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To the Honorable the Senate and Assembly of the State of California :

The Joint Committee appointed by your honorable bodies, pursuant to the joint resolution hereto annexed, to “inquire into and investigate the proceedings of the State Harbor Commissioners and make report thereon to the Senate and Assembly, respectively, with such recommendations as the Committee may deem proper,” beg leave respectfully to say: That they have had under consideration the subject matter mentioned in şaid joint resolution, and being fully advised thereon, they now beg leave respectfully to report:

That your Committee was organized on Monday, January thirteenth, eighteen bundred and sixty-eight, and held their first session at the office of the State Harbor Commissioners, in the City of San Francisco, and that they bave continued their sessions daily from the time last mentioned up to and including the twenty-second of January, A. D. 1868. That your Committee found it necessary to procure a Clerk and Sergeant-atArms, also one Expert for the special purpose of examining the books of account pertaining to the office of said Commissioners; and your Committee sbow to your honorable bodies that in the course of the investigation and inquiry contemplated by your joint resolution, the duty devolved upon them of making a thorough and complete examination into all the contracts and leases made by the said Harbor Commissioners from the date of the organization of the Board up to the present time. Your Committee further show, that in the performance of this duty they have carefully examined the records of said office and have there found documentary proofs that each and every lease and contract made by the Board has been duly advertised as required by law, before the same were awarded or executed; and that in all cases the said leases and contracts have been open to the fair competition of bidders, and that in every instance such leases or contracts have been awarded to the bidders contemplated by law. The circumstances under which these leases were made are particularly set forth in “ Exhibit F,” filed herewith, to which reference is respectfully made.

Your Committee further show, that in making the inquiry and investigation mentioned in the joint resolution, that they have availed themselves of inuch oral testimony, which has been reduced to writing, and

is herewith filed and marked Exhibits Nos. 1 to 19, inclusive; and they further show that subpænas were issued for thirty-seven witnesses, of whom three were returned not found.

Your Committee further show, tbat upon entering upon the discharge of their duties, vague rumors of malfeasance in office and improper conduct, on the part of the Harbor Commissioners, reached the ears of your Committee, and it became their duty to diligently search for the authors of these rumors in order that your Committee could direct their inquiries to some specific point, or to some particular member of the Board. But your Committee show, that although they have so searched, they have been unable to learn that the Board, or any member thereof, has at any time been charged with any specific act of improper conduct, and your Committee are convinced that these general rumors are entirely without foundation.

By reference to the testimony, it will be seen that a large number of the lessees and contractors have been examined, and that in every instance it appears that these leases and contracts have been made in the manner pointed out by law; that the bona fide and true consideration leading to the making of these leases and contracts, and the whole of such consideration, is truly stated in the leases or contracts respectively; that the bids for these contracts and leases, have at all times been received by the Board, properly sealed according to law, and were not opened until the time fixed by the advertisement, at which time all competing bidders were notified to be present, when the successful bidder or bidders were regularly declared in public, and the award publicly made; that the negotiations for the procurement of the same have been made directly with the Commissioners, and not by or through the agency of brokers or middle men, and that no member of the Board bas at any time been subject to any improper influence in the making of such leases or the award of such contracts.

Your Committee further show, that from a careful examination of the leases and contracts, they are convinced that the Board have at all times carefully guarded the interest of the State, by the insertion of such conditions and provisos as would tend to relieve the State from the burden of expenses, and at the same time preserve the property in good order on its reversion; and your Committee believe that the prices at wbich these contracts have been let, and the rents reserved in these leases, are the best that the Commissioners could obtain for the benefit of the State, and that all of such contracts and leases have been entered into by the Board with wisdom and prudence, and that their operation is such as must result in benefit to the State.

Your Committee further show, that it appears in testimony that no member of the Board has at any time been interested personally, either directly or indirectly, in any of the leases or contracts made by the Commissioners, or in the profits derived or to be derived from either.

