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Statement of Income and Expenses for the year ending Nov.

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The earnings on freight are given above, and not the receipts on freight,which will account for the variation from the statement of receipts at the beginning of the report.

This statement shows that the net income of the business of this corporation during the year amounted to $208,191, which is equal to 7 1-6 per cent. on the capital stock of the corporation. It shows that the rate of profit on that portion of the business, which is done in connexion with the Norwich and Worcester road, including the steamboat line, under the arrangement which has been alluded to, with the directors of that road, is less than that on the local business of the road, the line being such that, on account of the competition of other lines, and other modes of transportation, it must be done at low rates, or it would be transferred to other routes. It shows also that the rate of profit arising from the portion of the business which consists of the conveyance of passengers and freight, to and from the Western road, is still much less, affording a very inadequate compensation, in proportion to the amount of the business, for the capital required for transacting it, and even for that proportion of the capital which was expended for the special accommodation of this part of the business.

Such being the results of the business of the year, as governed by the rule of division prescribed by the referees, no one can doubt that the duty which rests on the directors, of protecting the rights of the corporation, forbids their assenting to the obligations of the award, for any longer period than it is already binding upon them. They are willing to substitute for it either the principle of mutual arrangement embraced in their proposition of the 23d inst., or any other equitable principle of establishing the rate of compensation for the joint business, and dividing the proceeds between the two roads. But they are not willing to admit the principle, that any part of the earnings of their own road belong to any other corporation, or that the rates of compensation can be established but by their own act. They are taught by the experience of this award, that a tribunal of the most upright and intelligent men, with the most anxious desire of doing justice between the parties, if not particularly conversant with the details of the business, are incompetent to judge from the representations of other persons, and the forms of proceeding which must necessarily govern such investigations, of the just claims and rights of the parties.

This statement of the proceedings of this board, in regard to all the matters in controversy between them and the Western Rail-road Corporation, is presented to the Legislature as a part of our Annual Report, in consequence of the petition which that corporation has announced its intention of presenting, praying the Legislature to interpose

by establishing the rates of compensation which shall be received for the transportation of persons and property on this road.

By the 5th section of the act to establish the Boston and Worcester Rail-road Corporation, it is provided, "that a toll be and hereby is granted and established for the sole benefit of said corporation, upon all passengers and property of all descriptions, which may be conveyed or transported upon said road, at such rates per mile as may be agreed upon, and established from time to time, by the directors of said corporation." There is nothing in the act establishing the Western Railroad Corporation, which invalidates this grant in its substance or form. There is nothing which exempts "persons and property " brought from the Western Rail-road, from the liability to the toll here granted, or which diverts the toll thus granted for "the sole benefit" of this corporation, to the use of another corporation; nor is there anything in that or in any other act, which deprives the directors of this corporation of the power here granted, to agree upon and establish from time to time such rates of toll, as they shall judge to be just and reasonable. Nor has anything been alleged, in the manner in which the directors have hitherto exercised the power here granted, of establishing the said tolls for the use of their corporation, by which they have forfeited the power of doing it exclusively. The directors are aware that the ground on which the Western Rail-road Corporation rest their petition, that the Legislature will interpose to establish rates of fare for their benefit, on the Boston and Worcester Rail-road, is the reservation contained in the 14th section of their act of incorporation, in the following words: "The Legislature may authorize any company to enter with another rail-road, at any point of said Boston and Worcester Rail-road, paying for the right of using the same, or any part thereof, such a rate of toll as the Legislature may from time to time prescribe, and complying with such rules and regulations as may be established by said Boston and Worcester Rail-road Corporation, by virtue of the 5th section of this act."

