Elections. Early in the year great preparations were made for the provincial elections. The leading issue was economy, which the Flynn Government claimed they had practiced, while the Liberal Opposition, led by Mr. F. G. Marchand, made charges of the grossest extravagance. One of their arrangements was the guaranteeing of the bonds of the Atlantic and Superior Railway for $8,270,000 on terms which were strongly denounced. The Administrator, Sir Alexander Lacoste (in the absence of Lieut.-Gov. Chapleau), disallowed the measure, and this increased the difficulties of the Government. The Opposition took high ground upon the improvement of the provincial system of education and the general question of electoral freedom from clerical domination. Incidentally, the ever-present Manitoba school problem complicated matters as between Protestants and Catholics. The elections were held in May, and the Flynn ministry was beaten by about 25 majority in the new Legislature.

The following new Liberal Government was formed May 26, 1897: G. G. Marchand, Premier and Treasurer; Horace Archambault, AttorneyGeneral; H. T. Duffy, Commissioner of Public Works; S. N. Parent, Commissioner of Crown Lands; F. G. M. Dechene, Commissioner of Agriculture; A. Turgeon, Commissioner of Mines and Fisheries: J. E. Robidoux, Provincial Secretary; George W. Stephens, J. Shehyn, and J. J. Guerin, ministers without portfolio.

Finances.-The budget speech of Mr. A. W. Atwater, Provincial Treasurer, was delivered in December, 1896. His statement may be summarized briefly:

"For the fiscal year just closed our ordinary receipts have exceeded our ordinary expenditure by $286,688. Let me deal first with the accounts of the fiscal year and the receipts and expenditure connected therewith which are before you in the shape of the public accounts. Mr. Taillon, in his budget speech delivered on Dec. 21, 1894, estimated the net receipts at $4,255,499.42. We find the actual receipts to have been $4,331,196.17, or an excess of actual over estimated receipts of $75,696.75. Mr. Taillon estimated the expenditure for 1895-'96 at $4,222,110.97. In this estimate he included the amount to be repaid upon the railway guarantee deposits of $268,235.62. His estimated expenditure then, without this item, would have been $3,953,875.35. The actual expenditure, exclusive of the return railway guarantee deposits,

RAILWAY SERVICE IN THE UNITED STATES. Because of the wide area of the United States, the diverse natural resources of the country, and the extent to which the territorial division of labor and localization of special forms of industry have been fostered by the prevalence of unrestricted domestic trade, facilities for cheap, rapid, and safe transportation are of the utmost importance in the economic organization. Though there are within the United States lakes vast enough to float the commerce of the world, and mighty rivers unequaled elsewhere within the domain of civilization, these natural water-ways are but auxiliaries to the general system of transportation, which, partly on account of the topography of the country and the normal trend of commercial shipment, is mainly overland. The early contest for supremacy between canals and railways demonstrated the comparative inadequacy of the former for any service other than

was $4,099,707, including extraordinary expenditure on public works and buildings, being $145,831.65 more than the estimate. This, however, included the $59,518.40 paid out of receipts by the collectors of provincial revenue and sheriffs, which amount appears in the statement of receipts. The actual excess, therefore, of expenditure over the estimates is $86,313.25. The principal increases have been in respect of agriculture, immigration, and colonization, extraordinary expenditure in connection with public buildings, and miscellaneous services."

Important arrangements were made during the session for the conversion and consolidation of the public debt and the reduction of interest from 4 and 5 per cent. to 3 and 3 per cent. The liabilities of the province on June 30, 1897, were $37,344,310, with assets valued at $11,852,652.

The estimates for the ensuing year were as follow: Public debt, $1,524,621.53; legislation, $195,678.96; civil government, $256,572; administration of justice, $575,390; public instruction, $380,260; agriculture, etc., $288,800; public works and buildings, $183,521.79; charities, including lunatic asylums, $339,375.75; miscellaneous services, $367,700; railways, $503,240; repayment of railways, $287,693.99; Aylmer Courthouse fund, $1,574.

The following are details of the principal amounts voted: Legislative Council, Speaker's salary, $3,000; members' indemnity and mileage, $19,865; salaries and contingent expenses, etc., $12,811.50; Legislative Assembly, Speaker's salary, $3,000; members' indemnity and mileage, $61,600; salaries and contingent expenses, etc., $54,002.45; printing and binding for the Legislature, $25,400; library of the Legislature, purchase of books, $2,000; salaries, contingent expenses, etc., $5,800; expenses of elections, $2,500; clerk of the Crown in Chancery, salary, $200; Queen's printer-printing, binding, and distributing the laws, $5,500; civil government salaries, $205,572; contingencies, $51.000; administration of justice, $478,450; judge of the Sessions of the Peace, Quebec, police magistrates, Montreal, their salaries, those of their officers and contingencies, including salaries of high constable and his deputy, etc., Montreal, $22,940; reformatory and industrial schools, $65,000; inspection of public offices, $9,000.

