ISSUE AND SALE OF SECURITIES OF REGISTERED HOLDING COMPANY OR SUBSIDIARY-Continued

Declaration, filed by a subsidiary of a registered holding company pursuant to Section 7 of the Act regarding the issue and sale to the Rural Electrification Administration of a promissory note in the amount of $65,000, proceeds of the note to be used to construct rural distribution lines to be leased with option to purchase to an associate company, permitted to become effective, subject to certain conditions, the Commission finding that since the proceeds of the note are to be used to finance the business of the declarant, the requirements of Section 7 (c) (2) of the Act are met. . . Page 412.

Declaration, having been filed by a subsidiary of a registered holding company, pursuant to Section 7 of the Act, regarding the issue and sale to its parent company of 3,400 shares of common stock without par value, the proceeds from the sale of stock to be used partially to reimburse declarant's treasury for property additions, permitted to become effective, subject to certain conditions, the Commission finding that the proposed stock is to be sold for the purpose of financing the business of declarant as a public utility company and therefore satisfies the provisions of Section 7 (c) of the Act... Page 429.

Declaration, filed by a registered holding company pursuant to Section 7 of the Act regarding the issue and sale of $16,000,000 aggregate principal amount of first mortgage and first lien bonds, series A, 3%, due 1954 and $6,000,000 aggregate principal amount of serial unsecured promissory notes, 2% %, the proceeds from the sale of the bonds to be used for the retirement of all the declarant's outstanding funded debt, the proceeds from the sale of the notes to be used for betterments and additions to declarant's property, permitted to become effective, subject to certain conditions, the Commission finding with respect to all of the proposed new securities, that the provisions of Section 7 (c) are satisfied but reserved jurisdiction with respect to the reasonableness of the fee to be paid to the underwriters or whether or not any fee should be paid in this connection ... Page 561.

An application, having been filed pursuant to Section 6 (b) or in the alternative a declaration pursuant to Section 7 of the Act by a subsidiary of a registered holding company regarding the issue and sale of $95,000,000 principal amount first mortgage bonds, 3% series due 1969, $28,500,000 principal amount 4%% debentures due 1974 and $8,500,000 face amount 2%% serial notes, the proceeds from these securities to be used to refund applicant's presently outstanding funded debt, to reimburse its treasury for expenditures made for improvements of its facilities and for general corporate purposes, the bonds to be secured by a first lien on substantially all of applicant's properties, the declaration under Section 7 permitted to become effective subject to certain conditions, the question of exemption pursuant to Section 6 (b) not being necessary to decide, the Commission finding that since the bonds, debentures and notes are to be issued and sold solely for the purpose of refunding or discharging outstanding securities and for the purpose of financing the business of the applicant, the requirements of Sections 7 (c) (1) (B), 7 (c) (2) (A) and 7 (c) (2) (B) are satisfied... Page 684. OBLIGATION DESIGNATED "NOTE" CONSIDERED AS A "BOND"

Declaration, pursuant to Section 7 regarding secured notes, permitted to become effective, where obligation, although designated a "note," comes within the meaning of the term "bond" as used in Section 7 (c) of the Act ... Page 765.

ISSUE AND SALE OF SECURITIES OF REGISTERED HOLDING COMPANY OR SUBSIDIARY-Continued

OBLIGATION SECURED BY ASSETS OF SUCH CHARACTER AS ARE APPROPRIATE IN THE PUBLIC INTEREST AND FOR THE PROTECTION OF INVESTORS

Declaration, having been filed by a registered holding company pursuant to Section 7 of the Act, with regard to the issue and sale of a 3% secured serial promissory note in the face amount of $1,200,000 and a 6% promissory note in the maximum face amount of $1,100,000, the proceeds from the notes, together with certain funds to be furnished by declarant, to be used for the purchase of all the issued and outstanding common stock of a water corporation, permitted to become effective, subject to certain conditions, the Commission finding that the obligation although designated "notes," meets the requirements of the term "bonds" as used in Section 7 (c) and are secured by assets of such character as are appropriate in the public interest and for the protection of investors Page 765.

