(a) Pinellas Water Company.-This company, an indirect subsidiary of International, sold $1,000,000 principal amount of first mortgage 52% bonds to the public in 1935. Chandler & Company, Inc. had a 25-percent participation in a syndicate for the sale of these bonds. The syndicate had no firm commitment to take the bonds but merely handled them as agents. The bonds were sold to the syndicate at 79% and to the public at 872, or with a spread of 8 points. In addition to this spread on 25 percent of the issue, Chandler & Company, Inc. received $5,000 as one-third of a $15,000 commission paid by the seller. The net profit on this transaction amounted to $22,325.72 for Chandler & Company, Inc.

In 1938 a second series of Pinellas bonds, $100,000 principal amount, were sold, on a firm basis, to Chandler & Company, Inc. at 962 and by them to the public at 100. The sale was made through dealers who received a 21/2 percent commission thus leaving 1 percent or $1,000 as the profit of Chandler & Company, Inc.

(b) San Jose Water Works.-In 1936, San Jose Water Works, an indirect subsidiary of International, sold $2,051,000 of first mortgage 334% bonds to a syndicate in which Chandler & Company, Inc. had a $879,000 participation. Chandler & Company, Inc. paid 100% for the bonds and they were sold to the public at 103. The greater portion of the bonds were sold through dealers who received 1 percent on $379,000 and 14 of 1 percent on $275,000. The profit of Chandler & Company, Inc. amounted to $17,581 89.

In 1937, another series of San Jose Water Works first mortgage bonds, $1,022,000 principal amount, were sold to a syndicate in which Chandler & Company, Inc. had a 50 percent participation. The sprend in this instance was 2 percent. Chandler & Company, Inc. sold $450,000 principal amount of its participation through dealers who received 1 percent. The net profit of Chandler & Company, Inc. was $4,480,46. (c) Canadian Utilities, Limited.-In 1985, Dominion Gas and Electric Company sold $2,450.000 principal amount of first mortgage bonds of Canadian Utilities, Limited, to a syndicate in which Chandler & Company, Inc. had a participation of $817,000. The price to the syndicate was 88% and to the public 9334. Of its participation, Chandler & Company, Inc. sold $126.000 through dealers with a commission of 3 percent and $164,000 with a commission of 4% percent. The net profit of Chandler & Company, Inc. amounted to $3026 27.

(d) Southeastern Greyhound Lines, Inc.-In 1929, International and its subsidiaries sold 49.000 shares of the common stock of Southeastern Greyhound Lines, Inc. to a syndicate headed by Chandler & Company, Inc. The price to the syndicate was $17 per share and to the public $19.50 per share. Chandler & Company, Inc. received an originating commission of $7,900. Chandler & Company, Inc., also had a participation of 12,900 shares in the syndicats. Of its partici pation, Chandler & Company, Inc. sold only ten shares at retail, the remainder being distributed by the other syndicate members, (72=dler & Company, Inc. made a profit of $9,372.80 on such participana or a total profit of $17.272.80 from the entire transaction.

(e) Community Public Service Company--In 1989. Internatural and subsidiaries sold 38,821 shares of Community Puble Semillpany common stock to a syndicate in which Chandler & Compa

had a participation of 3,500 shares. Chandler & Co.:

none of these shares at retail but disposed of them through other syndicate members. The profit to Chandler & Company, Inc. amounted to $2,314.13.

LOANS TO OFFICERS, DIRECTORS AND AFFILIATED PERSONS

During the period from 1924 to date, International financed many transactions for its officers and directors and for other persons closely connected with the management by means of loans to such persons or to their personal holding companies to acquire securities. In most cases the only collateral pledged was the securities so acquired.

SALARIES AND BONUSES

During the period from 1924 to December 31, 1940, P. M. Chandler received an aggregate of $928,186.48 as salary, director's fees, and bonuses directly from International and subsidiaries, including former subsidiaries, in addition to participating indirectly in the special commissions and profits hereinbefore stated. The following schedule indicates the total amount of compensation received by P. M. Chandler from International and subsidiaries, including former subsidiaries, for each year:

Salaries, director's fees and bonuses a $14,956. 66

Year

1924.

1925.

1926

1927.

1928

27,806. 65

41, 550. 00

37, 610. 00

37, 570.00

Includes salary received from Securities Corporation General during the years 1931 to 1940, inclusive.

At the present time Chandler's total salary from the system is $56,500, which is divided as follows: International, $20,000; General Water Gas and Electric Company, $15,000; Dominion Gas and Electric Company, $15,000; and Securities Corporation General, $6,500.

SELECTION OF DIRECTORS

The board consists of nine directors divided into three classes holding office for three years with the terms of the respective classes expir

ing in successive years. No more than three out of nine directors come up for re-election in any one year.

