61273_1945-1949

PANAMA RAILROAD COMPANY

CREATION AND PURPOSE

The Panama Railroad Company was incorporated byan act of the Legislature of the State of New York onApril 7, 1849, and was operated under private controluntil 1881, when the original French Canal Companyacquired most of the 70,000 shares of its stock. Thiscompany and its successor, the New Panama Canal Co.,continued to operate the railroad company as a commoncarrier and also as an adjunct to their attempt to constructa canal, until 1904, when their stock (68,888 shares)passed to the ownership of the United States as a part ofthe assets of the New Panama Canal Co., which werepurchased for the sum of $40,000,000, as authorized bythe act of Congress approved June 28, 1902 (34 Stat. 481).The remaining 1,112 shares were purchased from privateowners in 1905 at an average cost of approximately $140per share.

By Executive order of May 9, 1904, the Presidentdirected that all members of the Isthmian Canal Com-mission be elected to the board of directors of the PanamaRailroad Company and that the policy of the PanamaRailroad Company be completely harmonized with thepolicy of the Government of making it an adjunct to theconstruction of the Canal, while at the same time ful-filling the purpose for which it was constructed as a routeof commercial movement across the Isthmus of Panama.The Panama Canal Act, approved August 24, 1912,authorized the President to establish, maintain, andoperate, through the Panama Railroad Company orotherwise, numerous types of business activities relatedto the Canal. This authority was exercised in manycases, and the conduct of incidental business operationsby the Panama Railroad Company has been continued todate.

From 1914 to 1939 the Company's operations were on afairly stable basis, marked only by an abrupt decline in theearly 1930's of its once important coaling business. Dur-ing the period of construction for national defense,starting in 1940 and throughout World War II, theCompany's business was greatly expanded. This causeda large increase in the earnings of its various enterprises.The increased demands suddenly placed upon the Com-pany made it necessary for it to add many items to itsfacilities, such as additional locomotives, commissarystore buildings and warehouses, and telephone equipment.It also became necessary to utilize a great deal of additionalworking capital to coyer increased inventories, increasedcurrent accounts receivable, and increased cash to coverlarger purchases, pay rolls, and other expenses. The peakof the Company's business was reached in 1943, and whileall activities continued on a relatively high level duringthe years 1944 and 1945, they had declined to a certainextent by the end of fiscal year 1946.

Under section 304 of the Government CorporationControl Act (Public Law 238, 79th Cong.) the PanamaRailroad Company intends to seek reincorporation in theEightieth Congress. All of the present functions of the

Company as an adjunct to The Panama Canal and as atiinternational common carrier are essential and are requiredby provisions of public treaties and notes accessory theretoto be performed by a public agency of the United States.Operation by a Government corporation, rather than byan agency other than a corporation, is necessary for thosefunctions tinged with an international character and ishighly desirable in the public interest for the remainingfunctions, which require the flexibility of operation pro-vided by the corporate form for their proper performance.

FINANCIAL ORGANIZATION AND POLICY

The authorized and issued capital stock of the PanamaRailroad Company at the time of its acquisition by theUnited States Government in 1904 was $7,000,000, con-sisting of 70,000 shares. No change has been made in itscapital structure, and the Company has no bonded in-debtedness. The entire capital stock of the Companystands in the name of the Secretary of War, with the ex-ception of 13 shares which are issued to the directors forqualification purposes but which remain in the custody ofthe Secretary of War. The Secretary of War, by virtueof holding the majority of the stock, nominates or ap-proves the 13 directors who administer the affairs of thePanama Railroad Company. The Governor and theengineer of maintenance of The Panama Canal are presi-dent and second vice president, respectively, of the Pan-ama Railroad Company and also members of its board ofdirectors.

Although the Company is authorized by its charter toborrow money and to mortgage its property if necessary,it does not exercise the right to do so. The Company hasfollowed a very conservative financial policy, and itsboard of directors has set aside funds, invested in UnitedStates Government securities, to provide for the replace-ment of plant and equipment and for other importantfuture expenditures. All cash funds which the board ofdirectors considers to be in excess of the needs of theCompany are paid as dividends into the Treasury of theUnited States. The absolute necessity of adhering to thispolicy was amply demonstrated at the start of the ex-pansion period in early 1940, when the sudden demandsupon the Company, not only for additional facilities butalso for additional working capital, resulted in a seriousdrain on the Company's cash.

ANALYSIS OF BUDGET PROGRAM BY MAJOR ACTIVITIES

The operations of the Panama Railroad Company aredivided into nine distinct activities or functions, which arelisted below and individually discussed in the followingtext: (1) Railroad, (2) Harbor terminal facilities, (3)Telephone system, (4) Hotel Tivoli, (5) Hotel Washing-ton, (6) Commissary division, (7) Coaling plants, (8)Mindi dairy, (9) New York office and steamship line.

Statements of income and expenses have been preparedfor each of the foregoing units and are shown in the^sameorder as listed above in schedule B-l .

979

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1948

980 THE BUDGET FOR FISCAL YEAR 1948

Basic assumptions.—The estimates for fiscal years 1947and 1948 are based on the assumption that the generallevel of activity on the Isthmus during the 2 years will beapproximately the same as it was during the last half offiscal year 1946. However, the outlook for fiscal year 1947is highly uncertain and the net revenues could vary byan appreciable amount, either one way or the other, fromthe estimates submitted for that year.

The level of business activity on the Isthmus to acertain extent reflects world trade conditions, but it islargely dependent upon the activities of the various UnitedStates Government agencies in the Canal Zone, whichaffect certain services of the Railroad directly, and othersindirectly through the creation of employment in theCanal Zone and in the Republic of Panama. It is as-sumed that fiscal year 1947 will complete the transitionto normal peacetime conditions, but there is little definiteindication at this time as to what those conditions will be.

Another uncertain factor arises from increases in salariesand wages which were put into effect on July 1, 1946, andare reflected in the estimates for fiscal years 1947 and 1948.These increases, together with the increased costs of ma-terials and supplies, have made it necessary to increase theprices charged for many services and commodities, but itis considered desirable, in order to assist in combating in-flationary tendencies, to defer price increases as long aspossible and to hold them to a minimum when they mustbe made.

The combination of increased personnel costs and defer-ment of corresponding price increases will materially reducethe net income of the Company for fiscal year 1947, and,in fact, some of its operations may result in a deficit. Con-sidering the present financial position of the Company andthe dividends it has paid during the past few years, it isbelieved that there is full justification for the policy ofholding price increases to a minimum and of absorbing asmuch of the increased salary rates as is possible, in orderto promote business stability.

It is hoped that by fiscal year 1948 conditions will havebecome so stabilized that the Panama Railroad Companycan make a more definite estimate of its prospective busi-ness; if at that time costs are stabilized at a higher level,rates can be adjusted upward if necessary. In view of allthese factors, the estimated net revenues for fiscal year 1948may prove to be more accurate than the present estimateof net revenues for fiscal year 1947.

Railroad (see schedule B—l).—The railroad comprises50 miles of main line track between the cities of Panamaand Colon, at the Pacific and Atlantic terminals of theCanal, and the usual appurtenances such as freight andpassenger stations and terminals, railroad yards, industrialtrackage, and the requisite rolling stock. The railroadserves The Panama Canal, the United States Army andNavy, and other Government agencies on the Isthmus,and also performs the functions of a common carrier inmeeting the needs of the Republic of Panama, and com-mercial agencies transacting business in this area.

For purposes of administration and accounting, thereare also included under this heading the incidental realestate activities of the Company. Formerly the Companyhad an extensive real estate business consisting of therental of Company-owned lands in the cities of Colonand Panama, Republic of Panama. All such lands notneeded for the operations of the Panama Railroad Com-pany or The Panama Canal were transferred to theRepublic of Panama in December 1943, under authorityof Public Law 48, Seventy-eighth Congress, and since

that date the Company's real estate activities have beenof negligible importance. The $48,700 income from rentalsis nearly all derived from rental of buildings.

The gross revenues from operations of the railroadduring the fiscal year 1946 were $3,177,256 and for 1947are estimated to be $2,514,000. I t is estimated that forfiscal year 1948 gross revenues will be reduced to $2,120,-000 as a result of, first, a decline in Government businesswith the return to normal peacetime conditions, and,second, the contemplated diversion of a significant amountof passenger and freight traffic to the recently constructedtrans-Isthmian highway.

While operating expenses will be reduced, the reductioncannot be proportionate to the decline in revenue. Thisis because the largest part of the expense of operatingand maintaining the railroad does not vary appreciablywith the volume of traffic and must be incurred as longas required standards of service are maintained.

As a net result of the anticipated decline in both grossrevenues and expenses, it is estimated that net revenuesof the railroad, which were $877,293 in fiscal year 1946,will be reduced to $68,000 in fiscal year 1947, and furtherreduced to $20,000 in 1948.

The railroad provides the principal transportationservice for both freight and passengers between the twosides of the Isthmus of Panama. The Canal waterwayis primarily for oceangoing commerce and cannot beutilized conveniently lor local movements between itstwo terminal ports. The trans-Isthmian highway wasbuilt during the war by the United States Government,but shortages of equipment have so far prevented theestablishment of truck and bus facilities adequate tosatisfy a considerable part of the local demands. Therapid growth of highway facilities may be expected, butit is not believed that they will ever entirely replace theservices of the railroad, particularly for heavy or bulkyshipments.

Harbor terminal facilities (see schedule B-l).—Theharbor terminal facilities consist of docks, piers, andappurtenances necessary for handling, transferring, steve-doring, and storing cargo arriving at the Canal Zoneports of Cristobal and Balboa, either for ultimate desti-nation in the Canal Zone or the Republic of Panama, orfor transshipment to points beyond. They includefacilities for berthing vessels at docks and piers. Thisfunction also includes the custody and rental of the Colonstables.

The net income of the harbor terminals during fiscalyear 1946 was $269,955. An increase in wages effectiveJuly 1, 1946, together with a decline in activity, will causea major decline in net income. In addition, it is esti-mated that $128,000 will be expended during fiscal year1947 to complete several important deferred maintenanceprojects. These extraordinary repair expenses may causeharbor terminals to show a deficit of $52,000 for fiscal year1947 instead of a net income of some $76,000.

By fiscal year 1948 the receipt of commercial cargo fortransshipment is expected to increase, the extent of theincrease depending both on economic conditions and thetrade routes established, which might or might not entailcargo transfer on the Isthmus. Assuming a slight increasein business and no further increase in basic wage rates orin rates charged by the Company, the net revenues for1948 are estimated as $140,500.

Telephone system (see schedule B-l).—The telephonesystem provides telephone service for The Panama Canaland for the civilian communities in the Canal Zone. It


1948

GOVERNMENT CORPORATIONS 981

also leases trunk lines, circuits, and duct space to theUnited States Army and Navy and to the Government ofPanama. As regards gross and net income, it is the moststable operation conducted by the Panama RailroadCompany.

The net income from telephone system operations dur-ing fiscal year 1946 was $76,173, and it is estimated thatthe net income in both 1947 and 1948 will be approxi-mately $72,000. While the total income of the systemshould remain constant at about $386,000 per year, in-creases of some $30,000 in annual maintenance and opera-tion expenses will more than offset a decrease of $27,000in annual depreciation expense. The reduction in depre-ciation expense is due to completion of the assigned servicelives of certain switchboards and other equipment boughtduring the war expansion period and depreciated on whatwas expected to be the period of increased activity ratherthan on the normal physical life of such equipment.

Hotels Tivoli and Washington (see schedule B-l).—TheHotel Tivoli in Ancon, adjacent to Panama City, is an oldframe structure of 132 rooms owned by The PanamaCanal, built in 1907, and fully depreciated many years ago.It is operated by the Panama Railroad Company. TheCompany paid The Panama Canal a rental of $60,000 inthe fiscal year 1946. The rental rate has been reduced to$4,000 per month effective at the beginning of fiscal year1947 and probably will have to be further reduced becauseof present higher operating costs and lower net income.The Hotel Washington in Colon is a concrete structure of82 rooms, built in 1913 and owned by the Panama Rail-road Company.

In the decade 1930-39 both hotels operated at a loss,their continued operation having been justified becauseof their status as essential adjuncts to The Panama Canal,or, more broadly speaking, to the United States Govern-ment in this area. Since the large expansion in activityon the Isthmus which began about 1940, both hotels haveoperated at a profit, and in fiscal year 1946 the net incomeof the Hotel Tivoli was $63,739 and that of the HotelWashington, $34,772.

Increased salaries and wages effective at the start offiscal year 1947, in addition to general increases in otheroperating costs, will make appreciable increases in the costof operations of these two hotels, irrespective of anychanges in the volume of business. It is estimated thatthe Hotel Tivoli will have a net revenue of $43,700 forfiscal year 1947 after allowing for the purchase of somebadly needed equipment and certain maintenance expendi-tures which could not possibly be deferred. In fiscalyear 1948 no such extra expenses are anticipated and netrevenues are estimated at $64,700.

Business at the Hotel Tivoli is now maintained at a highlevel by transient guests from commercial airlines. TheHotel Washington has very little business of this kind andis expected to show a deficit of $34,300 in fiscal year 1947and $32,900 in fiscal year 1948. However, it will be notedthat depreciation charged to operations amounts to some$17,000 a year. Thus, while the Hotel Washington willnot be operated at a profit, it is estimated that the PanamaRailroad Company will derive a net revenue from thecombined operations of the two hotels.

In a note accessory to the Treaty of 1936 between theUnited States and the Republic of Panama, the UnitedStates agreed that the hotel business proper would be leftin the hands of Panamanian industry when suitable hotelaccommodations are available in the Republic of Panama.Preparations are now under way for the construction of alarge hotel in Panama City, but it is not anticipated that

the new hotel will be in operation before the end of fiscalyear 1948.

Commissary division (see schedule B-l).—The com-missary division provides food supplies, clothing, and otheressential requirements to Government employees andtheir families, to establishments of the United StatesGovernment located on the Isthmus, and to commercialshipping. In addition to retail stores in all the CanalZone communities, the division operates large dry andcold storage plants, a bakery, an ice-cream and milk-bottling plant, an industrial laboratory, an ice plant, anabattoir, and a coffee-roasting plant, primarily as proces-sing plants to supply its retail stores, as well as a laundry.

