Lehigh Valley Railroad Company.

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1



FORTIETH ANNUAL REPORT



OF THE



BOARD OF DIRECTORS



OF THE




TO THE



STOCKHOLDERS.



JANUARY 8th, 1895.



PHILADELPHIA:
Allen, Lane & Scott*s Printing House,

Nos. 239-231 South Fifth Street.

1895.



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(RECAT)

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ANNUAL REPORT



OF THE



Lehigh Valley Railroad Company



For the Fiscal Year ended November 30th, 1894.



-e-



January 8th, 1895.

The total tonnage for the fiscal year ended November 30th,
1894, as compared with the previous year,Vas as follows: —



Total Tonnage over Road in Tons of 2000 Pounds.





1894.


1893.


Differences.


Anthracite coal

Bituminous coal and coke
Miscellaneous freights . .


11,103,157

327,507

4,690,885


11,477,630

345,830

4,951,782


Dec. 374,473

18,323

260,897


Total


16,121,549


16,775,242


Dec. 653,693



Tons Carried One Mile.





1894.


1893.


Differences.


Anthracite coal

Bituminous coal and coke
Miscellaneous freights . .


1,130,195,335
16,862,073

1,004,772,737


1,100,454,043

20,795,772

927,481,372


Inc. 29,741,292
Dec. 3,933,699
Inc. 77,291,365


Total


2,151,830,145


2,048,731,187


Inc. 103,098,958



T!DL 3 1 1915






266



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Average Freight Rates.



X894.



1893.



DiFFERBNCBS.



Average rate per ton on coal .

Average rate per ton per mile
on coal

Average rate per ton on mis-
cellaneous freight

Average rate per ton per mile
on miscellaneous freight . .

Average rate per ton on total
tonnage

Werage rate per ton per mile
on total tonnage



73 Accents

Accents

1 27^ cents

T%V\7 cents

89AV cents
AVt cents



ySxJiy cents

tWAj cents

121 Accents

Accents

90 iWj cents
tWV cents



Dec.
((

Inc.
Dec



4^ cents
T^Jiy cents
6Ty\j cents
jgJxj cents

It^ cents
xJiij cents



Passenger Traffic.



1804.



1898.



DiFFBRRNCBS.



Number of passengers carried .

Number of passengers carried
one mile



4,812,652
102,579,780



6,306,039
131,221,553



Dec. 1,493,387
" 28,641,773



Passenger Averages.



1894.



1893.



Differ BNCBS.



Average mileage per passenger.
Average receipts per passenger.
Average rate per mile



2ij»^ miles
43t^oV cents
Miiy cents



201W miles
41 T^ cents
iA'(rtr cents



Inc. T^V miles
** a^VSr cents
" tWtt cents



The transportation earnings of the past year, compared with
those of 1893, were as follows : —



From coal

" miscellaneous fgt.
** passengers . . .
' * express and mail,
'* other items . . .



1894.



>8,39i,54l 81

5,982,857 70

2,104,677 12

262,590 95

588,926 19



1893.



Differences.



19,225,027 51

6,009,420 73

2,606,025 28

230,617 93

539.685 54



Dec. $833,485 70
26,563 05
*' 501,348 i^

Inc. 31,973 02
49,240 65



$17,330,593 77



$18,610,776 99



Dec.$i,28o,i83 22



r^^J^""'^ '



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Transportation Earnings as above . $17,330,593 77

From which deduct proportion due South-
em Central Railroad Company, being
surplus earnings over expenses, as per
agreement . 21,748 50

$17,308,845 27
Add net receipts from other transportation
lines operated conjointly with Lehigh
Valley Railroad :— ;
New York Lighterage
and Transportation

• Company $68,448 00

Bee Line (tugs and

barges) 43»i68 42

Buffalo Creek Railroad . 76,679 11

188,295 53



$17,497,140 80
Operating Expenses' 13,320,829 25

Net earnings $4,176,311 55

Deduct loss on Lehigh Valley Transpor-
tation Company : —

Operation 149,777 42

Steamship depreciation . 44,785 00



Add iricome from other sources : —

Interest on bonds .... $465,888 63
Dividends on stocks . . . 116,182 40
Interest on mortgages . . 50i3oi I7

