New York, N. Y. March 16th 1925.

To THE Stockholders and Bondholders of the

HUDSON & MANHATTAN RAILROAD COMPANY

The following report for the year ended December 31,1924, is submitted:

On January 17, 1924, the Board of Directors declared the regular 2}4^o semi¬
annual interest on the Company's Adjustment Income Mortgage 5^ bonds for the six
months ended December 31, 1923. On July 24, 1924, a declaration was made by the
Board of Directors of the regular 2}4^o semi-annual installment for the six months
ended June 30, 1924, and on January 22, 1925, a declaration of the regular semi-annual
interest of 2^% for the six months ended December 31, 1924, was made.

On January 17, 1924, the Board of Directors declared dividend No. 2 of 2>^% on
the Preferred Capital Stock of the Company, payable February 15, 1924, to stockholders
of record February 1, 1924, and on July 24, 1924, semi-annual dividend No. 3 of 2}4^o
was declared payable August 15, 1924, to stockholders of record August 4, 1924. On
January 22, 1925, semi-annual dividend No. 4. of 2}4^o was declared payable on
February 16, 1925, to stockholders of record February 4, 1925.

At the request of holders of a large amount of the Company's Stock, both the
preferred and common shares were listed on the New York Stock Exchange
October 22,  1924.

In previous reports reference has been made to our acceptance of the provisions
of Section 209 of the Transportation Act, 1920, which guaranteed the operating income
for the six months immediately following the termination of Federal Control on February
29,  1920.   This matter has now been adjusted without payment by or to the Company.

The net return from railroad operations, while showing an increase for 1924,
continues much below the rate of 5.75% which, as mentioned in previous reports, was
determined by the Interstate Commerce Commission as a fair return upon the aggregate
value of the railway property of carriers as defined in section 15-A of the Interstate
Commerce Act.

Work of enlargement of the station and passageway facilities at Erie Station,
referred to in the report for 1923, has been completed. The new sections are in use and
provide material improvement in the handling of traffic through Erie Station.

As a result of strict adherence to the policy of efficient maintenance, the tunnel,
station and other structures, and the plant and equipment remain in safe and satis¬
factory condition.

By order of the Board of Directors,

OREN ROOT,

President