One of the features of the session was a loan of

$500,000, by legislative enactment, to the Sisters of St. Jean de Dieu for the rebuilding of the Long Pointe Asylum, which had been destroyed by fire.

that of feeders for the more efficient system. The railways speedily gained and have successfully maintained a paramount position in the natural transportation system, though they are still unable to compete with either natural or artificial waterways in the movement of commodities that are shipped in large quantities, the bulk and weight of which are great in proportion to value, and in the movement of which rapid service is not required.

Construction and Mileage.—During the seven decades that comprehend the period of steam-railway transportation there have been constructed throughout the world about 430.000 miles of railway, which are capitalized at nearly $35,000,000,000. Though the United States occupies approximately but 6 per cent. of the land surface of the earth, and contains an even smaller proportion of its total population, it is traversed by 42 per cent. of this mileage, represented by 30 per cent. of the capital.

is adopted for this table.

b Including Oklahoma.

c No report of population in 1880.

d Including South Dakota.

The aggregate length of the railways of the United States on Dec. 31, 1896, was 183,601-05 miles, six times as great as in any other country, and exceeded the length of the lines serving the whole of Europe by nearly 30,000 miles.

It is not sufficient to measure the transportation facilities of a nation in miles; the true criterion is their relation to the demand for the movement of persons and property. Exact determination of the extent of this demand is practically impossible, but approximately accurate conclusions can be reached by comparing mileage with population and area. So measured, the people of the United States are served by a greater length of railways in proportion to their number than those of any other country except British North America, the Orange Free State, and some of the provinces of Australasia. For every 10,000 inhabitants the United States has 26-16 miles of railway; Great Britain and Ireland, 534; Germany, 550; France, 6:48; Russia, including Finland, 2-20; Spain, 4:27; Brazil, 5·13; Argentina, 1915; British North America, 31.90; and Australasia, 32:45.

The proportion of railway mileage to area is exceeded only in the most densely populated countries

e Included with Indian Territory. f Included with North Dakota.

of Europe. With 6.08 miles of railway for every 100 square miles of land area, the United States is surpassed by Great Britain and Ireland with 17-21; by Belgium with 30-25; by the Netherlands and Luxemburg with 14.02; by Germany with 1354; by Switzerland with 13:52; by France with 11:99; by Italy with 8-21; by Denmark with 9-26; and by Austria-Hungary, including Bosnia, with 7.14. The average for the whole of Europe is but 4-03 miles: for Brazil, 0.23; for Argentina, 0·78; for British North America, 0·46; and for Australasia, 0'44.

The number of passengers carried by the railways of the United States is exceeded in but one country, England; it is twice as great as in France, and 52 per cent. more than in the German Empire. The freight tonnage annually carried by the railways in this country is greater than the totals for Great Britain and Ireland, France, and Germany combined; and the average distance carried is much longer.

American ingenuity has provided railway facilities at a lower average cost per mile than in any other country in which due regard is paid to the requirements of speed and safety. The average capitalization of the railways of the United States

is about $63,000 a mile, and this includes such costly special construction as the sunken tracks of the New York Central and Hudson River Railroad in New York city; the tunnel that carries the trains of the Baltimore and Ohio Railroad underneath the city of Baltimore, and that which pierces the Hoosac mountain for the Fitchburg Railroad; the elaborate block-signal systems of the Pennsylvania Railroad and other companies; the triumphs of engineering skill required to carry the Denver and Rio Grande Railroad and other Pacific lines over the Rocky mountains; the numerous expensive bridges crossing the Mississippi, the Missouri, the Ohio, and other rivers; and many other extraordinary expenditures rendered essential by the development of the standards by which the adequacy of a modern transportation system is measured. Yet, in spite of the high standards established in order to meet American demands, the average capitalization per mile in this country is but 27 per cent. as high as in England, less than half that of France and Belgium, and not more than two thirds that of Germany, Austria-Hungary, Italy, and Switzerland. The difference is partly due to a difference in land damages. The quality of service in Denmark, Norway, Sweden, and Servia-the only European countries having a lower average capitalization than the United States-is not high enough to invalidate the conclusion. Railway capital in the United States averages $156.23 per capita and $3,901 per square mile of land surface. For Great Britain and Ireland these figures are $124.49 and $40,111, respectively; for France, $84.45 and $15,635; for Germany, $53.34 and $13,131. The following table shows the number of miles of railroad in the United States in relation to population and area at each census year, with the increase during each decade:

