28 THE CUBA: REVIEW 
The Cuba Railroad Company 
STATEMENTS TO JUNE 30, 1921 
September 10, 1921. 
To THE SHAREHOLDERS: 
The Annual Report for the year ended June 30, 1921, is submitted herewith. 
The gross earnings and operating expenses were increased, but the operating expenses 
increased much more than the gross earnings owing to the increased cost of materials and 
supplies which were necessarily purchased prior to the reduction which has taken place in 
such items during recent months, and to increased rates of pay which it was necessary to 
grant for the same reasons which required American railroads to make similar increases. 
The net income for the fiseal year was $312,958.52. 
The history of your company closely parallels that of the American railroads for the 
same period. During the first few months of the fiscal year business continued heavy and 
the gross earnings increased over the previous similar period. This was accompanied by 
even greater increases in the cost of materials, supplies and labor, especially labor. An 
application to the Railroad Commission of Cuba for an increase in rates was made 
promptly, but it was not granted until December 12, 1920. Meantime, a business depres- 
sion more severe and intense than in the United States had taken possession of Cuba 
and all classes of traffic fell off. Your company immediately began the inevitable process 
of reducing expenses. All unnecessary work was abandoned and the purchase of materials 
and supplies was reduced to the minimum. Pressure was brought to bear on labor, first 
to perform more efficient services, and secondly to accept lower wages. The result of the 
pressure on labor was the customary dissatisfaction among the laborers. The usual 
strikes, some partial and others tying up the entire operations of the company, ensued. 
Finally, however, as the cost of living in Cuba decreased and the number of unemployed 
laborers in Cuba increased, the employees of the company came to accept the demands 
for improved service and the necessity of reduced wages. 
The ratio of operating expenses to gross earnings was 89.12% as against 72.20% for 
the previous fiscal year. 
An addition of $412,324.55 was made to the Profit and Loss Surplus, which now 
amounts to $7,812,827.48. The property investment has increased from $52,914,073.54 
to $57,439,752.66, the increase being represented largely by additional equipment, addi- 
tions to sidetrack mileage, new stations, and especially by a continuance of the construc- 
tion of new shop facilities at Camaguey. 
The amount of the loan to the Camaguey & Nuevitas Railway has been increased 
from $181,623.38 to $285,976.41 in order to enable that company to complete essential 
improvements at the Pastelillo Terminal. The net earnings of the Camaguey & Nuevitas 
Railway for the fiscal year were $245,084.70 as against $615,409.05 in the previous year. 
On the Liabilities side of the general balance sheet it will be seen that the funded 
debt has increased from $23,192,000 to $24,031,000. The amount due on equipment 
trust obligations which were outstanding on June 30, 1920, has, of course, been reduced 
by payments on account of principal. In September, 1920, however, an additional equip- 
ment trust of $1,425,000 was created to finance payment for 500 box cars purchased and 
delivered during the fiscal year. The total amount of current liabilities has been slightly 
decreased. On June 30, 1920, the amount due to the Republic of Cuba on account of the 
loan by the Republic against services to be rendered was $1,320,068.55. That has been 
reduced to $807,856.24. An addition of $1,040,102.03 has been made to the reserve for 
depreciation, which now stands at $3,936,756.57. 
A comparative statement of the rolling stock on hand at June 30, 1920, and June 30, 
1921, is as follows: 