Commissary sales in fiscal year 1946 totaled $36,623,631,including some $6,000,000 of supplies furnished to otherUnited States Government agencies during the prosecu-tion of the war in the Pacific and the reconversion period.This abnormal wholesale trade has ended, but there hasbeen no change in the volume of retail trade and none isexpected. On this basis commissary sales are estimatedto be $30,000,000 iii fiscal years 1947 and 1948, and incomefrom other sources is estimated to be $585,000 a year.Net revenues are estimated to be approximately $200,000for each of these years.

The activities of the United States Government on theIsthmus, including The Panama Canal, the Army, andthe Navy, are now much greater than they were beforethe war, and these activities require a considerably in-creased quantity of commissary goods. The attendantlarger civilian population has increased the volume ofretail trade. Because of these two conditions, the com-missary business is now, and probably will continue tobe, much larger than it was before the war.

Coaling plants (see schedule B-l).—The Panama Rail-road operates two coaling plants, one at each terminus ofthe Canal, to supply coal to shipping calling at CanalZone ports. In addition to selling coal, the coaling plantsderive revenue from wharfage on vessels docking at coal-ing plant piers but not taking coal. The Balboa coalingplant also handles sand brought by barge to the CanalZone from nearby deposits.

The net revenue of the coaling plants during fiscalyear 1946 was $67,517. This favorable result was almostentirely due to reclaiming and selling a stock of coal oflow inventory value that had been in subaqueous storagefor many years at the Company's plant in Cristobal.

It is estimated that the net revenue of the coaling plantswill decline to $1,000 in fiscal year 1947 and that thereafterincome will approximately equal expenses. These esti-mates are based on the fact that the war-induced demandsfor coal for ocean vessels ceased soon after the start offiscal year 1946 and it is not expected that any importantnew demands will arise. Declines in revenues from sand-handling operations and wharfage are also anticipated asa result of generally reduced activity.

The function of the coaling plants was at one time ofgreat importance. Although operations have decreasedgreatly in the past 15 years, the plants played a vital partin the war effort, and as long as coal-burning ships usethe Canal their operation should be continued, eventhough the Company may recover no more than the annualdepreciation.

Mihdi dairy farm (see schedule B-l).—-The Mindi dairyfarm maintains a herd of approximately 1,000 head ofdairy cattle and produces the fresh milk for the CanalZone community, the total output being processed andmarketed through the commissary division. rfM~"~ :* -Thus it is


1948


really comparable in function to the other processing plantsof the commissary division, but it has always been admin-istered as a separate unit of the Company. Considerationis now being given to placing the dairy under the directsupervision of the commissary division and consolidatingits financial operations with those of the other processingplants of that division.

Under the climatic conditions of the Canal Zone, cowshave a relatively short life of full normal milk production,and it is not economically practicable to raise sufficientcalves for the necessary replacements. For this reason,dairy cattle are imported from the United States, therebeing no local source of suitable herd replacements.

The net revenue from the operaton of the dairy farmduring fiscal year 1946 was $5,669. It is estimated thatthere may be a loss of $10,900 in fiscal year 1947 as aresult of higher wage and feed costs and the policy ofholding down the retail selling price of milk. There willalso be an increase in repair costs because of the necessityof repairing farm buildings and purchasing items of farmequipment.and tools. By fiscal year 1948, it is estimatedthat there will be sufficient replacements to the herd toincrease the milk production and permit the dairy to earna net income of $6,600. The higher purchase price of newcows will require additional investment of funds in dairycattle without an increase in the actual number of cattlein the herd.

New York office and steamship line {see schedule B-l).—The New York office of the Panama Railroad Company isthe general office of the Company maintained under itscharter as a corporation of the State of New York; it isalso the main office of the Company in the United States.Aside from the administration of its corporate affairs, ithas control under the authority of the board of directorsof all of the funds of the Company, except those requiredfor working cash in the Canal Zone, and of the depositand investment of those funds.

The New York office also has direct supervision over andresponsibility for the operation of the steamship serviceand facilities in connection therewith; for the tmnsporta-tion of supplies, material, equipment, and personnel tothe Canal Zone; the operation of a commissary purchasingdepartment; and the necessary accounting required inconnection with those activities.

The Company's steamship line comprises three identicalcargo and passenger steamers of 10,000 gross tons, builtin 1939 at a total cost of $13,200,000. They normallymaintain a weekly service between New York and Cristo-bal, C. Z. In June 1941 the S. S. Panama was requisi-tioned by the United States Maritime Commission foruse during the national emergency, and shortly after thedeclaration of war the S. S. Ancon and the S. S. Cristobalwere requisitioned by the War Department for use in theprosecution of the war.

The steamship line, although discontinued during war-time, had proved itself to be an essential adjunct to theconstruction, operation, and maintenance of the Canal,by furnishing ocean transportation for the large quantityof goods required by The Panama Canal and by the civiliancommunity in the Canal Zone, as well as by furnishingpassenger transportation for the civilian employees andtheir families between the Canal Zone and the UnitedStates.

Since the cessation of hostilities the three steamers havebeen returned to the Company and are now undergoingan extensive overhaul and rehabilitation so that they maybe returned to their former service during the fiscal year1947.

It is expected that the steamship line and the New Yorkoffice will incur a large deficit in fiscal year 1947, which isshown as $285,800 in the estimate. The estimates sub-mitted in the 1947 Budget were based on the assumptionthat all three of the steamers would be in operationthroughout the greater part of the fiscal year, but unex-pected delays both in their return to the Company'scontrol and in their rehabilitation have vitiated thatassumption. The present estimates are therefore basedon a total of approximately 32 trips during fiscal year1947 and on full normal operation in fiscal year 1948.

OPERATING RESULTS

During the fiscal year 1946, the operations of the Com-pany as a whole resulted in a net revenue of $1,945,107.This result is arrived at after making due provision fordepreciation on the Company's physical plant, and takesinto account accrued liabilities for all expenses not settledat the close of the fiscal year. During fiscal year 1946,two dividends totaling $4,200,000 were paid in cash bythe Company into the Treasury of the United States.Certain other transactions affecting the general profitand loss or unreserved surplus account of the Companyare reflected in exhibit B.

For fiscal year 1947, it is estimated that the operationsof the Company as a whole will result in a net loss of$165,540, and for fiscal year 1948 a net revenue of $521,660.

Last year's budget statements indicated that the Com-pany would pay dividends of $2,100,000 in 1946 and$3,000,000 in fiscal year 1947, but it was stated in theBudget that part of the 1947 dividends might be paid in1946. Actually, dividends totaling $4,200,000 werepaid in 1946, a second dividend of $2,100,000 having beenpaid in the latter part of that year-

It is now estimated that a dividend of $1,250,000 canbe paid in 1947, and the normal dividend of $700,000, or10 percent on the capital stock, in 1948.

FINANCIAL CONDITION

There follows a brief discussion of the Company'sfinancial condition as detailed in exhibit C:

Inventories.—The inventories of the Company, totaling$6,452,962 at June 30, 1946, are carried on the books atcost, including liability for ocean freight not paid in cash,and they are corrected annually based on a physical checkat the close of the fiscal year. The merchandise held forsale consists of $78,648 in coal stock and $4,225,249 incommissary stock. Considering the present level of pricesand the prospective business of the commissary, an inven-tory value of $4,225,249 is low, but because of a generalscarcity of goods the inventories were low at both June 30,1945, and June 30, 1946. It is estimated that in thefuture the commissary will have an inventory of goodsvalued at $6,000,000. A postwar inventory reserve forcommissary supplies, amounting to $750,000, had beenprovided for contingent losses resulting from liquidationof surplus or substitute stock acquired during the war andto cover possible sharp declines in merchandise values.It became apparent after the termination of hostilitiesthat no losses of this sort would actually be suffered, andso this reserve was transferred to unreserved surplus duringfiscal year 1946.

Plant and equipment.—All items of plant and equip-ment are recorded on the books at actual cost, includingcost of installation, except for certain items acquired priorto 1921. Depreciation is charged on the straight-linemethod based on estimated service lives.


1948


The most important addition to capital in fiscal year1947 will be the purchase from The Panama Canal of theCocoli and Margarita commissary buildings. These storeswere built with funds provided for Third Locks construc-tion, in new townsites created to house employees workingon the Third Locks project, and have been rented bj thePanama Railroad Company. Because of the semiper-manent status of these towns, the Company is purchasingthe commissary buildings at their depreciated values.

The more important additions in fiscal year 1948 includea series of small projects (principally different equipmentitems) for the commissary, a number of new box carsfor the Railroad to continue a long-range program ofreplacements of freight cars interrupted by the outbreakof war, and additional fork-lift trucks as replacementsfor the old platform trucks used in cargo handling on thepiers. I t is also estimated that an ice-cream and milk-bottling plant to replace facilities now housed in thecommissary cold-storage building at Mount Hope willbe under construction as of June 30, 1948.

During the fiscal year 1947, it is planned to retireseveral of the old steam locomotives for which replace-ments were actually provided in 1941 but which wereretained in service to handle the peak volume of trafficduring the war period. It is also planned to retire certainparts of the coaling plant during 1947 and miscellaneousitems o-f equipment of the commissary and harbor ter-minals divisions during 1947 and 1948.

Accounts receivable.—Accounts receivable consist pri-marily of amounts due from United States Governmentagencies. As no credit is extended to commercial interestsor individuals without adequate guarantees, no significantlosses from uncollectible accounts are anticipated and noreserves for such losses are provided. The slight declinein accounts receivable during fiscal year 1946 reflects thedecline in activity.

Funds.—Funds of the Company which are not requiredfor handling its normal daily cash transactions are investedin United States Government securities. Certain of thesesecurities and the interest thereon have been set aside bythe board of directors to cover the Company's contingencyand depreciation reserves.

The investment in United States Government securitieson June 30, 1946, amounted to $21,806,000. All thesesecurities have been set aside for replacement of obsoleteand worn-out property and equipment and for the re-habilitation of steamers and other postwar contingencies,with the exception of $3,355,000 carried in the workingfund, consisting of United States Treasury notes andcertificates of indebtedness.

Deferred debit items.—The Company's steamers havebeen returned to it and are now undergoing rehabilitationto make them suitable for their regular service. As ofJune 30, 1946, $605,373 had been expended on this re-habilitation work. Funds, mostly invested in UnitedStates Government securities, set aside to pay for thisrehabilitation are transferred as needed to the generalworking funds of the Company to meet the actual cashdisbursements for this work.

The amount of the rehabilitation expense is includedunder Deferred debit items. When the rehabilitationprogram is complete this gross expense along with theoffsetting ocean freight liability, discussed below underDeferred credits, will be transferred to the unreservedsurplus account of the Company. (See exhibit B—Analysis of unreserved surplus.) It is assumed that thisentire transaction will be consummated before June 30,1947.

Deferred credits.—The item entitled, After-war adjust-ments, ocean freight, etc., represents the Company'saccrued liability for ocean freight payments on goodscarried under direction of the Army Transport Service andthe War Shipping Administration. It is assumed thatthe Company will not be required to make cash paymentfor this liability but, on the other hand, that it will receiveno rental for the wartime use of its steamers and will berequired to spend an estimated $6,000,000 to rehabilitatethem for the service in which they were formerly engaged.As the estimated gross liability for unpaid ocean freightwas $7,138,899 as of June 30, 1946, this would leave$1,138,899 to reduce the loss of $3,043,333 as of June 30,1946, in depreciation on the steamers while diverted fromthe Company's use, which has been taken from the Com-pany's annual earnings. The most important item in-cluded in the total of $555,314 for other deferred credititems is $294,270 for commissary coupon books outstand-ing as of June 30, 1946.

Reserved surplus.—A postwar contingency reserve of$2,000,000 had been set aside from prior years' earn-ings to cover contingencies that might be experienced inthe postwar years. It is now estimated that a reserve of$750,000 will be adequate and the amount of $1,250,000will be credited to unreserved surplus during the currentfiscal year. The remaining balance will be used for re-habilitation and alterations of commissary division plantswhich normally would have been accomplished during thewar years, but which were deferred primarily to avoidinterruption of service.

The cold-storage warehouse at Mount Hope, originallyconstructed in 1918 and 1919, is the principal structureinvolved. The structure has had undue deterioration fromcorrosion and from saturation of the insulation. About 10years ago, a gradual plan of rehabilitation was inaugurated,which was interrupted during the war. Preliminary esti-mates indicate that the cost of the rehabilitation will be$600,000.

In addition to deferred repairs on the cold-storagebuilding, fairly extensive alterations will be requiredin some of the retail store buildings and in the laun-dry to rectify certain temporary alterations which hadto be made to handle an excessive volume of businessduring the war period. Expenditures in these categoriesare roughly estimated to total $150,000, which, added tothe $600,000 for the cold-storage plant, indicates a requiredreserve of $750,000.

Because of inability to obtain construction materials aswell as governmental restrictions on new construction, itwill not be possible to accomplish any substantial amountof this work during fiscal year 1947. There is no basis atpresent for estimating how much of the work will be doneduring fiscal year 1948, and for the purpose of the budgetestimate the entire amount, or $750,000, is therefore shownas being intact at the end of that fiscal year.

The commissary division inventory reserve of $750,000has been discussed in the preceding section under the head-ing of Inventories. As explained under that heading, itdeveloped that there was no need for this reserve and itwas accordingly transferred from reserved surplus tounreserved surplus.

A coaling plant reserve of $165,000 and an operatingreserve of $118,565 were provided in part to cover con-tingent losses resulting from a major reduction of coalprices and to cover contingent losses in the possible partialliquidation of the coaling plants. During fiscal year 1946,$33,565 was set aside to pay for demolishing a wharf bunkerat Cristobal, and during fiscal year 1947, it is estimated


1948


that $51,000 will be expended on demolishing other surplusitems at both Balboa and Cristobal plants, while $34,000will be used to write off the undepreciated value of thedemolished items. The remaining balance of $165,000will be transferred from reserved surplus to unreservedsurplus during fiscal year 1947.

ADMINISTRATIVE EXPENSES

These expenses cover the salaries and wages in theNew York office of the first vice president, the third vicepresident and secretary, the treasurer, the auditor, andthe employees in the administrative office and in theoffices of the treasurer and the auditor. Also includedare the general office expenses of these officers and em-ployees and the legal expenses in the United States. Withreference to Isthmian activities, the entire administrativeexpense is composed of the executive, administrative,accounting, collecting, disbursing, and legal services fur-nished by The Panama Canal. Further details of admin-istrative expenses are given in schedule B-3.

