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As compared with the previous year, the capital stock actually paid in is increased $87,949.54. The indebtedness is increased $26,616.91. The total receipts are decreased $314,574.72. The number of passengers are decreased 632,177, while the tonnage of merchandise has increased 341,318 tons. The length of track in this State also shows an increase of 15 miles.
I cannot compare the net earnings of this year with the previous years, because in previous returns some of the corporations reported as their earnings the difference between their total receipts and their running expenses, accounting for their interest and taxes afterwards. This year I have changed the form of my returns, so that the amount representing the total running expenses, does in every instance, also include the expenditures for interest and taxes.
WORK OF THE YEAR.
THE NEW YORK, PROVIDENCE AND BOSTON RAILROAD COMPANY
have completed the Greenwood bridge; have laid fifteen miles of new steel rails; expended $3,994.95 for new cars; $2,333.31 for real estate; $3,162.53 for dredging; $2,118.54 on ferry-boat; $15,091.55 for ferryslip at New London; $3,129.28 for improving ferry at Groton, and $2,619.34 for a tenant-house. The whole amount expended during the year for maintenance of way, and for purchase or repairs of rolling stock, was $226,865.60, of which $222,870.65 was charged to expenses, and $3,994.95 was charged to equipment account.
THE PROVIDENCE AND WORCESTER RAILROAD COMPANY
have expended $93,345.70 for purchase or repairs of rolling stock, and $163,826.96 for maintenance of way. This makes a total of $257,172.66, all of which was charged to expenses.
THE BOSTON AND PROVIDENCE RAILROAD COMPANY
have completed a splendid and substantial bridge over the Blackstone River, at an expense of about $65,000, a large proportion of which was charged to profit and loss and the balance to expenses. They have also charged to profit and loss $31,654.07, as depreciation on some stock they held and for some accounts which they deemed to be worthless. They start on their new year with a credit on the profit and loss account of nearly $400,000. They have expended during the year for purchase or repairs of rolling stock $178,902.89, and for maintenance of way $307,826.34, making a total of $486,729.23, all of which was charged to expenses.
THE HARTFORD, PROVIDENCE AND FISHKILL RAILROAD COMPANY
have expended for maintenance of way $188,251.66, a large proportion of which was for new rails, and $93,972.25 for purchase or repairs of rolling stock, of which $2,602.72 was for new rolling stock, making a total of $282,223.91, all of which was charged to profit and loss.
PROVIDENCE AND SPRINGFIELD RAILROAD COMPANY
They report as ex
have replaced about thirty tons of new iron rails. pended for purchase or repairs of rolling stock $2,176.84, and for maintenance of way $6,981.12, which aggregate of $9,157.96 was charged to expenses. They also report as expended during the year $24,181.64, which was charged to construction account, and very properly so, as it was for land damages growing out of the original lay-out of their road, and for new stations, the building of which had been deferred. They, however, commence their new year with an addition of $13,761.07 to their surplus account.
NEWPORT AND WICKFORD RAILROAD AND STEAMBOAT COMPANY
have expended for purchase or repairs of rolling stock $3,889.14, and for maintenance of way $1,375.94, making a total of $5,265.08, which was charged to expenses. The report of this corporation for this year is so entirely at variance with all other business matters of the year that I feel compelled to especially refer to it and that their position may be easily seen, I herewith compare their returns of the year with the one of the previous year:
How this result has been attained I cannot explain, particularly so, as the number of passengers, and tons of merchandise transported, have materially decreased, as compared with the previous year. They are, however, to be congratulated on the result, and they commence their new year with their debt decreased and $4,488.40 added to their surplus account.
NARRAGANSETT PIER RAILROAD COMPANY
have expended $943.08 for purchase or repairs of rolling stock, and $6,563.26 for maintenance of way, which amounts were charged to expenses. Their previous report being for only a portion of a year, I cannot well compare them.
WOOD RIVER BRANCH RAILROAD COMPANY
have charged to expenses the $344.48 as expended by them for purchase or repairs of rolling stock, with the $1,778.65 expended for maintenance of way.
OLD COLONY RAILROAD COMPANY
have expended during the year $174,236.17 for purchase or repairs of rolling stock, and $351,321.15 for maintenance of way, making an aggregate of $525,557.32, which was charged to expenses. Ten new freight, and ten gravel and coal cars, have been added to their rolling stock, and five locomotives, three passenger cars, two baggage cars, twenty-one freight and nineteen gravel cars have been rebuilt. Four thousand and twelve tons of steel, and 1,260 tons of iron rails, and 102,435 new sleepers have been used in repairing and improving the track, and 1,217 tons of rails have been taken up, repaired and relaid.
FALL RIVER, WARREN AND PROVIDENCE RAILROAD COMPANY have paid $5,356.05 for use of rolling stock, and $2,517.16 for maintenance of way, which amounts were charged to expenses.
PROVIDENCE, WARREN AND BRISTOL RAILROAD COMPANY
have expended $8,046.65 for purchase or repairs of rolling stock, and $23,485.58 for maintenance of way, which total amount of $31,532.23 was charged to expenses. Their net earnings for the year show an increase of $19,387.76. They commence their new year with their indebtedness reduced $20,000.
NEW YORK AND NEW ENGLAND RAILROAD COMPANY
have expended as follows: $102,717.94 for purchase or repairs of rolling stock, and $289,866.24 for maintenance of way. This total of $392,584.18 was charged $350,265.37 to expenses, $33,718.76 to construction, and $8,600.05 to equipment. The amount charged to construction was $4,639.99 for extension of double track, $23,631.66 for improvements and land at Franklin, Mass., rendered necessary in order to make their connection with the Rhode Island and Massachusetts Railroad, and which charges are perhaps justifiable. The $8,600.05 was for new cars. This charge, and the one for extension of double
track, seems to me not to be justifiable, but I propose to refer to it again in another place in this report. They have laid during the year 1,445 tons of new steel rails and nearly 51,000 new ties. Their net earnings for the year show an increase of $93,321.58 over the previ ous, while their receipts only show an increase of $9,854.58. They commence their new year with their indebtedness reduced $2,868.98 and their surplus increased $70,521.60. This corporation has leased the Rhode Island and Massachusetts Railroad and are operating it.
THE PAWTUXET VALLEY RAILROAD
is leased to the Hartford, Providence and Fishkill Railroad Company.
UNION RAILROAD COMPANY
show an increase in their receipts of $8,333.83, as compared with the previous year, with an increased expenditure, so as to make their net earnings somewhat less than the previous year.
As work proposed for the coming year, I do not hear of any to report, although I feel quite confident, that should business matters decidedly improve, railroad enterprises that have been allowed to slumber will speedily assume life.
I dislike exceedingly to be compelled to report that any of our railroad corporations have again increased their equipment or rolling stock account.
In my last report I referred at length to this method of doing business: that various expenditures of the year, which, in my judgment, were nothing more or less than legitimate expenses, were charged to other accounts, and dividends were paid on a wrong basis.
Instead of changing my views, I am more strengthened in them that I am correct. When an account for rolling stock has once been opened, and the quantity requisite for the business has been procured and charged to it, there are only two ways to proceed. The original amount being carried forward from year to year, no other charges should be added to it. The two ways, then, are as follows: If the amount for subsequent purchases of rolling stock is to be charged to that account, then a certain percentage on the whole amount should be yearly charged to expenses, to equal the depreciation. The other way is: Charge the full amount of each purchase to that account, and yearly, before making up the accounts of the year; have all the rolling stock appraised by competent, disinterested persons, and let the amount they report represent the full value on that account.