Hudson & Manhattan Railroad Company
 

Report to Stockholders
 

William T. Rossell to serve as a director with
the expectation that he will become President of
the Company in April. Mr. Rossell was Vice
President of the Brooklyn & Queens Transit
Corporation for 9 3'ears prior to 1939. He was in
charge of trolley and bus lines connecting with
the BMT subway and elevated lines. From 1939
to 1944, he ran the St. Louis transit system as
President of the St. Louis Public Service Com¬
pany. He is currently President of Transit
Research Corporation, New York, New York and
Is also a Director of National City Lines, which
controls the transit systems in many cities,
Mr. Rossell has a nation-wide reputation as
an operator and executive in the transit field.
Your Board expects the Management, under
the leadership of Mr. Rossell, to make an all-out
effort to reverse the traffic trend and increase
efficiency in a manner not heretofore effectuated.
There are opportunities to increase and stimulate
commuter and off-peak travel: increasing traffic
congestion and parking problems in New York
City will  make  it ever  more difficult and  less
 

attractive for private autos and buses to use com¬
petitive facilities; housing developments should
increase the number of Jersey commuters. It is
hoped that increased traffic coupled with in¬
creased efficiency in the conduct of operations
will provide the basis for improved railroad
earnings.
 

Real Estate Operations
 

The Hudson Terminal Buildings, opened in
1908, contain approximately one million square
feet of rentable area. The bridge-connected twin
buildings are located in the downtown area of
New York City. The buildings represent the
principal real estate asset of the Company, which
has been successful in securing and maintaining
100% occupancy during the year 1946.

Gross revenues in 1946 amounted to $2,171,398,
an increase of 5.5% over 1945. This upward
trend is continuing this year. Net income
amounted to $549,462 representing a small in¬
crease over last year. A property maintenance
and upkeep program involving substantial expen¬
ditures has been necessary during past years to
retain a high level of rentals, and further sub¬
stantial expenditures for post-war modernization
 

are necessary to minimize the competitive attrac¬
tion of new office building construction now
contemplated. This program was fostered and
implemented during 1946, and has progressed
satisfactorily, to the enhancement of the security
of the present high rental income. The Company
has also endeavored to recapture office space
used by government and commercial organiza¬
tions for purposes allied to the war effort. In
this effort nearly ten per cent of all office space
has been re-let at higher rentals with negligible
loss of income during the conversion period.

During the year several parcels of non-income
producing properties were sold at advantageous
terms and the Company was relieved of the fixed
and maintenance expenses involved.
 

The Financial Situation
 

Since 1932, due to the combination of decreasing
passenger revenues and increased operating ex¬
penses, the Company has not earned the charges
on its bonded indebtedness. On December 31,
1946, the Company had outstanding $29,989,600
fixed interest and $21,754,000 contingent interest
obligations, a total of $51,743,600, all of which
matures In 1957.    The annual interest charges on
 

this amount were $2,582,470. In an effort to
reduce this indebtedness and the interest charges,
the Company has for some years past made
purchases of its bonds in the market.

During the year 1946, the Company continued
this policy, using a portion of the Property
Amortization Fund not required for maintenance
of physical properties to purchase bonds at sub-