PANAMA RAIL ROAD COMPANY.

: New York, December 1, 19149.
To THE STOCKHOLDERS:

I respectfully submit for your consideration a report of the Combate S
operations and resulting financial condition for the twelve months from
July 1, 1918 to June 30, 1919, both inclusive.

In ‘that connection I eall your particular attention to the sabjomedl
statements of operation and maintenance of the Company’s property
that are so detailed in character as not to require more than this reference
to them by me.

The advantage to United States Government Departments including
the Canal, foreign shipping transiting the Canal, and to this Company, ©
of having maintained an adequate supply of coal at both of our Isthmus
terminal coal plants was fully demonstrated during the last year of the war.

The usefulness of the Company’s Commissary and Cattle Industry on
the Isthmus, including farms, is shown to have justified the expenditure
for their establishment and progressive development.

The Company’s policy of operating all its branches on the basis of a ~
reasonable return only over cost, especially in respect to its transportation
charges, has been steadily maintained with satisfactory results.

Increased costs of operation are in the main accounted for by the
upward trend of compensation to both skilled and unskilled labor, made
necessary by the general labor situation throughout the country.

The result of the Company’s business of every character for the period
covered by this report after meeting the cost of operation, together with
fixed charges aggregating $1,457,557.90 and charges for depreciation on
rolling stock, floating and plant equipment of $841,687.96 shows a net
income of $3,846,705.77.

- Respectfully submitted,

CHESTER HARDING,
President,