Physical Condition

The structures, track, signaling devices, electrical equipment and rolling stock have been
maintained at a high standard of el^ciency. Much study has been given to the details of main¬
tenance for the purpose of reducing cost and promoting economy in operation, but in no case
has a false economy been practised through the deferring of necessary repairs.

Material improvement has been effected in track alignment, and extensive sections of
concrete track construction have been substituted for the ordinary form of crushed stone bal¬
lasted track, thus greatly improving the conditions of maintenance. Special attention has been
given to care of electric cables. An investigation of their condition and the methods of
maintenance was made by a board of consulting engineers aided by the operating officers. This
investigation was supplemented by one made by a committee of your board of directors, and as a
result of these, it is believed that this equipment has been maintained, and now is, in the best
possible condition, and that nothing of known value has been left undone. That the rolling
stock has been kept in first-class condition is evidenced by the fact that delays in operation
due to car equipment failure have been practically negligible.
 

Traffic

During the first seven months of the year 1914, the company's passenger traffic showed a
consistent and satisfactory normal increase of 2.6% over the same period of 1913, but owing
to the depressed business conditions incident to the European War, the last five months of 1914
showed a decrease of 1.8% as compared with the same period of 1913, but by the exercise of great
care in expenditures the net income of the company was not adversely affected. The principal
loss in traffic was in that which under normal conditions flows to and from Hoboken, where
since August 1st, there has been a condition of almost complete stagnation because of the intern¬
ment of the North-German Lloyd and the Hamburg-American steamships.

At midnight on February 25th 1915 seven full years of train operation were completed, dur¬
ing which time 329,357,277 passengers were carried without the loss of a single life. During the
year 1914 there were no injuries to passengers, except a few of minor nature.
 

Additional First lien Bonds Issued

During the year 1914, $356,500 face value of First Lien and Refunding Mortgage 5% Bonds
were authorized by the Public Service Commission for the First District of the State of New
York and the State Board of Public Utility Commissioners of New Jersey, for the purpose of
reimbursing the company's treasury for additional capital expenditures made and approved by
and Commissions. Of such amount, $202,500 face value of bonds have been sold, and the
proceeds applied to such reimbursement. The balance of $154,000 of bonds is retained in the
company's treasury.