29 PANAMA RAILROAD COMPANY.

In order to meet increasing demands upon the company’s terminal
facilities on both sides of the Isthmus, the construction at Balboa of
a reenforced concrete dock, with adequate slips alongside, has been
authorized, to cost approximately $470,000. At the same time
improvements and additions required by the company’s other docks
at Balboa were authorized. The company has under consideration
the construction at Cristobal of such docks as are required in connec-
tion with its railroad at that point to make a water terminal adequate
in every respect to the requirements of combined canal and railroad
operation. Work is already tentatively in progress under plans that
are comprehensive, and the estimated cost large, but all are subject
to the expected early determination by Congress of the scope of the
railroad’s functions when the canal shall have been opened to com-
merce.

Because of a large accumulation of funds in the company’s hands
at New York, which was distributed on deposit with various trust
companies at comparatively low rates of interest, and pending the
application of those funds to definite purposes to be determined
later, a reserve fund has been established by the board of directors,
and $1,500,000 invested in New York State and city obligations and
high-class railroad first mortgages classified in several States under
the savings bank act. The securities were so purchased and are
held in the separate custody of a committee of securities composed
of three directors and the vice president ex officio appointed for that
purpose. |
The suit in the admiralty against the British steamer Georgic for
the value of our steamship Finance, lost in collision with that ship,
has been finally disposed of by the payment to this company of a
sum of approximately $33,000, and it is not expected that any further
recovery can be made from any source on account of that disaster.
An arrangement was entered into with the Isthmian Canal Com-
mission whereby freight transportation of every character furnished
by the Panama Railroad Co. on the Isthmus be settled for by pay-
ment to the railroad of the lump sum of $41,000 per month. By a
similar arrangement affecting passenger traffic the railroad company
is paid the sum of $9,000 per month by the commission.

The earnings of the railroad company and its steamship line have
been derived practically on the basis of rates, both through and local,
that were in effect last year. ‘Those rates were considered unremu-
nerative by all connecting carriers, and, owing to increased cost of
- operation and material and supplies in every direction, there is good
reason to anticipate an advance in rates by initial water carriers both
‘outward’? and ‘‘homeward,’’ in Europe and in the United States, in ~
which, as the intermediate carrier, Panama Railroad will participate.
Without directly participating in the traffic conferences of our com-
petitors in service to the Isthmus (all of whom operate under foreign
registry), this company has been fully advised of their proceedings
and has by its independent attitude been able to stimulate competi-
tion and thereby insure a low scale of rates greatly to the advantage
of canal construction cost. | |

The Pacific Mail Steamship Co., which has for more than 50 years

- operated on both the Atlantic and Pacific Oceans in connection with

the Panama Railroad, has extended its service in through billing
cargo between foreign and domestic ports on the Pacific coast and —

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