It will be noted that the Panama Railroad Company'sadministrative expenses for fiscal year 1947 are now esti-

mated as $781,000, as compared to the $500,000 limitationset by the Congress in Public Law 519, Seventy-ninthCongress. A limitation of $779,700 administrative ex-penses proposed for 1948 does not include any amountfor an external audit. The sum of $12,000 was includedin 1947 under administrative expenses for this purpose.

LANGUAGE

Administrative Expenses, Panama Railroad Company—Panama Railroad Company: [Provided, That not] Not to exceed

[$500,000 shall be available for administrative expenses] $779,700(to he computed on an accrual basis) of the funds of the Company shallbe available during the fiscal year 1948 for its administrative expenses,including administrative services performed for the Company by otherGovernment agencies, which shall be determined in accordance withthe Company's prescribed accounting system in effect on July *1, 1946,and shall be exclusive of depreciation, payment of claims, contributionsto employees retirement system, expenditures which the Company'sprescribed accounting system requires to be capitalized or charged tocost of commodities acquired, and expenses in connection with acqui-sition, construction, operation, maintenance, improvement, protection,and disposition of facilities and other property belonging to the Com-pany or in which it has an interest. (Act of July 20, 1946, PublicLaw 519.)


1948


E X H I B I T A — P A N A M A RAILROAD COMPANY

COMPARATIVE STATEMENT OF SOURCES AND APPLICATION OF FUNDS

[Fiscal years ending June 30,1946,1947, and 1948]

FUNDS APPLIEDTo acquisition of assets:

Expansion of plant and equipment:RailroadHarbor terminalsTplephoTip. system > . . _,Hotel Washington _ . _ . .CommissaryUncompleted construction and improvement

Total expansion of plant and equipmentFunds reserved for replacement of plant and equipment - _

Total acquisition of assets _.

To operating and other costs (excluding depreciation and other charges not requiring funds):Cost of commodities sold (schedule B-2):

CommissaryCoaling plants

Total cost of commodities sold,. _. _ . _ _ . .Direct operating expenses:

RailroadHarbor terminals _ - . -.Telephone system .Hotel Tivoli . ._Hotel WashingtonCommissary . .__ _ _ . . .Coaling plants _. i.Mindi dairyNew York office and steamship line

Total direct operating expensesAdministrative expenses _ _ _Rehabilitation of steamers _Contribution to pension fund _. . .Nonadministrative expenses (audit)

Total operating and other costs

To distribution of surplus: Dividends paid to the XJ. S. Treasury.-

Total funds applied

FUNDS PROVIDED

By realization of assets: Sale of surplus property _

By income and cancellation of liability:Sales of commodities:


Total sales of commodities . . . _ _ -• . .Sales of services:

Railroad - _ - -Harbor terminals _ . .Telephone systemHotel Tivoli - .-Hotel Washington - -Commissary _ _ _ . _ . _ -_Coaling plants . -IVfindi dairy -New York office and steamship line _

Total sales of servicesRents: Railroad _ . _Interest on investments - .Miscellaneous freight adjustmentsElimination of ocean freight liability.

Total income and cancellation of liability

By decrease in working capital (schedule A-l)

Total funds pro Tided _

Actual,

$41,7437,531

30,851, 280339, 513

1, 965, 3951,934,044

218, 504585,179277,006

4,430,819228, 609362, 79812,989

36,623,631541,943

3,128, 5072,495, 292

386,496655,830338, 511503, 072126,432378,880

1946

$49, 274836, 497

885,771

31,190,793

10,015,343677,225

20,624

41,903,985

4,200,000

46,989,756

3,960

37,165, 574

8,013,02048,749

258, 00517,034

45,502,382

1,483,414

46,989,756

Estimate, 1947

$4,20030,00017,000

132,469121,000

$304, 669804,200

1,108,869

24,966,800101,000

25,067,800

2,165,7002,010,623

247,700727,871305,900

4,900,692212,915440,900

2,486,900

13,499,201781,000

6,000,00025,000

45,373,001

1,250,000

47,731,870

30,000,000216,000

30,216,000

2,465,3002,208,000

386,000738,900300,100585,00056,700

440, 5002,736,300

9,916,80048,700

192, 700

7,138,899

47,513,099

218,771

47,731,870

Estimate,

$100,000100,00018,0002,800

200,000500,000

=====

24,891,00099,300

1,815,3001,912,400

247,400643,300304,200

4,973,600106,200434,800

3,884,400

30,000,000172,800

2,071,3002,318,500

386,000722,500300,100585,00056,700

448,5004,698,500

1948

$920,800785,900

1, 706,700

24,990,300

14,321,600779,700

25,00012,000

40,128,600

700,000

42,535,300

30,172,800

11,587,10048,700

143,600

41,952,200

583,100

42,535,300


1948


EXHIBIT B—PANAMA RAILROAD COMPANY

COMPARATIVE STATEMENT OF INCOME AND EXPENSES[Fiscal years ending June 30, 1946, 1947, and 1948]

Actual, 1946 Estimate, 1947 Estimate, 1948

Income:Sales of commoditiesSales of services.RentsInterest earned on investments,..

$37,165,5748,013,020

48,749258,005

$30,216,0009,916,800

48,700192,700

$30,172,80011,587,100

48,700143,600

Total income-

Expenses:Cost of commodities sold (schedule B-2)Direct operating expenses ._ _.Administrative expensesNonadministrative expenses (audit). _Depreciation (not included in cost of sales or direct operating expenses)._Contribution to pension fund _Provision for postwar contingency, steamers _Interest income reserved for depreciation and contingency reserve funds..Losses and charge-offs:

Employees' leave paymentsRefrigerator guarantee costDemolition of pier No. 2, Colon _Demolition of wharf bunker, Cristobal coaling plantDemolition of coaling plant equipmentDeferred maintenance expensesLosses on plant retirement ^. .^. .

$45,485,348

31,258,30510,561,818

677,225

$40,374,200

25,101,00014,060,192

781,000

66,74020,624

660,000176,498

66,74025,000

264,000144,200

$41,952,200

25,024,30015,278,800

779,70012,00066,74025,000

125,900

196,3764,993

16,850

7,71325,693

228,0006,000

10,72316,71551,00047,57134,000

228,0006,000

251,625 394,009 234,000

Total expenses.

Net income (or loss*) before adjustment of reservesAdjustment of reserves:

Employees' accrued leaveRefrigerator guarantees..Demolition of pier No. 2, ColonDemolition of wharf bunker, Cristobal coaling plant-Deferred maintenance, Hotel TivoliCoaling plant contingency reserve

43,672,835

1,812,513

40,836,141 41,546,440

*461,941 405,760

•71,8073,340

16,8507,713

•3,176•4,63210,72316,71547,57185,000

•10,000

Net adjustment of reserves

Net income (or loss*) for the year..

•43,904

1,768,609

152,201

•309,740

•10,000

395,760

ANALYSIS OF UNRESERVED SURPLUS

Balance at beginning of fiscal year _ _Net income (or loss •) for the year (above)Miscellaneous freight adjustments, prior years _ _Profit from sale of freight cars _ _ _._Transfer from commissary division inventory reserve -Transfer from postwar contingency reserve. Isthmus _._Transfer from coal plant operatons contingency reserve _ _Transfer unpaid freight liability from deferred credits to offset rehabilitation of steamers.Cost of rehabilitation of steamers _ _ _.Dividends paid to U. S. Treasury _._ _

Balance at end of fiscal year. _

$47,437,6331,768,609

17,0343,960

750,000

•4,200,000

45,777,236

$45,777,236*309,740

1,250,000165,000

7,138,899•6,000,000•1,250,000

46,771,395

$46,771,395395,760

•700,000

46,467,155

•Deduct.


1948


EXHIBIT C— PANAMA RAILROAD COMPANY

COMPARATIVE STATEMENT OF FINANCIAL CONDITION[As of June 30,1945,1946,1947, and 1948]

ASSETSInventories:

Merchandise held for sale - -Railroad and other material and supplies .Dairy cattle - - - -_ - --Merchandise and other material in transit- ._ _

Total inventories _ -

Plant and equipment:Railroad and appurtenances „ . .. „Docks, piers, and appurtenancesCoaling plantsTelephone systemHotel WashingtonCommissary plants, stores, and equipmentDairyfarm _ _ _ _ • _ . _ __SteamshipsUncompleted construction and improvement _

Total . .Less donations and grants..-

Total plant and equipmentLess accrued depreciation , . ___

Net plant and equipment _• _

Accounts receivable:TJ. S. Government agencies _Individuals and companies _ _

Total accounts receivable __. ___

Special deposit.. _ _

Funds for replacement of plant and equipment and for postwar contingencies:Cash on depositU. S. Government securities _Other securities ._ __wAccrued interest on securities ___ _

Total _ _ _

Working funds:Steamer rehabilitation reserve fund:

Cash on hand and in banksU. S. Government securities

Total ._._ _ :

General fund:Cash on hand and in banks:

New YorkIsthmus

Total cashU. S. Government securities

Total general fund . _..

Total working funds---..-.. . . . . . . - . .. _

Accrued interest receivable: Accrued interest on investmentsDeferred debit items _ .. .Concession from New Granada. .

Total assets

Actual, 1945

$4,003, 204552,313172,231

1,968,643

6,696,391

17,099,9675, 790,828

833,4822,069,385

750,4085, 379,698

126, 28113,200,000

12,060

45,262,109901,079

44,361,03016,114,804

28,246,226

1,083,759573,825

1,657,584

20,000

71,10313,069,000

11,38541,805

13,193,293

6,000,000

6,000,000

3,881,9183, 600,749

7,482,6673,130,000

10, 612, 667

16,612,667

18,74359,127

1

66,504,032"

Actual, 1946

$4,303,897817,232171,352

1,160,481

6,452,962

17,079,6165,777,063

770,4822,069,385

750,4085,423,657

126,28113,200,000

7,531

45,204,423901,079

44,303,34417,600,196

26,703,148

884,475335,652

1,220,127

20,000

1,112,25012,861,000

11,38545,155

14,029, 790

45,9395,590,000

5,635,939

5,213,3722,528,931

7,742,3033,355,000

11,097,303

16, 733,242

22,407696,269

1

65,877,946

Estimate, 1947

$6,100,800810,500220,000

1,000,000

8,131,300

16,958,8165,777,063

687,4822,086,385

750,4085,538,657

126,28113,200,000

121,000

45,246,092901,079

44,345,01318,656,136

25,688,877

800,000400,000

1,200,000

20,000

256,60514,521,000

11,38545,000

14,833,990

4,643,3952,500,000

7,143,3951,000,000

8,143,395

8,143,395

5,000100,000

1

58,122,563

Estimate, 1948

$6,001,50Q810,500247,500

1,000,000

8,059,500

17,038,8165,847,063

687,4822,110,385

753,2085,828,657

126,28113,200,000

500,000

46,091,892901,079

45,190,81319,873,076

25,317,737

800,000400,000

1,200,000

20,000

382,50515,181,000

11,38545,000

15, 619,890

4,132,0952,500,000

6,632,0951,000,000

7,632,095

7,632,095

5,000100,000

1

57,954,223


1948


EXHIBIT C—PANAMA RAILROAD COMPANY—Continued

COMPARATIVE STATEMENT OP FINANCIAL CONDITION—Continued

LIABILITIESAccounts payable:

U. S. Government agenciesOther. - -

Total accounts payable . « . . .Accrued liabilities: Accrued salaries and wages payable

Deferred credit items:After-war adjustments, ocean freight, e tc . . , „ , . . . .Other - -

Total deferred credit items _

Operating reserves:Employees'accrued leave -- - -- . . - - - .Refrigerator giiwantees , . . „, , . .,Demolition of pier No. 2, Colon"Demolition of Wharf himkpr, Cristobal coaling plfvnt *vnd coritiTigenoyDeferred maintenance, Hotel Tivoli _ _

Total operating reserves _ _

Total liabilities _.._ _ . ._ .

CAPITALPaid-in capital: Capital stock __

Earned surplus:Surplus reserves:

Postwar contingency reserves: Isthmus - _ _ -- . - . . .Commissary division mventory reserve -.- ._ -Coaling plant contingency reserve ... . . ,„„._„ . . r _.Income reserved from funds invested in depreciation and contingency reserves

Unreserved surplus _ ._ _.-

Total earned surplus

Total capital

Total liabilities and capital

Actual, 1945

$563,5831,125,965

1,689,548289,728

5,647,865435,491

6,083,356

275,0178,708

10,723118,56555,284

468,297

8,530,929

7,000,000

2,000,000750,000165,000620,470

47,437,633

50,973,103

57,973,103

66,504,032

Actual, 1946

$458,4331,135,072

1,593,505338,823

7,138,899555,314

7,694,213

346,8245,368

10,723101,71547,571

512,201

10,138,742

7,000,000

2,000,000

165,000796,968

45,777,236

48,739,204

55,877,946

65,877,946

Estimate, 1947

$500,0001,000,000

1,500,000300,^00

500,000

500,000

350,00010,000

360,000

2,660,000

7,000,000

750,000

941,16846,771,395

48,462,563

55,462,563

58,122,563

Estimate, 1948

$500,0001,000,000

1,500,000300,000

500,000

500,000

350,00020,000

370,000

2,670,000

7,000,000

750,000

1,067,06846,467,155

48,284,223

55,284,223

57,954,223


1948


S C H E D U L E A - l

CHANGES IN WORKING CAPITAL



Current assets (increase or decrease*):Inventories:

Merchandise held for saleEailroad and other material and supplies.Dairy cattle.Merchandise an*i material in transit

Accrued interest receivableAccounts receivable:

U. S. Government agencies.Individuals and companies

Working funds:XT. S. Government securitiesCash on hand and in banks

Deferred debit itemsCurrent liabilities (increase* or decrease):

Accounts payable:XT. S. Government agenciesIndividuals and companies

Accrued salaries and wages payableDeferred credit items

Decrease in working capi tal_ _

$300,693

264,919

*879

*808,162

3,664

*199,284

*238,173

•186,000

305, 575

637,142

105,150

*9f 107

*49,095

•1,610,857

$1,796,903

*6,732

48,648

•160,481

•17,407

*84,475

64,348

•7,945,000

*644,847

•696,269

•41,667135,07238,823

7,194,213

1,483,414 218,771

27,500

•511,300

583,100

•Deduct.


