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Annual Report

The extension mortgage simply extends the lien of The New York Central and
Hudson River Railroad Company's $100,000,000 first mortgage, dated June 1, 1897, so as
to cover the railroad properties of certain companies consolidated during the past year,
which properties that company had, previous to consolidation, held under lease, the lease¬
holds being subject to the first mortgage.

The consolidation mortgage, which covers the lines of railroad owned by this com¬
pany and certain stock and leasehold interests held by it, and which provides for the
issuance of not exceeding $167,102,400 of four per cent bonds to mature on the first day
of February, 1998, has been executed to the Bankers Trust Company, as trustee, to secure
bonds and debentures to the amount of $167,102,400. The bonds so secured are the
$90,578,400 of three and one-half per cent Lake Shore collateral bonds, $19,336,000 of
three and one-half per cent Michigan Central collateral bonds, $48,000,000 of the deben¬
tures of 1904 and $9,188,000 of the debentures of 1912. It is provided that the four'
per cent bonds issued under this mortgage may, from time to time, as the Board of Direc¬
tors decides, be offered in exchange for and to retire the Lake Shore collaterals, the
Michigan Central collaterals, or the debentures. The consolidation mortgage does not
increase the present bonded indebtedness of the company.

The refunding and improvement mortgage, which has been authorized by the Board
of Directors, the stockholders, the Public Service Commission of the State of New York
and the Public Utility Commission of New Jersey, is intended to provide for the future
financing of the company or of a successor consolidated company, so far as such financing
is to be met by the issuance of bonds. The bonds to be issued under this mortgage will
become due on October 1, 2013, and the amount thereof at any time outstanding, together
with all outstanding prior debt of the railroad company, is not to exceed three times
the amount of the capital stock of the company or of a successor consolidated company,
as the amount of such stock is from time to tinie increased. Under the terms of the
mortgage the Board of Directors is given the power to issue bonds, in series, bearing
interest at such rates as shall be fixed and determined by the Board, for the purposes
specified in the mortgage, up to the sum of $500,000,000. When the amount issued shall
be $500,000,000 no additional amount of bonds shall thereafter be issued, except to refund
prior debt, unless such further issue shall have been authorized by a majority vote of
the stockholders. None of the additional bonds which may be so authorized by the
stockholders shall be issued in respect of work done, or property acquired, in any amount
exceeding eighty per cent of the cost of such work or property.

In connection with the Grand Central Terminal improvement, the main concourse,
the waiting room and many of the permanent facilities were opened to the public on
February 1, 1913, and since that date rapid progress has been made towards the com¬
pletion of the work. The shell of the incoming station has been completed and con¬
tract awarded for the interior finish and this important part of the terminal is expected to
be ready for use by the middle of 1914. The Vanderbilt Avenue store and office building
was completed and occupied during the summer and the Biltmore Hotel finished and
opened on December 31st. The foundations for the Yale Club building at the corner
of 44th Street and Vanderbilt Avenue have been commenced and this structure, in
architectural harmony with the rest of the terminal improvements, is expected to be com-