adventitious and temporary causes adverted to and explained in the report of the chief engineer hereto appended, notwithstanding an increase of nearly three-fold in the business of the road, and a considerable addition to the number of timber bridges, the cost of similar repairs did not exceed $918 per mile of road, being about twenty-five per cent. less than at the former period. The cost of repairs of machinery, engines, and cars, in 1837, was at the rate of 293 cents per mile run by the locomotives with trains, and in 1846, the cost did not exceed 16 per mile run; being little more than one-half of the former cost, although the trains hauled in the last year were, in all instances, considerably larger. In 1837, the aggregate expenses of working the road, exclusive of the expense of horse power in the streets of Baltimore, and over the old inclined planes at Parr's ridge, was at the rate of not less than 173 cents per mile run by the locomotives; and in 1846, the same expenses did not exceed the rate of 59% per mile-nearly two-thirds less than in the former period.

It has been already stated, that the proportion of the expenses of working the road to the gross receipts in 1837, was as much as 95 per cent; and it may now be added, that in 1846, the same expenses did not exceed 52 per cent. of the gross receipts. It must be observed, moreover, that this great reduction has been effected under the influence of a vastly augmented trade, of a continued dilapidation of the old and imperfect track, of a considerable multiplication of timber bridges, and of a reduction in the charges for transportation of more than 35 per cent. below the rates in 1837.

Excepting in Great Britain, where the rates of charges are high, and the wages of labor low, and where the receipts from passengers, always the chief source of profit upon railways, are much greater in proportion to those from burthen transportation, the expenses of working railways rarely, if ever, fall short of 50 per cent. of the gross receipts, and in most parts of the continent of Europe, and elsewhere, they more frequently exceed that ratio. It is to be observed, moreover, that this proportion is seldom or never maintained, except in the instances of new and well constructed railways with the most improved rail and form of structure, and with the aid of other advantages indispensable to the cheap management of such works, and where the receipts from profitable passenger traffic considerably exceed those from the transportation of burthen. Independently of the railways in England, the ratio of expenses to the gross receipts, and the economy in the working of the Baltimore and Ohio railroad, will be found to compare most advantageously with all the European works, the former being less and the working cheaper than upon the European works.

The roads in New England possess most of the advantages of newness and strength of construction, of liberal charges and large trade, and from the density of a general and manufacturing population, derive larger receipts from passenger traffic than from tonnage ; and are also universally conceded to be conducted with commendable regularity and economy. They possess besides many material advantages peculiar to that part of the Union, which would enable them to attain

a superiority over even the skill and economy of European works, which it would be difficult successfully to imitate.

With all these advantages, an investigation into the comparative cost and expenses of working the Baltimore and Ohio railroad, and of the principal New England roads, according to information derived from authentic sources, would still further illustrate the economy with which the operations of this road have been conducted.

The average cost per mile of twelve of the principal railroads of New England, including their necessary equipment, may be stated at $46,000, and that of the Baltimore and Ohio railroad, including the thirty miles reconstructed during the past and preceding years, may be taken to be about the same. If the cost of reconstructing the remaining portion of the old track, and of the alterations now in progress, be added, the average cost of the road would be more than $50,000 per mile. The average of all the expenses upon eleven of the principal New England roads per mile run by the locomotives with trains, during the year 1846, was not less than 78 cents; and that upon the Baltimore and Ohio railroad, during the same period, exclusive of the cost of horse power in the streets of the city, was, as before stated, not more than 59 cents; showing a difference of nearly twenty-five cents in favor of this road.