Mine leave 126,674 76

Miscellaneous items ... 88,712 01



194,562 42
$3,981,749 13



847,758 97

$4,829,508 10
Less interest on floating debt. State taxes,
loss on Morris Canal, &c 428,697 61



Net available income \ $4,400,810 49

From which deduct interest on funded debt and fixed
rentab of leased lines 4,273,740 00



Surplus $127,070 49



The details of above item of operating expenses are sup-
plied in a table appended to this report



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8

The balance to credit of Profit and Loss Account No-
vember 30th, 1893, was 17,291,059 16

Surplus earnings for 1894, as above stated » 127,070 49

To this are added the following additional items of rev-
enue not pertinent to the year just closed : —

Gain on water interests 1178,426 13

Adjustment of tax accounts of previous

years i59»404 22

Uncollected wages prior to January, 1886 23,434 34
Excess insurance— tug '* E. P. Ross," 470 00

fo6i,734 69
Less-
Rental Southern Central
Railroad, October and No-
vember, 1893 $25,684 94

Balance old accounts prior to

lease 24,019 90

49,704 84

312,029 85

Leaving a balance to credit of Profit and Loss, Novem-
ber 30th, 1894 $7,730,159 50



The gross earnings of the Lehigh Valley System, including
rail and water lines, from transportation, and of the Lehigh
Valley Coal Company for coal, wood, &c., have aggregated
during the past year about ;^35,ocxd,ocxd.

The capital account of the Company at the close of the

fiscal year stood as follows : —

Common stock $40,334,800

Preferred stock 106,300



'^ First mortgage six per cent, bonds, due in

1898 (coupon and registered) $5,000,000

Second mortgage seven per cent, bonds, due

in 1910 (registered) 6,000,000

Consolidated mortgage bonds, due (excepting

sterling and annuity bonds) in 1923 : —
Six per cent, bonds : —

Sterling $1,329,000

Coupons 1,319,000

Registered 4,319,000

Annuity 8,662,000



$40,441,100



Four and one-half per cent, bonds : —

Coupons $1,669,000

Registered 3i093,ooo

Annuity 2,538,000



15,629,000



$7,300,000



$33,929,000



174,370,100

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Three hundred and twenty of the sterling bonds were
drawn payable December ist, 1894, leaving ;^i,009,cxx) bear-
ing interest from that date.

The guarantees by this Company of the bonds and stocks
of affiliated companies remain as they were a year ago, and
are as follow : —

Pennsylvania and New York Canal and Railroad Company : —
First mortgage seven per cent, bonds, due

1896 |i, 500,000

First mortgage seven per cent, bonds, due

1906 1,500,000

Five per cent, bonds, due 1939 4,000,000

Four per cent, bonds, due 1939 3,000,000



fio,ooo,ooo

Easton and Amboy Railroad Company, first mortgage five

per cent, bonds, due 1920 6,000,000

The Lehigh Valley Rail Way Company, first mortgage
four and one-half per cent, gold bonds, due 1940 . . . 15,000,000

Lehigh Valley Terminal Railway Company, first mort-
gage dve per cent, gold bonds, due 1941 10,000,000

The Lehigh Valley Coal Company, first mortgage five
per cent, gold bonds, due 1933 4,000,000

The Delano Land Company, five per cent, gold bonds,
due 1932 1,200,000

Morris Canal and Banking Company: —

Preferred stock, ten per cent 11,175,000

Consolidated stock, four per cent. . . . 1,025,000

2,200,000

148,400,000 ^

The floating debt, represented by notes of the Company / 2f^ i%u^K
secured by bonds of the Lehigh Valley Coal Company as ' .

