interest was not paid, and that foreclosure proceedings having been commenced it was their right to divide among themselves all the money on hand. This they accordingly did, and no proceedings to test the legality of the transaction have ever been commenced.

The track of this road has been improved by laying one hundred tons of steel rails, and by a liberal amount of ballasting and surfacing, together with the usual repairs of the bridges, the most important of them having been recently replaced with iron.

The gross earnings are increased $2,433.22, the operating expenses are also increased $6,990.36, making the net earnings $4,557.14 less than last year.

SOUTH MANCHESTER RAILROAD.

This road, which is only 2.25 miles in length, is managed with the same skill, economy, and financial success as the manufacturing interests are which it subserves, and for which it furnishes an outlet. The property has been maintained in good condition, and the gross earnings are 43.7 per cent., and the net earnings 14.4 per cent., upon the capital stock, showing a net profit of 6.5 per cent. upon its permanent investment. The gross earnings are $2,662.84 more than for the preceding year; the operating expenses have increased $2,964.58, and the net earnings are diminished $301.74.

BUSINESS OF THE ROADS:

CAPITAL STOCK AND INDEBTEDNESS.

The total amount of stock issued as reported on the 30th of September, 1887, was $61,975,727.46, an increase of $866,500.00, divided as follows: Boston & New York Air Line, $9,700.00; Hartford & Connecticut Western, $50,700.00; Hartford & Connecticut Valley, $76,000.00; Shepaug, Litchfield & Northern, $281,100.00, and New York & New England, $449,000.00. Of the last amount $50,000.00 was for additional preferred stock. All of the rest was in conse

quence of the conversion of bonds into stock. The increase as given for the Shepaug, Litchfield & Northern being the difference between the stock of the former Shepaug Railroad Company and that issued by the S., L. & N. on foreclosure of the first mortgage of the original Shepaug Valley Railroad Company and the re-organization of the bondholders.

The total funded and floating debt of the companies is $32,730,384.84, or $214,720.11 less than last year. The reduction has been chiefly: $77,045.48, as reported, by the Danbury & Norwalk; $107,833.74 by the Hartford & Connecticut Valley; $115,012.36 by the Hartford & Connecticut Western, and $650,000.00 by the Shepaug foreclosure; with an increase of $153,245.03 by the New Haven & Derby; $195,537.14 by the New York, New Haven & Hartford, and $360,933.73 by the New York & New England. The changes have all been in the floating debt except that the bonds of the Connecticut Valley Railroad Company, reported last year by the H. & C. V. R. R. Co., have been converted into stock of the latter, and the outstanding certificates of 1881 and 1882 have been paid, and the principal of the Shepaug Valley first mortgage bonds, amounting to $400,000.00, was last year included in the funded debt of the Shepaug Railroad Company. The total stock and debt is $94,706,112.30, an increase of $651,779.89. The amount of stock per mile of road is $14,005.61, or $36,234.09 per mile of track not including sidings, and the debt is $23,240.07 per mile of road, or $19,197.37 per mile of single track.

GROSS EARNINGS.

The gross earnings for the year were $18,149,355.96, an increase of $760,217.02, or 4.37 per cent. The passenger earnings only increased $266,598.07, or 3.43 per cent., amounting to $8,021,169.33. The increase in freight earning was $446,953.07, or 5.45 per cent., amounting to $8,830,384 15. There was a slight falling off. in the passenger earnings of the Naugatuck of $2,833.93, wholly owing to the reduction in fares, as the number of passengers carried

increased 130,679, or 24.71 per cent. There was also a slight falling off in the passenger earnings of the New London Northern, and considerable in those of the Connecticut Central. All the other companies show an increase. In freight earnings there was a falling off on the Connecticut Central, the New Haven & Derby, the New Haven & Northampton, the New London Northern, and the Norwich & Worcester, and a gain on the others. The greatest proportionate gain, both in passenger and freight earnings, was on the Housatonic and its Danbury & Norwalk Division, being about ten per cent. in passenger and fifteen in freight earnings over the combined earnings of the two companies the previous year.

OPERATING EXPENSES.

The operating expenses show a considerably greater increase than the increase in gross earnings, amounting to the sum of $12,547,603.76, an increase of $1,177,686.05, or 10.35 per cent., and being 69.13 per cent. of the gross earnings. More than one-half the increase was on the New York, New Haven & Hartford road, on which an expenditure of $501,169 26 for betterments was charged to operating expenses.

NET EARNINGS.

The net earnings as reported of course are less than last year, amounting to $5,601,752.20, which is $117.469.03 or 6.93 per cent. less than in 1886.

DIVIDENDS.

Dividends were paid by thirteen companies during the year, not including $760.50 paid on old account by the Hartford & Connecticut Western, or the $35,820 divided by the Shepaug Railroad Company, as elsewhere explained. Leaving out these payments, the total amount paid in dividends was $2,771,691 upon $33,728,277.46 of capital stock, in rates varying from two per cent. to ten per cent., and averaging 8.22 per cent. on that amount of capital. There was $27,

666,500 of stock upon which no dividends were paid, making the average 4.51 per cent. on the total capital stock issued, not including the Shepaug. There was also expended for betterments, and charged to operating expenses, $501,169.26 by the New York, New Haven & Hartford, as stated above; $14,868.56 by the Naugatuck; $33,000 by the New London. Northern; and $73,950.05 by the New York, Providence & Boston, making a total of $652,987.87 so expended.

PROPERTY ACCOUNTS.

The permanent investments, including cash and cash assets, show an increase of $1,245,932.65, and amount in all to $102,520,165.23, divided as follows: construction account, $79,655,216.79; equipment account, $10,913,175.89; other permanent investments, $2,712,982.61; cash and cash assets, $9,238,789.94. The construction account, omitting the unfinished Ridgefield & New York, averages $56,406.57 per mile of road, main line and branches, or $46,452.51 per mile of single track, not including sidings. The equipment account averages $7,748.85 per mile of road operated.

LENGTH OF ROADS.

Some slight changes having been made, by re-measurement, the total length of railroads in this State, as included in the returns, which do not embrace the Meriden & Waterbury, is 973.36 miles, of which 174.07 is double track, making the length in single track miles 1,147.43. Adding to this the 300.21 miles of sidings gives 1,447.64 as the total length of tracks in the State.

PASSENGERS AND FREIGHT CARRIED.

There were 21,580,621 passengers carried on our roads during the year, an increase of 2,369,240 or 12.46 per cent. over the preceding year. All the roads except the Connecticut Central and the New Haven & Northampton show some increase, the greatest proportionate increase having been on the New York, Providence & Boston, amounting to 27 per

cent.

The quantity of freight carried was 8,439,712 tons, an increase of 513,897 tons, or 6.48 per cent. The passengers were carried an average of 19.95 miles each, and the freight an average of 52.88 miles per ton.

TRAIN MILEAGE.

The total train mileage was 13,239,632 miles, an increase of 729,813 miles, or 5.83 per cent. The mileage of passenger trains was 6,247,192, an increase of 200,791 miles, or 3 25 per cent. The mileage of freight trains was 4,308,154, an increase of 159,624 miles, or 3.84 per cent. The miscellaneous mileage was 2,579,03.

We append a table showing the number of passengers and tons of freight carried for each of the last ten years, commencing with the first year of the present form of returns, also the mileage of passenger and freight trains, and the passenger and freight earnings, with the percentages of increase or decrease each year, and the per cent. of increase from 1878 to 1887 inclusive.