Annual report together with statistics and other data for the year ...

(New York, N.Y. :  The Company,  )

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  1942: Page 1  



THE NEW YORK CENTRAL RAILROAD COMPANY
 

March

To the Stockholders:

The experience of 1942 strikingly demon¬
strates that the nation is largely dependent
upon the transportation facilities of its rail¬
roads. Never before have they been called
upon to move such a tremendous volume of
traffic. That their performance constitutes an
outstanding contribution to the war effort is
widely recognized.

Your Company has participated fully with
the other rail carriers of the country in this
vital transportation effort.

In addition to the vastly expanded industrial
production for war, other factors influenced
the upsurge of railroad traffic during the year.
First among these was the disruption of ship¬
ping along the Atlantic coast, and the with¬
drawal for war transport elsewhere of vessels
formerly in coastal and intercoastal service.
This diverted to the rails a huge volume of
traffic, the major part of which was petroleum
products that formerly moved to the eastern
seaboard by water. Further diversion of both
freight and passenger traffic to the rails, the
extent of which cannot be accurately measured,
followed gasoline rationing and the rubber
shortage. In the field of passenger traffic the
volume was greatly expanded by troop move¬
ments.

This abnormal wartime traffic volume has
had a pronounced effect upon the business of
the Company. Not since 1929 has it had a
year of comparable gross revenues. Despite
heavily increased costs for taxes, wages and
materials, the Company earned in 1942 a net
income of $49,082,183, equal to $7.61 a share.
Increased operating efficiency, reflected in a
substantial reduction in the ratio of operating
expenses to gross revenues, and lower annual
interest charges incident to the Company's pol¬
icy of debt retirement, contributed to this
result.

Operating Revenues and Expenses

Railway operating revenues totaled $593,666,-
096, more by $145,876,441, or 32.6%, than in
 

1, 1943

1941, and included an increase of $91,375,731,
or 27.1%, in freight revenue, and an increase
of $45,649,168, or 68.5%, in passenger
revenue.

The volume of revenue freight moved, as
measured by the number of tons moved one
mile, was 36.1% larger than in 1941. The
revenue per ton mile, however, declined to
8.65 mills, the lowest since 1918. The classes
of freight accounting for the largest gains in
tonnage, with the percentages of increase over
1941, were: Products of Agriculture, 14.4%;
Products of Mines, 14.5%; Manufactures and
Miscellaneous, 19.7%.

Passenger traffic, as measured by the number
of revenue passengers carried one mile, in¬
creased 55.5% above 1941. Revenue per pas¬
senger mile averaged 2.058 cents, the lowest,
except for 1940 and 1941, since 1917. The
movement of armed forces in active military
service contributed largely to the increased vol¬
ume of passenger traffic, which was further
augmented by members of the armed forces
traveling on furlough at reduced fares.

In both freight and passenger traffic, the vol¬
ume moved constituted an all-time high in the
Company's history.

Railway operating expenses (before taxes,
other deductions, and fixed charges) were
$402,669,598. This was an increase over the
previous year of $71,231,487, or 21.5%), due
to the greater volume of business as well as a
larger maintenance program, greater accruals
for depreciation, increased rates of pay and
higher costs of materials and supplies.

Railway operating ratio was 67.83, the low¬
est since 1916.

Taxes

Railway tax accruals were $82,890,104, greater
by $39,478,275, or 90.9%, than in 1941 and
equivalent to $12.86 per share of stock. In¬
creased personnel and higher wage rates neces¬
sitated larger payments under the Federal rail¬
road retirement and unemployment insurance
  1942: Page 1