a The operations of the sinking fund have slightly decreased these amounts.

The entire issue of £100,000 ordinary shares of the Midland Uruguay Extension Railway is owned. This extension represents the line between Tres Arboles and Piedra Sola. Its returns are included in the income account of the Midland Uruguay Railway. No dividends have been paid on the ordinary shares of the Midland Uruguay Railway since December, 1896.

NORTHWESTERN OF URUGUAY RAILWAY.

The Northwestern of Uruguay system consists of 113 miles of standard-gauge railway, extending from Salto, the terminus of the Midland Uruguay Railway, in a general northerly direction to Palomas, Cabellos (where connections are afforded with the Uruguay Northern Railway), and Cuareim (opposite Quarahim, Brazil). Salto is opposite Concordia, Argentina, an important railway center located on the Entre Rios and Argentine North Eastern Railway lines, and some traffic is interchanged. At Cuareim an international bridge has been constructed and a third rail laid to afford connections with the Brazil Great Southern Railway, which runs from Quarahim, Brazil, northward.

The railway's gross receipts for 1917-18 totaled 302,303 pesos, as compared with 296,553 pesos in 1916-17, 268,870 pesos in 1915-16, and 233,282 pesos in 1914-15. The Government guarantees 31 per cent on £5,000 per kilometer on 50 miles of the line, this guaranty being repayable out of surplus profits and expiring in 1925. The capitalization and prices of securities of the company are shown in the following table:

No dividends have ever been paid on the second preference or ordinary stocks; 1 per cent was paid on the first preference stock in 1905-6, 2 per cent 1906-7 to 1908-9, 21 per cent in 1909-10, 3 per cent each in 1910-11 and 1911-12, 21 per cent in 1912–13, and none since.

The country served by this railway is mostly pastoral, although there are agricultural areas and timber and mineral lands. The railway serves as a means of routing traffic around a series of rapids that obstruct navigation in the Uruguay River between Salto and Monte Caseros. Sheep are handled in fair numbers, destined to the refrigeration plants at Montevideo and elsewhere, and live cattle are shipped to Fray Bentos (Liebig plant, etc.).

The Quarahim International Bridge Co., which was formed to erect an international bridge across the Quarahim River, the boundary between Uruguay and Brazil, is capitalized at £10,000 shares and £100,000 (£125,000 authorized) 5 per cent guaranteed first debenture stock. The shares are owned and the bonds guaranteed jointly by the Northwestern of Uruguay Railway and the Brazil Great Southern Railway. The debenture stock is secured on the property and will be redeemed through the operations of a sinking fund of one-half per cent commencing operations in 1920.

The Northwestern of Uruguay Railway operates triweekly passenger-train service in both directions between Salta and Quarahim. Connections are afforded at. the latter point with trains for Uruguayana, Itaquy, and other points in southern Brazil.

URUGUAY NORTHERN RAILWAY.

The Uruguay Northern Railway is a 73-mile line, extending from Isla de Cabellos on the Northwestern of Uruguay Railway (where connections are afforded with Quarahim, Salto, Paysandu, Rio Negro, and Montevideo) to San Eugenio on the boundary with Brazil. The earnings of the railway are not large, the total for 1917-18 amounting to £21,545, as compared with £21,423 in 1916-17, £21,217 in 1915-16, £18,748 in 1914-15, £23,636 in 1913-14, £30,196 in 1912-13, and £27,986 in 1911-12. Net earnings have been from £5,000 to £11,000 per annum. The capitalization of the company consists of the following:

a Not quoted. Entitled to 3 per cent fixed and two-thirds of the net profit up to 13 per cent on £5,000 per kilometer; interest rate during 1916 was 79s. 9d.; highest rate paid during recent years was 95s. 4d., which was paid in 1913.

The Government guarantees 3 per cent on £570,776 capital, or £19,977 per annum. The 1916-17 freight traffic was composed chiefly of animal products (mostly live stock). Passenger traffic was limited to three trains per week in each direction. The country traversed is quite thinly settled, although capable of considerable development. The 1916 dividend was at the rate of 2 per cent, as compared with 14 per cent the previous year. No dividends were paid during 1913-14, and 1 to 2 per cent per annum from 1910 to

1912-13.

Preferred dividends in arrears at the end of 1916 amounted to approximately £375,000.

URUGUAY EAST COAST RAILWAY.

