L. 149] the Tuscarawas company at $216,525, and, less depreciation, $184,694. The reproduction cost new of the properties to be transferred by the Ohio company is found to be $78,865, and, less depreciation, $66,340. The estimated cost of unifying the properties is $11,002.

The exchanges of the two companies are not connected. and there is no interchange of service between the nonduplicate subscribers. The contract of purchase provides that upon the transfer of the properties the parties will enter into exchange and toll line traffic agreements. The unification of the properties will eliminate existing duplication; will enable subscribers of the Ohio company to secure telephone access to subscribers of the Tuscarawas company; and apparently should effect a material improvement in service. Both companies are now, and after the consummation of the proposed transaction will be, subject to the Interstate Commerce Act.

At the hearing communications signed by the mayors of all of the municipalities in which the properties to be transferred are located were introduced in evidence, stating that they had no objection to the granting of the application and did not desire to be heard. Letters were also received from various civic and commercial organizations and other representative telephone subscribers, all favoring the unification of the properties.

Upon the facts presented, we find that the acquisition by the Tuscarawas company of certain properties of the Ohio company, and the acquisition by the latter company of certain properties of the Tuscarawas company, as described in the application, will be of advantage to the persons to whom service is to be rendered and in the public interest. A certificate to that effect will be issued.

CERTIFICATE.

A hearing and investigation of the matters and things involved in this proceeding having been had, and said Division having, on the date hereof, made and filed a report containing its findings of fact and conclusions

[I. C. C.

thereon, which said report is hereby referred to and made a part hereof,

It is hereby certified, That the acquisition by The Tuscarawas County Telephone Company of certain properties of The Ohio Bell Telephone Company, and the acquisition. by the latter company of certain properties of The Tuscarawas County Telephone Company, as described in the application and report aforesaid, will be of advantage to the persons to whom service is to be rendered and in the public interest.

April 28, 1924.

CALIFORNIA.

Railroad Commission.

In re APPLICATION OF THE PACIFIC TELEPHONE AND TELEGRAPH COMPANY FOR AN ORDER AUTHORIZING THE ISSUANCE OF PREFERRED STOCK.

Application No. 9863-Decision No. 13369.

Decided April 2, 1924.

Issue of Preferred Stock Authorized.

OPINION.

In this application, The Pacific Telephone and Telegraph Company asks permission to issue and sell at $87.50 per share, 250,000 shares of its 6 per cent. preferred capital stock of the aggregate par value of $25,000,000, and to use the proceeds to reimburse its treasury for amounts paid into the sinking funds of its several bond issues and for its uncapitalized expenditures for fixed capital and investment accounts since October 31, 1922.

The Pacific Telephone and Telegraph Company owns and operates directly or through subsidiary corporations, a general telephone system in the States of California, Nevada, Oregon, Washington and Idaho. The system is composed of local and long distance telephone lines and exchanges and the buildings, rights-of-way, franchises and equipment therefor. The company reports that it has an authorized capital stock of $100,000,000 divided into $18,000,000 of common stock and $82,000,000 of 6 per cent. preferred stock. As of December 31, 1923, the company reports all of the common stock and $57,000,000 of the preferred stock outstanding. As of of the same date, it reports $62,152,200 of bonds outstanding. Its bonded debt consists of $31,247,000 of first mortgage collateral trust 5 per cent. bonds due January 2, 1937; $6,314,000 of first mortgage bonds of the Home Long Distance Tele

phone and Telegraph Company due January 2, 1932; $24,591,200 of refunding mortgage 5 per cent. bonds due May 1, 1952.

In addition to its outstanding bonded indebtedness, the company reports as of December 31, 1923, advances from system corporations aggregating $31,425,000, notes payable of $10,000, accounts payable of $3,382,516.84, and accrued liabilities not due of $2,708,395.51. The company reports its revenues and expenses for the years ending December 31 as follows:

[Cal.

The operating expenses for 1922 include $5,665,650 for depreciation of plant and equipment, and those for 1923 the sum of $6,228,500. During both 1922 and 1923, the company paid 6 per cent. dividends on its outstanding preferred stock. The increase in the amount of dividends paid is caused by the issue of additional preferred stock. The company paid no dividends on its common stock.

In its Exhibit A, applicant reports the increase in fixed capital accounts from October 31, 1922, to December 31, 1923, at $21,115,323.29. This amount is made up as follows:

The net increase of other asset accounts is reported at $17,272,500.37, most of which represents, directly or indirectly, advances to system corporations. Exhibit A also