THE CUBA REVIEW 31 



)f property of The Cuba Railroad Company and a reserve of $121,822.32 for deprecia- 

 ;ion of property of the Camaguey & Nuevitas Railway. The total additions to 

 lepreciation reserves for the two companies together were $1,383,911.77. In con- 

 lection with the First Lien and Refunding Mortgage of The Cuba Railroad Company, 

 he Camaguey and Nuevitas Railway made its First Mortgage under which it sold 

 H,000,000 of bonds to The Cuba Railroad Company, which, in turn, pledged those 

 3onds as partial security for its own issue of First Lien and Refunding Mortgage Bonds, 

 rhe bonds of the Camaguey & Nuevitas Railway are not callable, except in case of 

 lefault by The Cuba Railway Company to pay interest on its own First Lien and 

 Refunding Mortgage Bonds. 



Important changes appear in the statements of current assets and current liabilities 

 n the Balance Sheet. There is a decided increase in cash on hand and a decrease of over 

 51,000,000 m materials and supplies. There is an increase of about $1,700,000 in the 

 imounts due from individuals and companies, but of the total amount, the sum of 

 52,950,693.23 was due from Compaiiia Cubana for services and advances. Since June 

 ;0th this has been reduced to $1,977,000, and Compaiiia Cubana has in the form of raw 

 sugar ample current assets to pay off the entire amount before the end of the calendar 

 >rear. The total current assets at June 30, 1922, amounted to $6,541,050.52. 



The current liabilities at the end of the fiscal year were $2,598,850.18, a normal 

 imount. It should be stated, however, that in the previous fiscal year there was 

 ncluded among the current liabilities an item known as "Sinclair Conversion Contract" 

 Nhich now appears as a separate item because, while instalments are due from time to 

 :ime, it is not finally payable until December 31, 1925. 



A special reserve of $300,000 has been set up for maintenance of way and equip- 

 ment during the dull period from July 1st to December 31st. This is a new departure 

 for the Company. A similar item of $225,000 appears in the Balance Sheet of the 

 Camaguey & Nuevitas Railway. 



During the last fiscal year the sugar mills on your line rented fewer locomotives and 

 :ars than usual, but they are this year applying for more motive power and car equipment 

 than ever before, and the work of repairing locomotives and cars is progressing speedily 

 in response to this demand. Simultaneously, the work of converting the locomotives for 

 the use of fuel oil instead of coal is being advanced, and at the present time practically 

 all the locomotives that are in actual use bum fuel oil. It is no longer found necessary 

 to send any locomotives away for overhauling, as the new shops are able to meet all 

 requirements. 



Work on the construction of the branch line to Santa Cruz del Sur, which was 

 discontinued in 1920, has again been begun and is being vigorously pressed, with the 

 expectation that it will be completed as far as the new Vertientes sugar mill before the 

 beginning of the next sugar crop. 



Your Board of Directors created an additional ofiice of Vice-President and elected to 

 that office Mr. Domingo A. Galdos, who was for many years the operating head of The 

 Cuba Railroad, but resigned in 1916. His headquarters are in Havana and he has charge 

 of the increasingly important and voluminous business of the Company in Havana, 

 especially with the Railroad Commission and other departments of the Government. 

 There was also a shortage in the staff at Camaguey, and to meet that the office of 

 Assistant Vice-President was created subject to appointment by the operating Vice- 

 President. Mr. John Sesser was appointed to that ofi&ce. 



In July, 1922, your Directors declared a dividend of 6 per cent on the preferred 

 stock of your Company, payable half on August 15, 1922, and half on February 15, 

 1923. This dividend is on account of the surplus earnings of the fiscal year ended 

 June 30, 1922. 



The improvement work thus far planned for the current fiscal year consists chiefly of 

 the construction of the whole or a part of the branch line to Santa Cruz del Sur, the 

 addition of tools and machinery at the shops, the construction of new business tracks 

 and an extensive amount of new ballasting and new rails. The shop tools and machinery 