More than half the present railway mileage of the United States has been constructed since 1880. Of this increase, 56 per cent. is in the States and Territories west of the Mississippi, where it is equal to 184 per cent. of the mileage of 1880; 19 per cent. is east of the Mississippi and south of the Ohio and the Potomac, where the increase is 115 per cent. of what was in that section previously; and 25 per cent. is in the region east of the Mississippi and north of the Ohio and the Potomac, where the mileage constructed since 1880 is 53 per cent. of what then existed in that section. The evident conclusion is that in some of the older portions of the country the railway system is now practically completed; and this is confirmed by noticing in the table (given on the preceding page) the very small percentages of increase in all the New England States except Maine. In contrast with the plan of Federal and State aid in vogue during the early development of the railway system, the efforts of some of the State governments in the East are now directed toward preventing construction of unnecessary lines. The figures for 1880 in the table are from the reports of the tenth census; those for 1895 are from the report of the statistician to the Interstate Commerce Commission for June 30 of that year.

VOL. XXXVII.-45 A

The following table shows the railway mileage of the country on June 30 of each year from 1880 to 1896 and at the end of the calendar year 1896, together with the annual increase. The figures given for operated mileage include a duplication of physical mileage to the extent of 3,000 to 5,000 miles, owing to the use of the same tracks by two or more companies. Both physical and operated mileage are shown for those years for which such complete data are available, the figures being from official sources with the exception of those for 1896, which are estimated.

This table shows two periods of heavy railway construction since 1880, culminating in 1882 and 1887, each followed by a gradual falling off in the amount of new line built. The annual increase in operated mileage can not be taken to represent exactly the amount of new construction, but if both figures could be given they would be not far apart. Using round numbers, therefore, it may be said that the amount of new line constructed in a year has fluctuated between 12,000 miles in 1886587 and 2,000 miles since 1893. The average annual increase in operated mileage for the sixteen years has been 6,077-57 miles; but since 1890 the average increase has been only 3,360-35 miles in operated mileage, or 3,167.10 physical miles. It should be understood that the mileage figures in all these tables represent miles of line, not miles of track. The inclusion of second, third, and fourth tracks, yard tracks, and sidings would swell the present total to about 240,000 miles.

Employees. The operation of this railway system gives direct employment to nearly 800,000 men, or 1 in every 30 persons in the entire country engaged in gainful occupations; and approximately $500,000,000 a year is expended in wages and salaries. The number of employees of every grade increased from 418,957 in 1880 to 785,034 in 1895. This was an increase of 87 per cent., which is less than the increase in mileage during the same time, the number of employees per 100 miles of line having fallen from 477 to 441.

Equipment. The equipment of the railways on June 30, 1895, embraced more than 35,000 locomotives, 33,000 passenger cars, and 1,196,000 freight cars of various kinds. The increase in equipment has kept pace with the increase in mileage, and in some particulars has outstripped it.

The increase in the number of locomotives and passenger cars has been almost exactly in proportion to the increase in mileage the former remaining at 20 for each 100 miles of line, and the latter showing a slight increase from 18 to 19 per 100 miles. The freight cars, however, have increased

Switching and unclass'd

2,361

6,688

613 &

6

6,050

11

8

20

From the fact that gross earnings from transportation increased 85 per cent. while the amount of business increased 112 per cent. in the case of passenger traffic and 163 per cent. in the case of freight, it is obvious that there must have been during this period a marked reduction of charges. This conclusion is emphasized by observing that the earnings from freight and passenger traffic increased only 75 per cent., the largest percentages of increase being in the receipts from the Government and the express companies, for transportation of the mails and goods sent by express. The rate of increase in freight earnings is less than half as much, and in passenger earnings only two thirds as much, as in the volume of the corresponding traffic. Both freight and passenger rates have fallen,

Common stock.... Preferred stock.

Total stock.

Funded debt.

CAPITALIZATION.

Other forms of indebtedness..

Total...

There has been a diminution of $1,192 a mile in the relative amount of railway stock, and a relative diminution also in the floating debt of the railroads, but these are more than counterbalanced by the increase of $3,793 a mile in the bonded indebtedness. This tendency is to some extent explained by the number of reorganizations in which new bonds of higher par value, but entitled to a lower rate and aggregate of interest, have been exchanged for those formerly outstanding. There have been also numerous instances of railway consolidations brought about by purchase of stock in one company by an issue of bonds in another, and of construction of branch lines wholly upon the proceeds of bonds issued by the parent company.