1948


SCHEDULE B - l

COMPARATIVE STATEMENT OF INCOME AND EXPENSES BY ACTIVITIES[Fiscal years ending June 30,1946,1947, and 1948]

Income:Sales of services:

Freight transportationPassenger transportation.Other transportationOther services

RAILROAD

Rents.

Total income-

Expenses:Direct operating expenses:

Maintenance of wayMaintenance of equipment-Transportation expensesDepreciation, _ _--Other expenses

Administrative expenses and audit _.

Total expenses-

Net income


WharfageStevedoring -Handling and .transferring..Other services—

HARBOR TERMINALS

Total income-


Rental of piersRepairs - .Stevedoring expenses.Handling and transferring expenses. _.Depreciation of plant and equipment-Other expenses —

Administrative expenses and audit . .Losses and charge-offs:

Demolition of pier No. 2, Colon.

Total expenses.

Net income (or loss*) before adjustment of reserves..Adjustment of reserves:

Demolition of pier No. 2, Colon _

Net income (or loss*) for the year.


Telephone serviceTrunk lines, circuits, and duct space.Teletype machinesOtiher services.

TELEPHONE SYSTEM

Total income..

Eppenses:Direct operating expenses:

Maintenance and operation.Depreciation

Administrative expenses and audit..

Total expenses

Net income

Actual,

$1,953,844828,626290,86055,177

263,890560,528

1,112,889237,94228,088

226,477142, 582

1,905,099221,134

73,200207,413103,749929,315183,526620,367

246, 367117, 64115, 3957,093

218, 50481,343

1946

$3,128,50748,749

3,177,256

2,203,33796,626

2,299,963

877,293

2,495,292

2,117,570107,767

2,225,337

269,955

269,955

386,496

299,84710,476

310,323

•. ...

76,173

Estimate,

$1,600,000600,000230,00035,300

343,000550,000

1,233,000169,00039, 700

238,800144,000

1,635,600189,600

58,000203,00098,000

1,029,000135,000611,900

250,000112,50017,0006,500

247,70054,400

1947

$2,465,30048,700

2,514,000

2,334,700111, 300

2,446,000

68,000

2,208,000

2,134,900125,100

10,723

2,270,723

*62,723

10,723

•52,000

386,000

302,10012,100

314,200

71,800

Estimate,

$1,300,000550,000200,00021,300

319,000450,000

1,007,000173,00039,300

251,000151,200

1,717,300199,000

60,90078,700101,400

1,060,000140,000611,400

250,000112,50017,0006,500

247,40054,500

1948

$2,071,30048,700

2,120,000

1,988,300111,700

2,100,000

20,000

2,318,500

2,052,400125,600

2,178,000

140,500

140,500

386,000

301,90012,200

314,100

71,900


1948


S C H E D U L E B - l — C o n t i n u e d

COMPARATIVE STATEMENT OF INCOME AND EXPENSES BY ACTIVITIES—Continued


HOTEL TIVOLIIncome:

RoomsRestaurantNewsstandOther services

Total income... _.. -

enses:Direct operating expenses:

PayrollSubsistence suppliesNewsstand suppliesRepairsRentOther expenses.-.

Administrative expenses and auditLosses and charge-offs:

Deferred maintenance expensesEmployees' leave payments ^...

Total expenses


Deferred maintenanceEmployees' accrued leave

Net adjustment of reserves .

Net income for the year

HOTEL WASHINGTONIncome:

Rooms -Restaurant . _Newsstand _Other services

Total income .._


PayrollSubsistence suppliesNewsstand supplies _ .- .Repairs -Depreciation L.__.Other expenses ._. _•__.

Administrative expenses and audit .Losses and charge-offs:

Employees' leave payments . . .

Total expenses -


Employees' accrued leave _

Net income (or loss*) for the year

•Deduct.

$200,513

388,890

30,910

35,517

172,017

208,133

18,466

21,067

60,000

90,994

7,713

7,713

*1,771

97,203

205,044

15,594

20,670

97,923

108,136

9,507

8,541

17,352

47,490

$250,000

423,500

30,000

35,400

$655,830 $738,900

203,800

229,000

22,000

35,000

48,000

134,500

570,67712,854

14,502

47,571

8,000

672,300

14,900

55,571

598,033

• •..:' ."j • ; • "

57,797

5,942

47,571

742,771

- : '.=*3,871

47,571

63,739 43,700

83,200

184,600

12,200

20,100

338,511 300,100

288,949

9,498

5,409

123,900

98,700

11,000

13,200

17,400

54,100318,300

11,100

5,000

303,856

34,655

117

334,400— •' ;• =

*34,300

34,772 *34,300

$250,000

412,500

30,000

30,000

203,800

225,000

22,000

25,000

36,000

123,500

8,000

83,200

184,600

12,200

20,100

122,200

98,700

11,000

11,800

17,600

55,500

$722,500

635,300

14,500

8,000

657,800:::. • «3

64,700

64,700

300,100

316,80011,200

5,000

333,000

*32,900

*32,900


1948


SCHEDULE B-l—Continued

COMPARATIVE STATEMENT OP INCOME AND EXPENSES BY ACTIVITIES—Continued


COMMISSARYIncome:

Sales of commodities.Sales of services

Total income-

Expenses:Cost of commodities sold (schedule B-2).Direct operating expenses:

Payroll . .Merchandise loss and damageLocal transportation of mechandise...DepreciationOther expenses

Administrative expenses and audit_.Losses and charge-offs:

Employees' leave paymentsRefrigerator guarantee costLosses on plant retirement

Total expenses _

Net income before adjustment of reserves..Adjustment of reserves:

Employees' accrued leaveRefrigerator guarantees _._

Net adjustment of reserve-


COALING PLANTSIncome:

Sales of commodities:Coal sales

Sales of services:Handling sand and gravel._..Wharfage and other services-

Total income-

Expenses:Cost of commodities sold (schedule B-2).Direct operating expenses:

Operation and maintenanceRent of piers . „ .DepreciationOther expenses

Administrative expenses and audit _.Losses and charge-offs:

Demolition of wharf bunkerDemolition of equipmentLosses on plant retirement

Total expenses.

Net income (or loss*) before adjustment of reserves. _Adjustment of reserves:

Demolition of wharf bunker _Coaling plant contingency reserve..

Net income for the year.

•Deduct.

$36,623,631503,072

$37,126,703

30,918,792

2,714,948498,155350,428229,144678,117

184,1784,993493

*70,1533,340

21,577104,855

79,84567,88317,32964, 031

4,470, 792312, 575

189,664

35,891,823

1,234,880

*6G, 813

1,168,067

541,943

126, 432

668,375

16,850

25,200

339, 513

7,057

42,050

617,708

36,850

50,667

16,850

67,517

$30,000,000585,000

$30, 585,000

1,195, 524400,000392,000127,100692,168

25, 000,000

4,806,792353,400

215,0006,000

221,000

30,381,192

203,808

*3,176*4,632

196,000

6,00050, 700

216,000

56, 700

272, 700

76,00027,00017, 30042,200

16, 71551,00034,000

101,000

162, 5008,200

101, 715

373,415

16, 71585,000

*100,715

101,715

1,000

$30,000,000585,000

$30,585,000

24,925,000

3, 244,600400,000392, 000129,000716, 000

215,0006,000

4,881, 600348, 400

221,000

30,376,000

* 10,000

209,000

*10,000

199,000

6,00050, 700

172,800

56, 700

229, 500

45, 00027,00015, 70034,200

99, 300

121,9008,300

229,500


1948



COMPARATIVE STATEMENT OF INCOME AND EXPENSES BY ACTIVITIES—Continued

MINDI DAIRYIncome:

Milk salesOther sales ._.-_.

Total income _ _


PayrollFeed . . .Repairs and replacements . . . _ _ _Supplies and servicesLosses in dairy herdDepreciation

Administrative expenses and audit _ -

Total expenses _ . . .

Net income (or loss*)

NEW YORK OFFICE AND STEAMSHIP LINEIncome:

Sales of services:Freight transportation. . . . . _ _ _Passenger transportationBaggage, mail, and treasureOther services .,.

Total income


Maintenance of shipsOperation of ships - . _Agency expenses . . . .Depreciation - _

Administrative expenses and audit .- .

Total expenses ._ _.. _._

Net income (or loss*) - - .

Actual,

$347,60431,276

107,082197,954

4,33035,69317,7395,771

12,989

1946

$378,880

368,5694,642

373,211

5,669

12,989115, 730

128, 719

•128,719

Estimate,

$422,50018,000

130,000240,00023,60037,30010,0004,800

2,250,000432,00033,30021,000

78,0001,860,000

548,900396,000

1947

$440, 500

445,7005,700

451,400

•10,900

2,736,300

2,882,900139,200

3,022,100,i ,:, .:£.. -*.

•285,800

Estimate,

$436,50012,000

rrsr

130,000240,00017,30037,50010,0001,400

3,880,000725,00055,50038,000

165,0003,100,000

619,400660,000

1948

$448,500

436,2005,700

441,900

6,600

4,698,500: • • : T • — -

4,544,400154,100

4,698,500

• Deduct.

720000—47 63


1948


SCHEDULE B-2

COST OF COMMODITIES SOLD

[Fiscal years ending June 30, 1946, 1947, and 1948]

COMMISSARYInventory at beginning of y«arPurchasesSupplies used for productionDirect expenses _ _ . _ . _ _

Less inventory at end of year _._ _

Cost of commissary supplies sold _ .._

COALING PLANTSInventory at beginning of yearPurchases

Less inventory at end of year

Cost of coal sold . _. _

Total cost of commodities sold - _

Actual,

$3, 794,23125, 549, 632

4, 728, 9241, 071, 254

185, 791232, 370

1946

$35,144, 0414, 225, 249

30,918,792

418,16178, 648

339, 513

31, 258,305

Estimate,

$4, 225,24921, 594, 7514,000,0001,180,000

<

78,648123,152

1947

m, ooo, ooo6,000,000

25,000,000

201,800100,800

101,000

25,101,000

Estimate,

$6,000,00019,745,0004,000,0001,180,000

100,800

1948

$30,925,0006,000,000

24,925,000

100,8001,500

99,300

25,024,300

SCHEDULE B-3

ADMINISTRATIVE EXPENSES[Fiscal years ending June 30, 1946, 1947, and 1948]

By accounts

NEW YOKE OFFICE

Salaries and wages:Officers:

Vice president...Vice president and secretary..TreasurerAuditor

Employees:Executive officeTreasurer's officeAuditor's office

Total personal services...Travel expensesTelephone and telegraphElectricityRental of officePostage and stationeryLegal expensesOther expensesPayment for services received:

External audit

Total New York office-

Actual, 1946 Estimate,1947 Estimate, 1948

Av. Totalnumber salary

1 $15,0001 12,0001 6,0000.2 1,300

2.9 7,1551 2,00413.3 37,500

20.4 80, 9591,2353,086$68

10, 5604,49910,1004,423

115, 730

Total Totalnumber salary

1 $15,0001 12,0001 6,0001 5,200

5 12,1002 5,600

13 41,100

24 97, 0001,0002,800

40010,0003,400

17, 5005,100

2,000

139, 200


1 $15,0001 12,0001 6,0001 5,200

5 12,2004 11,100

17 47,000

30 108, 5001,2001,900

50012, 3003,000

18, 7006,000

152,100

By accounts

ISTHMUS

Payment for services received:Panama Canal:

Governor's officeEngineer of maintenance officeComptroller's officeGeneral counsel's officePersonnel administrationGeneral correspondence and records..Pay roll bureauA ccounting department _Paymaster and collectorChief quartermaster's office ,

Payment for other services received:External audit. _

Total Isthmus..

Total administrative expensesLess amount due to Public Law 390Proposed 1947 supplemental language

Net administrative expenses ad-justed to limitation.

Actual, 1946

11,23813, 51611,55957,31023,17710,710

355, 77059,8209,800

561,495

677, 225

677, 225

Estimate, 1947 Estimate, 1948

$10,40014,40015,30013,10072,60021,9009,900

397,10066,10011,000

10,000

641,800

781,000*85,000

*196,000

500,000

$8,90014,40015,50013,10072,60021,90010,200

393,90066,10011,000

627,600

779,700

779, 700

• D e d u c t .


1948


SCHEDULE B-4

SCHEDULE OF PERSONAL SERVICES[Fiscal years ending June 30,1946,1947, and 19481

By grades

ON THE ISTHMUS

PERSONAL SERVICES

Clerical, administrative, and fiscal servicerGrade 14. Range $9,611 to $10,000:

General manager (railroad). _Grade 13. Range $8,878 to $9,470:

Receiving and forwarding agentGeneral manager (commissary)

Grade 12. Range $7,382 to $8,579:Assistant general manager (com-

missary)Grade 11. Range $6,128 to $7,382:

Superintendent, cold storage plantMaster of transportationAssistant receiving and forwarding

agentAssistant general manager (com-

missary) -__Supervisor of retail stores

Grade 10. Range $5,657 to $6,598:Assistant to receiving and forwarding

agentExecutive assistant _

Grade 9. Range $5,187 to $6,128:Commissary managerLocal agentManager, wholesale groceriesAssistant to receiving and forwarding

agent.-.Assistant superintendent, cold storage

plantAdministrative assistant _.Laundry managerManager, refrigerator and dry storage-Manager, wholesale dry goods

Grade 8. Range $4,717 to $5,657Grade 7. Range $4,247 to $5,187Grade 6. Range $3,776 to $4,717

Grade 5. Range $3,306 to $4,247.

Grade 4. Range $2,993 to $3,557.

Grade 3. Range $2,710 to $3,275.

Grade 2. Range $2,443 to $2,993.

Grade 1. Range $2,195 to $2,710Professional service:

Grade 6. Range $8,878 to $9,470:Assistant to general manager (rail-

road)Grade 4. Range $6,128 to $7,382:

Dairy managerRoadmasterMechanical engineer

Grade 3. Range $5,187 to $6,128:VeterinarianChemist.Engineer .

