The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1911-03-07

bic solely dependent on the passenger rstss
which can be charged for the short mileage oper-
ated. and it naturally follows that your Company
As owner VIII pay any deficit arising from its oper-
alton because it was constructed primarily for ths
use and benefit Of the entire Pennsylvania Railroad
system as an entrance into and through New York
City and Long Island.
1t was deemed appropriate that the complexion
OF such an important extension Of your system into
the heart Of New York City should be cummem-
GRATED by fitting tribute to your former President,
in whose administration the work was undertaken
A statue Of Mr. CSssatt. erected in the main wait
ing room in the New York Station. unveiled
August LIST, 1910 and bears the inscription, Alex
ander Johnston Cassatt. President. Pennsylvania
Railroad Company lSals06, whose foresight, cour-
age. and ability achieved the extension Of the
Pennsylvania Railroad System System into New
York City,"
Since the Inauguration Of direct rail service into
New York City and Brooklyn via the tunnel extern
sion, the ferries from Jersey City to Twenty third
Street New York, and to Brooklyn have been dis
continued.
The New York Tunnel Extension is carried on
your books at SO 565 Il5.52- Of which S5.0nOO Is
represented By full paid capital stock OF the Penn
sylTania Tunnel and Terminal Railroad Company
and the remainder by advances The total cost OF
this extension To December 31st, 1910. including
real estate not permanently required for its uss
and conserJatiyey estimated To be worth between
seven and eight millions Of dollars and not yet
disposed Of. is Sll2965. fl552. Of which VI
has been charged against Net Income and Prohs
and Loss and as explained in previous reports Sb,-
900 COCO has been borns by the Pennsylvania Com
pany and charged against Its Front ann Ao0S
Account
SECURITIES OWNED.
The securities held by your Company Decsnaher
ax- 1910. at a valuation Of 2906e.6L2 produced
direct income during the year Of Sl49e.S6G.
During the year your Company increased its hold
ings Of the stocks Of the New York. New Haven
and Hartford Railroad Company and the Norfolk
and Westen Railway Company, with both df which
the Company and its affiliated lines have for many
years ints-rhansed very large volume Of traffic
CONTROLLED. AFFILIATED. AND LEASED
COMPANIES.
Many minority stockholders d. the Northern On
traI Railway Company representing substantial hold
ins requested your Company to consider whether
more permanent operating aransznent OF Lease oc
its property to the Pennsylvania Railroad Company
could be made 4 basis equitable to al inter
ests. md special committee Of the Board Of tho
former Company. and also Minority Stockholders
Committee, were appointed TO consider the subject
After a careful analysis and study Of the whcls
situation. these Committees united in a recomnen-
dation that the lease Of the railroad franchises.
equipment and all other property Of the northern
Central Railway Company bs made To the Penn
syfTania Railroad Company for p9 years from jan
uary lst. 1871 upon the following general basis:
! taJ 4 rental Of per oent- payable on the out
standing capital stock Of the Company after it had
been increased by 70 per cent stock dividend;
the present stock; lei a further sum sufficient to
, preserJe and maintain that Conpary's corporate
existence and organization; ID the Lessee TO also
pay all fixed charges md taxes The proposed Has
stating in detail the full terms and conditions was
after due approval By the Boards Of Directors OF
the respective COmpanieS submitted to the stock
holders of the Northern Central Railway Company.
and Approved bg the vote and consent Of share
holders representing g per cent Of the whole
stock. which included over s. per cent Of shares
owned by others than tho Pennsylvania Railroad
CoHr0 l-aaa Nd Tpe7ff ~
capital stock. now before the Public SerIica
Commission Of Maryland for its approval
quired By law. Upon such approval. The kass
could becrme effective hut By reason of two SuitS
instituted BY dissatisfied minority scockholders
in the United States Circuit Court Of the District
Of Maryland and the other m tho same curt for
the Eastern District Of Pennsylvania, your COm-
pany, BY action Of its Board Of Directors. has
deemed 1t prudent to declare that It shall not b
required 10 execute and efectuats the said lease.
IL approved by the Public Service Commission q
Maryland or to take possessiou Of the railway and
property Of the Northern Central Railway Company,
until each II the two suts against the Latter Com
pzny and the Pennsylvania Railroad Compan- shall
be adjudicated, until your Company Is advised
By Counsel that It IS proper to consUrunate the
sane pFior to such adjudication The Northern
Central Railway Company has been affiliated with
your Company for almost fifty years, and in that
time has had the benefit Of the npest experience
in r1ilruad operation and mana cement which your
Company could give it. and although several
previous attempts to lease that property to tho
PENNSYLVANIA Railroad Company unsuccessful.
because Of the lack Of unanimity among the Moth
ern Central Railway stockholders. it was believed
that the time had come when It desirabl8
and proper for your Coupsny tn consider lease
Both Companies. By reason Of this long afhltaton.
their mutual trackase asTeenentA. and terminal
grants have become essential IN their operations
TO each other and the Northern Central Railway
Company being dependent upon the traffic inter
changed with your system for about s. per cent OF
its Eruss reTenues it IS evident that q lease Is
natural result and the closer operating relationship
which VIII be thereby effected cannot fail to Be
beneficial 10 the Companies and TO the territory
served BY tho Northern Central Lines This Opin-
ion Is fully justified BY the unanimous consent and
action Of the holders Of a Substantial majority OF
the minority shxres Of that Company. without
which this Company declined To even consider the
| lease. The purpose Of your Company and tbs
action Of your Board n connection with tho fore
going Lease. is reported, with the other mat
ters in this report for the approval and conrnna-
ton II the stockhcldss-
RELIEF. SAVING FUND. AND PENSION
DEPARTMENTS.
The expenditures for pensions for tho year hare
bern 1854 nos or S54.7ln3 in excess Of tho
appropriated by the various companies affiliated
in this DEPARTMENT.
The various increases IN employees WAGES sinoe
the establishment Of this Department the Increasing
length Of service Of those retired. together with
continued growth in the number Of retirenents
der the $50 Year Clause Of the Pension ReGIla-
tons which the Management did not deem it visa,
IN the best interest Of the service to restrict an
tend To heavier drain upon the pension Sp-
preparation
To cover this Company's po-tion Of the additional
expenditures for pensions during the year. your
Board found it necessary to expend additional
sum Of 10 which YOU asked To approve
The stockholders will also be requested to an
thorze an increase in the annual set apart for
pension purposes from 10000 to $4,000
II the Board,
JAMES McCREA.
President
PIES OF THE ANNUAL REPORT COM