here. The court overruled their objection stating (151 F.2d 326, at p. 332):

Which method is to be followed [distribution in kind or redemption in cash] is a matter of judgment, and the Commission has exercised its judgment. We think its exercise was not unreasonable nor inequitable and should be allowed to stand. There is talk about the noteholders being compelled to take "wampum" instead of money for part of their holdings. This is good, argumentum ad hominem, but it is not good enough. The stuff these noteholders are being given is the very stuff which makes the corporate promise to pay worth anything. They are getting the cream off the milk in the Standard ice box. Nor does this distribution in kind turn them from investors to speculators. All they ever had was the corporation's promise. This promise was backed by what the corporation owned and what the corporation owned was junior equities in a number of public enterprises. Owning the junior equities is no more speculative than the promise of the corporation whose assets consist of such equities.

The fact that the debentures of American are "secured" is not sufficient to distinguish the Standard Gas case. The "security" consists primarily of the company's portfolio which contains only the con mon stock of Minneapolis. This will be distributed to them directly. The balance of the security consists of about $3,400,000 in cash obtained from previous property dispositions. This cash will be used to retire American's outstanding certificates of indebtedness and as a capital contribution to Minneapolis. Such a capital contribution is the equivalent of an additional investment in the securities of Minneapolis. The use of this cash for the purposes proposed is therefore consistent with the provisions of the debenture agreement.27 Moreover, if the proposal were deemed inconsistent with the debenture agreement, we believe that the provisions of the Public Utility Holding Company Act would in this respect override the terms of the agreement.28 Under the circumstances we are unable to find that the disposition of the cash proposed in the plan is unfair to them.

CONCLUSION

(1) The plan as modified by Amendment No. 14 is fair and equitable to the persons affected thereby and necessary to effectuate the purposes of Section 11 (b) of the Act.

(2) Amendment No. 14 is approved.

(3) Counsel for the Commission shall immediately proceed with enforcement proceedings in the appropriate United States District Court.

An appropriate order will issue.

By the Commission: (Chairman Caffrey and Commissioners McConnaughey, McEntire and Hanrahan).

See footnote 25.

See In re American Gas & Power Co., 55 F. Supp. 756 (D. Del. 1944).

APPENDIX A

Investment: Certificate of indebtedness due from American Gas & Power Co..

Investment in subsidiary companies..

Special deposits with debenture trustee.

Special redemption deposits (contra).

Special deposit for liquidation of Savannah Gas Co.

Deferred charges:

APPENDIX B

APPENDIX C