Grade 2. Range $4,247 to $5,187Subprofessional service:

Grade 8. Range $4,247 to $5,187Grade 6. Range $3,306 to $4,247Grade 5. Range $2,993 to $3,557Grade 4. Range $2,710 to $3,275Grade 3. Range $2,443 to $2,993

Crafts, protective, and custodial service:Grade 10. Range $4,560 to $5,501Grade 9. Range $4,090 to $5,030Grade 8. Range $3,620 to $4,560Grade 7. Range $3,369 to $4,090Grade 6. Range $3,087 to $3,651.Grade 5. Range $2,804 to $3,369

Related to classified service:Range $5,000 and over:

Hotel managerMaster baker

Range less than $5,000

Unclassified service, monthly:Range $5,000 and over:

TrainmasterChief train dispatcherElectrical supervisor

Obligations

Actual, 1946 Estimate,1947 Estimate,l948


1 $9,697

8,4829,826

0.4 2,526

6,3586,183

5,925

2 12,8740.8 4,581

1 5,7860.8 4,130

1 5,5111 5,4721 6,725

1 5,074

1 4,9101 4,7381 4,9311 4,7351 4,721

•11. 5 51, 99413.8 56,48534.2

130, 02965.7

240, 31255.1

161, 63840.8

103,47074.1

176,04630. 6 63, 601

8,147

7,9366,0535,375

1 5,0401 4,9250.1 7632.2 8,483

1 4,1862.2 7,4121.3 3,380

2 8,2383 10,3702 7,7972.4 8,1131.8 5,2621 3,082

2 12,5181 4,871

64.8172,912

0.3 1,5711 5,8291 5,571


1 $9,875

1 9,3351 9,177


1 $9,875

1 9,3351 9,177

1 7,3821 6,7541 6,754

2 13,1951 6,441

5,814

6,1276,1275,344

5,6575,3445,3445,5015,3447296614 72,966

15 69, 11143

179, 70378

287, 99264

205,96541

118,37087

224, 05930 68,804

9,177

6,1286,7546,441

5,2265,5015, 5019,173

4,40310, 8596,2672,7102,442

5, 0308, 6508,69715, 03613, 6083,432

2 13,4021 5,36377

224,494

5,4256,615

7,3826,754

6,754

2 13,8221 6,755

5,971

6,1276,1275,501

11111141543

79

64

41

5,8145,5015,5015,6575,50174,21970,286

183, 478

297,690

206,467

119, 80287

230, 66630 70,702

9,177

6,4436,7546,755

5,3835,6575,6579,485

1 4,5603 11,3292 6,4552 5,515

5,1878,9638,69715, 41113, 9843,432

2 13,4021 5,363

78232,202

1 5,075

By grade

ON THE ISTHMUS—Continued

PERSONAL SERVICES—continued

Unclassified service monthly—ContinuedRange $5,000 and over—Continued

Supervisor of telephones.Supervisor of railway signals

Range less than $5,000.

Total permanent, Isthmus..

Deduct:LapsesSalaries paid by "Pay of the Army" and

"Pay and subsistence of naval per-sonnel"

Net permanent, Isthmus.Native employment:

Full time employment

Part-time employment- _.W. A. E. employmentTemporary employment-.

Total personnel, Isthmus..

I N UNITED STATES

PERSONAL SERVICES

Clerical, administrative, and fiscal service:Grade 12. Range $5,905 to $6,863:

Commissary purchasing agentAssistant commissary purchasing

agentGrade 11. Range $4,902 to $5,905:

Passenger traffic managerAssistant auditor

Grade 10. Range $4,526 to $5,278:Assistant commissary purchasing

agent..Clerk

Grade 9. Range $4,150 to $4,902:Assistant auditorClerkFreight representative.__

Grade 8. Range $3,773 to $4,526Grade 7. Range $3,397 to $4,150Grade 6. Range $3,021 to $3,773Grade 5. Range $2,645 to $3,397Grade 4. Range $2,394 to $2,845Grade 3. Range $2,168 to $2,620.. . .Grade 2. Range $1,954 to $2,394Grade 1. Range $1,756 to $2,168

Unclassified service:Range $4,000 and over:

Vice presidentThird vice president and secretarySuperintendentCommissary purchasing agentFreight traffic managerTreasurerAssistant superintendent_.AuditorShore steward

Range less than $4,000Ship personnel

Total permanent, United States

Deduct lapses.-

Net permanent...Part-time employment.

Total personnel, United States

services (net),Total personalIsthmus

Total personal services, UnitedStates

Total personal services..

Obligations



11

246.54,S

972,138

(9.42,398,687

15,096

2,383, 591

3,172,0013.3 9,0281,139, 269

746

2,622,379

4,920.53, 745, 586

12 10,8851,178, 509

1,000

6,704, 635

2 11,410

3 13,780

2 7,8301 3,8606 22,280

10 26,9206 16,6705 11,094

12. 2 25, 5555 9,180

15, 00012,0007,5007,280

6,000

0.2 1, 3001 5,2005 15,080

64.4222,459

222,459

222, 459

6, 704, 635

222, 459

6, 927, 094


1 $5,5951 5,054

!681,104,808

7732,851, 276

225,882

3,015

7, 558,359

6,144

5,152

4,52515,709

4,52513, 452

6 25,521

109

152412

32,96727, 94036,96253,80324,30710, 536

1 15,0001 12,0001 7,500

11111

15360

7,2806,0006,0005, 2005,200

45,000

1,097, 200

4761,474, 785

499, 555

975, 23045 44,400

1, 019, 630

7,558,359

1, 019, 630

8, 577,989


1 $5,5951 5,054

2611,061,029

7672,841,428

215,595

2,625,833

3,728,92012 10,885

1,178,9821,000

7, 545,620

1 6,623

1 6,862

1 5,403

4,52515,834

4,65113,828

51

1010173515

21, 7503,522

33, 96032,96742,49974, 48230, 31715,804

1 15,0001 12,0001 8,400

11211

18384

7,2806,000

12,2005,2005,200

53, 000

1,167, 600

5241,604, 907

76,865

1, 528,04272 74,000

1, 602, 042

7, 545, 620

1, 602, 042

9,147,662


1948


STATEMENT OF PROPOSED

SCHEDULE B-5

OBLIGATIONS TO BE INCURRED FOR PURCHASE ANDVEHICLES FOR THE FISCAL YEAR 1948

HIRE OF PASSENGER MOTOR

Appropriation

Panama Railroad . . ._ .

Do

Total

Vehicles (motorunless otherwiseindicated) to bepurchased

Number Grosscost

Old vehicles to beexchanged

Number Allowance(estimated)

Net costof vehi-cles tobe pur-chased

Oldvehiclesstill tobe used

3

3

Cost of hireof motorvehicles

$24,000

24,000

Public purpose and users

The 3 cars owned by the Panama Railroad Company are main-tained and operated by The Panama Canal for use of theGovernor, who is president of the Panama Railroad Com-pany, and other officials of the Canal and Railroad.

General passenger transportation service for all other officialuses of the Company on the Isthmus is hired from the pool ofthe motor transportation division of The Panama Canal.


1948


PURPOSE AND FINANCIAL ORGANIZATION

The Panama Railroad Company was incorporated byan act of the Legislature of the State of New York onApril 7, 1849. In 1904 the majority of its capital stockwas acquired by the United States as a part of the assetsof the New Panama Canal Company, which were pur-chased for $40,000,000, as authorized by the act of June28, 1902 (34 Stat. 481). The remaining shares werepurchased from private owners during 1905.

By Executive order of May 9, 1904, the Presidentdirected that the policy of the Panama Railroad Companybe harmonized with the policy of the Government bymaking it an adjunct to the construction of the Canal,while at the same time fulfilling the purpose for which itwas created. The Panama Canal Act, approved August24, 1912, authorized the President to establish, maintain,and operate, through the Panama Railroad Company orotherwise, numerous types of business activities relatedto the Canal, and this legislation constitutes the basicstatutory authority for the present activities of theCompany.

The authorized and issued capital stock of the Company,consisting of 70,000 shares with a par value of $7,000,000,stands in the name of the Secretary of the Army, with theexception of 13 shares which are issued to the directors forqualification purposes but which remain in the custody ofthe Secretary of the Army. The Secretary nominates orapproves the 13 directors who comprise the board ofdirectors of the Company. The Governor and the engi-neer of maintenance of The Panama Canal are presidentand second vice president, respectively, of the Companyand also members of its board of directors.

Although the Company is authorized by its charter toborrow money and to mortgage its property if necessary,it has not done so and has no bonded indebtedness. TheCompany has followed a very conservative financial policy,and its board of directors has set aside funds, invested inUnited States Government securities, to provide for thereplacement of plant and equipment and for other im-portant future expenditures. Funds which the board ofdirectors considers to be in excess of the needs of theCompany are paid as dividends into the Treasury of theUnited States.

Pursuant to section 304 (b) of the Government Corpora-tion Control Act, a bill was drafted recommending thatthe Panama Railroad Company be reincorporated as aFederal corporation.

ANALYSIS OF BUDGET PROGRAM BY MAJOR ACTIVITIES

The operations of the Panama Railroad Company com-prise eight distinct functions, which are listed below andindividually discussed in the following text: (1) Railroad,(2) harbor terminal facilities, (3) telephone system, (4)Hotel Tivoli, (5) Hotel Washington, (6) commissarydivision, (7) coaling plants, (8) New York office and steam-ship line. Statements of income and expenses for each ofthese functions are shown in schedule B-l .

Effective January 1, 1947, the operation of the Mindidairy farm as a separate function of the Company was

discontinued and the activity became one of the productiveplants of the commissary division. The results of opera-tions for the entire year are included in commissary opera-tions.

Basic assumptions.—The estimates for fiscal years 1948and 1949 are based on the assumption that the generallevel of activity on the Isthmus during both years will beapproximately the same as during the last half of fiscalyear 1947.

The volume of the Company's business is affected to acertain extent by world trade conditions, but it is largelydependent upon the activities of the various United StatesGovernment agencies in the Canal^ Zone. The presentindications are that neither of these factors will changegreatly in the near future, but unforeseen conditions maydevelop which will result in variations from the estimatesas submitted. If a new project for improving the capacityand security of the Panama Canal should be adopted bythe Congress prior to or during the fiscal year 1949 andappropriations made for initiating work on the project,it is expected that the estimated volume of business willbe substantially increased.

Railroad (see schedule B-l).—The railroad comprises50 miles of main line track between the cities of Panamaand Colon, at the Pacific and Atlantic terminals of theCanal, and the usual appurtenances such as freight andpassenger stations and terminals, railroad yards, industrialtrackage, and the requisite rolling stock. The railroadserves The Panama Canal, the United States Army andNavy, and other Government agencies on the Isthmus,and also performs the functions of a common carrier inmeeting the needs of the Republic of Panama, and com-mercial agencies transacting business in this area.

For purposes of administration and accounting, thereare also included under this heading the incidental realestate activities of the Company. The $48,000 incomefrom rentals is nearly all derived from rental of buildings.

The gross revenues from operations of the railroad dur-ing the fiscal year 1947 were $2,708,167 and for 1948 areestimated to be $2,435,000. It is estimated that in fiscalyear 1949 the gross revenues will further decline to$2,375,000 as the result of the probable diversion of somepassenger traffic to the trans-Isthmian highway whichwas constructed during the war.

While operating expenses will also be reduced, the reduc-tion will not be proportionate to the decline in gross reve-nue. This is because a large part of the expense of operat- ,ing and maintaining the railroad does not vary in directratio to the volume of traffic and must be incurred aslong as required standards of service are maintained.

As the result of the anticipated decline in both grossrevenues and expenses, it is estimated that net revenuesof the railroad, which were $292,513 in fiscal year 1947,will be reduced to $131,800 in fiscal year 1948, and furtherreduced to $60,900 in 1949.

Harbor terminal facilities (see schedule B-l).—The harborterminal facilities consist of docks, piers, and appurte-nances necessary for handling, transferring, stevedoring,and storing cargo arriving at the Canal Zone ports ofCristobal and Balboa. This function also includes thecustody and rental of the Colon stables.

1081


1949


The gross revenues of the harbor terminals during fiscalyear 1947 were $2,821,982 and are estimated to be$2,990,000 for each of fiscal years 1948 and 1949. Theestimated increases in gross revenues as compared tofiscal year 1947 are based on an expected increase in thereceipt of commercial cargo for transshipment.

Operating expenses for fiscal year 1948 are expected toincrease as a result of increased business and the comple-tion of several deferred maintenance projects, and it isestimated that they will amount to $2,780,300 in that yearas compared to $2,489,445 in fiscal year 1947. Expensesfor fiscal year 1949 are estimated to be $2,681,300, thedecrease as compared to fiscal year 1948 being the resultof reduced repair expenses.

The net income of the harbor terminals in 1947 was$343,260, and it is estimated to be $209,700 in fiscal year1948 and $308,700 in fiscal year 1949.

Telephone system (see schedule B-l).—The telephonesystem provides telephone service for The Panama Canaland for the civilian communities in the Canal Zone. Italso leases trunk lines, circuits, and duct space to theUnited States Army and Navy and to the Government ofthe Republic of Panama.

Gross revenues of the telephone system are estimatedto be approximately the same for fiscal years 1948 and1949 as for 1947. The net income for fiscal year 1947was $56,026 and it is estimated that net income in fiscalyears 1948 and 1949 will be $49,500 and $48,300 respec-tively. The decrease in net revenue is the result of in-creased operating expense, largely on account of increasingmaterial costs.

Hotels Tivoli and Washington (see schedule B-l).—The Hotel Tivoli in Ancon, adjacent to Panama City, isan old frame structure of 132 rooms owned by The PanamaCanal, built in 1906, and fully depreciated many years ago.It is operated by the Panama .Railroad Company. TheHotel Washington in Colon is a concrete structure of 82rooms, built in 1913 and owned by the Panama RailroadCompany.

In the decade 1930-39 both hotels operated at a loss,their continued operation having been justified because oftheir status as essential adjuncts to The Panama Canal, or,more broadly speaking, to the United States Govern-ment in this area.

Business q,t the Hotel Tivoli is now maintained at a highlevel by transient guests from commercial air lines, andthis business is expected to remain at about the same levelduring fiscal years 1948 and 1949. It is estimated thatthe net revenues of the Hotel Tivoli will be $5,000 infiscal year 1948 and $20,000 in 1949. The Hotel Washing-ton has little business from commercial air lines and it isestimated that it will show a deficit of $35,000 in fiscalyear 1948 and a deficit of $27,000 in 1949. The decreasein the loss for 1949 as compared to 1948 is the result of ananticipated slight increase in tourist trade.