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The average of the proportion of expenses to the gross receipts upon the eleven New England roads, during the year 1846, was a fraction over fifty per cent., and that of the Baltimore and Ohio railroad, during the same period, may be stated at not more than fifty-two per cent. If, in regard to this part of the comparison, the superior construction and comparative newness of the New England roads, their exemption from the employment of horse power in cities, and the greater amount of passenger traffic in proportion to that of burthen, be taken into consideration, (that on the Baltimore and Ohio railroad being $654,916-14 from tonnage, and only $447,020-14 from passengers,) the cheapness of working this road would be apparent. Of all these facts and grounds of comparison, therefore, it may be safely predicated, that, as soon as the old track of the Baltimore and Ohio railroad shall be thoroughly reconstructed, and, by an adequate provision of motive power and other machinery, and of depot buildings, necessary for its general purposes, the entire road shall be placed in a finished state, the general expenses will not exceed the best economy upon any other work.

Notwithstanding, however, the confidence of the Board in the results already adverted to, and in the general system of management gradually adopted subsequent to the year 1837, they have not been insensible to the necessity of adapting it, from time to time, more perfectly to an extended road, to a rapidly increasing trade, and to the great augmentation of power and machinery demanded by the increasing business. The accumulated business, in the year 1846, and the near approach of the periodical renewal of the timber of the road over its entire line, presented an appropriate occasion to revise the general system of management, and in the month of November last, the President suggested a scheme of a modified system, and invited

the attention of the Board to the necessity of a particular examination into the present organization of the Company, and to the introduction. of some reforms which he thought might be advantageously made. He also asked the appointment of a committee by whom he might be assisted in the investigation, and in maturing the reforms that might be deemed expedient. The principal objects to be attained, by the proposed modifications, consisted in confining the general supervision and superintendence of all the departments nearer to their duties, and, by a judicious subdivision of labor, to insure a proper adaptation and daily application of the supervisory power to the objects under its immediate charge; in the multiplication of checks, and to effecting a strict responsibility in the collection and disbursement of money; in confining the Company's mechanical operations in their shops to the purposes of repairs, rather than of construction; in promoting the economical purchase and application of materials and other articles needed in every class of the service; and in effecting a strict and more perfect responsibility in the accounting department generally.

After diligent investigation, with the aid of the experience of other roads in New England, and elsewhere, the committee proposed to attain the foregoing objects by confiding the departments of transportation, of the construction and repairs of the road, and of the repairs of machinery, to a separate superintendence; each being subject to the immediate supervision of a professional engineer, under the direction of the President.

They subjected all these officers, and all other principal agents, to an annual appointment, and required satisfactory security for the faithful performance of his duties from each. They also adopted measures for the purpose of confining the receipt of money to as few agents as possible, and for insuring the prompt payment from all of monies received by them; and they prescribed a new and securely guarded system of tickets, recommended by the best experience in other companies; and imposed further checks upon conductors, and other agents, which were thought would prove effective in enforcing a rigid accountability from all. They revised and remodeled the system of accounts, and, by bringing them into the Company's office, effected a daily accountability and settlement of the account of each of the agents by the Treasurer and Secretary, under the immediate supervision of the President.

It is not proposed in this place, to do more than indicate the general features of the modified system now adverted to. It was adopted by the Board as proposed by the committee, and, as far as can be inferred from its operation, it is believed that, with such improvements as practical experience may suggest, it will fully realize the advantages expected from it, and effect all the security of which the case is susceptible. It may be further observed that, although in the execution of the system, the duties of some of the old agents were materially changed, and in some instances the employment of new ones was required, yet it has been so arranged, as that by reducing the salary of those whose duties had been lessened, the aggregate expense of the whole is less than was paid under the system it superseded. The re

port of the chief engineer, acting at present as general superintendent, hereto appended, will not only disclose the present working of the system, so far as tested by practical experience, but also contains, in addition, a general professional exposition, by that officer, of the state of the road and machinery, and of the working and operation during the year; and, by its statements on these points, will dispense with further observations in this report upon the same topics.

SECOND. Of the Washington Road.

The affairs of the Washington road are shown by the statements D and E.

