Rent for leased roads and equipment de¬
creased $1,296,368, interest on funded debt
was $970,189 lower, and interest on unfunded
debt was less by $915,635 compared with
1942.

These decreases resulted from reduction in
the amount payable as dividends on outstand¬
ing stock of lessor companies, the retirement
of capital obligations, and the non-recurrence
of interest paid in 1942 in settlement of back
Federal taxes in controversy.

Net Income and Dividends

Net income, after all deductions, was $62,-
734,050 and was transferred to the credit of
Earned Surplus.

The Board of Directors, on May 12, 1943,
declared a dividend of $0.50 per share on the
capital stock, payable July 15, 1943, to stock¬
holders of record June 11, 1943, and on No¬
vember 10, 1943, a dividend of $1.00 per share
payable January 15, 1944, to stockholders of
record November 20, 1943. The amount of
these dividends, $9,671,091, was charged to
Earned Surplus.
 

Net Working Capital

Current Assets and Liabilities are set forth in
the Condensed General Balance Sheet and
show Net Working Capital at the end of the
year of $107,112,821, an increase of $55,650,-
319 over the amount at the end of the pre¬
ceding year.
 

Equipment

All available equipment, including additions
made during the year, continued to be sub¬
jected to the most intensive utilization in
meeting the demands of increased traffic vol¬
ume. During the year, the following addi¬
tional equipment was placed in service:

36 Steam   combination   passenger   and
freight locomotives.

21 Diesel-electric switching locomotives.

1101 Freight train cars having an aggre¬
gate carrying capacity of 77,200
tons.
 

In addition to the foregoing, the Company
acquired from the Pullman Company 26 addi¬
tional parlor cars heretofore in service on our
line, of which 24 have been converted into
coaches and 2 continued in service as restau¬
rant-lounge cars. Air conditioning equipment
was installed on 22 coaches during the year.

Satisfactory results were obtained in main¬
taining a low ratio of "bad order" revenue
freight cars, thus contributing to the maxi¬
mum utilization of equipment. The percent¬
age of such cars requiring heavy and medium
repairs at the end of the year was 2.9 of own¬
ership. At the end of 1942, the percentage was
2.7.

Despite continued heavy demands upon
motive power, it was possible to maintain a
comparatively low percentage of locomotives
awaiting general repairs at shops. At the end
of the year, this percentage was 2.6, compared
with 2.4 at the end of 1942.

The current volume of traffic and increases
anticipated require further additional equip¬
ment, which has been ordered for delivery in
1944.
 

Capital Obligations

During the year, a reduction of $25,770,184
was effected in the amount of capital obliga¬
tions (including amounts payable to the State
of New York on account of grade crossing
eliminations, and amounts payable in respect
of equipment acquired under railroad equip¬
ment agreements assigned to banks) of the
Company and its lessor companies outstand¬
ing in the hands of the public. At the end of
the year, the total of such obligations was
$891,967,063, compared with $917,737,246 at
the end of 1942, and $1,108,807,952 at the
end of 1932.

Interest charges computed on an annual
basis, on the obligations outstanding at the
end of 1943, were $12,323,586 less than on
the obligations outstanding at the end of
1932, a reduction of 26%.

Wage Increase

As stated in the annual report for 1942, or¬
ganizations representing fifteen groups of rail-