New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-12-14
PUBLIC UTILITY
MERGER PLANNED
Cities Service Company May
Absorb Two Others-Letter
to Stockholders.

An announcement has just been made
BY the banking house of Henry l.. Do
bertv & Co. that plan. which has been
under consideration for some time past,
has been approved by the board Of d-
rectors OF the Cities Service Company.
consolidated Cities Light. Power and
Traction Company and Utilities Improve
ment Company for the Cities Service
Company TO take over the assets of the
other two companies named. The letter
sent out to the stockholders says that
the decision was reached after careful
study and discussion with the companies
English associates. and that the result
will be TO put the Cities Service Company
in position TO provide for future require
nents of its financing on a broad aud
sound basis. 1t is stated that arrange
ments have been made with European
bankers that a London Office will be
opened and several London directors will
be admitted to the board. The announce
ment in part. says:
stockholders of the Utilities Improve
ment Company may surrender their pre-
ferred stock 10 their company and receive
Cities Service Company preferred stock
therefor, share for share. They may sur
render their common stock to their COM
pany and receive one share of common
stock of the Cities Service Company for
each two shares of Utilities Improvement
Company common stock. The Consoi-
dated Cities Light. Power and Traction
Company has no preferred stock. Hold
ers Of its common stock may surrender
their certificates to their company and re
ceive one share of Cities Service Company
common stock for each two shares OF
Consolidated Cities Light. Power and
Traction Company stock. The 5 per cent
bonds OF the Consolidated Cities Light,
Power and Traction Company remain
outstanding.
The Cities Service Company thus be-
comes one Of the largest American pub
Tic utility holding companies. The gross
revenue Of its subsidiary properties for
the last year was more than Sl7.0o0S.
and their net earnings from operation
were more than two and f1ve-eighths
times the total interest charges on un-
deriving bonds and other Indebtedness.
THE larger volume of its assets will
give II stronger recognition than 1t has
heretofore had. Its factor OF safety, be-
cause Of the diversified location OF its
properties in widely separated localities
throughout the United States and Canada,
the broader market for its securities be-
cause of the very much larger number
~ stockholders and consequent wider dis
tribution Of its securities, the greatly en-
larged equity and earning power oenlhu
its fixed obligations-all of these tend TO
establish for the company an improved
financial position.
The Cities Service Company was or
ganized In September, 1870 with an su-
tborIzed capital of 100000 preferred
stock. 6 per cent cumulative, and $2oV'-
90 common stock.
Beginning October |. 1910 its dividends
have been continuous. the first being
quarterly dividend, paid January J. lsll'
ia per cent on the preferred stock ana
:, per cent on the common stock. Since
January |. 1911. its dividends have been
paid monthly, on the first of each month,
d, per cent monthly on the preterreo
stock and on the common stock IN iSIl
AT the rate of per cent year "a per
cent monthly; in 1912, at the rate OF !
per cent q year G-S per cent monthlE''
and in 1918 at the rate Of per cent year
(5-l2 per cent monthly.
BEGINNING with the January dlvidehu
Of 1914 payable February y, the divloehd
rate on the common stock will be per
cent a year az per cent monthly. DiVi-
dend payable February 1, 1914 at this rate
has already been declared.
4This consolidation will enable the com
paiiy to effect many important economies
In operation, and Is made on such basis
that there will not be any reduction from
the present rate of earnings on the pre-
ferrcd and common stocks of the Cities
Service Company. These earnings for the
year ended October 81, 1913, were more
than twice the preferred dividend re-
ouirements. and were sufficient after pay
ing per cent preferred dividends, to
show more than 10 per cent earned on
ths average amount OF common STOCK
outstanding for the year.