Service and Earnings.-The increase in the public service performed by the railways has great ly exceeded the increase in mileage, and in 1895 the service performed was equivalent to carrying more than 12,000,000,000 passengers and 85,000,000,000 tons of freight a distance of one mile. While the mileage has increased 106 per cent., there has been an increase of 112 per cent. in the volume of the passenger business, and of 163 per cent. in the freight traffic. This is shown in the following table, in which the volume of traffic is expressed in passenger miles and ton miles:

but the decline has been much less marked in the latter case, probably owing to the expense connected with increased speed and otherwise improved accommodations for travel. The average rate per passenger mile in 1880 was 2:51 cents; in 1895, 2-04 cents. The average rate per ton mile in 1880 was 1.286 cent; in 1895, 0-839 cent. The downward tendency in rates on both classes of traffic has been broken by but few and slight temporary augmentations of the average charges. There was an increase in the average passenger rate for 1895 over that for 1894, which is fully explained, not by any actual increase in regular passenger charges, but by a diminished proportion of reduced-rate tickets, the enormous excursion business occasioned by the Columbian Exposition at Chicago being almost wholly included in the official year immediately preceding. Notwithstanding this increase (more than half a mill), the average passenger receipts per mile were less in 1895 than in any previous year except 1894.

The passenger rates in 1895 were a little more than four fifths, and the freight rates a little less than two thirds of the corresponding charges fifteen years before. The yearly saving to the public from the reduced rates, on the basis of the business done in 1895, is $53,673,821 in passenger fares and

$365,822,392 in freight bills, or nearly $420,000,000 altogether.

The efficient cause of the reduction in rates has doubtless been competition-not between the railroads to any important extent, but with water routes and between shippers and markets, the latter having produced increasing pressure upon the railways for concessions. The reduction in freight rates has been general; it has not been confined to any particular class of traffic or section of the country. A few examples will serve to illustrate the general tendency. The most important single rate is that on grain and flour from Chicago to New York, which is the basis of all charges on grain and flour shipped from the West to the East. This rate fell from 35 cents per 100 pounds in 1880 to 15 cents in 1896. The charge on packed meats from Cincinnati to New York, another rate of great importance, fell between 1880 and 1895 from an average of 33.41 cents to 26 cents per 100 pounds. The rates on cotton, the great staple product of the South, have diminished in like manner. The cotton rate to New York from Memphis fell from 74 cents in 1880 to 50 cents in 1895; and the rate from New Orleans, which is affected by the competition of the water routes, was 55 cents in the former year and 44 cents in the latter. These are not extreme instances, but are typical reductions affecting some of the most important articles shipped.

It must not be supposed that the amount saved to the public by the decline in rates represents a net loss to the railroads. The lowering of rates has helped materially to bring about the enormous increase in traffic, which in turn has made possible a relative saving in the expense of conducting the business. The increase in the volume of traffic has not been accompanied by a correspondingly great increase in operating expenses, several causes having combined to produce greater economy of operation. There was between 1880 and 1895 an increase of about 5 per cent. in the density of passenger traffic, and 30 per cent. in that of freight traffic. The average efficiency of one employee shows a much more striking increase, being represented by 13,701 passenger miles and 77,213 ton miles in 1880, and by 15,526 passenger miles and 108,565 ton miles in 1895. The efficiency obtained in the use of the equipment shows on the whole no decided change, the increase in the work done by each locomotive

being about offset by a diminution in the amount of traffic to a car. In the case of passenger cars this diminution is easily explained by the increased and often unnecessary frequency of trains between the same points, due to rivalry of competing roads, and by the increased use of sleeping and parlor cars. These causes have resulted also in a diminution of 3 in the average number of passengers to a train. The average freight-train load, on the other hand, has increased 47 per cent., but the average efficiency obtained in the use of freight cars has diminished almost as much as that of passenger cars. It is impossible, under present conditions, for the railways to use their cars economically while moving the crops. As New England has almost ceased to grow wheat, and as this and other bulky products have been shipped in larger and larger quantities from the West, it has become necessary to return from the Atlantic seaboard every year an increasing number of empty cars. A less important and less inevitable waste arises from the occasional practice of granting, as a special concession to certain shippers, the privilege of keeping cars for a specified time for storage. Finally, examining the efficiency of capital in the railway business, it is seen to have increased nearly one-third in the movement of freight, and somewhat less than one twentieth in the case of passenger traffic. Stating the results in different words. as the traffic has increased a greater amount of work has been accomplished by each mile of track, each employee, each locomotive, each freight train, and each dollar of capital, while the reverse is true of passenger trains and both passenger and freight cars. The net result is that the expense of operation as a whole has increased much less rapidly than the volume of traffic. The operating expenses rose during the period under consideration from $339,516,302 to $725.720,415, an increase of 114 per cent. This is a little more than the rate of increase in the passenger traffic, but much less than the rate of increase in freight traffic. It is evident that the railway business as a whole is, in the language of the economists, subject to the law of increasing return, an increase in the amount of work done being accompanied by a less than proportional increase in cost.

On the other hand, operating expenses have increased more rapidly than gross earnings. They were 585 of the earnings from transportation in