The Uruguay East Coast Railway operates about 78 miles of road, starting from Olmas, a station on the Central Uruguay (Northeastern) Railway, and running to Maldonado, in the State of Maldonado. A large part of the traffic of the road is due to the fact that the railway serves the seaside resorts of Puenta del Este and Piriapolis, the summering places for numerous residents of Montevideo and Buenos Aires. The freight traffic is divided between agricultural and pastoral products and fish destined for the Montevideo markets. An extension of the line northward to Rocha is projected.

Early in 1918 the Government of Uruguay purchased this railway, giving in exchange for the property 5 per cent Government bonds to the amount of 2,843,500 pesos, with an annual sinking fund of 1 per cent, cumulative.

The capitalization of the company June 30, 1917, was as follows:

No dividends were being paid on the ordinary stock. The 4 per cent debenture stock received 4 per cent in 1917, 3 per cent in 1916, and 4 per cent per annum during the several years previous. The railway's best year was 1912-13, when the earnings amounted to 193,234 pesos gross and 39,404 pesos net. Securities of the company were not widely distributed.

DURAZNO-TRINIDAD LINE (STATE RAILWAY).

The State railway line from Durazno to Trinidad was taken over from private owners as an unfinished project some time ago. The plan for future construction is a rather elaborate one, which is likely to be deferred until after the close of the war. The Farquhar-Pearson scheme to build a line diagonally across the Republic from the port of Colonia, where docks and terminals were to have been constructed, to San Luis, on the Brazilian border, has fallen through, so far as the promoters are concerned.

RECORD OF OPERATIONS AND OUTLOOK FOR FUTURE.

During the fiscal year ended June 30, 1916, passenger traffic handled by the various Uruguayan railways increased more than 19 per cent and freight earnings about 16 per cent. Despite this fact and

despite the Government guaranties on various lines, dividend payments were mostly quite small. A glance over the record of railway operations covering a period of a dozen years fails to show any startling results. The European war has put a stop to immigration and otherwise disturbed the economic condition of the Republic, and this has been detrimental to the development of the railways. The returns from the live-stock and meat traffic added to the revenues of the various lines during 1916-17. This traffic will continue to be extremely heavy as long as the war lasts. Although better things are expected after the war, the immediate outlook for railways in general throughout the Republic does not indicate that any extraordinary results will be realized. Nevertheless Uruguay railway shares and debentures are selling at extremely low figures, and there are prospects that they will some day bring far better prices. Uruguay needs additional railways through some of the less developed sections of the country. Whether these lines would pay immediately after completion is somewhat a matter of conjecture, yet their construction would be of inestimable value to the nation, and capital invested in them would probably result to better advantage than if placed in the building of lines competing with railways already in the field.

The Government has met its railway guaranties during the most trying period of the recent financial depression.

Several of the Uruguayan railway companies have recently petitioned the Uruguayan Government for increases in tariff rates varying from 10 to 25 per cent per annum. The Government in the case of the Central Uruguay Railway allowed the company to make a surcharge on a large variety of articles of freight, also to raise the price. of sleeping berths 1 peso. The Government reserves the right, however, to withdraw the surcharging privilege upon giving three months' notice on any date after October 1, 1917.

In May, 1917, international through train service was established between Montevideo and São Paulo, Brazil. The Saturday evening through train via the Central Uruguay Railway connects at Sant' Anna do Livramento the following afternoon with the through train for Santa Maria, Brazil. From the latter point direct service is maintained to São Paulo. Sleeping and dining car service is provided.

PROJECT FOR SYSTEM OF GOVERNMENT RAILWAYS.

The Uruguayan Government voted recently to employ 10,000 pesos on preliminary surveys for a system of State railways, with the idea of carrying on active construction work as soon as possible.

It was announced in June, 1917, that the Government would contract with the Uruguay Railway for the purchase of the 23 miles of line built between Rocha and Paloma Port, together with equipment, buildings, workshops, etc., as well as rails, ties, and materials of various descriptions that had been delivered to the company prior to its receivership, to be used for the construction of about 31 miles of line from Rocha to San Carlos. Additional equipment sufficient for about 40 miles of line, to be completed at a future date, was also acquired. The price agreed upon by the two parties was 1,000,000 pesos, payable in 5 per cent Government bonds. This acquired mileage, it is said, is to be used by the Government as a nucleus of an