PANAMA RAIL ROAD COMPANY. | i 21

maintenance of any schedule by our regular steamers that it became
increasingly necessary for us to employ our entire fleet as expediency
dictated without regard to schedule, or in fact, expense.
' The net revenue derived was $1, 162 900. 46, an increase of $158, 497. Al
as compared with the preceding year.

The operating revenue was $4,108,412.36, an increase of $167, 133. 67
over 1916 and the operating expense was gD, 945,611.90, an increase. of
$608,706.26. The percentage of operating expense to revenue was 71.70%
as against 69.94%, an increase of 1.76% as compared with 1916.

~The steadily advancing cost of all operating items such as pier rental,
labor, including stevedoring that was advanced approximately 3314%,
salaries and wages, those of steamship employes being increased by fully
25%, together with independent services of every other character inci-
dental to operation, has resulted in an aggregate cost wholly unprece-
dented.

The Company’s policy of maintaining reasonably lower rates as
compared with all other Lines has been continued with only unimportant
revisions of existing tariffs as necessary.

From time to time the Company has been obliged to secure at pre-
vailing high rentals additional pier accommodations in order to handle
its increased number of vessels and their cargoes. The difficulty attendant
upon securing such accommodations repeatedly threatened absolute con-
gestion of our facilities,

Our contract for coal to bunker the Company’s vessels in New York
Harbor expired by limitation April 15th, 1917. As we were unable to
arrange for its renewal or to reach satisfactory terms with other coal
concerns recourse was had to bunkering all of our ships at the Isthmus
until such time as we were able to resume supplying them at New York; a
higher grade of coal was furnished there but at the regular list prices
for coal supplied at Cristobal to all other lines.

Anticipating an enlargement of the “‘war zone”’ the necessity for
equipping our steamers with armament for their defense in the event of
an attack by hostile submarines became apparent, and arrangements
were made with the Ordnance Department of the Army to that end.
Subsequently foundations and guns were installed and guncrews instructed
by a detailed Gunner’s Mate, U. S. N. Navy Department instructions
concerning the operation of the steamers have otherwise been carefully
followed. |

Notwithstanding arrangements had been completed for the with-
drawal successively of the “‘Ancon” and “Cristobal” for reboilering and
other repairs at the Isthmus it became imperatively necessary because
of the shortage of tonnage available for the Company’s business to con-
tinue those ships in active service until such time as they could be more
advantageously released, presumably about the end of the calendar year
1917 by which time it was confidently expected the first ship could be
withdrawn.

Early in May, On, the Aolllonmine Hamburg-American lane chee
which had been interned in Colon Harbor since the outbreak of the allied
hostilities with Germany were turned over to the Panama Rail Road
Company to operate in its Line: |

‘““GRUNEWALD,”’ gross tonnage PORN SERRE TERRI TC tke a 707 tons
pel, SIGISMUND,” BNOSSOMMACC hs ies steve cy ae cre A O890 cae
ae SACHSENWALD,’ WOTOSS tONMAGe. ee rn ee 3 i550)

AVOIA,”’ ‘gross tonnage SEU ono eeee ura SRNR oa See Oa Ane.