To His Excellency, PHINEAS C. LOUNSBURY, Governor of Connecticut:

We respectfully submit our report for the year 1887, being the thirty-fifth annual report of the Railroad Commissioners of Connecticut, together with the returns made to us by the railroad companies for the year ending September 30, 1887, and the statistical tables and statements compiled therefrom. The first railroad in Connecticut was opened for public travel fifty years ago the tenth day of last November. On that day regular trains began running over the New York, Providence & Boston railroad between Stonington, in this State, and Providence, R. I. Connecticut then had about six miles of railroad, and the whole United States fifteen hundred miles; now Connecticut has eleven hundred and fifty-nine miles of track, and the whole country one hundred and fiftyone thousand miles.

By the construction of 11.6 miles of the Meriden & Waterbury railroad, not included in the returns for the year, our State again enters the ranks of railroad building states, though within three of the bottom of the list, every State and Territory, except Vermont, Rhode Island, Delaware, and Nevada having added to their railroad mileage during the year, with a total of 12,736 miles. The greatest number of miles of track reported as laid in any one State during the year was 2,070 miles in Kansas, while Texas reports 1,055 miles, Nebraska 1,101 miles, Colorado 818 miles, and Dakota 760 miles. The following table, from The Railway Age, shows the miles of track reported as laid in each year for the past twenty years, but does not include the 11.6 miles laid by the Meriden & Waterbury, which we have included above:

From this table it appears that the miles of track laid last year exceeds even that of 1882, and makes reasonable the estimate which a few years ago appeared baseless, that by the year 1900 there would be over 225,000 miles of railroad in this country. This would require only one mile of railroad to every thirteen square miles of territory, while Connecticut now has about one mile of railroad to every five square miles, and Massachusetts about one to every four square miles.

Except the work done on the Meriden & Waterbury, there has been no new construction in the State during the year, unless we include the short piece of track put down at Hawleyville, to connect the Housatonic main line from a point just above the station with the branch line between Hawleyville and Bethel, on the Danbury & Norwalk division, for the purpose of making a connection by that route between the Housatonic main line and tide water at Wilson's Point on the Danbury & Norwalk. At the date of our last report it was proposed to make this connection over the Brookfield branch by building about one-third of a mile of road at Danbury. This would have involved crossing the New York & New England railroad, and there were other objections also, so that, after the hearing upon this proposed location had been adjourned several times, the project was abandoned, and the connection made a Hawleyville, over which a portion of the freight which formerly went to Bridgeport, and thence over the New York, New Haven & Hartford railroad, is now sent. Since the date of our last report the control of the New Haven & Derby Railroad Company has passed into the hands of the parties in control of the Housatonic and of the

New York & New England; so also has the organization of the Housatonic Valley Railroad Company, but instead of proceeding under the latter organization to make the connection between New Haven and the west it is proposed to accomplish the same purpose by building a branch of the Housatonic from Botsford's Station to a point about three miles northerly from Shelton, and a branch of the Derby across the Housatonic river to connect with the branch from Botsford's. The hearings on the petition for our approval of the location of the Housatonic branch were begun on the 4th of this month. The capital stock of the Housatonic Railroad Company at the date of their last return was, and for some time has been, made up of $820,000.00 of common stock and $1,180,000.00 of preferred stock. The latter was entitled to eight per cent. cumulative dividends. No dividends have been paid on the common stock, and considerably less than eight per cent. on the preferred. In November last the management sent out a circular announcing that a settlement had been effected of all claims by preferred stockholders for back or unpaid dividends, and for taking up the old common stock. The proposed settlement involves the possible increase of the capital stock of the company of over $600,000.00, and the matter is of general interest only as it involves the question of the legality of the proposed proceeding. As is well known a law was passed by our legislature is 1878, which undertook to regulate and control the subsequent increase of capital stock by our railroad companies. This law required that whenever a company desired to increase its capital stock, it should make application to the Railroad Commissioners, setting forth the amount to which, and the purpose for which, it desired to make such increase, and that the Commissioners, after hearing, should report the essential facts found to the next session of the General Assembly with their recommendation whether the increase should be allowed, and if so, the manner in which, and terms upon which, it should be issued, and further providing that no company should increase its capital stock except by special authority of the General Assembly, to be iven only on recommendation of the Commissioners; also

providing that it should not be necessary for the act to be accepted by any company before it should become operative as an amendment to the charter of the company, and finally repealing all acts and parts of acts which were inconsistent. None of the steps required by this act of 1878 have been taken in the case of this proposed increase of stock, it being claimed that certain authority conferred by a special act or resolution passed in 1870 was not taken away or in any way impaired by the subsequent law of 1878. By the resolution of 1870 the directors of the company were authorized to settle with the holders of the preferred stock for their claims, either by funding the claims or by the issue of additional preferred stock therefor, and in order to carry out the settlement the company was authorized to issue the necessary amount of additional stock. And the opinion of learned counsel has been given that the proposed increase of stock is legal under and by virtue of this special resolution. On the other hand it is the opinion of eminent counsel that whatever power, to increase the amount of its capital stock, was conferred by the resolution of 1870, was revoked by the act of 1878, and that any increase except in accordance with that law, no subsequent special authority of the General Assembly having been given, would be void. It has been further claimed that this proposed action would be such a violation of law as it is made our duty to take official notice of; but it has seemed to us that in the absence of any written request from a holder either of the stock or securities of the company, it was not an occasion for us to interfere.

The completion of these branches of the Housatonic and of the Derby, will bring New Haven into direct connection with the Housatonic and the New York & New England system. This system of roads has also been enlarged by the termination of the foreclosure proceedings which have been pending for some time on the petition of the New York & New England against the Connecticut Central Railroad Company, and this road with its twenty miles will now become an integral part of the former, and as the accounts of the Norwich & Worcester road are now kept with the general accounts of