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New York Central Hudson River TWENTY-NINTH ANNUAL REPORT OF THE BOARD OF DIRECTORS OP THE NEW YORK CENTRAL AND HUDSON RIVER RAILROAD COMPANY AND ITS LEASED LINES TO THE STOCKHOLDERS POE THE YE A It ENDED JUNE 30 1898 1 OFFICE OF THE COMPTROLLER 1898 3 ORGANIZATION OF THE NEW YORK CENTRAL AND HUDSON RIVER RAILROAD COMPANY CORPORATE OFFICERS Chairman of the Board CHADNCEY M. DEPEW President SAMUEL R. CALLAWAY First Vice President CHAELES C. CLARKE Second Vice President HORACE J. HAYDEN Secretary . , EDWIN D. WORCESTER Treasurer EDWARD V. W. ROSSITER DIRECTORS Elected at the annual meeting of stockholders held at Albany, New York, April 20, 1898 CORNELIUS VANDERBILT HAMILTON McK. TWOMBLY WILLIAM K. VANDERBILT SAMUEL R. CALLAWAY FREDERICK W. VANDERBILT CHARLES C. CLARKE CHAUNCEY M. DEPEW HORACE J. HAYDEN SAMUEL P. BARGER WILLIAM BLISS J. PIERPONT MORGAN SAMUEL D. BABCOCK GEORGE S. BOWDOIN EXECUTIVE COMMITTEE CHAUNCEY M. DEPEW, Chairman of the Board* SAMUEL R. CALLAWAY, President* CORNELIUS VANDEEBILT J. PIERPONT MORGAN WILLIAM K. VANDEEBILT SAMUEL F. BARGEE FEEDEEICK W. VANDEEBILT HAMILTON MCK. TWOMBLY The annual meeting of stockholders for the election of directors is held in the city of Albany, on the third Wednesday in April Total number of stockholders at last election, 11,277 I * Members ex-qfficio I 415703 REPORT To the stockholders of the NEW YORK CENTRAL AND HUDSON RIVER RAILROAD COMPANY: The Board of Directors herewith submits its report for the year ended June 30, 1898, with statements showing the results for the year aud the financial condition of the company. The report covers the operations of the system east of Buffalo, including the following proprietary and leased lines: New York Central & Hudson River Railroad Niagaru Palls Branch Railroad New York & Harlem Railroad Utica & Black River Railroad Troy & Greenbnsh Railroad Carthage Watertown & Sackets Harbor Railroad Spuyten Duyvil & Port Morris Railroad Mohawk & Malone Railway West Shore Railroad Carthage & Adirondack Railway New Jersey Junction Railroad Grouverneur & Oswegatchie Railroad Rome Watertown & Ogdensburg Railroad New York & Putnam Railroad Oswego & Rome Railroad The Dunkirk Allegheny Valley & Pittsburg Railroad and the Beech Creek Railroad are also leased by this company, but their mileage and operations are not included in this report, as separate accounts have been kept and independent reports prepared in behalf of those companies. The gross earnings from the operation of the system east of Buffalo, excluding income from investments, were $45,774,240.43, exceeding those of any previous year with the excep• tion of 1892-3, the "World's Fair" year, when they were $512,127.07 greater. The net earnings from operation, $16,263,220.45, were, however, $608,591.82 in excess of those of the year 1892-3. The expenses of operation, all taxes being excluded, were $29,511,013.98, an increase of $1,911,102.71 over those of the previous year. This was caused largely by the greater volume of traffic handled during the year. It was also due to the inclusion of $1,345,948.54, represent• ing extraordinary outlays for equipment and miscellaneous additions to the property, thereby continuiug the long-established policy of the company in this regard. The profit for the past year was $4,654,471.16, and the surplus, after payment of four per cent in dividends, $654,471.16, as against $51,S66.80, one year ago. 5 During the period covered by this report, financial transactions of unusual importance have been undertaken. At a meeting held April 14, 1897, the Board of Directors adopted resolutions authorizing the execution of a mortgage to be dated July 1, 1897 (the beginning of the fiscal year just closed) to secure an issue of $100,000,000 bonds, the principal to become due and payable in gold on July 1, 1997, and the interest, at 3£% per annum, to be paid .semi-annually on the first days of January and July. This action was ratified at the stockholders' meeting held May 26, 1897. Of the $100,000,000 authorized, $70,377,333 is reserved for the purpose of retiring a like amount of obligations outstanding on June 30, 1897, composed of six different classes of bonds, varying in nature, rates of interest and dates of maturity; $14,022,007 is reserved for the premiums necessary to retire the old bonds before their maturity, and for such other uses as the Board of Directors may approve; and the remaining $15,000,000 is to be held uutil December 31, 1903, after which time it is to be available for construction, equipment or other purposes. During the past year $23,499,600.38 of the new bonds have been issued in exchange for $21,480,985.93 of bonds of the old forms, and a saving in interest has been effected