THE CUBA REVIEW 25 



GUANTANAMO & WESTERN RAILROAD COMPANY 



ANNUAL REPORT & GENERAL BALANCE SHEET 



1918 



New York, December 12, 1918. 



The following report on operations of the Company for fiscal year ended June 30, 

 1918, has been submitted. 



Additions to Capital Account amounted to $120,472.94, net, of which $97,439.05 

 were account of Road and $23,033.89 were account Equipment. Capital expenditures 

 aggregated $159,443.63, as compared with $325,457.60 in 1917 and $285,376.58 in 1916. 

 Of this amount $60,379.65 was for new rolling stock, $19,263.77 for stations, freight 

 sheds and additions to shops and terminal facilities, $68,642.98 for track betterments 

 and extensions and $11,157.23 for improvements not completed. 



Railway operating revenues were $748,664.08, as compared with $555,949.57 in 

 1917; and operating expenses $761,342.04, as compared with $526,220.10 in 1917. The 

 deficit of $12,677.96 compares with a net operating income of $25,918.20 in 1917. 



Of the increased revenue of $192,714.51 over the previous year, $141,281.90 was 

 from freight and $49,863.68 from passenger traffic, both due about equally to a larger 

 volume of business and an increase in rates authorized by the Cuban Government and 

 effective since November, 1917. 



Of the increase over the previous year of $235,121.94 in operating expenses, 

 $129,756.92 was in the cost of maintenance, $88,024.15 in cost of conducting trans- 

 portation and $17,340.87 in general expenses. 



The increase in maintenance charges was due to higher wages, increased cost of 

 all materials used, a considerable amount of special maintenance work on both road 

 and equipment, and $23,499.83 written off for damaged and condemned cars. The 

 increased cost of conducting transportation was due entirely to higher costs for labor 

 and fuel, the latter largely because of the enormous advance in marine freight rates. 



All these costs are expected gradually to become lower, and as the heavy ex- 

 penditures for betterments and special maintenance are now beginning to reduce 

 operating expenses and the volume of business continues to increase, much better 

 results for the current year seem assured. The first quarter, July 1 to September 30, 

 showed a net operating income of $9,356.63, compared with a deficit of $16,392.74 

 in 1917. 



Since June 30 five new coaches and twenty-five new steel box cars have been put 

 in service; three new coaches will be added to the passenger equipment in January, 

 and a large steel warehouse for sugar at the Boqueron Terminal is under construc- 

 tion. Special maintenance work continues, and by next year the railroad will be 

 in good condition and should thereafter produce substantial and continuously increas- 

 ing profits. The large part of its territory not now developed will unquestionably 

 become so as rapidly as the necessary transportation facilities are assured. 



To make ample provision for present and future requirements of the Company, 

 including the refunding or payment of all funded and floating debt, was the purpose 

 of the refunding 6% mortgage which was authorized by the stockholders and subse- 

 quently executed as of February 1, 1918. 



Since June 30, bonds aggregating $1,400,000 of the $6,000,000 issue authorized by 

 this mortgage have been sold and delivered. By June 30 next it is expected to re- 

 ceive proceeds of $600,000 more of these bonds, which will meet all anticipated neces- 

 sary requirements to that time and provide a working cash balance after the payment 

 of all floating debt. 