collateral, was at the beginning of the year ^3,870,0CX). It j
was reduced during that period g670,0CX), being at the close f
of the year ;g>3,200,ocx>. A further reduction of ;g325,ooo has (
since been made, the amount at this d^e being $2,875,ocX). j

To meet this debt and such future expenditures for exten- '
sions, new properties, and equipment, as may properly be
chargeable to capital accounts, the following securities, which
do not include cash assets shown in the balance sheet, are
available : —



K



^v-






Six per cent, consolidated mortgage bonds of Lehigh Val-
ley Railroad Company I850.000



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lO

Five per cent, first mortgage bonds of Lehigh Valley Coal
Company $8,072,000

Five per cent, first mortgage bonds of Schuylkill and Le-
high Valley Railroad Company 2,000,000

Six per cent, first mortgage bonds of Morris Canal and
Banking Company i 500,000

Five per cent, certificates of Lehigh Valley Terminal Rail-
way Car Trust , 893,000

Bills receivable 617,086

Mortgages receivable • . . 938,068

113,870,154

* [Note. — The disagreements in some items of this list with the cor-

responding items of the balance sheet are due to the former being of
' present date, the latter of November 30th, 1894.]

I There is also a margin of ;^ 1,000,000 in the reserve of con-

■ solidated mortgage bonds, ;^ 12,000,000 being retained under
I the terms of the mortgage to meet at maturity the outstanding
first mortgage bonds due in 1898, amounting to g 5, 000,000,
: and second mortgage bonds due in 1910, amounting to
;^6,ooo,ooo. A reserve of $3,000,000 of the consolidated
mortgage bonds of the Pennsylvania and New York Canal
and Railroad Company is also provided for the redemption at
maturity of the same amount of first mortgage bonds of that
company, of which $1,500,000 mature in 1896 and $1,500,000
in 1906. No bonds of this Company or of any of its aflfiliated
I Companies mature during 1895, except the sterling bonds

I which are drawn annually for the sinking fund under the pro-
visions of the consolidated mortgage.

A condensed balance sheet, showing the condition of the
Company November 30th, 1894, and also a comparison with
that of the previous year, is appended hereto. It may be
noted as to the increase of the charge against the Philadelphia
and Reading Railroad "Company that it is due to liabilities of
the lessee under the lease, the amount of which was ascer-
tained since the close of the books a year ago. Considerable
progress has been made in the adjustment of the accounts
between the two Companies during the year, but some im-
portant items are still under consideration by the Accounting
Departments, under advice of counsel as to the respective
liabilities of the Companies.



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II



It has been a matter of much disappointment to your offi-
cers and to all interested that the trade conditions of the
country have not so improved as to produce net earnings suf-
ficient to justify the resumption of dividends. These condi-
tions are clearly reflected in the tonnage and revenue state-
ments already submitted. While the total tonnage of the past
year shows a decrease of 653,693 tons, or nearly 4 per cent,
the tons carried one mile (the true test of transportation ser-
vice rendered) increased 103,098,958 tons, or over 5 per
cent. ; yet the transportation earnings from all sources decreased
over ;g 1, 2 50,000, as compared with those of the previous year.

The condition of the anthracite coal trade, upon which the
Company is so largely dependent, has been particularly bad —
worse during 1894 than in the previous year, and especially
so near the close of the fiscal year. It will be noted in the fore-
going table of rates realized per ton per mile for transporta-
tion of all classes of freight during the year, that the rate in
1894 was i Hq cents per ton less than in the previous year.
This upon the tonnage carried was more than $1,600,000, or
4 per cent, upon the capital stock of the Company.

The loss to the Company from the strike alluded to in the
last annual report, which occurred between November i8th
and December 6th, 1893, is estimated at over g 1,000,000.
A very large proportion of this loss was sustained during
the fiscal year just closed, the increased expenses incident
to the strike and the reduction of traffic having continued
many weeks after the strike was nominally ended. A diversion
of business to other lines also resulted, which has been grad-
ually returning up to the present time. It will be easily
recognized that these two items of loss of revenue from the
reduced rates of transportation on both coal and general mer-
chandise, and loss incident to the strike, together amount to
more than the annual dividends which were current for some
years prior to 1892.

