Court Opinion

ID: 9642060
Source: CourtListenerOpinion
Date Created: 2023-08-22 17:47:07.613283+00
Date Added: 2024-06-11T18:10:42.696724
License: Public Domain

L. HAND, Circuit Judge
(concurring).
It seems to me doubtful whether sections 4 and 5 of the act (15 U.S.C.A. §§ 79d, 79e) could stand alone if all the rest of the statute were stripped away; I do not say that they could not, but I prefer what seems to me a safer ground on which to affirm the decree. Sections 6 and 7 (15 U.S.C.A. §§ 79f, 79g) lay out a system of control over the issuance and sale of securities; sections 9 and 10 (15 U.S.C.A. §§ 79i, 79j), over their acquisition. I am by no means sure that all parts of these sections are valid; for example, those which forbid the use of other means (“or otherwise”), than the mails and interstate commerce; again, some of the regulatory discretions vested in the Commission. But when all these doubtful provisions are deleted, a workable system of controls would still be left, which section 5 would implement. Section 4 is not merely a sanction in terrorem, to procure nhodience to this system; the controls may be read as conditions upon the exercise of the activities which the section specifies. This is plainly true as to subdivisions 3 and 4; and the relation between the controls of sections 6, 7, 9 and 10 and subdivision 1 is direct enough. The securities issued or acquired by a holding company or a subsidiary which it controls, may certainly have an effect upon the service rendered, and especially upon the rates. Indeed, it is held in many quarters that an effective regulation of rates is impossible without some control over the issuance and acquisition of securities. The relation between those activities and “servicing contracts” proscribed by subdivision 2 is indeed less direct; undoubtedly the subdivision relates principally to section 13 (15 U.S.C.A. § 79m), but it seems to me that there is more than a fanciful relation between the credit of a company — as represented by its securities held or issued — and the services which it renders to another utility company. The pressure to exact exorbitant terms will depend in some measure upon that credit; so too its ability to perform and the character of the performance. Therefore even though section 13 were void, which I do not suggest, I should say that subdivision 2 might stand.