In a note accessory to the Treaty of 1936 between theUnited States and the Republic of Panama, the UnitedStates agreed that the hotel business proper would beleft in the hands of Panamanian industry when suitablehotel accommodations were available in the Republic ofPanama. Preparations are now under way for the con-struction of a large hotel in Panama City; the estimateshave been prepared on the assumption that the new hotelwill be in operation about the end of fiscal year 1949.

Commissary division (see schedule B-l).-—The commis-sary division provides food supplies, clothing, and otheressential requirements to Government employees andtheir families, to establishments of the United States

Government located on the Isthmus, and to commercialshipping. In addition to 20 retail stores in Canal Zonecommunities, the division operates large dry and coldstorage plants, a bakery, an ice-cream and milk-bottlingplant, an industrial laboratory, an ice plant, an abattoir,and a coffee-roasting plant, primarily as processing plantsto supply its retail stores, as well as a laundry. It alsooperates the Mindi Dairy, which prior to January 1,1947, was conducted as a separate activity of the Com-pany.

Commissary sales, excluding sales of services amountingto $548,744, totaled $31,729,719 in fiscal year 1947 and itis estimated that they will amount to $30,000,000 in eachof fiscal years 1948 and 1949. * The net revenue of thecommissary division in fiscal year 1947 was $203,703, andit is estimated that it will amount to $200,000 in each ofthe fiscal years 1948 and 1949.

Coaling plants (see schedule B-l).—The Panama Rail-road Company operates two coaling plants, one at eachterminus of the Canal, to supply coal to shipping callingat Canal Zone ports. Shortly before the close of fiscalyear 1946, the Balboa coaling plant was placed on aninoperative or stand-by basis and bunkering operationsare confined to emergency demands. In addition to sell-ing coal, the coaling plants derive revenue from vesselsdocking at coaling plant piers but not taking coal, and theBalboa plant handles sand brought by barge to the Canalfrom nearby deposits.

The net revenue of the coaling plants during fiscal year1947 was $87,373. The reason for this favorable showingwas that coal-burning vessels have continued to operateafter the war to a greater extent than was expected. Acontributing reason was the reclamation and sale of theremainder of a stock of coal of low inventory value thathad been in subaqueous storage for many years at theCompany's plant in Cristobal. I t is anticipated, however,that demands for coal from shipping calling at the Canalwill constantly diminish as coal-burning vessels are with-drawn from service and it is estimated that the net revenuefrom coaling plant operations will decline to $12,400 infiscal year 1948 and to $5,300 in fiscal year 1949.

New York City office and steamship line (see scheduleB-l).—The New York City office of the Panama RailroadCompany is the general office of the Company maintainedunder its charter as a corporation of the State of NewYork; it is also the main office of the Company in theUnited States. Aside from the administration of itscorporate affairs, it has control under the authority of theboard of directors of all of the funds of the Company,except those required for working cash in the Canal Zone,and of the deposit and investment of those funds.

The New York office also has direct supervision overand responsibility for the operation of the steamshipservice and facilities in connection therewith, for thetransportation of supplies, material, equipment, and per-sonnel to the Canal Zone; the operation of a commissarypurchasing department; and the necessary accountingrequired in connection with those activities.

The Company's steamship line comprises three identicalcargo and passenger steamers of 10,000 gross tons each,built in 1939 at a total cost of $13,200,000, which normallymaintain a weekly service between New York and Cris-tobal, Canal Zone. The steamship line is an essentialadjunct to the operation and maintenance of The PanamaCanal, furnishing ocean transportation for the large quan-tity of goods required by The Panama Canal and by thecivilian communities in the Canal Zone, and furnishing


1949

BUSINESS-TYPE BUDGETS—PANAMA RAILROAD COMPANY 1083

passenger transportation for civilian employees and theirfamilies between the Canal Zone and the United States.

During the war, all three steamers were withdrawn fromthe Company's service for use in the war effort. Afterthe cessation of hostilities, they were returned to the Com-pany and after undergoing some overhaul and rehabilita-tion were restored to their former service. The S. S.Panama resumed operations on September 20, 1946, theCristobal on February 5, 1947, and the Ancon on June 26,1947. Rehabilitation of the steamers Panama and Cris-tobal has not been completed and both steamers will againbe temporarily withdrawn from service in fiscal year 1948for completion of repairs and refitting.

The net income from steamship line operations duringfiscaljyear 1947 was $174,124 and it is estimated that netincome for fiscal years 1948 and 1949 will amount to$12,300 and $75,400, respectively. The low net incomefor fiscal year 1948 will be the result of the withdrawalof two of the steamers from service during the year forfinal rehabilitation, while in 1949 it is anticipated thatthey will be in full service during the entire fiscal year.It is expected that the three steamers will be running fulltime in 1949. This was not true in 1947. While expenseswill increase in proportion to time of operation, it is notanticipated revenues will increase in the same proportionfor the reason that the ships will probably not be runningwith full loads in 1949, especially freight loadings.

CAPITAL EXPENDITURES

The principal capital expenditures in fiscal year 1948will be for a number of box cars for the railroad to com-plete a long-range program of freight car replacements, thereplacement of certain cargo-handling equipment for theharbor terminals, telephone exchange equipment andcables, dry-cleaning equipment and an annex to theAncon laundry, and preliminary work on a new ice-creamand milk-bottling plant. In fiscal year 1949 the principalexpenditures will be for further replacement of box carsand cargo-handling equipment, the acquisition of newDiesel-powered passenger equipment for the railroad,completion of the laundry annex and the installation ofdry-cleaning equipment, and additional work on the newice-cream and milk-bottling plant. The amounts estimatedto be expended are shown in schedule A-2.

Retirements of plant and equipment are estimated toamount to $147,000 in fiscal year 1948 and $90,000 infiscal year 1949.

OPERATING RESULTS

During the fiscal year 1947 the operations of the Com-pany as a whole resulted in a net revenue of $956,834.This result is arrived at after making due provision fordepreciation on the Company's physical plant, and takesinto account accrued liabilities at the close of the fiscalyear. During fiscal year 1947 a dividend of $1,250,000was paid into the Treasury of the United States.

For fiscal year 1948, it is estimated that the operationsof the Company as a whole will result in a net revenue of$664,960, and for fiscal year 1949 in a net revenue of$772,860, and it is estimated that a dividend of $700,000,or 10 percent on the capital stock, will be paid into theTreasury of the United States in each of these years.

FINANCIAL CONDITION

The comparative statement of financial condition,exhibit C, indicates that the Company has maintained a

strong financial position. It has been unnecessary toborrow any funds for its operations. The earned surplusof the Company will be maintained at about $47,000,000after payment of dividends to the United States Treasury.The greater portion of the earned surplus is invested inplants and facilities of the Company.

EFFECT ON GOVERNMENT BUDGET

Since the Panama Railroad Company does not makeexpenditures from general or special accounts in theTreasury or from checking accounts with the Treasurer,the only effect on the Government budget as a result ofits operation results from the payment of dividends intothe Treasury.

AUDIT BY THE GENERAL ACCOUNTING OFFICE

The accounts of the Company for fiscal years 1945 and1946 were audited in fiscal year 1947 by the corporationaudits division of the General Accounting Office and theaudit of the accounts for fiscal year 1947 was begun justprior to the close of the fiscal year. No report of the re-sult of the audits has yet been received by the Company.

ADMINISTRATIVE EXPENSES

Administrative expenses applying to the general admin-istration of the Company amount to less than 2 percent ofsales. Included in these expenses are the New York Cityoffice and the administrative, fiscal, and legal services fur-nished by The Panama Canal on the Isthmus to thePanama Railroad Company.

Compliance with the limitations fixed by the Congressfor the administrative expenses of the Panama RailroadCompany in the fiscal years 1947 and 1948 has requiredthe curtailment of important auditing and accountingwork, a slight curtailment of personnel work, and thepostponement of the contemplated expansion of the staffof the engineer of maintenance.

Estimates for fiscal year 1949 are based upon the resump-tion of normal administrative control over the operationsof the Company. Detailed figures show increases as com-pared to 1948 estimates to cover Ramspeck promotionsto employees in the New York City office and to cover thePanama Railroad Company's share of the cost of Ram-speck promotions in the comptroller's office, the office ofthe general counsel, general correspondence and records,pay-roll bureau, paymaster, and collector of The PanamaCanal. In addition, it will be necessary to make increasesin administrative expenses to cover the following items:

(a) Transfer of roll keeping from the commissary divisionto the pay-roll bureau.—Roll keeping is now handled aspart of the commissary division's operations, and henceits expense is included in the direct operating expensesof the commissary. For better efficiency it is proposedto transfer this work to the central pay-roll bureau, andthis will require a shift of $10,000 from operating expensesto administrative expenses.

(b) Expansion of staff of engineer of maintenance.—Theengineer of maintenance is likewise second vice presidentof the Panama Railroad Company and, as such, is indirect charge of the Isthmian operations. It has beenapparent for some time that his staff should be expandedfor the adequate supervision and analysis of the manydiverse operations of the Company, and this expansionwas postponed to fiscal year 1949 only because of thelimitation on administrative expenses.


1949


(c) Increased 'personnel administration.—An expansionof service by the personnel division of The PanamaCanal will be required in connection with improvedpersonnel procedures and techniques with respect to thenative employees, including more adequate personnelrecords and the institution of efficiency ratings and job-analysis procedures.

However, as an offset to the above three increases, thecost of the following two services rendered by the account-ing department of The Panama Canal for the PanamaRailroad Company commissary has been reclassified asdirect operating expense of that division rather than asan administrative expense of the Company as a whole:

(a) Coupon audit.—The coupon system is used by thecommissaries in lieu of handling cash in the retail stores,and hence the cost of the system is actually a direct operat-ing expense. The expense of manufacturing coupons andinspection thereof by employees of the accounting depart-ment is now treated as an operating expense of thecommissary division, and the proposed reclassification ofthe coupon audit w°ulcl make uniform the classificationof all expense incident to the manufacturing of new

coupons and the verification and destruction of usedcoupons.

(b) Commissary contraband inspection.—This service isprovided by the accounting department in accordancewith treaty commitments with the Republic of Panamaand is designed to curtail purchases in Panama Railroadcommissaries by persons not entitled to commissaryprivileges. It also is considered a direct operatingexpense.

When the original classification of administrative ex-penses was devised, in the absence of any clear-cutdefinition, it was assumed that all executive departmentand accounting department expenses on the Isthmus forwork performed for the Panama Railroad Company (withthe exception of the inspection of new coupons) would beclassified as administrative expenses. However, it isapparent that both of the above-mentioned servicespertain to the direct operations of the commissary divisionalone and not to the general administration of the Com-pany as a whole, and it is accordingly proposed to classifythem as operating expenses for fiscal year 1949.


1949


E X H I B I T A

COMPARATIVE STATEMENT OF SOURCES AND APPLICATION OF FUNDS



FUNDS APPLIEDTo acquisition of assets:

Expansion of plant and equipment:Eailroad --- -Harbor terminals . . . _Telephone system...Hotel WashingtonCommissaryCoaling plantsUncompleted construction and improvement

Total acquisition of assets..

To operating and other costs (excluding depreciation and other charges not requiring funds):Cost of commodities sold:


Total cost of commodities soldDirect operating expenses:

Railroad ._.Harbor terminals ...Telephone systemHotel TivoliHotel WashingtonCommissaryCoaling plantsNew York office and steamship line..

Total direct operating expenses..Administrative expensesRehabilitation of steamersContribution to pension fund

Total operating and other costsTo distribution of surplus: Dividends paid to U. S. Treasury..

Total funds applied..

FUNDS PROVIDEDBy realization of assets:

Sale of surplus propertyTransfer from funds reserved for replacement of plant and equipment.Collection of long-term receivable items

Total realization of assets..

By income:Sales of commodities:

Commissary. _Coaling plants

Total sales of commodities _ _Sales of services:

RailroadHarbor terminalsTelephone system _Hotel TivoliHotel WashingtonCommissary divisionCoaling plants —New York office and steamship line..

Total sales of services. _Rents: RailroadInterest on U. S. Government investments..Interest on other investments

Total incomeBy decrease in working capital.

Total funds provided

$6,4133,346

26,4962,640

112, 247

31, 552

$100,000264,000

28,0002,800

218,4472,000

178,200

$450,000221,200

175,000

1,200,000

$182,694 $793,447

26,867, 717262,210

25,101,000336,000

25,057,200280,000

27,129,927 25,437,000

2,131,8892,231,095

247,321643,341289,189

4,730,471217,642

1,871,299

2,053,4002,504,600

259,600

268,0234,744,469

181,8704,411,200

2,044,9002,401,200

259,000516,800278,300

4,871,500169,000

4,968,200

12,362, 247759,090

5,193,03010,685

14,984,151750,000

3,201,597

45,454,9791,250,000

44,372,748700,000

46,887,673 45,866,195

9,098573,156

4,650 4,650 4,650

586,904 4,650

31,729,719535,519

30,000,000456,000

30,000,000390,000

32,265,238 30,456,000

2,659, 4282,821,982

370, 597636,015311,188548, 744

69, 7172,438,160

2,387,0002,990,000

376,000570,000260,000535,000

70,0005,230,600

2,327,0002,990,000

376,000550,000280,000565,000

62,0005,855,700

9,855,83148,739

221,476815

12,418,60048,000

145,200800

42,392,0993,908,670

43,068,6002,792,945

46,887,673 45,866,195

$2,046,200

25,337,200

15,508,900715,000

41,561,100700,000

44,307,300

4,650

30,390,000

13,005,70048,000

147,200800

43,591,700710,950

44,307,300


1949

1086 THE BUDGET FOtt FISCAL YEAR 1949

EXHIBIT B

COMPARATIVE STATEMENT OF INCOME AND EXPENSES



Income:Sales of commodities _Sales of services..Rents _ _Interest income on U. S. Government securitiesOther interest _. .__Other income-profit from sale of assets _

Total income

Expenses:Cost of commodities sold __Direct operating expenses.._ _Administrative expenses _Depreciation (not included in cost of sales or direct operating expenses)Contribution to pension fund _Provision for postwar contingency—steamersLosses and charge-offs:

Employees'leave payments _.Refrigerator guarantee costDemolition of pier No. 2, Colon _ _.Demolition of wharf bunker, Cristobal.- -Demolition of coaling plant structuresDeferred maintenance expensesLosses on plant retirement ___

Total expenses.__ _

Net income before adjustment of reservesAd jus tment of reserves:

Employees' accrued leave _Refrigerator guarantees _. _Demolition of pier No. 2, ColonDemolition of wharf bunker, Cristobal coaling plant__ _Deferred maintenance, Hotel Tivoii _


Net income for the year __

$32, 265, 2389,855,831

48,739221,476

815

$42,401,035

27,166,11612,779,882

759,09066,74010,685

365,700

241,7863,88010,72315,07534,57039,92978,877

424,840

41,573,053

827,982

18,323232

10,72359,64539,929

128,852

956,834

$30,456,00012,418,600

48,000145,200

800

$30,390,00013,005,700

48,000147,200

800

$43,068,600

25,465,00015,862,769

750,00066,740

$43,591,700

25,365,20016,422,900

715,00066, 740

235,1694,000

234,0005,000

22,0707,64315,600

20,000

284,482 259,000

42,428,991

639,609

42,828,840

762,860

502"4,864

22,0707,643

•10,000

20,000

25,351 10,000

664,960 772,860

ANALYSIS OF UNRESERVED SURPLUS

Balance at beginning of fiscal year _Net income for the year (above)Transfer from postwar contingency reserve, IsthmusTransfer from coaling plant contingency reserveTransfer from income reserved from funds invested in depreciation and contingency reservesTransfer to accrued depreciation to bring depreciation on steamers to full 5 percent of book value.Dividends paid to U. S. Treasury

Balance at end of fiscal year _

$45,777, 236956,834

1,250,000165,000796,968

• 212,720« 1,250,000

47,483,318

$47,483,318664,960

• 700,000

47,448,278

$47,448,278772,860

« 700,000

47,521,138

»Deduct.


