be produced at a very low cost, if the machinery can be kept
running outside of the hours of greatest demand. Your Direc¬
tors have, therefore, authorized a general policy of reducing the
prices for light outside maximum hours, as shown by long aver¬
age use of lamps, to a price much below the standard or maxi¬
mum prices and below the price of gas. For the supply of
current under the same conditions of demand, the Company
adheres to the policy of making prices absolutely uniform to all
consumers by giving to each customer the benefit of any reduc¬
tion made to others of his class.

Extensions of the underground system have been confined
chiefly to extending the mains within the territory at present occu¬
pied by the Company, through streets or to buildings where a de¬
mand had shown itself, and to installing new feeders to provide
for the increased demand upon the mains. In the coming year,
it is proposed to make considerable extensions of the under¬
ground system into territory not hitherto occupied by the Com¬
pany's service.

The adoption of the enclosed arc lamp has greatly stimulated
arc lighting on the low-tension system. The number of low-
tension arc lights has increased during the year from 3,225 to
4,775. Upon the application of the enclosed arc lamp to city
lighting, a post of special and artistic design was devised by the
Company's engineers, after studying designs of electric posts in
other cities abroad as well as in this country. 285 street lamp
posts were installed during the year, and the Company has
been asked to place about 300 more for the coming year.

The high tension properties owned by your Company have
shown great increase of economy since the consolidation into
the system of the installations of the old Madison Square Light
Company.

The Balance Sheet and Statement of Income Account are ap¬
pended. Depreciation charges throughout the year have been
carried in the monthly expenses, the dividend has been contin¬
ued at the rate of six per cent, per annum, and out of the sur¬
plus earnings extra allowances have been made for general
depreciation account.

The great increase of business during the past two years has
been cared for without increase of capital account. New con¬
struction, making good replaced or depreciated plant, has been