ALTERATION OF RIGHTS OF HOLDERS OF OUTSTANDING SECURITIES OF REGISTERED HOLDING COMPANY OR SUBSIDIARY-Continued

stock caused by the issuance of new preferred stock, 4%% series, permitted to become effective, subject to certain conditions, the Commission finding the effect of the new amendment to the articles of incorporation is to decrease the voting power and control of the common stock, because of the increased rights of the holders of the new 42% preferred stock, such provisions not resulting in an unfair or inequitable distribution of voting among the holders of the securities of the applicant or being otherwise detrimental to the public interest of investors or consumers... Page 418.

Declaration, having been filed by a registered holding company pursuant to Section 7 of the Act regarding a proposed change in the voting rights of the common stockholders so as to give such stockholders, upon the happening of certain events, the right of cumulative voting with respect to the election of directors, permitted to become effective, subject to certain conditions, in view of the conclusions with respect to declarant's securities which were reached in a previous case, the proposed charter amendment not correcting the objectionable features of declarant's allocation of voting power . . . Page 557.

Declaration, filed by a subsidiary of a registered holding company pursuant to Section 7 of the Act regarding the alteration of priorities, preferences or rights of security holders by increasing the stated value of 20,000 shares, of its common capital stock now outstanding from $22 a share to $25 a share by a charge of $60,000 to earned surplus, permitted to become effective, subject to certain conditions, the Commission finding that the increase in the stated value of the stock will not result in an unfair or unequitable distribution of voting power among holders of the securities of the company or is otherwise detrimental to the public interest or the interest of investors or consumers ... Page 755.

Declaration, filed by a subsidiary of a registered holding company pursuant to Section 7 of the Act regarding the alteration of priorities, preferences or rights of security holders by reducing the rate of interest and sinking fund payments of bonds assumed by the declarant, and to be pledged as collateral for a proposed note to be issued by declarant, all of the common stock of declarant being owned by its parent company and all of the outstanding bonds to be held by the trustee and both having agreed to the proposed modification, permitted to become effective, subject to certain conditions . . . Page 964.

CONDITION-PAYMENT OF DIVIDENDS

Application, filed pursuant to Section 6 (b) and declaration pursuant to Section 7 in regard to the change in rights of the outstanding common stock permitted to become effective, subject to the condition, among others, that until further order of the Commission, so long as any shares of the 4%% perferred stock are outstanding, the applicant and declarant shall not pay any dividends on or make any other distribution to the holders of shares of its common stock if, after giving effect to such payment or distribution, the capital of the applicant and declarant represented by its common stock, together with its surplus, as then stated on its books of account, shall in the aggregate be less than $6,000,000, such condition to become inoperative and of no effect if the Commission shall at any time hereafter adopt or enter a rule, regulation, or order under Section 12 (c) of the Act or otherwise which shall be applicable to the applicant and declarant, limiting the right of companies to pay dividends on their common stock with reference to maintaining an equity junior to the outstanding preferred or preference stocks... Page 418.

ALTERATION OF RIGHTS OF HOLDERS OF OUTSTANDING SECU. RITIES OF REGISTERED HOLDING COMPANY OF SUBSIDIARY-Continued

REDUCTION OF CAPITAL STOCK

Declaration, filed by a subsidiary of a registered holding company, pursuant to Section 7 of the Act, regarding the reduction of its capital stock, the purpose of said reduction being to create a capital surplus which will be segregated in a separate "special capital surplus" account, the major portion of such account to be thereafter transferred to a "reserve for investment" account, permitted to become effective, subject to certain conditions. . . Page 961.

REDUCTION OF PAR VALUE OF COMMON STOCK

Declaration, having been filed by a subsidiary of a registered holding company pursuant to Section 7 of the Act, regarding the reduction of the par value of its common stock, the amount of such decrease to be segregated in a special capital surplus account together with certain other credits, such account to provide for any downward revaluations in its property account, as such account existed at December 31, 1937, which may be necessary or required by regulatory authority, permitted to become effective, subject to certain conditions, the Commission observing no basis for finding that the proposed transaction will be detrimental to the public interest or to the interest of investors or that it will result in an unfair or inequitable distribution of voting power among holders of securities of the declarant... Page 897.

Declaration, having been filed by a subsidiary of a registered holding company pursuant to Section 7 of the Act, regarding the reduction of the par value of its common stock, the amount of such decrease to be segregated in a special capital surplus account against which may be charged such downward revaluations in declarant's property account, as of December 31, 1937, as may possibly in the future be required by regulatory bodies having jurisdiction in the premises, permitted to become effective, subject to certain conditions, the Commission finding that the proposed reduction will have no effect upon voting power and that all the voting securities are held by the parent company. Page 904.

