PANAMA RAIL ROAD COMPANY. So

The losses through condemned goods, shrinkage, etc., amounted. to
$124,000.00, a decrease of somewhat over $3,000.00 over the previous
fiscal year. The amount of loss through these causes is considered eX-
cessive and every effort is being made to reduce it.

The prices in general have averaged higher, there Pome a decided
increase in the cost of all meat. |

The Manufacturing Plants have not showed the same percentage of

decrease in business as have the retail commissaries. ‘There have been
- no changes in the physical arrangement of the plants or in their manage-
ment during the year.

I do not consider the financial results of the year’s business satisfactory.
The reports made up at the end of the fiscal year show a net loss of
$37,000.00 for the year’s operations. Adjustments which will be made
in this year’s reports bring the actual loss to $30,000.00, but this does
not take into account depreciation of plant and equipment. If this should
be considered, and rightfully it should be considered, the actual loss for
the year’s business would amount to approximately $75,000.00.

The Commissary reports, up to the fiscal year 1914, showed a large
net profit. In figuring this profit, however, some factors were omitted;
to wit, the cost of the retail commissaries constructed from Canal funds ©
and the allowances furnished by the Canal to Commissary employees,
which allowances are as much a part of the Commissary expense as the
actual salaries paid.

The previous management of the Commissaries, in view of this large —
surplus, practically sold goods at a loss during the first three quarters
of the fiscal year, and, if this policy were to be continued indefinitely,
the surplus would soon ‘be wiped out and the commissaries would be run-
ning permanently at a loss.

I do not consider this good business policy. I believe the Comnnesary
should be absolutely self-sustaining and every legitimate expense included,
including depreciation of plant and equipment.

Since the consolidation with the Supply Department, some radical
changes have been made in the organization. The positions of Manager
of Commissaries and Superintendent of Manufacturing Plants were
eliminated. The position of Depot Commissary was created.

The wholesale business, embracing the business of the manufacturing
plants and the wholesale warehouses at Cristobal, was placed under the
control of the Depot Commissary, upon whom devolves the responsibility
for the proper upkeep of stock, ‘The various line commissaries were
placed, for purpose of administration and discipline, under the various
District Quartermasters, with the exception of the terminal commissaries:
Cristobal, Camp Bierd, Balboa and La Boca, which were handled as sep-
arate units.

On account of the approaching removal of the general offices to Balboa,
a temporary organization was effected by which the Assistant Chief
Quartermaster at Cristobal remained in charge of the purchasing and with
supervision over the Depot Commissary, while the Inspector of Commis-
saries was transferred to Culebra, and the various line storekeepers report,
through the District Quartermasters, to the Chief Quartermaster. Ulti-
mately the supervision of all commissary matters will be transferred to

the main offices at Balboa. |

Especial attention has been given to the foreign purchases which have

_ heretofore been handled on the Isthmus. The bulk of foreign purchases

_ were handled through agents in Hamburg and London. Efforts have —