It is gratifying to note that the experience of the past year
has fully confirmed the expressions contained in the report of
l^t year in reference to the causes and purposes of the strike
and the judgment of the management in dealing with it.

Of a total tonnage of anthracite coal during • the year.




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12

amounting to 11,103,157 tons of 2000 pounds each. 2,321,390
tons were of coal hauled in the trains of other companies over
our tracks, much of it very short distances; 878,180 tons
were of coal for use of our own locomotives ; and 5 1 1 ,3 1 3
tons were of coal in our own trains, giving a short lateral haul
between the mines and junctions with other lines controlling
the transportation of the coal. These items together consti-
t^^^ 33 A P^** ^^"^- ^f ^he total anthracite tonnage of the year^
leaving a tonnage of 7,392,274 tons of 2000 pounds each dis-
tributed to local points in our own territory and to terminal
points and junctions other than those in the immediate neigh-
borhood of the mines. For the detail of this distribution
reference is made to a table appended to this report.

The tables of passenger statistics present some noticeable
features, to which we may appropriately call attention. The
aggregate number of passengers was reduced about 1,500-
000, or over 23 per cent, from the number carried in 1893.
The World's Fair traffic, which was generally a long haul,
averaging probably 300 miles, must account for a small pro-
portion of this. This, however, has been offset in a large
measure by an increase in the through passenger business of
the Company between the Atlantic seaboard and the Niagara
River, in connection with lines to and from western States.
Notwithstanding the loss of the World's Fair traffic, the
average distance traveled per passenger has increased from
20^1^ miles in 1893 to 2\-^^ miles in 1894. This is explained
by the opening for busiitess of electric railways between
many of the largest towns located upon our system, where pre-
viously we have carried large numbers of passengers for short
distances at low fares. It may be noted that in the midst
of these changes the average rate per passenger per mile
has increased from lyVl^ cents in 1893 to 2y^-§^ cents in
1894.

In connection with improved train service between New
York and Chicago via our line, a high-grade dining car ser-
vice on the " European " plan has been introduced, which has
commended itself to the traveling public.

The advances by this Company to the East Jersey Water
Company^ which amounted a year ago to ;g 1,466,287.78, have



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^3

been returned during the year from the proceeds of sale of
bonds of the city of Newark belonging to the Water Com-
pany, alluded to in previous reports.

On January 31st, 1894, a contract was entered into with
the Delaware, Susquehanna and Schuylkill Railroad Com-
pany, whereby that Company was granted the privilege of
running its own trains coal laden to the tidewaters of New
York, thus assuring to this Company for a term of 15
years from July ist, 1894, an important traffic (that of the
Cross Creek Coal Company, formerly Coxe Bros. & Co.), for
which several outlets existed and which had been in con-
tention for some time previously. It also removed an in-
centive to the construction of further new lines into the ter-
ritory tributary to the Lehigh Valley system. Local coal
received from the line of that Company continues to be
hauled in our own trains, as previously.

That portion of the Pennsylvania, Poughkeepsie and Bos-
ton Railroad located between Slatington, on our own line, and
the point of junction with the New York, Susquehanna and
Western Railroad, a short distance east of the crossing of the
Delaware River, has been operated by our Company during
the past year under an arrangement with the Receiver of the
Pennsylvania, Poughkeepsie and Boston Railroad Company.
Its whole line, extending with some intermissions from Slat-
ington to the New York and New Jersey State line, near
Campbell Hall, has recently been sold under foreclosure and
bought by the bondholders, and the arrangements alluded to
are temporarily continued, awaiting the organization of the
purchasers and assumption of possession by them.

