proved June 25, 1868, the Pacific Railroad Companies are required to make certain annual reports to this department, and the government directors are likewise required to communicate, from time to time, information in regard to the affairs of the companies, such as should be in the possession of the department.
Reports have been made by the several companies from year to year; but none of the reports rendered have given that full and specific information in regard to the receipts, expenditures, and indebtedness of the roads which is called for by law, and which is necessary to a full knowledge of their true condition.
The reports made annually by the government directors have furnished much valuable information in regard to the roads, and have intimated and suggested many things whereby the condition of the roads could be improved.
Whether the laws now in force are repealed and new laws passed or not, injustice to the gentlemen who are now filling the positions of government directors, as well as to enable the government to utilize and systematize matters connected with these railroads, in which there is so much at stake, legislation looking to more practical methods of obtaining information seems to be absolutely required.
In order that the amount of net earnings be properly and accurately ascertained, it is desirable that monthly reports, instead of annual ones, be made to this department on proper forms to be prepared and furnished to all the Pacific railroad companies. The business of the two main companies is assuming such large proportions that the annual report is too slow, and altogether of too summary a character to serve the purpose for which it was intended. The government should receive its information in regard to the business and condition of these roads just as often and just as promptly as a board of directors or any officer of the company. The companies should be required to keep their accounts in such manner as to enable them to give promptly and with accuracy any information required by the department.
One of the difficulties at present in the way of obtaining proper information is the fact that the companies put their own construction upon the laws, as to what reports are required of them; and whether they report or not according to the construction of the department, there is no penalty for non-compliance. There is no uniformity in the manner of keeping their accounts or rendering reports to the government.
Not to go too much into detail, it may be stated, that while the law requires that the reports called for shall contain “a statement of the indebtedness of said company, setting forth the various kinds thereof,” the companies report the amount of their funded debt, leaving out their floating debt — their entire indebtedness — or failing to give the details thereof; so, with the required “statement of the expense of said road and its fixtures,” the entire annual expense of operating as well as the amount invested in new property or improvements — fixtures — is evidently