Where collateral provision in note could be interpreted as either giving the purchaser a second lien on securities to be pledged for another note, or may merely give the purchaser a contract right to security in the future subject to certain stated conditions, the Commission, in permitting a declaration pursuant to Section 7 of the Act to become effective, is of the opinion that it makes no difference, as to the qualfication of the note under Section 7 (c) (1) (B) (iii), which of these interpretations is adopted, inasmuch as the purchaser in either case is receiving a note that is presently secured-either by a second lien or by a contract to give security, either of which is an asset within the contemplation of the statute . . . Page 765.

Declaration, pursuant to Section 7 of the Act regarding the issue and sale of a 6% promissory note, permitted to become effective, subject to certain conditions, the Commission finding that the obligation meets the requirements of the term "bond" as used in Section 7 (c) and is secured by assets of such character as are appropriate in the public interest and for the protection of investors, taking into consideration the fact that the only investor here concerned is the parent of the issuing company which has full knowledge of the situation and the risk to be assumed . . . Page 765.

Declaration, pursuant to Section 7 of the Act regarding the issue and sale of a 3% secured serial promissory note, permitted to become effective, subject to certain conditions, the Commission finding that although the 3% note does not meet the standards of either Section 7 (c) (1) (B) (i) or Section 7 (c) (1) (B) (ii) as the note is not secured by a first lien on the physical property of the declarant in view of the fact that the note is to be held by a single investor well qualified to judge the merits of the risk assumed, and because of the further fact that the loan agreement contains no provision for breaking up the note for sale to the public, the Commission is of the opinion that the assets pledged are of such character as to satisfy the requirements of Section 7 (c) (1) (B) (iii) . . . Page 765. PAYMENT OF FEES TO ASSOCIATES AND AFFILIATES IN CONNECTION WITH A SALE OF SECURITIES

Where past affiliations and present relationships between declarant and underwriter heading the underwriting syndicate of the sale of certain bonds might have necessitated a proceeding to determine whether or not "there is liable to be or to have been an absence of arm's length bargaining" within the meaning

5 S. E. C.

ISSUE AND SALE OF SECURITIES OF REGISTERED HOLDING COMPANY OR SUBSIDIARY-Continued

of Rule U-12F-2 (a) (3) the underwriter heading the syndicate agreed to head and manage it without receiving any management fee and to limit its participation to 5 percent of the total issue thus bringing itself within the exemption provision of subparagraph (d) of the rule . . . Page 170.

REFUNDING, EXTENDING, EXCHANGING OR DISCHARGING AN OUTSTANDING SECURITY OF THE DECLARANT

Declaration, filed by subsidiary of registered holding company, pursuant to Section 7 of the Act, regarding the issue and sale of 5% first mortgage bonds, 5% cumulative preferred stock with a par value of $50 per share, and of common stock without par value, ordered effective subject to certain conditions, the Commission finding that the new securities are to be issued for the purpose of effecting a reorganization and satisfy Section 7 (c) (2) of the Act . . . Page 1.

Declaration, having been filed by a subsidiary of a registered holding company pursuant to Section 7 of the Act, regarding the issue and sale of its unsecured promissory note in the principal amount of $395,000 for the purpose of renewing an outstanding 3% promissory note in the principal amount of $450,000 the unpaid balance of which amounted to $395,000, ordered effective subject to certain conditions, the Commission finding that the note falls within the provisions of Section 7 (c) (2) (A) of the Act . . . Page 1.

Declaration, having been filed by a subsidiary of a registered holding company pursuant to Section 7 of the Act, regarding the issue and sale by a declarant of $18,000,000 in principal amount of first mortgage bonds, series A, 3%, due May 1, 1969, and $4,000,000 in principal amount of 3%% unsecured serial notes, the proceeds to be applied together with other funds, to the redemption, at 1021⁄2 and accrued interest, of $21,693,900 principal amount of declarant's outstanding first mortgage 5% gold bonds, series A, due October 1, 1957, the new bonds to be issued under an open-end indenture constituting a first lien upon substantially all physical property and franchises owned or hereafter acquired by declarant, ordered effective subject to certain conditions, the Commission finding that the issuances comply with Section 7 of the Act . . . Page 24.