Your Committee further show, that the public funds in the custody of the Board have at all times been disbursed as directed by law, and that no portion of the same bave in any manner, at any time, been used for any private purpose whatever. That the office of the Commissioners has at all times during proper business hours been open, and the books, plats, plans, vouchers, and accounts pertaining to said office, have ever been accessible to the public generally.

Vouchers for the receipts of the office are in all cases on file, and are regularly signed by the Payer and the Secretary of the Board, and

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vouchers for the disbursements of the office are in all cases on file and signed by the payees.

The quarterly report to the Secretary of State and a monthly report to the Controller of State, have been regularly forwarded as required by law; and although the statute does not require it to be done, the Secretary, under the direction of the Board, has furnished a monthly statement of the receipts and disbursements of the office to the public press.

Bonds bave in all instances been required of the Wharfingers and Toll Collectors, and are now on file in the office of the Secretary of the Board.

General rules and regulations for the government of Wharfingers and Toll Collectors have been adopted by the Board, and at all times bare been strictly enforced. A copy of these rules and regulations are filed herewith, and are marked "Exhibit E."

With regard to the books of account of the Board, your Committee respectfully show that they deemed it expedient to secure the services of M. Scott, Jr., an experinced accountant, as an expert for the purpose of examining the same; that the said expert has been daily engaged in . making sucb examination, and has filed with your Committee a preliminary report, wbich is herewith filed and marked " Exhibit G,” showing that the aggregate receipts of the Board from the fourth day of November, eighteen hundred and sixty-three, to the first day of January, eighteen hundred and sixty-eight, amount to the sum of eight hundred and sixty-nine tbousand four hundred and seventy-seven dollars and fifteen cents, and that the aggregate disbursements during the same period amount to the same sum, of wbich latter sum two hundred and seventy-three thousand eight bundred and sixteen dollars and twentyeight cents has been paid into the State Wharf and Dock Fund, and three bundred and fifty-five thousand six hundred and forty-two dollars has been paid into the Harbor Protection Fund; that since these payments have been made into the said funds, the Commissioners have drawn orders on said funds respectively for the following amounts, to wit:

State Wharf and Dock Fund........

$243,836 71 Harbor Protection Fund........

28,616 00 Otherwise expended by the Board....

240,018 87 Total expenditures of the Board. That there remains in the respective funds

the following amounts: State Wharf and Dock Fund, to January, 1868 $29.979 57 Harbor Protection Fund, to January, 1868... 327,026 00

$512,471 58

357,005 57

Total..........

$869,477 15

The vouchers attendant upon the daily and general cash account of the Board number five thousand eight hundred and seventy-three, and these bave been carefully examined to test the correctness of the entries upon the cash books, and the time expended upon this examination has prevented the expert from giving more details in his report, showing the

particular objects or accounts for or upon which these expenditures have been made.

The expert reports that the books, accounts, and all matters pertaining to the office are kept in neat, clear, and systematic order, and that as yet he has been unable to discover any error. And it is suggested that if a more detailed statement is required, that he be directed by your honorable bodies to proceed to a further examination, and make final report.

Your Committee further show, that they have carefully examined into the merits of the plan adopted for the construction of the sea wall, the specifications for building the same, the "Report of Thaddeus R. Brooks, Civil Engineer, and Table of Soundings along the water front of the City of San Francisco," the profiles made by Thaddeus R. Brooks, Civil Engineer, for the purpose of determining the depth of water, deptb of mud, and the character of the foundation upon which the mud rests. That in making this examination they have called to their assistance the valuable aid and counsel of the most distinguished practical and professional engineers in the State; and your Committee bave great pleasure in stating that upon their invitation Major-Generals Halleck, Alexander, and Rosecrans; Colonel Ransom, Thaddeus R. Brooks, and Colonel W.J. Lewis, appeared before them to give their opinions, as experts, touching the merits of the plan of the sea wall adopted by the Commissioners, and also relative to the material used in the construction of the same.