DECLARATION OF STATUS

COMPANY DECLARED NOT TO BE A HOLDING COMPANY

Application, having been filed by a company for an order declaring it not to be a holding company pursuant to Section 2 (a) (7) of the Act, where the applicant owned slightly more than 10 percent of the outstanding voting securities of a registered holding company and more than one-third of the preferred stock, which amounted to a veto power over certain corporate action of the registered holding company, but voting control was held by another registered holding company, the Commission, in view of the unusual circumstances surrounding the application, granted an order, subject to certain conditions, declaring the applicant not to be a holding company within the meaning of Section 2 (a) (7) (A) of the Act... Page 151.

COMPANY DECLARED TO HAVE CEASED TO BE A HOLDING COMPANY

Where trustee transferred, assigned, and delivered all of the assets of debtor corporation held by him as trustee to new company pursuant to a plan of reorganization, and no longer owns, controls, or holds with power to vote 10 percent or more of the voting securities of a public utility company, trustee declared to have ceased to be a holding company, pursuant to Section 5 (d) of the Act... Page 11.

DECLARATION OF STATUS-Continued

ELECTRIC UTILITY COMPANY

Applicant, having applied pursuant to Section 2 (a) (3) (B) of the Act for an order declaring it not to be an electric utility company, declared not to be an electric utility company, the Commission finding that by reason of the small amount of electric energy sold by applicant, it is not necessary in the public interest or for the protection of investors or consumers that the applicant be considered an electric utility company for the purposes of the Act... Page 640. SUBSIDIARY COMPANY

Joint application, having been filed by two registered holding companies for an order declaring a railroad company not to be a subsidiary of either of applicants pursuant to Section 2 (a) (8) of the Act, company declared not a subsidiary of either applicant . Page 137.

Joint application, having been filed by two registered holding companies for an order, pursuant to Section 2 (a) (8) of the Act, declaring a company, 17 percent of the outstanding voting stock of which is owned by one of the applicants, not to be a subsidiary of either of such applicants, the company, having been relatively inactive for a number of years, as the reasons for its formation and existence ceased to exist, declared not to be a subsidiary of either applicant... Page 140. Application, having been filed by registered holding company, pursuant to Section 2 (a) (8) of the Act, for an order declaring a public utility company not to be a subsidiary of the registered holding company or two other registered holding companies, the public utility declared not to be a subsidiary of the registered holding companies, the Commission finding that the company is not controlled, directly or indirectly, by the holding companies, or by any person whose ownership, control, or holding with power to vote of 10 percent or more of the outstanding voting securities of the company is only through the holding companies, either through one or more intermediary persons or by any means or device whatsoever; that the public utility company is not an intermediary company through which the holding companies exercise control over any other company; that the management or policies of the public utility company are not subject to a controlling influence by the holding companies... Page 143.

Applications, having been filed by a registered holding company, pursuant to Section 2 (a) (8) of the Act, for orders declaring applicant not to be a subsidiary of several proprietary companies, denied, the Commission finding that each of the proprietary companies exercises a controlling influence over the management and the policies of the applicant as to all important matters, so as to make it necessary in the public interest, and for the protection of investors and consumers, that the applicant be subject to the obligations, duties and liabilities imposed by the Act upon subsidiaries of registered holding companies. . . Page 228.

CONDITIONS

DIVIDENDS

Approval of an application regarding the declaration and payment of a regular quarterly dividend out of capital or unearned surplus, granted subject to the condition, among others, that the payment of the proposed dividends shall be charged to capital surplus, and that the amount of such dividends so charged shall be restored to capital surplus from the first available earnings after December 31, 1938, after providing for 1939 dividends heretofore declared and paid . . . Page 403.

DIVIDENDS Continued

DECLARATION AND PAYMENT OUT OF Capital or unearNED SURPLUS

Application, having been filed by a registered holding company, pursuant to Section 12 (c) of the Act and Rule U-12C-2 promulgated thereunder, for approval of the declaration and payment out of capital or unearned surplus of a regular quarterly dividend of 8732¢ per share on the $3.50 prior preferred stock and payment of $1.4375 per share on the $1.75 preferred stock on account of accumulated unpaid dividends, approved as to the $3.50 prior preferred stock subject to certain conditions, the Commission finding that the proposed quarterly dividend is not unreasonable in respect of estimated earnings for 1939, and in view of the applicant's large cash resources and other circumstances, the payment, judged by the standards of Section 12 (c), does not appear to impair the financial integrity of the applicant nor impair the financial integrity of companies in the holding company system and appears to be in the best interests of the security holders of the corporation to avoid default, the Commission reserving jurisdiction with respect to the dividend payment to the $1.75 preferred stook... Page 403.

