665.36; operating expenses, $330,475.22; net earnings, $40,190.14; interest paid, $111,654.50. The Texas and Pacific Railway Company rendered its customary report to the department on October 5, 1878, which was referred to the Auditor. This officer called for explanations as to the report, so as to bring the information therein contained within the requirements of the act of 1871, and repeated his requests for reports under the act of June 19, 1878. These explanations, it is understood, will be furnished by the company, but it has so far declined to report under the act of June 19, 1878. From the report and other unofficial sources the following is compiled for the year ending June 30, 1878: Miles subsidized, 443.86; miles operated, 443.86; number of locomotives, 49; passenger-cars, 32; baggage, mail, and express cars, 11; freight and other cars, 986; par value of shares, $100; stock issued, $7,018,500; funded debt, $18,488,000; floating debt, $1,255,113.60; total debt, $19,743,113.60; total stock and debt, $26,761,613.60; cost of road, $26,540,239.61; passenger earnings, $594,030.84; freight earnings, $1,644,753.03; miscellaneous earnings, $77,787.88; total earnings, $2,316,571.75; operating expenses, $1,448,329.66; net earnings, $868,242.09; interest paid, $659,461.89; granted lands unsold, 18,000,000 acres. The Southern Pacific Railroad Company has referred the law and the requirements made under it by the Auditor to its law officers and has not made any report. The following facts and figures have been compiled from unofficial sources for the year ending June 30, 1877: Miles subsidized, 711.95; miles operated, 711.95; number of locomotives, 43; passenger-cars, 69; baggage, mail, and express cars, 10; freight and other cars, 1,024; stock subscribed, $38,122,000; par value of shares, $100; stock issued, $36,763,900; funded debt, $29,300,000; floating debt, $994,861.03; total debt, $30,294,861.03; total stock and debt, $67,058,761.03; cost of road, $66,495,837.04; passenger earnings, $598,529.49; freight earnings, $654,303.78; miscellaneous earnings, $2,300,171.29; total earnings, $3,553,004.56; operating expenses, $1,724,174.41; net earnings, $1,828,830.15; interest paid, $1,817,449.50; lands unsold, 12,061,206 acres. The Northern Pacific Railroad Company has made full and acceptable reports. The following facts are shown: For the year ending June 30, 1878, miles subsidized estimated at 2,000; miles operated, 555; number of locomotives, 48; passenger-cars, 22; baggage, mail, and express ears, 24; freight and other cars, 1,196; stock authorized, $100,000,000; par value of shares, $100; stock issued, $68,438,543.11; floating debt, $320,125.50; total stock and debt, $68,758,668.61; cost of road, $20,872,051.58; passenger earnings, $318,745.82; freight earnings, $745,517.28; miscellaneous earnings, $80,502.61; total earnings, $1,144,765.71; operating expenses, $608,788.99; net earnings, $535,976.72; lands unsold, 45,000,000 acres. The Saint Louis and San Francisco Railway Company of Missouri, purchaser of the Missouri portion of the Atlantic and Pacific Railroad, and successor of that company, has complied with the law and rendered reports. The following is compiled therefrom for the year ending December 31, 1877: Miles subsidized, 292.50; miles operated, 363.50; number of locomotives, 28; passenger-cars, 10; baggage, mail, and express cars, 8; freight and other cars, 738; par value of shares, $100; stock issued, $21,289,608; funded debt, $5,278,982.26; floating debt, $49,612; total debt, $5,328.594.26; total stock and debt, $26,618,202.26; cost of road, $26,734,718.15; passenger earnings, $230,242.57; freight earnings, $1,023,909.89; miscellaneous earnings, $69,791.30; total earnings, $1,323,943.76; operating expenses, $584,816.91; net earnings, $739,126.85; interest paid, $734,740.91, annual interest payment being $549,340 in gold; lands unsold, 915,654 acres. The Burlington and Missouri River Railroad Company in Nebraska at first complied with the requirements of the law, but, acting under legal advice, the president of this company referred further requests to the directors for a final decision. The Oregon and California Railroad Company has complied with the law and rendered reports accordingly. The following facts are shown for the year ending June 30, 1878: Miles subsidized, estimated at 300; miles operated, 200; number of locomotives, 14; passenger cars, 11; baggage, mail, and express cars, 3; freight and other cars, 227; par value of shares, $100; stock issued, $20,000,000; funded debt, $10,950,000; floating debt, $800,000; total debt, $11,750,000; total stock and debt, $31,750,000; cost of road, $5,422,958.32; passenger earnings, $227,524.15; freight earnings, $402.286.07; miscellaneous earnings, $37,381.18; total earnings, $667,191.40; operating