The record indicates that with very few exceptions all of the directors of International since 1924 have been selected by P. M. Chandler. Many of them were officers, directors, or employees of Chandler & Company, Inc. or were employees of International or its subsidiaries. Almost all of the few outside directors were personal friends or business acquaintances of P. M. Chandler's. Few of the present directors, including P. M. Chandler have or represent substantial holdings of the securities of International. In almost every instance the introduction of a new member of the board was accomplished by the appointment to fill a vacancy rather than by submission to the stockholders.

Further details regarding the foregoing and facts regarding additional transactions similar in character to those above described are to be found in the public records of the Commission.

9 S. E. C.

[No. 1343]

IN THE MATTER OF

STANDARD POWER AND LIGHT CORPORATION

File No. 70-208. Promulgated June 13, 1941

(Public Utility Holding Company Act of 1935-Sections 9 and 10)

ACQUISITION OF SECURITIES BY REGISTERED HOLDING COMPANY OR SUBSIDIARY.

Where the Commission pursuant to Section 11 (e) of the Public Utility Holding Company Act of 1935 had approved a voluntary plan of an intermediate registered holding company to exchange for its notes or debentures, the stock owned by it of a subsidiary company, the Commission finding that Section 11 (b) (1) of the Act forbids the retention of such stock by the holding company, application filed pursuant to Sections 9 (a) (1) and 10 of the Act by the top holding company, as the owner of $973,000 principal amount of the notes and debentures, for approval of the acquisition by it of such stock under the plan of exchange, denied, as detrimental to the carrying out of the provisions of Section 11 of the Act and not tending toward the economical and efficient development of an integrated public utility system.

APPEARANCES:

David K. Kadane, of the Public Utilities Division of the Commission.

R. E. T. Riggs, of Seibert & Riggs, for Standard Power and Light Corporation.

Abner Goldstone, for Standard Gas and Electric Company. William Yeager, for Abraham K. Weber, Attorney of Record for a holder of common stock, Nathaniel W. Nelson.

FINDINGS AND OPINION OF THE COMMISSION

Standard Power and Light Corporation is a registered holding company owning 1,160,000 shares or 53.64 percent of the common stock of Standard Gas and Electric Company, also a registered holding company. Standard Gas as of December 31, 1940 owned 993,870 shares or 99 percent of the common stock (constituting 76 percent of the voting power) of San Diego Gas & Electric Company, a public utility company, serving San Diego, Calif., and its vicinage. Standard Gas also has subsidiaries which conduct utility operations

in 22 states other than California, and it has embarked on a program whereby it seeks to adjust its affairs in accordance with Section 11 (b) (1) of the Public Utility Holding Company Act of 1935, by disposing of all its interests except Philadelphia Company (Philadelphia Company, et al., 9 S. E. C. 532 (1941).

As a step in the consummation of this program, Standard Gas applied to this Commission pursuant to Section 11 (e) of the Act for our approval of a plan which as amended provided that holders of notes or debentures of Standard Gas would be entitled to exchange each $1,000 principal amount thereof for 58 shares of the common stock of San Diego Gas & Electric Company. We approved the amended plan, finding that it was "necessary to effectuate the provisions" of Section 11 (b). Standard Gas and Electric Company, et al., 7 S. E. C. 1089 (1940) and 8 S. E. C. 481 (1940).

Standard Power and Light Corporation owned at December 31, 1940, $973,000 principal amount of notes and debentures of Standard Gas. This proceeding is on an application of Standard Power for our approval of an exchange by it of $150,000 principal amount of notes and debentures of Standard Gas for 8,700 shares of common stock of San Diego Gas & Electric Company pursuant to the Standard Gas exchange plan. Hearings were held after appropriate public notice.

Standard Power and Light Corporation has outstanding 34,054 shares of $7 preferred stock on which dividends were in arrears on December 31, 1940 in the amount of $48.06 per share, aggregating $1,636,862.27. It also has outstanding common stock in two series. The portfolio of Standard Power consists of the following securities: $973, 000 principal amount of Standard Gas and Electric Company notes and debentures.

40, 751. 3 1,160,000

1,980

1,267. 65

9,750 23,570

shares of Standard Gas $7 prior preference stock. shares of Standard Gas common stock.

shares of Louisville Gas and Electric Company (Delaware) class B common stock.

shares of Mountain States Power Company common stock.

shares of Philadelphia Company common stock. shares of Southern Colorado Power Company class A common stock.

The four last named companies are direct subsidiaries of Standard Gas and Electric Company, and the interests represented by the shares held by Standard Power are small in comparison with the direct interests of Standard Gas in those companies. No dividends have been paid on the preferred stock of Standard Power since 1933.