Some small appropriations for improvements are necessarily included in these totals, but nothing more than may be expected every year or two. It is proper to rate the average annual expense of these institutions at nearly half a million dollars, nor can this sum be materially reduced until the State accepts the fundamental principle that prisons should be made nearly or quite self-supporting. San Quentin was once managed to some extent on the contract system. Furniture-makers and other manufacturers paid half a dollar a day for each convict employed, and at one time as many as eight hundred men were thus utilized, giving the prison an income of twenty-four hundred dollars a week. The system was so violently attacked by labor unions that it was finally abandoned, and now I am told that convict-made furniture, stoves, and other articles such as were formerly made at San Quentin are brought to California from Joliet, Illinois, and other places by the carload. Having abandoned the contract system, the State decided to make jute bags, chiefly for grain, and to sell them as nearly as possible at cost direct to the consumers, so as to help the agricultural classes. Machinery costing $400,000 was obtained in England, and after many difficulties a factory was established at San Quentin. The price of raw material fluctuates greatly, and the mill has sometimes lost money, sometimes made a somewhat nominal profit. During the fiscal year ending June 30, 1891, for instance, 2,574,254 pounds of goods were manufactured at a total operating expense of $160,684.07, and were sold at a price which nominally gave $40,275.07 profit. But no sinking fund was allowed for, to cover wear and tear of machinery, nor did the operating expenses include even the maintenance of the convicts while at work. The following fiscal year the profit estimated in the same way was $39,293.18. During the fiscal year 1893-'94 the loss on the jute mill was $14,660.22; in 1894-'95 there was a profit of $6,670.56; and in 1895-'96 a loss of $12,288.45.