Declaration, having been filed by a subsidiary of a registered holding company, pursuant to Section 7 of the Act, regarding the issue and sale to the Rural Electrification Administration of a first mortgage note in the principal amount of $39,000, ordered effective, subject to certain conditions, the Commission finding that the proceeds of the note are to be used to finance the business of the declarant which satisfies the provisions of Section 7 of the Act . . . Page 146.

Declaration, having been filed by a subsidiary of a registered holding company, pursuant to Section 7 of the Act, regarding the issue and sale of $27,300,000 aggregate principal amount of first mortgage and refunding bonds, series D, 34% due May 1, 1969, the proceeds of the issue to be expended for the purpose of retiring $27,300,000 of outstanding first mortgage and refunding bonds, series C, 4%, due October 1, 1966, ordered effective, the Commission finding that the bonds are to be a first lien on physical properties of the declarant and are issued for the purpose of refunding outstanding bonds of the declarant, and therefore qualify under the provisions of clause (B) of Section 7 (c) (1) and clause (A) of Section 7 (c) (2) of the Act . . . Page 170.

Declaration, having been filed by a subsidiary of a registered holding company pursuant to Section 7 of the Act, regarding the issue and sale by the declarant of $22,000,000 principal amount of its first mortgage bonds, 3% series, due

ISSUE AND SALE OF SECURITIES OF REGISTERED HOLDING COMPANY OR SUBSIDIARY-Continued

1964, the net proceeds from the sale of the bonds to be used (1) for the payment of the principal of declarant's first refunding mortgage bonds maturing July 1, 1939, in the amount of $4,413,000, (2) for the payment of principal and premium on the redemption of all the $15,498,000 principal amount of declarant's first and general mortgage gold bonds, 5% series due 1960, (3) to reimburse the treasury of the declarant, in part, for expenditures made for extensions and improvements of its facilities in an amount not to exceed $400,000, the balance of the proceeds to be used for the improvement of facilities, ordered effective subject to certain conditions, the Commission finding that the bonds are to be secured by a first lien on physical property of the declarant and are to be issued and sold solely for the purpose of refunding or discharging outstanding securities and for the purpose of financing the business of the declarant. . . Page 177.

Declaration, having been filed by a subsidiary of a registered holding company pursuant to Section 7 of the Act, regarding the issue and sale of its unsecured promissory note in the principal amount of $395,000 for the purpose of renewing an outstanding 3% promissory note in the principal amount of $450,000 the unpaid balance of which amounted to $395,000, ordered effective subject to certain conditions, the Commission finding that the note falls within the provisions of Section 7 (c) (2) (A) of the Act... Page 185.

Declarations, having been filed by five subsidiary companies of a holding company, and an indirect subsidiary of a registered holding company, pursuant to Section 7 of the Act, regarding the issue and sale of unsecured 3% promissory notes, all of such notes to be sold to the holding company for the purpose of discharging similar notes of such companies held by the holding company, ordered effective subject to certain conditions, the Commission finding that the proposed notes being for the purpose of "discharging an outstanding security of the declarant," appear therefore to come within the provisions of Section 7 (c) (2) (A) of the Act... Page 195.

Declaration, filed by a subsidiary of a registered holding company pursuant to Section 7 of the Act with regard to the issue and sale of two demand promissory notes in the face amount of $85,000, the notes constituting a renewal of two other renewal promissory notes issued in violation of the provisions of Section 6 (a) of the Act, permitted to become effective, subject to certain conditions, the Commission finding that in view of the circumstances surrounding the issue of the renewal notes, adverse action with respect to the present declaration is not required... Page 300.