The line of the Southern Central Railroad Company, ex-
tending from near Sayre, Pennsylvania, to North Fair Haven,
New York, on the shores of Lake Ontario, 117 miles in length,
which has been operated since December 29th, 1886 under
an agreement with that Company, passed into the hands of a
Receiver in July, 1894, upon application of holders of the
consolidated mortgage bonds. The operation of the line has
<:ontinued in the hands of this Company as agent for the Re-
ceiver. This Company holds all of the first mortgage bonds
outstanding, amounting to 1190,000, and about 60 per cent



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of the consolidated mortgage bonds. Negotiations are pend- •
ing with other bondholders with a view to securing such a
reorganization as will bring the fixed charges of the Com-
pany within the limits of its net earnings, and of substituting
in the hands of the bondholders a marketable security in ex-
change for bonds which, owing to the default of interest,
have for several years past had very limited sale.

There being little traffic since the opening of the Company's
line between Geneva and Bufifalo which could be advanta-
geously passed by us over the line between Geneva and a junc-
tion with the main line of the New York Central and Hudson
River Railroad Company at Lyons, notice was given to that
Company as of December ist, 1894, for the abrogation of the
contract between that Company and this, whereby our trains
have been running between Geneva and Lyons.

Arrangements were effected early in the year, whereby loaded
cars were delivered without transfer of lading to the New York,
New Haven and Hartford Railroad Company at our Jersey
City terminal, for transfer to the lines of that Company at the
^ Harlem River and distribution over the large territory tribu-

tary thereto. This has opened up a large area for the supply .
of coal by operators located on our line as well as for the
agricultural products of the West received from connecting
water and rail lines at Buffalo and Suspension Bridge. The
interchange of business under this arrangement has increased
to such volume that it has recently been found necessary
to provide two additional bridges at the Jersey City terminal
for the transfer of cars to floats, the construction of which is
now in progress.
^ : I /y Our freight terminals at Jersey City, New York, and Brook-
^^^ ^ \yn have been developed to a high point of efficiency, and have
* / \ justified the policy of the Company in establishing independ-
I ent terminals for the accommodation of this class of business.
I Our passenger business continues to be done at all these
' points through the terminals of the Pennsylvania Railroad
Company ; the volume of our passenger traffic has not war-
ranted the cost of instituting independent ferries and passen-
ger stations. We have, however, ample ground and water
front at Jersey City should the same be needed.

V

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The increase of business at Jersey City Terminal and con- I
tiguous points has involved an expenditure of about ^220,-
000 for increased facilities. A coal trestle, yard, buildings, I
&c., were completed at Avenue D. A large building for the /
accommodation of the United States Express Company at
Jersey City has been built. The demands of our patrons for
a building in which their shipments of hay could be stored \
and kept dry seemed to make it necessary, and such a build-
ing has been erected. Its capacity is between 300 and 400
cars. It is provided with th^ most approved appliances for
handling the bales and so placing them as to be readily in-
spected by the purchasers. This improvement has just been
completed ; it is highly commended by the dealers, and will
largely increase our traffic in that commodity. In addition to
the other advantages, this house will relieve to a great extent
our Jersey City yards and release cars for other service. We
have had at one time over 600 carloads of hay standing on
side tracks.

A n^ yard containing four miles of track has been com-
pleted, and another of equal capacity has been determined
upon. Convenient yards for the economical handling and for-
warding of cars are essential to the proper conduct of our
large and increasing business. Our traffic to and from New i

York Harbor through our Jersey City and Perth Amboy ) .

terminals reached in 1893 1,337,587 tons, and in 1894 1,641,- f '

896 tons, showing an increase of 304,309 tons, or 22^ per
cent.

In the event of our grounds at Jersey City being fully occu-
pied, we have a magnificent domain at Constable's Hook, to
which the National Docks Railway (of which this Company
is part owner and is represented in its management) has been
extended, so that it may be brought into use on short notice
when the necessity arises. . ^

Under arrangements effected during the past year with the V"* !v \
United States Express Company, the express business over our .
lines has largely increased. A fast night train from our Jersey *" ' '


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Online LibraryLehigh Valley Railroad CompanyAnnual report of the Board of Directors of the Lehigh Valley Railroad ... → online text (page 1 of 21)