expenses, $396,000; net earnings, $271,191.40; interest paid, $158,775; lands unsold, 3,000,000 acres. The Oregon Central Railroad Company has rendered reports to the Auditor. For the year ending June 30, 1878, the following is reported: Miles subsidized, 47.50; miles operated, 47.50; locomotives, 4; passenger ears, 2; baggage, mail, and express cars, 2; freight and other cars, 62; stock subscribed, $5,000,000; par value of shares, 100; stock issued, $4,980,050; funded debt, first-mortgage bonds, $4,695,000, issued and delivered to trustees as security for $1,000,000 borrowed money; floating debt, $1,182,507.58, including $1,000,000 secured by first-mortgage bonds; total debt, $5,877,507.58; total stock and debt, $10,857,557.58; cost of road, $1,201,927.97; passenger earnings, $25,337.05; freight earnings, $44,532.27; miscellaneous earnings, $2,397.07; total earnings, $72,266.39; operating expenses estimated at $72,266.39; interest paid, $98,000; lands unsold, 1,200,000 acres. Of the railroad companies which have received grants of land from the United States through State or Territorial governments, the following have not rendered reports by reason of interruption of business during the past four months in consequence of the prevalence of yellow fever in the Southwestern States, viz: The Memphis and Little Rock Railroad Company, the Vicksburgh, Shreveport and Texas Railroad The following have complied in a measure with the requests of the The following railroad companies are preparing to comply with the requests of the Auditor, viz: The Little Rock and Fort Smith Railway Company, the Memphis and Little Rock Railroad Company, the Atchison, Topeka and Santa Fé Railroad Company, the Chicago, Rock Island and Pacific Railroad Company, and the Missouri Pacific Railroad Company. Four months only having elapsed since the establishment of the bureau, most of which time has been consumed in organizing and in correspondence with railroad companies, it became questionable whether any report of its operations could be made at so early a day, and in consequence it is necessarily incomplete. The Auditor's report is accompanied by an appendix, containing statements and compilations of facts relating to the Pacific and land-grant railroad companies, the laws affecting them, official correspondence, statements of the affairs of the companies, their receipts, expenditures, and operations, the accounts between the United States and the Pacific Railroad companies, the condition of the respective land-grants, and other matters of general interest in respect to railroad companies. It will be seen from Appendix C of the Auditor's report, that about 196,424,800.68 acres of land have been granted for railroad purposes, of which, to June 30, 1878, 31,014,496.7 acres were patented. The acts of Congress making these large grants were passed with conditions intended, in a measure, to repay the people for such valuable donations; but, until the passage of the act creating the Bureau of the Auditor of Railroad Accounts, the government had no certain way of ascertaining whether these conditions were complied with, nor was it possible to know what they were worth. The recommendations of the Auditor in regard to legislation are worthy of consideration. THE PRO-RATE QUESTION. The suit of the Kansas Pacific Railway Company et al. vs. The Union Pacific Railroad Company, instituted January 21, 1875, in the United States circuit court of the district of Nebraska, commonly known as "the pro-rate case," has not been determined. In view of this fact, and the fact that legislation bearing upon this question is now pending in Con 1 gress, and that much complaint continues to be made against the Union Pacific Railroad Company for non-compliance with the requirements of law in this respect, it is hoped that the whole subject will receive early consideration by Congress, so that some final settlement of these difficulties may be had. THE GOVERNMENT DIRECTORS. The report of the government directors of the Union Pacific Railroad Company has not yet been received, but it is understood that it will be shortly made, and will be laid before Congress during the present session. PENSIONS. The number of unsettled pension claims of all classes at the beginning of the year was 91,444, of which 49,369 were original Army invalid claims, 5,610 invalid increase; 32,969 original widows, dependent relations, and minors, 907 widows increase; 1,053 original Navy invalid, 65 invalid increase; 485 original widows, dependent relations, and minors, 1 widow increase; 448 survivors War of 1812, and 537 widows. During the year there were 67,218 new pension claims of all classes filed, of which 18,812 were original Army invalid, 21,915 invalid increase; 6,661 original widows, dependent relations, and