PANAMA RAIL ROAD COMPANY.

' New York, N. -Y., November 1, 1916.
To THE So oF PANAMA Ratu RoApD Company:

I respectfully submit for your consideration a report of the Company’s

operations and resulting financial condition for the twelve 2) months
- from July 1, 1915,-to June 30, 1916.
«> In this connection I call your particular a Llention to the subjoined
statements of Operation and Maintenance of the Company’s property; to.
the details of the attached Exhibits that show Income and Profit and Loss
Account; General Balance Sheet, and statistical tables that furnish com-
plete information concerning the financial aspect of the Company’s business,
together with the Subsistence Officer’s report of his operation of the Com-
pany’s Commissary Department and the resulting earnings.

The Interruption to Canal transit caused by the slide in September,
1915, referred to in last year’s report, continued until April 15, 1916, when —
the Canal was definitely reopened to commerce. During the intervening
period all freight brought to the Company’s terminals on both oceans was
transhipped by rail between steamers under conditions that gave sea
carriers an option to avail of a special $3 flat rate per ton for cargo hauled _
directly between ships under which this Company was relieved of responsi- —
bility for loss or damage, or of regular classified rates that were made
_ effective to meet the situation. :
Anticipating the opening of the Canal the Rail Rodd anceuneed by

its Circular 500 effective October 17, 1914, terms and conditions appli-
cable to the transfer of cargo between sea-carriers at its terminal docks on
both oceans. Supplements covering amended rates and conditions to
date have become effective.

~ In accordance with the plan for the construction of additional piers,
as required, at the Cristobal terminal of the Canal and Rail Road the new
Pier No. 7 having been completed the need, indicated in last year’s report,
for the building of new Pier No. 6 was established and as no Canal or Rail _
Road funds were available for the purpose an appropriation of $1,500,000
was secured from Congress (H. R. 15836 passed June 28, 1916, approved
July Ist, 1916). Borings and other preliminary work is already under way.

Incidental reference only was made in last year’s report to an arrange-
ment made between the.Canal and Rail Road that covered a scheme for
‘ plamt exchange ” that involved values in excess of $5,000,000; intended
to re-adjust titles to and responsibility for values of property and equip-
ment that had been, in the common interest, exchanged from time to time
for use in operation during the period of Canal construction, much of which.
had become obsolete or useless, and on that account condemned. 2

The agreement referred to or any modification of it involving the dis-
posal of property of the Canal must be legalized by Congress in order to
become effective and application for such authority is to be made.

As it developed through the actual use of the Company’s Piers 8 and 7
(new) that our arrangements as designed for handling cargo to and from
Steamships | were inadequate and unsatisfactory it became necessary to