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Kansas and Missouri. Since that date this company has constructed one hundred and fifty (150) miles of its road, which you have accepted. The government commissioners are now examining an additional section of twenty miles, completing the road for a distance of three hundred and five (305) miles from said initial point. The company report the road as provided with round-houses, repair-shops, turntables, water tanks, sidings, &c., sufficient to meet the immediate wants of business, and that the necessary warehouses and depot buildings have been erected at the stations for the accommodation of passengers and freight.

The equipment now in use consists of twenty-five (25) locomotives, eighteen (18) passenger and seven hundred and thirty-six (736) other cars. Contracts have been made for two locomotives, two passenger and one hundred and forty (140) other cars. Iron has been ordered sufficient to complete the road to the 335th mile, nearly all of which has been delivered.

The aggregate earnings of the company for ten months and fifteen days, from October 15, 1866, are represented to have been one million two hundred and twenty-six thousand four hundred and eighty-three dollars and eight cents, ($1,226,483 08.) It is also represented that during the same period the business done for the government amounted to three hundred and fifty-eight thousand nine hundred and forty-nine dollars and forty-nine cents, ($358,949 49 ;) that the fifty per cent, retained therefrom is in excess of the interest paid by the government on the bonds issued to the company during ten months and fifteen days, six thousand one hundred and eighty-nine dollars and fifty-three cents ($6,189 53.)

A table is submitted showing that the amount retained by the United States Treasurer from that due the company on the government business, for the month of August last, is nearly eight per cent. per annum of the princicipal of the bonds issued to the company on account of the construction of the road. This would repay the principal at no distant period by the government business

at maturity is therefore considered by the company to be fully assured, and the road as being built, so far as the government is concerned, simply by the loan of its credit for a term of years upon ample security, and without the actual expenditure of a single dollar from the public treasury. The company have organized and sent into the field, during the past year, three large surveying parties, and have already had careful instrumental examinations made, covering an aggregate distance of more than 1,300 miles. Two lines have been run from Fort Wallace to Denver, and an advantageous route discovered. One has been surveyed from Fort Wallace to the Arkansas river, and thence up the Purgatory valley, through the passes of the Raton mountains, to Fort Union, and with two lines thence, through the easternmost range of the Rocky mountains, to Albuquerque and Fort Craig, on the Rio Grande. Another has been examined up the valley of the Huerfano river, through the Sangre de Christo Pass, via Fort Garland, to the Rio Grande, and thence, via Santa Fé, to Albnquerque. Surveying parties, organized into two divisions, are now making a careful survey of two general routes from the Rio Grande to the Pacificone along the thirty-fifth parallel west from Albuquerque ; the other from Fort Craig, along the thirty-second parallel, by what is known as the Gila route. The surveys have met the most favorable anticipations. At no point will the grades exceed the maximum allowed by law for the Pacific railroad, and such grades will be for short distances, and at only two or three points between Fort Wallace and the Rio Grande. The highest altitude attained on this line is 7,846 feet above tide-water. The company express the conviction that had the work not been delayed by unexpected difficulties with the Indians, the road would have been finished to Fort Wallace by the end of the present year, and they have every reason to expect that it will reach a point 335 miles west from the Missouri river by the 31st proximo.

Forty miles of the road of the Central Branch Union Pacific Railroad Company have been accepted since the date of my last annual report, and the gorernment commissioners are now engaged in examining another section of twenty miles.

This company, after the Union Pacific Railway Company, Eastern Division had vacated its line along the Republican fork of the Kansas river, claimed that, under existing laws, they were entitled to extend their road from its intersection with such vacated line, and on the latter to the one hundredth meridian, and to receive, in aid of the construction thereof, the same subsidy in lands and bonds per mile as for the first hundred miles of their road. The department, February 19, 1867, rejected the claim upon the ground that the promised subsidy was confined to " one hundred miles in length next to the Missouri river."'The lands on such yacated line, that had been originally withdrawn, were, therefore, restored to their original status.