It will appear from these statements that there has been a falling off in the receipts from this road, and that the diminution has been in the passenger traffic. During the past year the number of passengers has been five thousand four hundred and three less than in the year 1846, and the amount of revenue received from this source has been eleven thousand eight hundred and nineteen dollars less than in the preceding year. It may also be stated, that during the past year there was an increase in tonnage transportation of 3,109 tons, and of $2,198.87 in the revenue from that source over the year 1846. It may be inferred, therefore, that the experiment of a reduced charge, authorized by the Board in the years 1845-46, has not realized the expectations by which it was recommended; and the conclusion would seem to be warranted, that the lowest charges do not uniformly increase the amount of travel. It will, therefore, become the duty of the Board to reconsider the subject with the benefit of the experience they have already had, and to make such addition to the present charges as a full investigation may be found to authorize. The net profits from the Washington road, for the last six months, including the surplus of $6,724-19 remaining after the dividend in April last, amount to the sum of $48,131-66, of which the Board have declared a further dividend for the last six months of $2.50 upon each share of stock, leaving a surplus of $6,881-66, to be carried to the account of the current year.

THIRD. Of the further prosecution of the Road to the Ohio River.

Under this head the Board are gratified to be enabled to congratulate the stockholders, that by their action on a recent occasion one of the obstacles that has hitherto retarded the extension of the road to its ultimate destination, has been removed.

By an act of the Legislature of the state of Virginia, passed at the last session, the grant of the right of way through that state has been renewed for a period of twelve years, upon condition that the road shall be extended to the city of Wheeling without touching the Ohio river at a point lower down than the mouth of Fish creek; and according to the agreement with that city, the option of extending the road by the latter point is absolute.

The Board is not aware that until very recently any diversity of opinion existed with the public authorities, or in the community at

large, of the expediency of extending their road to a southern point on the Ohio, from which they could, with the least competition, command the trade and travel passing up the river, and most certainly form connexions with the improvements of Ohio, upon both the central and southern lines, on which they have been projected in that state. And the Board do not doubt that it is the clear, unquestionable policy and duty of the stockholders, of the state, and especially of this city, by the extension of their road to a southern point on the river, to attract the western improvements from any other point to which they might possibly be diverted, and at which they would be brought within the attraction of the rival cities north of Baltimore. A connexion with the western roads in the state of Ohio, upon either the central or southern line, in that state, would be indispensable to the success of this enterprise, and its ultimate object could be most effectually obtained by extending it so as to connect with both, and without the risk of competition with the northern rivals. In the earlier history of the company, greater reliance than at present was placed upon the river trade and travel, and the city of Wheeling was considered by the projectors of the road as not only commanding these, but at the same time insuring a connexion with the railroads on the central line of the Ohio improvements. In all the applications of the company for the right of way through the state of Virginia since the year 1842, however, the company have asked for the option of extending their road to any point on the Ohio within that state they might select above the mouth of the Little Kanawha, intending, undoubtedly, to terminate it at some point within that range of choice. Within those limits the selection must have been, and was expected to be regulated so as to insure a connexion with the Ohio improvements, both on the central and southern lines; and it would have been necessary to avoid a terminus so far south as might force the improvements on the central line to a more northern point on the river, beyond the reach of this road. It had been, until recently, supposed that the mouth of Fishing creek, twelve miles below Fish creek, presented the best medium point for both purposes; and the impression generally prevailed, that while the improvements on the southern line in Ohio could certainly connect more advantageously at Fishing creek, those on the central line could also be more easily formed at that point than at Wheeling. From subsequent information, however, it would appear that the central improvements in Ohio may connect with this road on the river as advantageously at Wheeling as at Fishing creek; while it is certain that the improvements projected on the Southern line might form a connexion at Fish creek, without increasing their length, or the distance between Cincinnati and Baltimore more than twelve miles.

The distance from Cincinnati to Baltimore on the southern line through Ohio, by the mouth of Fishing creek, may be stated at 600 miles, and to New York 800 miles; and to Baltimore, by the way of Fish creek, 617 miles, and to New York, by the same point, 817 miles. While, therefore, from Cincinnati to New York, by the way of Fishing creek, the distance would be 109 miles less through Balti