That your Committee personally examined the structure, the material of wbich it is being made, and the quarry from wbich said material is taken, and that they are clearly of' opinion that the plan adopted is perfectly safe ; that the work, when constructed, will be durable and is well calculated to answer the purposes designed, and that the same is the best and cheapest plan that could be adopted, under all the circumstances. That the work upon said wall has been performed in strict accordance with the specifications beforo spoken of, which specifications are herewith filed and marked " Exhibit H.” That the material used in the construction of the embankınent for said sea wall is taken from Tel. egraph Hill, in the City of San Francisco, and that the same is, in the opinion of your Committee, and that of all the distinguished engineers before named, suitable for the uses to wbich it is devoted; that the same is not soluble, and that it is of sufficient specific gravity to insure a permanent and secure barrier or wall for the protection and preservation of the harbor and city front. That all of these opinions of your Committee are based on personal examination, and upon information received from the distinguished civil engineers before named, who approved of the plan adopted and material used, and who, with the exception of Major-General Alexander, were of' opinion that the plan adopted was the best, safest, and cheapest that could, under all the circumstances, be resorted to.

Major-General Alexander expressed an opinion that the structure might possibly slide outward into the bay, but whilst he thought this possible, he did not apprehend any considerable danger of such slide ever taking place.

He was likewise of opinion that in building said embankment, that it would be better to commence filling in on shore and fill outward to the proposed line of the sea wall, but in these opinions he was not supported by his co-experts, who were clearly of opinion that no danger of an outward slide was to be apprehended, and that it was more economical and equally safe to commence filling in on the embankment at a point imme. diately beneath the centre of the proposed wall, so that the compressed

mud which would be retained in rear of the wall would serve as filling, for which purpose they were of opinion it would well answer. It appeared, also, that this lower strata of mud was of a tough character, and that the superincumbent filling would gradually compress the same into a substance of sufficient solidity to exclude all danger arising from the seaping of fluids through its pores, and to support firmly the superincumbent filling, and all additional weight that the wants of commerce and the uses for which it is designed, would require to be placed thereon.

The work of constructing the sea wall is being vigorously prosecuted by A. H. Houston, the contractor, under the supervision of Colonel W. J. Lewis, the Civil Engineer, who is the author of the plan adopted by the Board. The Commissioners deemed it prudent to secure the services of Colonel Lewis to supervise the work projected and planned by himself, and your Committee entirely concur in the opinion that his supervision is necessary to secure to the State the proper completion of an undertaking of such magnitude. The statutes of the State make no provision for compensating Colonel Lewis for his services in this respect, and he has already, under the understanding that the Commissioners would bring this matter to the attention of your bonorable bodies, performed valuable service to the State without any compensation whatever.

Your Committee further show, that they have bad under consideration the question of the propriety and necessity of increasing the present number of the members of the Board, and that from a careful investigation of the duties of the office, as derived from information within the reach of your Committee, they are of opinion that there is no public necessity for such increase.

Your Committee find, that although it is requisite that the Board should be constituted as at present, in order to preserve the checks necessary upon the action of individnal members of the Board, that the duties of the Board could well be performed by a less number, and that the actual labor of the office is by no means onerous.

Your Committee further show, that the duties of the office of Secretary of said Board are quite onerous, and that the labor attending the discharge of the same is greater than can be performed by one individual; that the position of Secretary is one of great responsibility, and that your Committee believe that it is necessary to the proper conduct of his office that he be allowed the services of an assistant.

And your Committee further show, that the rooms now occupied by the Commissioners as the office of the Board are unsuitable for that pur. pose; that they are situated in the third story of a building at the corner of Pine and Montgomery streets; that the archives of the office are in danger of destruction by fire, and your Committee are of opinion that other accommodations should be provided, and especially they deem it absolutely necessary that there should be furnished a fire-proof vault for the preservation of the books and records of the office.

Your Committee bave sought information upon the subject of the propriety of reducing the rates of charges now being collected as dockage upon vessels lying at the wharves of the port of San Francisco, and the rates of wharfage and tolls on merchandise passing over the said wharves. Dockage is the charge made daily against a vessel according to her tonnage, for the privilege of lying at the wharf while discharging and receiving cargo. Full rates are charged whilst the vessel is discharging, and only half rates wbilst she is receiving cargo. Wharfage

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