It is not questioned, that the Legislature, on establishing the Western Rail-road Corporation, might have authorized it to enter with their rail-road upon the Boston and Worcester Rail-road, in which case the parties would have been subject to the provisions of the said section. But the Legislature saw fit to establish the said corporation without the right of so entering upon the said Boston and Worcester Rail-road, but "from the western termination" thereof to the western boundary of the State. The charter so granted was accepted, the company or

ganized, and the road constructed, without any such provision. The two rail-roads were united, as has been herein before stated, by mutual agreement of the two corporations, and in consequence thereof, and for the purpose of carrying out more effectually the object of the said union; this corporation has made the expenditure of capital already referred to, in the full faith that, in making these expenditures, after the agreement had been made and executed for the union of the two roads, no act of the Legislature would be passed, which would change the relative rights of the two corporations, by taking away the toll granted for the sole use of one, and conferring it as a donation upon the other.

If it can be supposed that the reservation of power, in the 14th section of the charter above recited, was intended to apply to the case of a corporation already existing, under a charter which gives them no right to enter upon or to use the Boston and Worcester Road, the Legislature surely would not undertake to exercise the authority so reserved, except in case of some urgent necessity, arising from the abuse by the directors of the power granted to them of establishing rules and regulations, and fixing the rates of toll. Such abuse has not been alleged, and it surely has not been practised. On the contrary, it has been shown above, and it is otherwise notorious, that the rates of fare which have been established by them are moderate and reasonable; that, in the aggregate, they are materially lower than on the Western road itself; they are much lower than on any other class of customers of the Boston and Worcester road, and lower than the rates on the general traffic, exclusive of coal transportation, on any other rail-road in the United States. The directors feel assured that, under such circumstances, the Legislature will not interfere with the exercise of a power granted to the directors of this road, which has been hitherto exercised by them with so much moderation and so much consideration of the interests of the Western road, by reducing the rates of fare which they have established or propose to establish. It is apparent, that in so doing, they would compel this corporation to rely upon their local customers as their chief resource for an income from their capital. The Legislature will hardly deem it just or reasonable to make so marked a distinction in favor of those who travel or transport their property on the Western Rail-road, as will either deprive the stockholders of this corporation of the reasonable income which it was the intent of their charter to secure to them, or compel them to assess that income upon certain classes of their customers, and to exempt a

very large class who derive as great a benefit, at least, as any, from the use of the road.

Were the effect of such a proceeding in no degree injurious to the rights of the stockholders of this corporation, the directors would deem it unjust towards that portion of the public who have the most frequent occasion to make use of this road. There is doubtless a degree of discrimination which, for reasons sufficiently obvious, may be justly made, in the rates of compensation exacted from different classes of passengers, with a view of promoting branches of business which would otherwise fall into some other route of transportation. But the directors of this road are unwilling to depart from the principle of uniformity in proportion to the nature and degree of the service rendered, any further than the discrimination can be justified by some good and intelligible reason. On this consideration, in part, they have recently been constrained to make a reduction in the ordinary rate of charge, which had regulated their passenger fares for a number of years. From the opening of their road, to the month of December last, they had demanded as the general rate from all first class passengers, passing over the whole road, a fare of a dollar and fifty cents, with the exception of a short period, when the charge was two dollars. From this rule was excepted only the passengers proceeding to and from the Norwich and Worcester, and the Western Rail-roads, on whom, in conformity with the arrangements above alluded to, they have uniformly assessed only a dollar and twenty-five cents. This rate was further abated under the award of the referees to a fraction over a dollar and eleven cents, making a difference of about thirty-nine cents between it and the charge on local passengers.

At the time when the rate of a dollar and fifty cents was established, it was, as has been already remarked, a low rate compared with the charges on the other rail-roads, as well as low comparatively with the amount of charges to be defrayed out of the gross income. But in consequence of the increase in the general income of the road, and of a very general reduction of rates on other rail-roads, this charge began to be regarded as comparatively high, and in some degree at variance with the principle which has governed this board in the establishment of the rates. Urgent applications were in consequence made for a reduction of it. This claim was enforced by reference to a reduction which had been made on passengers in a special train, established between Boston and Newton, (embracing, however, comparatively a small amount of travel,) and more especially to the difference of compensa

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