1949


E X H I B I T C

COMPARATIVE STATEMENT OF FINANCIAL CONDITION

[As of June 30, 1946,1947, 1948, and 1949]

ASSETSInventories:

Merchandise held for saleRailroad and other material and supplies -Dairy cattle . _ _Merchandise and other material in transit. _

Total inventories..- .--

Plant and equipment:Railroad and appurtenancesDocks, piers, and appurtenances -Telephone system _ _Hotel Washington _ . . _Commissary plants stores, and equipmentCoaling plantsDairy farmSteamships . -Uncompleted construction and improvement..

TotalLess donations and grants __ Z _

Total plant and equipment _Less accrued depreciation. _ . .

Net plant and equipment _

Accounts receivable:U. S. Government agencies _Individuals and companies __ _

Total accounts receivable.

Special deposit

Funds for replacement of plant and equipment and for postwar contingencies:Cash on deposit _- - .-.U. S. Government securities _ . _ __ _Other securities _ _..

Total

Working funds:Steamer rehabilitation reserve fund:

Cash on hand and in banksU. S. Government securities ._

Total _

General fund:Cash on hand and in banks:

New York ,_ . .Isthmus _

Total cash .

U. S. Government securities __ __

Total general fund _ ___

Total working funds.. _ _

Accrued interest receivable:Interest on U. S. Government securities. - .Interest on other securities _ _ _

Total accrued interest receivable _ _

Deferred debit items:Steamer rehabilitation expenditures _ _ _ _ __ _.Other _ ._. . _ .__

Total deferred debit items.. __ _ _

Concession from New GranadaOther assets —_ _

Total assets _-

Actual, 1946

$4,303,897817,232171,352

1,160,481

6,452,962

17,079,6165,777,0632,069,385

750,4085,423,657

770,482126,281

13,200,0007,531

45, 204,423901,079

44,303,34417,600,196

26,703,148

884,475296,802

1,181,277

20,000

1,112,25012,861,000

11,385

13,984,635

45,9395,590,000

5,635,939

5,213,3722, 528,931

7,742,303

3,355,000

11,097,303

16,733,242

67,415147

67,562

605,37390,896

696,269

138,850

65,877,946

Actual, 1947

$6,157,982876,860176,052

1,334,647

8,545, 541

16,867,7885,738,0702,095,881

753,0485,657,839

575,888

13,200,00031, 552

44,920,066901,079

44,018,98718,683,408

25,335,579

919,052455,495

1,374,547

20,000

213,09413,187,000

11,385

13,411,479

10,1141,744,000

1,754,114

2,888,5062,626,490

5,514,996

4,399,000

9,913,996

11,668,110

93,801147

93,948

5,798,403229,557

6,027,960

134,200

66,611,365

Estimate, 1948

$6,140,0001,064,000

206,0001,000,000

8,410,000

16,951,4495,927,0702,123,881

755,8485,857,839

572,494

13,200,000178,200

45,566,781901,079

44,665,70219,794,515

24,871,187

800,000400,000

1,200,000

20,000

13,09413,387,000

11,385

13,411,479

4,499,9142,500,000

6,999,914

999,000

7,998,914

7,998,914

50,000147

50,147

9,000,000200,000

9,200,000

129,550

65,191,278

Estimate, 1949

$6,140,0001,064,000

206,0001,000,000

8,410,000

17,381,4496,128,2702,123,881

755,8486,061,039

572,494

13,200,0001,300,000

47,522,981901,079

46,621,90220,972,255

25,649,647

800,000400,000

1,200,000

20,000

13,09413,387,000

11,385

13,411,479

3,788,9642,500,000

6,288,964

999,000

7,287,964

7,287,964

50,000147

50,147

9,000,000200,000

9,200,000

124,900

65,254,138


1949


EXHIBIT C—Continued

COMPARATIVE STATEMENT OF FINANCIAL CONDITION—Continued

LIABILITIESAccounts payable:

XT S. GovPTTiTn '̂nt ftgfvnofosOther _

Total accounts payableAccrued liabilities: Accrued salaries and wages payable

Deferred credit items:For rehabilitation of steamersOther

Total deferred credit i tems..

Operating reserves:Employees'accrued leaveRefrigerator guaranteesDemolition of pier No. 2, ColonDemolition of wharf bunker, Cristobal coaling plant and contingencyDeferred maintenance, Hotel Tivoli _ . -Rehabilitation reserve—commissary plant ___

Total operating reserves _ _

Total liabilities.—

CAPITALPaid-in capital: Capital stock._

Earned surplus:Surplus reserves:

Postwar contingency reserves: Isthmus _ _Coaling plant contingency reserve. _ _.Income reserved from funds invested in depreciation and contingency reserves

Unreserved surplus

Total earned surplus..

Total capital _

Total liabilities and capital.

Actual, 1946

$458,4331,135,072

1, 593, 505338,823

7,138,899555,314

7,694, 213

346,8245,368

10,723101, 71547, 571

750,000

1, 262, 201 *

10,888,742

7,000,000

1,250,000165,000796,968

45,777,236

47,989,204

54,989,204

65,877,946

Actual, 1947

$294,1932,333, 537

2,627,730390,704

7,333,881542,382

7,876, 263

328, 5015,136

42,0707,643

750,000

1,133,350

12,028,047

7,000,000

47,483,318

47,483,318

54,483,318

66,511,365

Estimate, 1948

$300,0001,200,000

1,500,000300,000

7,335,000500,000

7,835,000

328,00010,000

20,000

750,000

1,108,000

10,743,000

7,000,000

47,448,278

47,448, 278

54,448,278

65,191,278

Estimate, 1949

$300,0001,200,000

1,500,000300,000

7,335,000500,000

7,835,000

328,00020,000

750,000

1,098,000

10, 733,000

7,000,000

47,521,138

47,521,138

54,521,138

65,254,138

SCHEDULE A - l

EFFECT ON THE GOVERNMENT BUDGET[Fiscal years ending June 30,1947,1948, and 1949]

BUDGETARY RECEIPTS

General account receipts: Payment ofdividends into miscellaneous receipts ofU. S. Treasury

Actual, 1947 Estimate, 1948 Estimate,1949

$1,250,000 $700,000 $700,000

SCHEDULE A-2

COMPARATIVE STATEMENT OF CAPITAL EXPENDITURES[Fiscal years ending June 30,1947, 1948, and 19491

Margarita commissary buildingC ocoli commissary buildingIncinerator for Curundu commissary _Flat-work ironer for laundry—Telephone system expansionRailroad freight carsPassenger-train equipmentFork-lift cargo handling trucksLaundry annex and dry-cleaning equip-

mentIce cream and milk bottling plantMiscellaneous improvements

Total capital expenditures

Actual, 1947

$36,73132,75810,28510,66426,496

65,760

182,694

Estimate, 1948

$78,000100,000

210,000

78,20050,000

277,247

793,447

Estimate, 1949

$200,000200,000250,000210,000

65,0001,000,000

121,200

2,046,200


1949

BUSINESS-TYPE BUDGETS—PANAMA &AILROAD COMPANY 1089

SCHEDULE B-l

COMPARATIVE STATEMENT OF INCOME AND EXPENSESBY ACTIVITIES

[Fiscal years ending June 30,1947,1948, and 1949J

RAILROADIncome:

Sales of services:Freight transportationPassenger transportationOther transportationOther services

Total sales of servicesRents.

Total income ___


Maintenance of wayM aintenance of equipmentTransportation expensesDepreciationOther expenses

Total direct operating expensesAdministrative expenses ___Losses and charge-offs: Losses on plant

retirement

Total expenses _

Net income _

HARBOR TERMINALS

Fncome:Sales of services:

WharfageStevedoringHandling and transferring_Other services

Total income


Rental of piersRepairsStevedoring expensesHandling and transferring expenses. _.Depreciation of plant and equipment-Other expenses

Total, direct operating expensesAdministrative expensesLosses and charge-offs:

Demolition of Pier No. 2, ColonLosses on plant retirement

Total expenses

Net income before adjustment ofreserves

Adjustment of reserves: Demolition ofPier No. 2, Colon

N e t income for the year

Actua l , 1947

$1, 792, 511615, 623183,06068,234

2, 659, 42848. 739

2, 708,167

321,124569,154

1,208, 600168, 59133,013

2.300,482111,077

4,095

2,415, 654

292, 513

246,277219,873

2,194,159161, 673

2,821,982

66,000151,755127,401

1, 270,490135, 251604, 726

2,355, 623123,099

10, 723

2,489,445

332,537

10,723

343,260

E s t i m a t e , 1948

$1,600,000560.000175,00052.000

2,387,00048,000

2. 435,000

370, 400540,000

1,115,000168, 600

28,000

2, 222, 00081, 200

2.303, 200

131,800

235,000216,000

2,394,000145,000

2,990,000

66,000199,900155,200

1,475, 500132,000608,000

2, 636,600128, 700

15,000

2,780,300

209, 700

209, 700

Es t ima te , 1949

$1,600,000500,000175,00052,000

2.327,00048,000

2,375,000

365, 000540,000

1,115,000178,000

24,900

2, 222, 900

91,200

2, 314,100

60,900

235,000216,000

2,394,000145,000

2,990,000

66,000100,000155,200

1,475, 500138,000604, 500

2,539, 200142,100

2,681,300

308, 700

308, 700

TELEPHONE SYSTEM


Telephone service.Trunk lines, circuits, and duct space.Teletype machinesOther services __

Total income.


Maintenance and operation..Depreciation _.

Total direct operating expensesAdministrative expenses

Total expenses

Net income

HOTEL TIVOLI

Income:RoomsRestaurantNewsstandOther services

Total income-


Pay roll .__Subsistence suppliesNewsstand suppliesRepairsRentOther expenses


Losses and charge-offs:Deferred maintenance expenses..Employees' leave payments

Total losses and charge-offs.

Total expenses

Net income (or loss a) before ad-justment of reserves

Adjustment of reserves:Deferred maintenanceEmployees' accrued leave.

Net adjustment of reserves.


HOTEL WASHINGTON

Income:RoomsRestaurantNewsstandOther services-

Total income .

Actual, 1947

$238,465108,90917,1876,036

370, 597

247,32154,415

301, 73612,835

314, 571

56,026

225, 964339, 28130, 20840, 562

636,015

197, 748177,79719, 29829,90748, 000123,345

596,09514, 683

39 9297,317

47, 246

658,024

« 22, 009

39, 929316

40, 245

18,236

96,691180,24614,78719,464

311,188

Estimate, 1948

$240.000112,00018,4005,600

376,000

259,60053, 200

312,80013, 700

326, 500

49, 500

215,000295,00026, 00034, 000

570,000

199, 200155, 00018,00015,00036,000120, 700

543, 90012,100

7,6439,446

«3,C

7,643446

5,000

85,000147,00012,00016,000

260,000

Estimate, 1949

$240,000112,00018,4005,600

376,000

259,00053,600

312,60015,100

327, 700

48,300

200,000291,00025,00034, 000

550, 000

200, 800153,00017,00015, 00018,000

104, 000

507, 80013, 200

9,000

9,000

530,000

20,000

20,000

93,000158,000

13,00016,000

280,000

• Deduct.

770000—48


1949



COMPARATIVE STATEMENT OF INCOME ANDEXPENSES BY ACTIVITIES—Continued

HOTEL WASHINGTON—Con.


Pay rollSubsistence suppliesNewsstand supplies . .RepairsDepreciation .__Other expenses _ _.

Total direct operating expensesAdministrative expensesLosses and charge-offs:

Employees' leave payments

Total expenses

Net income (or loss °) beforeadjustment of reserves

Adjustment of reserves: Employees' ac-crued leave.

Net income (or loss a) for the year..

COMMISSARYIncome:

Sales of commoditiesSales of services

Total income

Expenses:Cost of commodities sold.

Direct operating expenses:Pay rollMerchandise loss and damageLocal transportation of merchandise..DepreciationOther expenses _


Losses and charge-offs:E mployees' leave payments _Refrigerator guarantee cost

Total losses and charge-offs

Total expenses

Net income before adjustment ofreserves

Adjustment of reserves:E mployees' accrued leaveRefrigerator guarantees


N e t income for the year

Actua l , 1947

$113,34695,953

9,36310,80517,34155,301

302,10910, 629

4,421

317,159

« 5,971

«532

«6,503

31,729, 719548, 744

32, 278, 463

26,903,906

2,942,065420,175361,166104, 232773,137

4, 600, 775354,922

230,0483,880

233, 928

32,093, 531

184.932

18, 539232

18,771

203, 703

Estimate, 1948

$112,80079,0007,600

10,00017,50052,900

279,80010, 200

5,723

295, 723

° 35, 723

723

° 35, 000

30,000,000535,000

30, 535,000

25,129,000

2,969, 000400,000392,000104,000759, 469

4, 624, 469352, 000

220.0004,000

224,000

30,329, 469

205, 531

«667• 4,864

« 5, 531

200,000

Estimate, 1949

$116,70085,000

8,00010,00017,60053, 600

290, 90011,100

5,000

307,000

« 27,000

« 27, 0C0

30,000,000565,000

30, 565,000

25,085, 200

2, 983,000400,000392,000114,000871, 500

4, 760, 500284, 300

220,0005,000

225,000

30,355,000

210,000

• 10,000

« 10,000

200,000

« Deduct.