minors, 516 widows increase; 300 original Navy invalid, 182 invalid increase; 131 original widows, dependent relations, and minors, 14 widows increase; 2,789 survivors War of 1812, and 15,898 widows. There were filed in addition 291 claims for bounty land warrants. Besides these, 5,095 claims of the several classes which had been rejected were reopened for further consideration. Of the new claims, 18,240 were under the act of March 9, 1878. During the year, 43,370 pension claims of the various classes and 394 claims for bounty land warrants were settled. The whole number of unsettled pension claims at the close of the year was 120,387. As shown by an actual count in all the agencies, there were at the beginning of the year 226,643 pensioners on the rolls. At the close of the year there were on the rolls 223,998 pensioners, a decrease of 2,645. Owing to the large number of 1812 claims, which will be settled within the year, it is probable that there will be a considerable increase in the number of pensioners during the current year. The amount appropriated for pensions for the year ending June 30, 1878, exclusive of surgeons' fees and the salaries and fees of the agents for paying pensions, was $27,850,000, of which $26,530,792.10 were disbursed for pensions, leaving unexpended $1,319,207.90. For a more particular statistical account of the transactions of the Pension Bureau, reference is made to the Commissioner's annual report. The special service division of the office investigated during the year 1,830 cases, resulting in a total saving to the government, by dropping from the rolls the names of those not entitled to receive pensions, the rejection of cases presented in proper form but found to be without merit, the reduction of pensions already granted, and the refanding of money improperly collected by pensioners, with one year's pension added in each case, of $402,096.95. The total cost of the investigations to the fund appropriated for the expenses of the special service was $38,235.80 In referring to this special work of his office the Commissioner says: Considering the extraordinary opportunities for the successful prosecution of fraudulent or unmeritorious claims which exist under the present system of adjudication, in connection with the fact that the Commissioner of Pensions has no authority to go out and hunt for fraud, but is limited by the statute to the investigation of such cases only as suspicion attaches to in the usual routine of the office, the investigations of the last year, as well as those of the preceding year, furnish a very suggestive lesson. I am convinced that a great number of persons have been pensioned who had no just title, and that the number of that class is being constantly increased in the settlements which are now going on, and this must continue to be the case until some measure shall be adopted by which the truth of the parol testimony which is offered can be tested. No such test is possible under the present system. The annual expenditure of so large an amount of public money should certainly have thrown about it all the safeguards that are attainable by improved methods of settlement and payment. The greatest care should be taken to establish beyond doubt the right of a claimant to pension money; for, once allowed, it becomes through a long series of years an annual tax upon the government. The results of investigation into a limited number of claims which have attracted suspicion appear to justify the conclusion arrived at by the Commissioner, that the present system of examining the evidence on which pension is allowed is defective and ought to be corrected. In two previous annual reports the Commissioner recommended the substitution of a corps of efficient surgeons, to be assigned by districts throughout the country and assisted by competent clerks, for the present unwieldy and unreliable system of medical examination, which requires the services of over 1,500 examining surgeons. By the system proposed, the claimants and their witnesses would be brought face to face with the officers of the government, a more accurate knowledge would be received by the facts set forth, and more reliable data than can be now obtained would be secured for the settlement of claims. In his present report he states that another year's observation and experience have only tended to confirm his previous opinion that the change of system proposed is necessary and that it is both feasible and economical. The magnitude of the interests involved commends this proposed system to the considerate attention of Congress. If on examination it is found to be an improvement on the present one, no time should be Jost in securing the legislation necessary to the change. The consolidation of pension agencies, which went into effect July 1, |