It appears from the company's report, dated the 11th of October last, that the road has been definitely located for one hundred miles, and terminates in the valley of the Little Blue river, near the mouth of Coon creek, in township four, range vix, east of the sixth principal meridian, in Marshall county, Kansas. The construction of bridges occasions a heavy expense. The most important is that across the Big Blue river, four hundred and thirty-four feet in length, and thirtyone feet above low water. The equipment of the road consists of six locomotives, two passenger and one hundred and forty-four other cars. A substantial round-house, with stalls for six locomotives, a machine shop, and commodious depot buildings have been erected. Other buildings are in process of erection, A ferry, with a first-class side-wheel boat, has been established by the company on the Missouri river, at Atchison, for the accommodation of the road.

No report has been received from the Sioux City and Pacific Railroad Com. pany, and the department has not been advised of the construction of any por tion of the road.

The first section of the Western Pacific Railroad Company, of California, twenty miles in length, was accepted on the 14th day of December last. No work has since been prosecuted.

Commissioners examined the road of the San Francisco and San Jose Rail. road Company, and reported, under date of February 9, 1966, thnt, in its construction and equipment, it fully attained the standard of excellence prescribed by the Pacific railroad acts. The company made claim to an acceptance by the

government of the road, and to bonds and lande. Their agent was verbally informed that an allowance of the claim, so far from being warranted, was, in the opinion of the department, positively forbidden by law. Subsequently, on the production of additional papers, I received a communication, in which the views of the company on the subject were presented. After full consideration, I was constrained to adhere to the conclusion previously announced. I stated, how. ever, that if I had failed to recognize the just rights of the company, Congress would, no doubt, at its approaching session, furnish an appropriate remedy. The subject is submitted for consideration. ;

The seventh section of the act approved July 1, 1862, seems to require, upon a map being filed designating the route of the Union Pacific railroad, or any branch thereof, that all the lands situate within fifteen miles on each side of the route should be withdrawn from pre-emption, private entry and sale. This distance is increased to twenty-five miles by the amendatory act of July 2, 1864. One of my predecessors, however, directed that the order of withdrawal should not apply to the even-numbered sections reserved by the government. The present practice, in conformity with this precedent, therefore authorizes a settlement on such sections, and, if they were surveyed at the date of settlement, recognizes the right of the settler to enter his claim either under the pre-emption or homestead laws. Conflicting opinions have been entertained by my predecessors as to the applicability to tliese lands of other acts of Congress prescribing the price of the even-numbered or reserved sections within certain prescribed distances from railways. The practice in this regard has not been uniform. The settler is now required, on entering these lands, to pay therefor the double 'minimum price. The acts of 1862 and 1864 are silent on the subject, and I respectfully submit that the question should be determined by the authoritative action of Congress.

In a recent pre-emption case, contested by the Central Pacific Railroad Company of California, it was decided by the department that the grant embraces the unsurveyed as well as the surveyed lands traversed by the route of these roads. An actual settler cannot, therefore, by settlement upon lands of either description which fall within the operation of the grant, inaugurate a valid preemption right thereto, after the local officers, pursuant to instructions, have with drawn or withheld such lands. The proviso in the act of 1864, which declares that the grant shall not defeat or impair any pre-emption or other lawful claim, has exclusive reference to such claims as had lawful inception at the date when the right of the road attached.

The Northern Pacific Railroad Company report that two 'surveying parties from Lake Superior and two from the Pacific coast have been actively engaged in the field. Explorations have been made, and the company are of opinion that a practicable route will be found. No portion of the road has been constructed.

· The Atlantic and Pacific Railroad Company, by a resolution of its board of directors passed November 20, 1866, accepted the terms, conditions, and impositions of the act approved July 27, 1866, granting lands to aid in the construction of a railroad and telegraph line from the States of Missouri and Arkan: as to the Pacific coast A map was subsequently filed showing the location of the road from Springfield, Missouri, to the western boundary of that State. Upon the basis of this map the Commissioner of the General Land Office was directed to withdraw the lands. The 18th section of this act authorizes the Southern Pacific railroad, a company incorporated under the laws of the State of California, to connect with the Atlantic and Pacific railroad near the boundary line of California, and gives it a similar grant of lands. The latter company filed an acceptance of the terms and conditions of said act, and a map showing the preliminary survey of the road from San Francisco to the Colorado river. The Commissioner of the General Land Office was instructed to withdraw the lands along the line represen ed upon that map.

