in the litigation. I now continue its history: After the United States Court refused to enjoin me from selling the road and appurtenances for delinquent interest upon the matured coupons, the road, or certain trustees, paid that installment of interest, and then amended its bill in equity, praying the reliet as asked for in a former bill, and in case that should be denied, asking the alternative relief of a repayment of the $3,000,000. On the final hearing of this bill at Keokuk, Iowa, by Judge McCrary, an interlocutory decretal order was made, prescribing legal rules by which the amount due by the company to the State might be ascertained, and referring the whole matter to a Master in Chancery, Hon. John K. Cravens, of Kansas City, with directions to take an account thereof and report the same to the court.

A great deal of testimony was taken on the subject of the accounting between the State and the railroad, and the matter was thoroughly argued twice before the finding of the Master, after which the Master prepared his report showing the balance due the State on said accounting, January 1, 1883, to be $549,083.58. On the 1st day of February, 1883, the Master having notified the parties that the draft of his report was ready for examination, the parties appeared and the solicitors for the complainants asked that they be permitted to introduce as evidence the report of the State Auditor to the Thirty second General Assembly of the State of Missouri as newly discovered evidence, which was permitted against our objections. The complainant's counsel filed. many objections to the report, which were thoroughly argued by both sides. The objections were overruled, and the Master, on the 15th day of March, signed his report, showing that the State was entitled, on January 1, 1883, to $549,083.58, with interest. The finding of the Master was a substantial victory for the State. Exceptions to this report were filed in court by counsel, both for the State and the complainant, which exceptions were, on April 25, 1883, argued before Judges Krekel and McCrary, in Jefferson City, by Attorney-General McIntyre, Hon. John B. Henderson and George H. Shields, for the State, and by Judge Dillon, Mr. Root and Mr. Easley, for the complainant. This argument was exhaustive, going over the entire case and resulted in a modified final decree for the State, and finding that the State was entitled to receive from the Hannibal & St. Joseph Railroad Company on May 11, 1883, $476,049.27, with interest at the rate of three per cent. per annum till paid. Both parties took appeals from the judgment to the United States Supreme Court. The United States Circuit Court, on September 16, 1882, in its interlocutory order, had enjoined the sale of the railroad by the Governor until the final judgment in the case upon the further payment of $90,000 on or be

fore October 4, 1882, into the State Treasury, which was paid October 3, 1882.

It will thus be seen that in addition to the $3,090,000 originally paid by the railroad company to the State, and which was claimed by the railroad to be all that was due to the State on account of the Hannibal and St. Joseph Railroad Aid Bonds, that the litigation has so far resulted in a judgment in favor of the State for $566,049.27 more, $90,000 of which has already been paid into the State Treasury, and for the balance of which, to wit, $176,049.27, the State has a lien upon the property of the railroad company if the judgment of the United States Circuit Court should be affirmed by the Supreme Court of the United States. In the ordinary course of business this case will probably be reached in the United States Supreme Court some time in 1886 or 1887, but it is hoped that the case may be advanced and heard some time during the year 1885.

The last Legislature appropriated $10,000 to pay, as a retainer or partial pay, the employed counsel of the State, Glover & Shepley and Henderson & Shields. With profound regret I announce that Messrs. Glover & Shepley have both died since the case was last argued and decided at Jefferson City.

Mr. Glover performed the labor of the firm in this case, and did it with singular earnestness and ability, commanding the respect of both the court and his associate counsel, in the management of this great cause. Henderson & Shields are still retained by the State in the controversy. I suggest that the Legislature make another appropriation to compensate the counsel for their services in the case up to its final determination in the Supreme Court of the United States. It is confidently believed that the judgment of the United States Circuit Court will be affirmed by the Supreme Court, or that if a modification of the judgment is made, that it will be in favor of the State, in allowing a still greater sum.

As D. H. McIntyre will soon retire from the office of AttorneyGeneral, I suggest that the Legislature make a sufficient appropriation to continue him in this important case. Having been one of the Fund Commissioners of the State from the inception of the controversy, and the leading law officer in the management of the litigation in behalf of the State, and having served the State in this behalf with unswerving fidelity and marked ability, he is necessarily more thoroughly acquainted with the intricacies and salient points involved in the litigation than it is possible for his successor to become in the short time intervening hetween this and the hearing of the case by the Supreme Court.

The State could make no wiser investment of its money. The in

creased premium upon the United States bonds purchased with the $3,000,000 paid by the trustees of the Hannibal & St. Joe R. R. Co., has been more than sufficient to defray the expenses of litigation upon the part of the State. My official connection with this important case being now severed, I sincerely trust the State will suffer no harm in its final determination.

I recommend that the State take steps at once towards the payment of the over due coupons on the Hannibal & St. Joe bonds, and the payment of interest on the same at such a percentage as may seem wise to the Legislature. I think the State has arrived at that stage in the controversy, when it is no longer just and honorable to delay the recognition of those demands. Such an act will uphold the credit of the State. The issue between the State and road cannot be affected by their adjustment. This suggestion is made with the sanction of the other Fund Commissioners and the State Treasurer.