Application, having been filed by a subsidiary of a registered holding company pursuant to Section 12 (c) of the Act and Rule U-12C-2 adopted thereunder, for approval of the declaration and payment out of capital or unearned surplus of a regular quarterly dividend on its $7 and $6 cumulative preferred stock, approval granted, subject to certain conditions, the Commission taking into consideration the fact that the applicant is neither an operating utility nor a holding company, that neither the $7 series nor the $6 series appears to be prejudiced by the payment of dividends on the other, and that the preferred stock of both series is held exclusively by the public, the Commission's order providing that the amount of such dividends charged to capital surplus shall be restored to capital surplus from the first available net income after December 31, 1938. . . Page 859. PAYMENT OF PARTIAL LIQUIDATING DIVIDENDS

Application, filed by a registered holding company, pursuant to Rule U-12C-2 promulgated under Section 12 (c) of the Act, for approval of the payment of partial liquidating dividends on its preferred shares of beneficial interest from time to time as cash may become available from the proceeds of sales of certain capital assets, applicant having an earned surplus deficit, approved, subject to certain conditions, the Commission finding that the payment of a partial liquidating dividend will not be adverse to the public interest or the interest of investors and consumers .. Page 1001.

EXEMPTION OF HOLDING COMPANY OR SUBSIDIARY

COMPANY ONLY INCIDENTALLY A HOLDING COMPANY

Three holding companies having filed joint applications for exemption from the provisions of the Act pursuant to Section 3 (a) (3) of the Act, exemption granted to two of said companies from all those provisions of the Act which would require them to register under said Act because of their directly or indirectly owning, controlling, or holding with power to vote 10 percent or more of the outstanding voting securities of certain public utility subsidiary companies, and application of third company dismissed, the Commission finding that the two applicants are only incidentally holding companies, and the third applicant does not directly or indirectly own, control, or hold with power to vote, 10 percent, or more, of the outstanding voting securities of a public utility company, and it is not, therefore, a holding company within Section 2 (a) (7) of the Act... Page 640.

EXEMPTION OF HOLDING COMPANY OR SUBSIDIARY-Con.

EXEMPTION DENIED-HOLDING COMPANY NOT PREDOMINANTLY A PUBLIC UTILITY COMPANY

A holding company having applied for exemption from the provisions of the Act pursuant to Section 3 (a) (2) thereof, exemption denied, the Commission finding that the applicant is a holding company and cannot be considered as predominantly a public utility company .. Page 252.

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In denying an application for exemption of a holding company from the provisions of the Act, pursuant to Section 3 (a) (2), the Commission held that public ownership of subsidiaries' securities makes it all the more essential that the parent company, which by ownership of equity securities actively controls and manages these subsidiaries, should be subject to regulations as a holding company .. Page 252.

...

Where holding company, in support of its application for an exemption from the provisions of the Act pursuant to Section 3 (a) (2), urged that since it was a subsidiary of a registered holding company it was already subject to the bulk of the regulatory provisions of the Act, the Commission held that the mere fact that the applicant may now be subject to many of the sections of the Act does not empower the Commission to grant it an exemption as a holding company unless it comes within those provisions authorizing an exemption . . . Page 252.

Where holding company applying for exemption from the provisions of the Act, contended that the close interrelationship between itself and its subsidiary companies, and the fact that its subsidiaries are separately incorporated only because of the state statute requiring that utility companies be incorporated locally, indicated that the corporate fiction should be disregarded and that the subsidiaries should be considered in effect merely departments of the applicant, the Commission was of the opinion that the assertion was without merit and that the subsidiaries must be considered as corporations in their own right... Page 252.

HOLDING COMPANY PREDOMINANTLY A PUBLIC UTILITY COMPANY

A holding company having applied for exemption from the provisions of the Act pursuant to Section 3 (a) (2) of the Act, exemption granted from all provisions of the Act, that would require its registration thereunder because of its control over its subsidiary public utility companies, the Commission finding that the applicant is predominantly a public utility company whose operations as a public utility company do not extend beyond the state in which it is organized and states contiguous thereto, the applicant and its subsidiary companies remaining subject to any obligations imposed on them in any other capacity, such as that of an "affiliate" or a "person" as defined in the Act... Page 784.

EXEMPTION OF SECURITY ISSUE OF REGISTERED HOLDING COMPANY OR SUBSIDIARY

ISSUE SOLELY FOR PURPOSE OF FINANCING THE BUSINESS OF SUBSIDIARY

Application, having been filed by a subsidiary company under Section 6 (b) of the Act, for an order exempting the issue and sale of certain common stock from the provisions of Section 6 (a) of the Act, exemption granted, subject to certain conditions, the Commission finding that such issue and sale are solely for the purpose of financing the business of the issuer . . . Page 101.