineers, firemen, brakesmen, and conductors, whether the train is large or small. Therefore, if you only haul small trains in the winter, you increase your expenses very largely without a corresponding increase of prices to meet it.

Q. I had no doubt that there was an increase of expenses, but I wanted you to state in what it consisted.

A. You have to have additional track-men to clear the ice from the track, from the wheels, and everything of that sort. The increased expense of operating that road is considered more in the winter than the increase in rates.

By Mr. SHERMAN:

Q. What per cent. is your estimate, sir?

A. I should think it would cost nearly a quarter more in winter than in summer.