A somewhat decreased use of light per customer has been
more than offset by a large increase in the number of new cus¬
tomers ; in fact, the number of applicants has been in excess of
our ability to supply. This inability was partly due to the fact
that last summer, during the extreme monetary stringency, your
Directors felt bound to exercise great care in accepting new
business, since its acceptance would have necessitated addi¬
tions to our plant, which, however desirable in themselves,
were not then expedient, as no funds had been provided for such
purposes. Of late, the Company has resumed its policy of taking
on all new applicants, thus securing a present increase, of revenue,
with the certainty of still further increase as soon as financial
conditions shall improve. The fact that even in the extreme
time of the depression through which we are passing, the de¬
mand for our light exceeded our capacity to supply it, is a
forcible illustration of the soundness of our enterprise.

In the last report your Directors referred to the necessity of
completing the Elm Street Station, and adding to the plant. In
order to provide funds for these purposes, as well as to carry
out contracts made in connection with the acquirement of a large
interest in the Manhattan and Harlem Companies, also referred
to in last year's report, a plan was devised last spring looking to
the retirement of the then outstanding bonds of the Company
by conversion into stock, which would have enabled the Com¬
pany to create a new non-convertible bond at a lower rate of
interest. In pursuance of this plan authority was obtained
from the stockholders to increase the capital stock to provide for
conversion and for the general purposes of the Company.

The financial stress which began early in the spring limited
the offerings of bonds for conversion, although $688,000 bonds
were exchanged. As contracts for the new work contemplated
had been made early in the year, before there were any signs of
the coming storm, an entire change of plan was necessitated
later on, owing to the changed financial conditions. Such change
was, however, satisfactorily made.

Your Directors decided that it was wise to sell some of the
stock which had not been called for in exchange for bonds, and
later obtained authorization from the stockholders to issue
the balance of the bonds available under the mortgage ($1,750,000
in all).    $1,000,000 were sold and paid for in the year just closed,