amount• ing to $197,710.51. New bonds to the amount of $2,019,000 have also been issued and sold for cash; $19,000 in connection with the exchange of old bonds for new, and $2,000,000 for the general purposes of the company. On February 4, 1898, the Board of Directors authorized the purchase of the capital stock of the Lake Shore & Michigan Southern Railway Company, aggregating $50,000,000, and agreed to issue, in payment therefor, $100,000,000 in gold bonds of the New York Central & Hudson River Railroad Company, maturing February 1, 1998, with interest at 3£% per annum payable semi-annually on the first days of February and August; and also provided for the deposit, with the Guaranty Trust Company of New York, trustee, of all stock thus acquired, as collateral security for the payment of the principal and interest of the bonds; the basis for this purchase being one $1,000 bond for five shares of stock at $100 each. Up to June 30, 1898, $89,938,025 of Lake Shore collateral bonds had been issued in ex• change for $44,969,312.50 in stock. On April 13, 1898, resolutions were adopted by the Board of Directors, providing for the purchase of the capital stock of the Michigan Central Railroad Company, at present $18,738,000, and agreeing to issue, in payment therefor, gold bonds of the New York Central & Hud• son River Railroad Company, to the amount of $21,550,000, maturing February 1, 1998, with interest at 3£% per annum payable semi-annually on the first days of February and August; and further agreeing to deposit with the Guaranty Trust Company of New York, trustee, 1A 6 all stock thus acquired, as collatei'al security for the payment of the principal and interest of the bonds; the basis of purchase being $115 in bonds for $100 of stock. Up to June 30, 1898, $17,137,415 of Michigan Central collateral bonds had been issued in exchange for $14,902,100 in stock. The action of the Board in obtaining control of these two properties was taken with the view of establishing, on a permanent basis, the unity of interests of the three companies. The acquisition of these important roads makes a notable increase in the mileage eon- trolled by this company. In 1869, it operated 837'67 miles of single track; in 1878, 1104-20 miles; in 1888, 1544*12 miles; and on June 30,1898, the mileage of single track under its con• trol is 6,309-77 miles. The Directors announce, with deep regret, the death of two of their associates in the Board —Mr. Erastus Corning, on August 30,1897, and Mr. George C. Buell, on January 24,1898. On February 4, 1898, Messrs. Ashbel Green and George C. Bowdoin were chosen by the Board of Directors to fill the vacancies created by the deaths of Messrs. Corning and Buell. At the stockholders' annual meeting held April 20, 1898, Mr. Samuel It. Callaway was elected a Director in place of Mr. Ashbel Green, resigned. The year has also been marked by a number of important changes in the executive force. Mr. Cornelius Vanderbilt, for fifteen years the Chairman of the Board of Directors, was compelled to retire on account of ill health. Mr. Chauncey M. Depew, after a service of thirteen years as President, succeeded Mr. Vanderbilt on April 27, 1898. Mr. Samuel R. Callaway, President of the Lake Shore & Michigan Southern Railway Company, was chosen to succeed Mr. Depew as President, and took office on April 27, 1898. Mr. H. Walter Webb, for eight years the Third Vice-President of the company, also resigned during the year, because of illness; and Mr. John M. Toucey, after a valuable and extended service of forty-three years, retired from the office of General Manager. For the Board of Directors, S. R. CALLAWAY, CHAUNCEY M. DEPEW, President Chairman New York, August 25, 1898 7 SUMMARY OF FINANCIAL OPERATIONS AFFECTING INCOME EARNINGS PROM OPERATION 1898 1807 Increase Decreaae From freight traffic $27,496,129 69 $25,850,731 46 $1,645,398 23 From pasat'Dger traffic 13,250,800 65 13,094,61.9 62 156,181 03 From express traffie 1,285,779 07 1,254,066 88 31,712 19 From transportation of mails 1,652,779 21 1,539,826 00 112,953 21 From rentals 1,984,790 51 1,791,884 29 192,906 22 From miscellaneous sources 103,961 30 83,276 25 20,685 05 $45,774,240 43 $43,614,404 50 $2,159,835 93 i OF OPERATION For maintenance of way and structures 4,660,333 14 $4,838,267 33 $177,634 19 For maintenance of equipment 4,987,191 86 4,435,472 77 $551,719 09 18,735,462 46 17,215,888 62 1,519,573 84 1,127,726 52 1,110,282 55 17,443 97 $29,511,013 98 $27,599,911 27 $1,911,102 71 NET EARNINGS PROM OPERATION $16,263,226 45 $16,014,493 23 $248,733 22 To which add: Dividend on Lake Shore & Michigan Southern > stock owned i 1,311,604 95 1,311,604 95 Dividend on Michigan Central stock owned.
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