30 THE C U B A RE V I E W 



The Cuba Railroad Company 



(INCORPORATED MAY 2, 1902) 



Statements to 30th June, 1922 — Submitted to the Shareholderj 

 at Their Annual Meeting, 20th September, 1922 



September 1, 1922. 

 To THE Shareholders: 



The annual report for the year ended June 30. 1922. is submitted herewith, togethei 

 with a Balance Sheet of the Camaguey & Nuevitas Railway, the stock of which is ownet 

 by your Company. 



The gross receipts were less than in the previous year, but the operating expense; 

 were reduced to a greater extent than the receipts, so that the net earnings were largei 

 than for the year ended June 30, 1921. The business depression noted in the previous 

 year continued during the past year, and accounts for about half the reduction in gross 

 earnings, the remaining half being due to the fact that the Cuban Congress in December 

 1921, passed a law materially reducing rates. The decrease in operating expenses tool 

 place chiefly in the cost of transportation, and can be traced directly to good managemen 

 on the part of the operating Vice-President, ]\Ir. Gruber, and his staff. A greater amoun 

 of more efficient maintenance work was done during the year at less cost than previously 

 and both road and equipment are today in better condition than a year ago. The same i: 

 true of the Camaguey & Nuevitas Railway. There was a notable decrease in expenses o; 

 operating the terminals of both railroads, accompanied by a distinct improvement ii 

 service. 



The ratio of operating expenses to gross earnings was 71.68 per cent as agains' 

 89.12 per cent for the previous fiscal year. 



The stagnation in general business is illustrated by the statement of operations o: 

 your three hotels. In the year ended June 30, 1921, they did a gross business o: 

 $591,857.94. During the past year their total business amounted to only $342,904.83 

 a decrease of 42 per cent, and the profits fell from $62,302.96 to $724.64. On the 

 other hand, the results of good management are shown in the operation of the buffet 

 which was formerly operated under contract, and the laundry. Under the heading 

 "Buffet" are included not only the buffet services on trains but the station buffets 

 at Camaguey and Alto Cedro. The buffet and laundry with a gross business o: 

 $247,054.41 make a profit of $46,914.69. 



In spite of reduced rates, the gross earnings of the terminals at Antilla and 

 Pastelillo increased, due to greater production and more rapid movement of sugai 

 from the mills. 



In addition to the improvements in the quality of the work in the operating depart- 

 ments, there was a corresponding increase of efficiency in the other departments, notablj 

 auditing and claims. 



An addition of $809,299.11 was made to the Profit and Loss Surplus, which novs 

 aggregates $8,622,126.54. The property investment has increased from $57,439, 752. 6f 

 to $58,444,574.55, represented chiefly by installation of about fifty kilometers of perma- 

 nent rock ballast, additions to side track mileage, and especially by a continuance 

 of the construction of the new locomotive and car shops and houses for the officers at 

 Camaguey. Except for lifting and ballasting some of the tracks in the shop yards 

 the work of construction there is now completed. 



In order to redeem $2,000,000 of Two-Year notes and to fund a portion of the 

 amounts recently expended for account of road and equipment and chargeable to 

 capital, the Company as of December 1, 1921. made its First Lien and Refunding 

 Mortgage, under which it issued $4,000,000 of bonds due December 1, 1936. During 

 the year the Company paid off $871,000 on account of Equipment Trust obligations 

 and reduced the amount of indebtedness to the Government of Cuba from $807,856.24 

 to $437,582.15. An addition of $1,262,089.45 was made to the reserve for depreciation 



