Of the bonds secured by the proposed mortgage—

14,312,000 are to be reserved to pay off at, or before, maturity, the
existing Mortgage Bonds of the Illuminating Com¬
pany.
502,000 are to be reserved to pay off the existing Mortgage Bonds
of the Manhattan Electric Light Conipauy and the
Harlem Electric Light Company other than $573,000
Manhattan & Harlem Bonds recently acqiiired by this
Company, and which will be pledged under the new
mortgage.
1,686,000 are lo b? used to reimburse the Company for outlays
recently made for the final payment on its purchases
of stocks and bonds of the Manhattan and of the
Harlem Companies, and to provide funds for the con¬
struction requirements of the Companies during the
present year.
8,500,000 bonds will remain in the Treasury for future use.

The mortgage will provide that none of these last-
mentioned bonds shall be issued before January ist,
1896, but that they may be issued from time to time
thereafter, for the purpose of new construction and
acquisition, to an extent not exceeding $1,000,000 in
any one j^ear, but with a restriction that the entire
bonded debt of this and the previous issues shall at no
time exceed the amount of outstanding paid-up capital
stock. It will also contain carefully drawn provisions
regulating the use of these reserved bonds.
 

$15,000,000 Total.

At this meeting the proposed mortgage was unanimously
authorized by the vote of all stockholders present or represented,
and the necessary steps to give effect to such authority have
been duly taken. During the year, $2,118,000 bonds, secured by
the new mortgage, have been issued and disposed of, viz. :

$1,686,000 immediately issuable as above.

432,000 used to acquire a like amount of Manhattan & Har¬
lem bonds which were outstanding at the time of
the creation of the mortgage {part of the $502,000
above noted).

The' Balance Sheet and Statement of Income Account are
appended. In accordance with their usual policy, after pay¬
ing 6^ in Dividends, your Directors have carried $100,000 to
the   Depreciation Reserve Fund.

It has been the practice of this Company for some years to
pay its employes at the close of the year, in recognition of their