The bridges across the Big Sioux river and the Vermillion, on the line of the wagon road between Sioux City and the mouth of the Big Cheyenne, have been completed. The James river bridge is unfinished. The balance of the appropriation is twelve hundred and fifty dollars ($1,250.) .

I have declined ordering a resumption of work on the projected road from the mouth of the Big Cheyenne to a point on the Niobrara road, in consequence of the hostile attitude of the Indians. The unexpended appropriation applicable to this road is twelve thousand one hundred and fifty-seven dollars and seventy cents (812,157 70.)

The Superintendent of the wagon road from Virginia City, Montana, to Lewiston, reports that it is impossible to grade and open such a road between those termini, and that a construction of one for a part of the distance would be of very little utility, as there is no local business. His efforts were directed to opening a track for the passage of loaded pack-trains; that being the only method by which goods could be transported from Columbia river to Montana. There remains of the appropriation, unexpended, eight thousand and twenty-five dollars and twenty-four cents (88,025 24.)

The architect in charge of the Capitol extension reports the completion of the portico of the south wing, and reiterates the opinion expressed in his prevous reports, that the central portico should be extended to correspond with those of the wings.

The skylights of the halls of the Senate and House of Representatives are, on account of their great dimensions, peculiarly sensitive to variations in temperature, which occasion frequent fractures. It is proposed to substitute for them others of the same description as those placed in the Supreme Court room.

There are serious objections to appropriating the committee rooms in each wing as depositories of public documents. They are needed for the uses for which they were originally designed, and the floors and walls are being injured and defaced. It is desirable that arrangements should be made for storing the documents elzewhere.

The chambers occupied by the Supreme Court, law library, and Court of Claims, and the passages between the Senate wing and the rotunda, are warmed with inproved heating apparatus; but the rotunda and the old hall of the House of Representatives are cold and often damp in winter, to the prejudice of the

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health as well as comfort of visitors. It is recommended that they be warmed in the same manner as the other passages.

If the Capitol grounds be extended to C streets north and south, as recommended by the architect, the Capitol would occupy about the centre of the enlarged area. It is universally conceded that the present limits are entirely too contracted. Justice to the adjoining proprietors requires that it should at an early day be determined to what extent their property contiguous to those limits will be needed for public uses. Squares numbered 575, 576, 687, and 688 were. appraised in 1860, by authority of Congress, as a preliminary step to their purchase. All permanent improvement of the property was suspended. The Senate subsequently passed a bill providing for the purchase of the squares, but limiting the price thereof to the appraisal of 1860. The value of real estate in that portion of the city has since then greatly enhanced. In view of these facts, the holders of this property have presented a memorial to this department urging that three disinterested appraisers be selected—one by the government, one by the property owners, and the third by these two; that Congress' shall at once decide what grounds shall be purchased, and direct their value to be fixed by the appraisers. The propriety of early legislative action is suggested.

The work upon the north portico of the Department of the Interior is nearly finished. An estimate has been submitted of the amount necessary for completing it and paving the street.

The following statement shows the amount advanced to marshals of the United States for the year ending June 30, 1867, for defraying the expenses of the courts of the United States, including fees of marshals, jurors, and witnesses, maintenance of prisoners, and contingencies of holding the courts : Alabama, northern district ...

$2, 971 00 Alabama, southern district ......

27,037 00 Arkansas, eastern district

7,479 00 Arkansas, western district

16, 896 00 California .

13, 902 00 Connecticut ....

5,677 00 Delaware

2,014 61 District of Columbia ........

84,769 50 Florida, northern district

4, 532 00 Florida, southern district ..

12, 344 85 Georgia ..................

15,774 50 Illinois, northern district ..

14, 411 00 Illinois, southern district

24, 129 00 Indiana ... Iowa ....... ..

25, 491 00 Kansas ...

21, 469 00 Kentucky ......

44,053 00 Louisiana.......

31, 634 00 Maine.........

16, 935 50 Maryland..... ..

22, 273 00 Massachusetts ....

56, 614 43

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