Unification on June 1, 1940, together with the eflfect of such consumma¬
tion, are all reflected in the balance sheet as of June 30, 1940, submitted
herewith. For this reason and the fact that all the operating properties
have been transferred to the City, such operating statements are of no
present practical significance and accordingly are not included in this
report.

Notice of the Annual Meeting of stockholders to be held on Septem¬
ber 16, 1940, a form of Proxy for use at said meeting and a Proxy
Statement relative to such Proxy are enclosed with this report. You
will observe that several matters will be presented to the meeting for
action.   The first three of these require no special comment.

The fourth proposal provides for the reduction of the capital of the
Corporation and the complete elimination of the Preferred Stock from
the capital structure of the Corporation. In this connection the bal¬
ance of approximately 3,670 shares of Preferred Stock outstanding at
June 30, 1940, will be redeemed, unless otherwise retired. The Com¬
mon Stock will then be the only class of stock of the Corporation out¬
standing. The proposed reduction of capital will provide an ample
capital surplus out of which distributions may be made upon the Com¬
mon Stock of the Corporation, to the extent consistent with the payment
of or adequate provision for the obligations and liabilities of the Cor¬
poration, including contingent liabilities, prior to the final dissolution
of the Corporation.

The fifth proposal involves authorization of the winding up of the
business and affairs of your Corporation and the making of distribu¬
tions to Common stockholders and, in connection therewith, the collec¬
tion of and realization upon the assets of your Corjioration as may be
appropriate, and the payment of or provision for its obligations and
liabilities.

The fourth and the fifth proposals are both necessary in order to
put the assets and liabilities of the Corporation in shape to commence
distributions to stocldiolders. Stockholders are not being asked to
authorize final dissolution of the Corporation at this time because con¬
siderable time must elapse before final distribution can be made to
the stockholders, and until at least a substantially final distribution to