ments of Sections 371 and 1808 of the Internal Revenue Code, as amended. It appears that this request may appropriately be granted, and our order will so provide. CONCLUSIONS The sale by Peoples of its Columbus and Meridian properties and the acquisition thereof by Mississippi are subject to the requirements of Sections 12 and 10 of the Act and Rule U-43. We observe no basis for any adverse findings on this aspect of the case, and find that the acquisition has the tendency required by Section 10 (c) (2). However, as indicated above, we find it appropriate in the public interest and for the protection of investors and consumers to prescribe certain conditions regarding the accounting treatment of the acquisition on the books of Mississippi, and our order herein will be conditioned accordingly. The redemption by Peoples of its mortgage bonds by the use of the proceeds derived from the sale is not subject, as such, to our approval under the Act, being expressly exempted by the provisions of Rule U-42. The donation to Peoples of the preferred stock held by Federal and the acquisition thereof, together with the redemption of the publicly held preferred, are subject to Sections 12 and 10 and Rules U-42, U-43, U-44 and U-45. We find that the acquisitions have the tendency required by Section 10 (c) (2), and see no basis for any adverse findings on this aspect of the case. The supplemental indenture of Peoples restricting payment of dividends has been submitted to us under Section 6 (a) (2) of the Act. We find that modification of the supplemental indenture as indicated above is necessary to assure compliance with the provisions of Section 7, and that subject to this condition, the standards of Section 7 are satisfied. The issue of additional common stock by Mississippi, the sale of such stock to Federal and the acquisition thereof by Federal are subject to Sections 7, 10 and 12 of the Act and Rule U-43. We find that the acquisition has the tendency required by Section 10 (c) (2), and observe no basis for any adverse findings on this aspect of the case. However, our order herein will, as noted above, reserve jurisdiction regarding the accounting treatment by Federal of its investment in Mississippi. An appropriate order in conformity with the foregoing will accordingly issue. By the Commission (Commissioners Healy, McConnaughey, and Caffrey), Chairman Purcell and Commissioner Pike being absent and not participating. 1 Other adjustments: a-elimination of appraisal write-up; b-bonds retired by sinking fund; c-restate preferred stock at $100 per share; d-2,427 shares preferred stock owned by Federal donated to Peoples; e-balance preferred stock owned by public retired at 105 plus accrued dividends; f-retire $1,308,000 p.a. of 5 percent bonds at 104; o-write-off balance of unamortized bond discount and expense on 5 percent retired; h-write-off clearing accounts of Columbus and Meridian properties sold. APPENDIX B PEOPLES WATER & GAS COMPANY Comparative statement of income For the 12 months ended March 31, 1945 Before and after giving effect to the sale of the Columbus and Meridian, Mississippi natural gas properties, the retirement of $1,308,000 principal amount 5 percent firs} mortgage bonds and the retirement of all the preferred stock outstanding. 1 Savings due to the reporting of income for Federal tax purposes on a consolidated basis with Federal Water and Gas Corporation and its subsidiary companies. • Reduction due to bonds retired through sinking fund. APPENDIX C MISSISSIPPI PUBLIC SERVICE COMPANY Comparative statement of income and expense for the 12 months ended March 31, 1945 Before and after giving effect to the sale of 7,500 shares common stock to Federal and the acquisition of the Columbus and Meridian properties from Peoples Water and Gas Company 1 Savings due to the reporting of income for Federal tax purposes on a consolidated basis with Federal Water and Gas Corporation and its subsidiary companies. |