COALING PLANTSIncome:

Sales of commodities: Coal sales

Sales of services:Handling sand and gravelWharfage and other services

Total, sales of service

Total income _

Expenses:Cost of commodities sold

Direct operating expenses:O peration and maintenanceRent of piersDepreciation. _ _Other expenses

Total direct operating expensesAdministrative expenses._

Losses and charge-offs:Demolition of wharf bunker.Demolition of coaling plant structuresLosses on plant retirement _.

Total losses and charge-offs

Total expenses....

Net income (or loss a) before ad-justment of reserves

Adjustment of reserves:Demolition of wharf bunkerDemolition of coaling plant structures. _.

Net adjustment of reserves- _


NEW YORK OFFICE AND STEAM-SHIP LINE


Freight transportationPassenger transportationBaggage, mail, and treasureOther services

Total income


Maintenance of shipsOperation of shipsAgency expensesDepreciation __

Administrative expenses,.

Total expenses

N e t income

Actua l , 1947

$535, 519

13,80855,909

>9,717

605, 236

262, 210

86, 50124,00015, 74557,496

183. 7427,129

15,07534, 57074, 782

124.427

577, 508

27, 728

15,07544, 570

59,645

87,373

1,985, 751350, 983

84, 25817,168

2,438,160

100, 8631,377,486

392,950268,021

2,139,320124, 716

E s t i m a t e , 1948 E s t i m a t e , 1949

$456,000

14,00056,000

70,000

526,000

336,000

69,50024,00012, 20066,300

172,000

5,000

22,070600

22, 670

535,670

0 9,670

22,070

22,070

12,400

4, 111, 500942, 500136, 60040,000

5, 230, 600

270,0003,468, 700

672, 500660,000

5,071, 200147,100

5. 218,300

12,300

$390,000

12,60049,400

62,000

452,000

280,000

67,00022,00011.80060,000

160,8005,900

20,000

20,000

466,700

* 14,700

20,000

20,000

5,300

4,495, 6001,155,000

157, 80047,300

5, 855, 700

327, 6003, 952,000

688, 600660,000

5, 628,200152,100

5,780,300

75,400


1949


ESTIMATES OF AUTHORIZATION RELATINGTO CORPORATE FUNDS

NOTE.—The text of general authorizing language, as incorporated in the GovernmentCorporations Appropriation Act, 1948, and as proposed for 1949, will be found at the endof the "Summary Statements and General Language" of part III of the Budget.

Administrative Expenses, Panama Railroad Company—Panama Railroad Company: Not to exceed [$750,000J $715,-

000 (to be computed on an accrual basis) of the funds of the Com-pany shall be available during the fiscal year [1948] 194-9 for itsadministrative expenses, including administrative services per-formed for the Company by other Government agencies, whichshall be determined in accordance with the Company's prescribedaccounting system in effect on July 1, 1946, and shall be exclusiveof depreciation, payment of claims, [contributions to employeesretirement system,] expenses of the commissary coupon audit, com-missary contraband inspection, expenditures which the Company'sprescribed accounting system requires to be capitalized or chargedto cost of commodities acquired, and expenses in connection withacquisition, construction, operation, maintenance, improvement,protection, and disposition of facilities and other property belong-ing to the company or in which it has an interest. {The Govern-ment Corporations Appropriation Act, 194-8.)

FUNDS AVAILABLE FOR ADMINISTRATIVEEXPENSES

Limitation or estimateUnexpended balance

Total administrative expenses

ADMINISTRATIVE EXPENSES BY OBJECTS

UNITED STATES

01 Personal services

02 Travel03 Transportation of things04 Communication services05 Rents and utility services ___06 Printing and binding.07 O ther contractual services08 Supplies and materials09 Equipment _ . .

Total administrative ___

ISTHMUS

07 Other contractual services:Panama Canal-

Governor's officeEngineer of maintenance officeComptroller's officeGeneral counsel's officePersonnel administrationGeneral correspondence and rec-

ordsPay-roll bureau ___Accounting departmentPaymaster and collector ~Chief quartermaster's office

Total, Panama Canal

EXTERNAL AUDIT

07 O ther contractual services

Total administrative expenses

DETAIL OF PERSONAL SERVICES

ON THE ISTHMUS

Clerical, administrative, fiscal service:Grade 14. Range $9,611 to $10,000:

General manager, railroad__Grade 13. Range $8,878 to $9,470:

Receiving and forwarding agentGeneral manager, commissary.

Grade 12. Range $7,382 to $8,579:Assistant general manager, commis-

sary - - -Grade 11. Range $6,128 to $7,382:

Superintendent, cold storage plantAssistant receiving and forwarding

agentMaster of transportationSupervisor of retail storesAssistant general manager, commis-

sary. _ . -

Actual, 1947

$760,000-910

759,090

$88,664547158

2,70311,083

86417, 919

307471

122,716

10,38014, 40015,08513,03270, 971

21, 91210,637

390, 82566,13211,000

624,374

12,000

759,090

Num- Totalber salary

1 $9,928

1 9,3281 8,956

1 7,382

1 7,382

1 6,8871 6,7551 6,205

1 6,128

Estimate, 1948

$750,000

750,000

$105, 927800200

3,10011, 7701,750

20, 3251,7281,500

147,100

13,9006,609

13, 59213,10064, 499

21, 90010, 200

367, 00066,10011,000

587,900

15,000

750, 000


1 $10,000

1 9,3841 9,177

1 7,382

1 7,382

1 7,0681 6,1281 6,441

1 6,441

Estimate, 1949

$715,000

715,000

$107,532800200

3,10012, 6401,750

20, 3251,7531,500

149, 600

13,90017, 70013, 73813,50070, 437

22,13721,026

299, 34267, 62011,000

550,400

15, 000

715,000


1 $10,000

1 9,4701 9,259

1 7,681

1 7,382

1 7,3821 6,4411 6,519

1 6,598

DETAIL OF PERSONAL SERVICES—Con.

ON THE ISTHMUS—continued

Clerical, administrative, fiscal service-Continued

Grade 10. Range $5,657 to $6,598:Executive assistant

Grade 9. Range $5,187 to $6,127:Local agentCommissary managerAssistant superintendent, cold storage

plantA dministrative assistantManager, wholesale groceriesLaundry managerManager, wholesale drygoods

Grade 8. Range $4,717 to $5,657Grade 7. Range $4,247 to $5,187Grade 6. Range $3,776 to $4,717Grade 5. Range $3,306 to $4,247Grade 4. Range $2,993 to $3,557Grade 3. Range $2,710 to $3,275Grade 2. Range $2,443 to $2,993Grade 1. Range $2,195 to $2,710

Professional service:Grade 6. Range $8,878 to $9,470:

Assistant to general manager-Grade 4. Range $6,128 to $7,382:

RoadmasterEngineer, mechanicalDairy manager

Grade 3. Range $5,187 to $6,128:Electrical engineerChemistVeterinarian

Grade 2. Range $4,247 to $5,187Subprofessional service:

Grade 8. Range $4,247 to $5,187Grade 7. Range $3,776 to $4,717Grade 6. Range $3,306 to $4,247Grade 5. Range $2,993 to $3,557Grade 4. Range $2,710 to $3,275

Crafts, protective, custodial service:Grade 10. Range $4,560 to $5,501Grade 9. Range $4,090 to $5,030Grade 7. Range $3,369 to $4,090Grade 6. Range $3,087 to $3,651

Related to classified service:Range $5,187 and over:

Hotel managerRange less than $5,187

Unclassified service, monthly:Range $5,187 and over:

Supervisor of telephonesRange less than $5,187

Num-ber

Total permanent, Isthmus..Deduct:

Lapses

Salaries paid by "Pay of the Army"

Net permanent, Isthmus (averagenumber, net salary)

Temporary employmentPart-time employmentW. A. E. employmentRegular pay in excess of 52-wcek base, 5

U. S. C. 944Overtime and holiday payNight-work differential

Total, Isthmus, except native em-ployment

Native employment:Full-time employment-.

W. A. E. employment

All personal services, Isthmus

IN THE UNITED STATES

Clerical, administrative, fiscal service:Grade 12. Range $5,905 to $6,863:

Commissary purchasing agentAssistant commissary purchasing

agentGrade 11. Range $4,902 to $5,905:

Passenger traffic manager ___Grade 10. Range $4,526 to $5,287:

ClerkGrade 9. Range $4,150 to $4,902:

Assistant auditorClerk

Grade 8. Ranere $3,773 to $4,526Grade 7. Range $3,397 to $4,150Grade 6. Range $3,021 to $3,773Grade 5. Range $2,645 to $3,397Grade 4. Range $2,394 to $2,845Grade 3. Range $2,168 to $2,620Grade 2. Range $l,954"to $2,394.

Actual, 1947

Totalsalary

1 $5,775

1 6,1571 6,128

Num-ber

5,5145,3045,2395,1875,187

72, 05766,957

160,077268, 037

57 182,99552 143,855

197,38234, 995

1 9,177

1 6,8871 6,3371 6,128

1 5,8011 5,4871 5,2922 9,107

12, 9897,9986,7389,2345,421

1 4,8741 4,9783 9,0173 10,498

2 12,93261 186,881

1256

5, 595

1, 021, 563

7072, 592, 731

46.1110,376

2,349

2, 480,0062,1851,1753,045

8,06667, 5986,373

660.9

2, 568, 448

4, 608. 23, 477, 4691, 618. 360

7, 664, 277

2 13,062

1 5,211

3 15,834

1 4,526

4 17,945

7 29,81734, 21921, 92622, 58740,53110,780


Totalsalary

1 $5,853

6,1275,187

11

11111

1415417357538014

5,6575,4615,3965,3445,344

73,08469,358

173,048278, 532186,027151, 558207,83636,183

8,778

7,2316,4416,232

5,8795,6445,4989,240

13,0358,1666,9939,4175,515

5,0305,03010, 74910, 780

1244

12, 982189,103

5,595

979, 911

7012,606,647

2254, 785

2, 551,8627,3341,9973,045

16, 26150,11413, 752

6792, 644, 365

4,5683, 435, 3911, 790,992

7, 870, 748

147110725204

6,384

5,403

15,834

4, 65118, 60530, 4273,522

34, 22321,27263, 46346,7538,550

Num- Total

ber salary

1 $5,971

1 6,1271 5,34411111

1415417357538014

3 12,9772 8,3222 7,19232

5,8145,6175,5535,5005,500

75,03571,511

178, 611287, 740191, 234156, 273214, 265

37, 345

9,177

7,3816,7546,441

5,9715,8015,6059,734

5,703

1 5,1871 5,0303 11,0943 10,906

2 12,98261 193,021

1243

5,595

984,437

700

2, 657,180

26.5

62,841

673.5

2, 594, 339

1,9973,045

8,14850, 20311, 877

673.5

4,4183, 439, 7551, 965, 400

8, 074, 764

6.623

147110725204

5,654

15,834

4,77618,98130,8033,64835,22621, 77465,26748,0318,778


1949


Administrative Expenses, Panama Railroad Company—Continued


IN THE UNITED STATES—continued

Unclassified service:Range $4,050 and over:

Shore personnel:Vice presidentThird vice president and secretary..SuperintendentActing commissary purchasing

agentFreight traffic managerTreasurerAssistant superintendentAuditorShore steward

Ship personnel:MasterChief engineerFirst assistant engineerChief officer _.Chief stewardSecond assistant engineerSecond officerPurserChief cook

Actual, 1947


$15,00012,0008,500

7,280

6,0006,2005,2005,200

24,11721,43214, 70314,703

13, 02313,00213, 00212, 96612, 822


1 $15,0001 12,0001 8,500


Num-ber

7,2806,00012,4005,2005,200

24,11721,43214, 70314,70313,02313, 00213, 00212, 96612, 822

Totalsalary

1 $15,0001 12,0001 8,500

7,2806,000

12,4005,2005,200

24,11721, 43214,70314,70313, 02313,00213,00212,96612,822


IN THE UNITED STATES—continued

Unclassified service—ContinuedRange less than $4,150:

Shore personnelShips personnel

Total permanent, United States

Deduct lapses

Net permanent, United States, (av-erage number, net salary)

Part-time employmentRegular pay in excess of 52-week base, 5

U. S. C. 944Overtime

All personal services, United StatesTotal, Isthmus and United States..

Salaries and wages in the foregoing sched-ule are distributed as follows:

Isthmus operationsNew York Office and steamship lineoperations

Administrative expensesTotal

Actual, 1947


18 $64,764369 893,259


18 $64,764369 903,730

4891,379,611

246.7722, 581

242.3657,03026,421

64377,607761, 701

8, 425, 978

7,664, 277

673,037

8, 425, 978


508

311,445,793

77,500

4771,368, 293

79, 872

1,558157, 500

1, 607, 2239, 477, 971

7,870,748

1,501, 296105,927

9,477,971


18 $64,764369 926,230

5081,474,601

12, 500

5031,462,101

79,872

797182,000

1, 724, 770

9, 799, 534

8,074,764

1,617, 238107, 532

9, 799, 534

Statement of proposed obligations for purchase and hire of passenger motor vehicles for the fiscal year 1949


Appropriation

Panama Railroad

Vehicles (motorunless otherwiseindicated) to bepurchased

Number Grosscost

Old vehicles to beexchanged

Number Allowance(estimated)

Net costof vehi-cles tobe pur-chased

Oldvehiclesstill tobe used

3

Cost of hireof motorvehicles

$20,000

Public purpose and users

The 3 cars owned by the Panama Railroad Company are main-tained and operated by The Panama Canal for use of theGovernor, who is president of the Panama Railroad Company,and other officials of the Canal and Railroad. Generalpassenger transportation service for all other official use ofthe Company on the Isthmus is hired from the pool of themotor transportation division of the Panama Canal.


1949

Documents

61273_1945-1949