Declaration, having been filed by a subsidiary of a registered holding company pursuant to Section 7 of the Act, regarding the issue and sale of 45,000 shares of 6% cumulative preferred stock having a par value of $100 per share, to be offered under an exchange offer or a subscription privilege to the holders of declarant's outstanding 8% and 7% preferred stock, the remainder to be offered to the public, the funds received to be used to redeem such of the outstanding preferred stock as has not been exchanged, permitted to become effective, subject to certain conditions, the Commission finding that the proposed new preferred stock qualifies under Section 7 (c) (2) (A) of the Act . . . Page 336.

Declaration, having been filed by a registered holding company, which is also a subsidiary of a registered holding company, pursuant to Section 7 of the Act, regarding the issue and/or sale of its secured promissory note in the principal amount of $2,000,000, its first lien and refunding mortgage 5% bonds, series C

ISSUE AND SALE OF SECURITIES OF REGISTERED HOLDING COMPANY OR SUBSIDIARY—Continued

due 1969, in the principal amount of $3,000,000, to be pledged as collateral security for said note, and 20,000 shares of its common stock of $100 par value to its parent company, permitted to become effective, subject to certain conditions, the Commission finding that since the promissory note is to be issued and sold solely for the purpose of discharging an outstanding obligation the requirements of Section 7 (c) (2) (B) of the Act are satisfied, that since the bonds to be issued are to be pledged as security for the payment of the promissory note the requirements of Section 7 (c) (2) (B) and 7 (c) (1) (B) of the Act are satisfied, and that since the common stock to be issued is a common stock having a par value and being without preference as to dividends or distribution over, and having at least equal voting rights with any outstanding security of the declarant, the requirements of Section 7 (c) (1) (A) of the Act are satisfied . . . Page 344.

Declaration, having been filed by a subsidiary of a registered holding company, pursuant to Section 7 of the Act, regarding the issue and sale of $5,000,000 principal amount of its first mortgage bonds, series A, 4% due 1964, and $600.000 principal amount of 32% unsecured serial notes, the proceeds from the sale of the bonds to be used to redeem all of the presently outstanding first mortgage 5% bonds due 1947, for the payment of expenses incident to the refinancing and for other corporate purposes, permitted to become effective, subject to certain conditions, the Commission finding that the proposed bonds are secured by a first lien on physical property of the declarant and that the proposed bonds and notes are to be issued solely for the purpose of refunding or discharging outstanding securities of the declarant and for the purpose of financing the business of declarant as a public utility and therefore satisfy the requirements of Section 7 (c) of the Act... Page 353.

An application pursuant to Section 6 (b) or in the alternative, a declaration pursuant to Section 7 of the Act having been filed by a subsidiary of a registered holding company, with respect to the issuance of not more than 76,560 shares of its common stock, to be issued to four associate companies in exchange for their respective utility assets, declaration under Section 7 permitted to become effective, subject to certain conditions, the question as to whether the issue and sale are exempt under Section 6 (b) not being necessary to answer, the securities qualifying under Section 7 (c) (1) . . . Page 359.

Declarations, having been filed by four subsidiary companies of a registered holding company, pursuant to Section 7 of the Act with regard to the issuance as a stock dividend to their parent company of shares of their respective common stocks equal in par amount to the largest amounts in even hundreds of dollars in their respective earned surpluses, and relative to the issuance of shares of their respective common stocks equal in par amount to the amount of their respective indebtedness to the parent company, permitted to become effective, subject to certain conditions, the common stock having a par value of $100 per share and therefore qualifying under Section 7 (c) (1) . . . Page 359.

An application, having been filed pursuant to Section 6 (b) or in the alternative a declaration pursuant to Section 7 of the Act by a subsidiary of a registered holding company regarding the issue and sale of 297,077 shares of 44% preferred stock, and $3,200,000 aggregate principal amount of 10-year promissory notes due in equal annual installments, and certain amendments to the company's charter, the new preferred stock to be offered in exchange for the presently outstanding 6% cumulative preferred stock and the 7% cumulative preferred stock with appropriate cash adjustments, the proceeds of the issue not so exchanged