RAILROADS.

Missouri is keeping pace with her sister States in the construction of railroads. It is yet one of the "new states," which has offered and is still offering inviting fields for such enterprises. Nothing has done more towards developing the State and bringing it into public admiration than the various lines of railroad penetrating the different sections of the State. Many look upon a railroad with distrust and aversion, almost placing it in the catalogue of public robbers. Strange as it may appear, this opinion is formed after having sought its construction and even after having voted county subsidies to further the project. A railroad is built and run for two purposes: to make money for its owners and to accommodate the people. They are not built as playthings for the boys nor as subjects of demagoguery for the average politician. It has been well said that in conducting the business of a railroad it is well nigh impossible to suit every community and every individual. The trouble is, each community and individual wants the railroad operated for his or its special convenience. Of course it is impossible. to do this. Then what should be done? How should these great enterprises be managed? To what extent should Congress or the States undertake to govern them? These are no idle questions. To-day the answer to them is puzzling professional railroad men and statesmen of the deepest thought. It is impossible for the legislator of one day, of one session, or even of one year, to comprehend these great questions and evolve from them relief to both the roads and the people. I believe the created is always subject to the creator; that at no time can it infringe upon popular rights, disregard the inherent power of the people of the State-that of self-defense-which can never be legis

lated away nor surrendered; which principle has been clearly enunciated by the Supreme Court of the United States in what is known as the Granger cases. It is one thing to have such rights reserved and sustained by judicial decisions, and another of equal importance to exercise those rights. If there is an evil in the growth and assumed power of great corporations, there is an equal evil in oppressive and empirical legislation. Recurring to the first question, how to manage these great enterprises, common sense suggests but one leading answer, to wit in such a way as for them to accommodate the greatest number at the lowest reasonable rates; and, upon the other hand, for that number to give the same consideration to the capital invested in them as if it were invested in houses, lands and merchandise, and not seek to destroy it by unjust legislation and the decisions of partisan courts. Railroads are entitled to the same rights and protection as other property -no more, no less, and no one should complain at such a law and such decisions. If the law is wrong, then, as Gov. Sherman says, amend it, for there should be no distinctions among the people. If not wrong, let us cease from inveighing against the roads, and resolutely work for the interests of the people, for the interests of the State and the interests of the roads. The second question is, to what extent should Congress or the States undertake to govern them? I answer, by as little legislation as possible, and that upon vital points. Railroad managers and the people are not necessarily in antagonism to each other. Wherever a railroad goes we see additional value given to the land and a new value given to the products of the land. Transportation is one process of manipulation which transforms the products of the wheat fields into bread, life and happiness for the hungry thousands elsewhere. Let us not forget this important fact, and we will find our opposition to railroads gradually diminishing. As said by a thoughtful writer: "Gradually the railroad managers have reached a better understanding of the fact that the prosperity of their corporations and the growth of their properties were indissolubly linked with the growth and prosperity of the community from which they must derive all their business. This view is clearest among those managers who have control of the most diversified interests, among those whose lines stretch through different States and supply different communities."

Railroads are common carriers and are entitled to receive a just compensation for their labor. What is just compensation to one road would not be to another. No Congress, no Legislature, can prescribe, by its own acts, nor by or through a Board of Commissioners, an inflexible rule or rate of fares and freight applicable, at all times, and to all railroads, which would not build up one road and at the same time destroy another. Many causes forbid such an iron rule. Commercial depres

sions, bad harvests, meteorological emergencies, manifold reasons beyond the power of human control or foresight, may, in a few months, reduce the demand for transportation to the minimum, where the tariff which yielded a fair profit, when there was more freight to be moved, would not yield any profit at all under those adverse circumstances. Legislators might as wisely undertake to fix the price of corn for the farmers for a series of seasons or years. The minimum rate one season might be more than the maximum the following season. Business and competition are the true regulating forces in transportation, more potential than legislative acts, and more wisely applicable to all conditions. No fixed rule can be adopted in regard to freight and passenger rates. As a rule, the rates of to-day are less than the rates of one year ago. As science and skill in railroad business secure lower rates of operating expenses, so they at the same time secure lower rates in freight and passenger transportation. The rates in existence in Missouri ten years ago would be considered inequitable at the present time, by the managers of the roads, and would not be submitted to by the people. To show you what progress has been made in such reductions, I append a table relating to the business of the main line of the Pennsylvania Central Railroad. This presents a comparative idea of such reductions on all the lines.

There are very few persons who have any conception of the rapidity with which the rates of transportation have been reduced in this country since the close of the late civil war. The following table, confined to the business of the main line of the Pennsylvania Railroad between Philadelphia and Pittsburg, gives some information on this subject, and the figures are authentic. It shows, for each year since 1865, the number of tons of freight moved one mile, the rates per ton per mile, and the amount of reduction in any given year, computed on the difference between the rate in that year and the rate charged in 1865: