Court Opinion

ID: 9637434
Source: CourtListenerOpinion
Date Created: 2023-08-22 15:06:53.756607+00
Date Added: 2024-06-11T18:09:56.161877
License: Public Domain

STEPHENS, Associate Justice
(dissenting).
Section 2(a) (8) of the Public Utility Holding Company Act of 1935, 49 Stat. 807, 15 U.S.C.A. § 79b, provides:
“. .. . The Commission, upon application, shall by order declare that a company is not a subsidiary company of a specified holding company under clause (A) [which clause makes a subsidiary any company 10 per centum or more of whose outstanding voting securities are owned, controlled, or held with power to vote, by a holding company] if the Commission finds that (i) the applicant' is not controlled, directly or indirectly, by such holding company (either alone or pursuant to an arrangement or understanding with one or more other persons) either through one or more intermediary persons or by any means or device whatsoever, (ii) the applicant is not an intermediary company through which such control of another company is exercised, and (iii) the management or policies of the applicant are not subject to a controlling influence, directly or indirectly, by such holding company (either alone or pursuant to an arrangement or understanding with one or more other persons) so as to make it necessary or appropriate in the public interest or for the protection of investors or consumers that the applicant be subject to the obligations, duties, and liabilities imposed in this title upon subsidiary companies of holding companies. „ . . As a condition to the entry of, and as a part of, any order granting such application, the Commission may require the applicant to apply periodically for a renewal of such order and to file such periodic or *645special reports regarding the affiliations or intercorporate relationships of the applicant as the Commission may find necessary or appropriate to enable it to determine whether in the case of the applicant the conditions specified in clauses (i), (ii), and (iii) are satisfied during the period for which such order is effective. The Commission, upon its own motion or upon application, shall revoke the order declaring such company not to be a subsidiary company whenever in its judgment any condition specified in clause (i), (ii), (iii) is not satisfied in the case of such company, or modify the terms of such order whenever in its judgment such modification is necessary to ensure that in the case of such company the conditions specified in clauses (i), (ii), and (iii) are satisfied during the period for which such order is effective. ...” [Italics supplied]
The question in this case is whether or not, within the meaning of this Act, American Gas and Electric Company (hereinafter called American Gas) is a subsidiary of Electric Bond and Share Company (hereinafter called Bond and Share).1 The Commission found “that the facts . . . show past relationships between applicant [ American Gas] and Bond and Share which clearly ‘have resulted in a personnel and tradition’ which make applicant responsive to Bond and Share’s desires . . ..” The Act provides in Section 24(a), 15 U.S.C.A. § 79x, that “The findings of the Commission as to the facts if supported by substantial evidence, shall be conclusive.” (Italics supplied) American Gas contends that there is no substantial evidence to support the finding that the Commission made and that on the contrary substantial evidence shows, and the Commission should have found, that the “management or policies” of American Gas “are not subject to a controlling influence, directly or indirectly,” by Bond and Share and that it is therefore not a subsidiary of the latter.2 This finding the Commission declined to make.
In determining the questions of fact in this case the Commission as trier of fact must, properly, have taken two steps: one, determination, from consideration of the evidence, of the underlying or subsidiary (sometimes referred to as the basic) facts in the case; the other, determination from such facts of the question whether the ultimate facts alleged have been established. And, under the system of law guaranteed by our Constitution, the subsidiary facts must be reached from the evidence and the ultimate facts from the subsidiary facts, not arbitrarily or by assumption or conjecture or by a process contrary to reason, but according to reason. Although, as said in National Labor Relations Board v. Pennsylvania Greyhound Lines, 1938, 303 U.S. 261, 271, 58 S.Ct. 571, 82 L.Ed. 831, 115 A.L.R. 307, inferences are to be drawn by the trier of fact and not by the courts, the inferences must nevertheless be reasoned inferences. And it is the duty of the reviewing tribunal to see that they áre, otherwise the case is not decided according to law. “The primary question presented for our determination is whether or not the findings of the Board find support in the record and are not arbitrary and capricious.” Union Drawn Steel Co. v. National Labor Relations Board, 3 Cir., 1940, 109 F.2d 587, 589. Under the Federal rule findings must be supported by substantial evidence, and substantial evidence is “more than a scintilla and must do more than create a suspicion of the existence of the fact to be established.” National Labor Relations Board v. Columbian Enameling & Stamping Co., 1939, 306 U.S. 292, 300, 59 S.Ct. 501, 83 L.Ed. 660. In Consolidated Edison Company v. National Labor Relations Board, 1938, 305 U.S. 197, 229, 230, 59 S.Ct. 206, 83 L. Ed. 126, the Supreme Court put it thus:
“. . . the statute, in providing that “the findings of the Board as to the facts if *646supported by evidence, shall be conclusive,” means supported by substantial .evidence. Washington, V. & M. Coach Co. v. National Labor Relations Board, 1937, 301 U.S. 142, 147, 57 S.Ct. 648, 81 L.Ed. 965. Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. [Citing authorities]
“. . . desirable flexibility in administrative procedure does not go so far as to justify orders without a basis in evidence having rational probative force. ...”
In the instant case the subsidiary or basic facts are undisputed; the dispute in the case is concerning their meaning. Therefore the question before us on this review of the correctness of the Commission’s findings is whether or not the inference drawn by the Commission that the facts show past relationships between American Gas and Bond and Share which clearly have resulted in a personnel and tradition which make it responsive to Bond and Share’s desires is a reasonable inference, or whether the Commission should reasonably have inferred and found that the “management or policies” of American Gas “are not subject to a controlling influence” by Bond and Share and that it is hence not a subsidiary of the latter.3
*647But before the question of the sufficiency of the evidence to support the findings in the instant case can be determined the meaning of the phrase “subject to a controlling influence” as used in the statute must be ascertained. Here I am unable to agree with the construction of this phrase in the cases relied on in the majority opinion. It was held in Detroit Edison Co. v. Securities and Exchange Commission, 6 Cir., 1941, 119 F.2d 730, 739, that the phrase “means the act or process, or power of producing an effect which may be without apparent force or direct authority and is effective in checking or directing action, or exercising restraint or preventing free action. The phrase as here used does not necessarily mean that those exercising controlling influence must be able to carry their point. A controlling influence may be effective without accomplishing its purpose fully.” This construction was accepted in Public Service Corp. v. Securities and Exchange Commission, 3 Cir., 1942, 129 F.2d 899. In Pacific Gas & Electric Co. v. Securities and Exchange Commission, 9 Cir., 1942, 127 F.2d 378, the view of the court (Garrecht, J., dissenting) was that “subject to a controlling influence” meant mere susceptibility to a controlling influence and that in addition to the conditions specified in clauses (i), (ii) and (iii) of the statute there was a fourth and independent condition in view of which the Commission might find that an applicant was a subsidiary if the Commission thought merely that it was necessary or appropriate in the public interest or for the protection of investors or consumers that the applicant be subject to the obligations, duties and liabilities of the Act upon subsidiary companies of holding companies.4
*648“Subject to” means under the power or dominion of another. It is synonymous' with subordinate, inferior.5 “To control” means to exercise restraining or directing influence over; to dominate; .regulate; hence, to hold from action; to curb; subject.6 And “controlling,” the present participial form of the verb, therefore means the act or fact of exercising restraining or directing influence over; it conveys the idea of process or continuance. Moreover, the word “influence” itself has a present participial, i. e., present continuing action, connotation.7 It is defined to mean (as said in the first portion of the quotation from the Detroit Edison case, supra) the act or process, or the power, of producing an effect without apparent force or direct authority. But it is further defined (this was not stated in the Detroit Edison case) to mean influence by suggestion; the influence of heat upon life; hence, a considerable or an ascendant power arising from station, excellence of character or intellect, etc., sway, control, mastery, effect, force.8 All of the foregoing dictionary definitions are trite but it is seemingly necessary to state them. In view of the common meaning of these words it is a contradiction in terms to say, as in the Detroit Edison case, that “subject to a controlling influence” does “not necessarily mean that those exercising controlling influence must be able to carry their point.” How can an influence be controlling, in the normal use of language, which does not control; and how can “subject to a controlling influence” be a mere susceptibility to a controlling influence as held in the Pacific Gas case? I think that Congress in using the word “control” in clause (i) and the phrase “subject to a controlling influence” in clause (iii) of the Act intended to differentiate, not between presently effective control on the one hand and mere susceptibility to control on the other — if it had intended such a distinction it could easily have used apt language to express it —but between two different types of presently effective control. I think that in clause (i) Congress intended to cover control through, so to speak, structural means, such as complete or majority ownership of capital stock, or devices such as combinations of stockholders, voting trusts, majority membership on proxy committees, interlocking corporate officers or directors; I think that by the phrase “subject to a controlling influence” Congress intended to describe such control as might result from the command of one mind over another, or from station or *649prestige, or from habituation to the policies of another. I think therefore that the phrase “subject to a controlling influence” is fairly to be taken to mean under a presently effective dominion.
The meaning of the phrase “management or policies” as used in the Act must also be borne in mind. By “policy” is meant in the present context a settled or definite course or method adopted and followed by a government, institution, body, or individual.9 The word “management” may refer to the act or art of managing, the manner of treating, directing, carrying on, or using, for a purpose; conduct, control. It may also mean, however, the collective body of those who manage or direct any enterprise or interest, the board of managers.10 It is not to be assumed that Congress was using the word “policies” and the word “management” redundantly, and I think, therefore, that the latter meaning of “management” was the one intended.
Turning now to the question what inferences may reasonably be drawn from the basic facts in the instant case: Stated in brief the basic facts from which the ultimate facts are by inference to be reached are the following: American Gas was organized by Bond and Share in 1906 out of Electric Company of America. Of the outstanding voting securities of American Gas 17.51% are owned by Bond and Share; the remaining 82.49% is in the scattered ownership of persons other than Bond and Share; no one of these other stockholders and no organized group thereof owns as much as 4%. Until 1928-1931 Bond and Share, for substantial compensation, as fiscal agent supervised the financial affairs of American Gas; since that period there has been no financial supervision by Bond and Share — American Gas has handled all of its financing independently.11 From the outset there were common directorships of Bond and Share and American Gas — this reached its highest point in 1926 when 7 out of the 15 members of the board of directors of American Gas were at the same time directors of Bond .and Share or of companies in its system; after 1926 the number of common directorships lessened until at the time of the present inquiry (the hearing commenced June 12, 1940, and terminated, in the order of the Commission, May 12, 1941) only 2 members of the board of American Gas are directors of or have any connection with Bond and Share or companies in its system. The same is true of the executive committee of American Gas; 5 out of a membership of 7 were connected with Bond and Share in 1926 but at the present time only 1 is so connected.12 The two directors of American Gas who are now connected with Bond and Share are Mr. C. E. Groesbeck and Mr. Frederick A. Farrar. Mr. Qroesbeck is chairman of the'board of both' Bond and Share and American Gas and chairman of the executive committee of American Gas, but in such positions in American Gas he is without salary, desk or office. Mr. Farrar is a director of both American Gas and Bond and Share but is in his eighty-sixth year and is retired. Prior to 1938 all of the members of the proxy committee of American Gas were persons who were also directors of Bond and Share or of one of its subsidiaries but in 1939 there was only 1 such, and in 1940 none. There are not now and never have been any common officers of American Gas and Bond and Share or its subsidiaries. Certain of the present directors of American Gas were such during the period when Bond and Share was the fiscal agent for American Gas.13 *650Prior to 1928 loans were made by Bond and Share to American Gas and by the latter to Bond and Share subsidiaries; but since 1928 American Gas has not been indebted to Bond and Share nor have Bond and Share subsidiaries been indebted to American Gas. From 1912 to 1935 Bond and Share and American Gas were parties to group purchase contracts. From 1910 to 1932 American Gas was a party to a contract with an engineering firm for the rendering of advice, reports and construction services to which contract 13ond and Share and one of its subsidiaries were also parties; the fees for services were based on the actual work done for each company. (This engineering service is to be distinguished from the engineering service, referred to below, rendered by American Gas’ own staff.) Since 1928 American Gas has continued to use investment and commercial banks, the original connection with most of which was formed in the period prior to 1928 when Bond and Share was acting as fiscal agent for American Gas. American Gas and Bond and Share have never had common auditors. Except in respect of the instant proceeding and a proceeding, referred to below, under Section 11 of the Act, the same law firm has represented and continues to represent Bond and Share and American Gas. In 1936 in pleadings in the case of Securities and Exchange Commission V. ; Electric Bond and Share Co.,14 wherein American Gas was a defendant, it joined with several co-defendants in an allegation that they (including American Gas) were “subsidiary companies of the defendant Bond and Share . . . and none of said companies is entitled to exemption or to claim exemption as a subsidiary under the terms of Section 2(a) (8) * * * of said Act.” From the outset of its organization American Gas has had its own managerial, operating and engineering staff (segregated in 1938 — in compliance with the Public Utility Holding Company Act — into a newly created subsidiary of American Gas, American Gas and Electric Service Corporation) ; all of the managerial, operating and engineering functions (except for financial service until 1928-1931 as above described) of American Gas and its system have been performed by this staff, and this staff has performed no service for Bond and Share. Shortly after the formation of American Gas, Bond and Share assembled its own complete service staff, now segregated into its service subsidiary, Ebasco Services, Inc. American Gas has never (except for financial service until 1928-1931 as above described) received advice or service from the Bond and Share service staff or from Ebasco Services, Inc., and does not do so at the present time. The techniques of these two separate service staffs developed along different lines; their methods of organization and functioning, engineering practices and commercial policies have presented' and now present a definite contrast. The management and policies of American Gas, including the technique of generation, transmission and distribution of electric energy, construction standards, uniformity of practices and operations, retention or non-retention of non-electric utility properties, depreciation policy, rate structure policy, merchandising policy, policy as to extent of investment retained in subsidiaries, and financing (since 1928-1931) — all of these may for convenience be referred to as business and engineering policies — are different from those of Bond and Share; the differences are more explicitly set forth in the margin.15 In 1938-1939 Bond and Share, *651through Mr. Sydney R. Inch its president, attempted to cause Mr. G. N. Tidd, president ol American Gas and a member of its board of directors and executive committee, and Mr. Joseph M. Burchill, a vice-president and member of the board, and Mr. M. F. Millikan, a vice-president, house counsel and member of the board, and through them American Gas, to abandon its intention of filing under Section 11 of the Act a formal integration plan of its own, i. e., to comprehend its own system and nothing else. Nevertheless, resolutions to file the independent plan of American Gas and to file the application of American Gas under Section 2(a) (8) to be declared not a subsidiary of Bond and Share (the application which resulted in the present proceeding) were adopted by unanimous vote of the board of directors of American Gas, including the vote of Mr. Farrar and Mr. Grocsbeck the two directors of American Gas who are also directors of Bond and Share. This episode, as shown by the record, is described in greater detail in the margin.16 In 1939 Mr. Tidd resigned from *652the board of directors of the American Power and Light ' Company (a subsidiary of Bond and Share) in part because he could not agree to a proxy statement of *653American Power and Light Company to the effect that American Gas is an affiliate of Bond and Share.
What inferences may reasonably be drawn from these basic facts: I think that they support no reasonable inference of presently effective domination by Bond and Share of American Gas management or policies and that they reasonably support a contrary inference. That American Gas was organized by Bond and Share thirty-four years before the commencement of the hearing in this case is too remote and abstract a circumstance alone to support an inference that the management or policies of American Gas were at the time of the inquiry subject to a controlling influence by Bond and Share. The mere organization of one corporation by another is but a paper transaction, in and of itself unproductive of influence except through the impact of the personalities in the organizing corporation upon those of the organized. That Bond and Share was fiscal agent of American Gas from the time of its organization until the period 1928-1931 proves, without more, nothing now, that fiscal agency having terminated and American Gas since that period having had an established credit of its own and having alone carried out its own financing. The Commission urges that the fiscal agency of Bond and Share was a control of the purse prearranged at organization time and that it was hence the result, not the cause, of influence. But even if that is true, control of the purse is now gone. The presence in 1926 and theretofore upon the board of directors, executive committee and proxy committee of American Gas of a substantial number of persons who were connected with Bond and Share is evidence of a past possible means of influence by Bond and Share but is not, without more, evidence that the present *654management or present policies of American Gas are subject to a dominating influence by Bond and Share. And in view of the limited number of common directorships, executive committee memberships and proxy committee memberships at the present time, such a means for influence has greatly lessened. That certain of the present directors of American Gas were such during the period when Bond and Share was fiscal agent for American Gas also, in my mind, proves, without more, nothing now. If they were subservient then, the ascribed cause of that subservience has passed away. The debtor relationship which American Gas once bore toward Bond and Share has long since terminated, as has participation in group purchase and group engineering contracts. If it can be inferred that these relationships were once the cause of subservience, that cause has long since passed away. The fact of continued use of the same commercial and investment banks by American Gas and Bond and Share is not evidence of subjection of the former to the influence of the latter; that two companies deposit their funds in and borrow at or invest through the same bank is, to my mind, an irrelevant circumstance, one that does not reasonably support an inference that one company is influenced by the other; at the most such a circumstance is equivocal — if influence exists, in: which direction does it operate? The existence of a common law firm (except in the Section 11 proceeding and in the instant proceeding) of itself proves nothing. Lawyers advise as to the law and as to legal policy; they litigate and draw instruments. But in the absence of evidence to the contrary, it is a fair presumption of fact that they do so singly to the interest of each client, and in the event of conflicting interests withdraw from one or another. There is no evidence that the law firm in question was retained by Bond and Share to advise it and American Gas as a part of the system of Bond and Share; it is a fair inference from the facts in the case that each company independently retained the firm. There is no evidence that the law firm in question ever advised American Gas against its interest and in favor of Bond and Share, or lent itself to influencing the management or policies of American Gas at the instance of Bond and Share. The scattered character of American Gas stock ownership outside the 17.51% owned by Bond and Share might, in the event of indifference or absence of common interest on the part of other stockholders or ‘ in the event of a combination of stockholders, result in a preponderant voting control in Bond and Share. But that is one of the types of control which, as said at the outset of this opinion, I think Congress intended to cover in clause (i) of Section 2(a) (8) of the Act, and, as I pointed out (in footnote 2), the Commission does not contend that American Gas is “controlled” by Bond and Share within the meaning of that word in clause (i). Moreover, there is no evidence in the case that either at the time of the inquiry or at any other time Bond and Share had preponderant voting power from any such event. The concession in the pleadings in the suit of Securities and Exchange Commission v. Electric Bond and Share Co., above referred to, that American Gas was a subsidiary of Bond and Share is to my mind of no probative value in respect of the issue in the instant case, first because it was made as of 1936 and second because it is a mere conclusion of counsel or of corporate officers and one not made on the record in the instant case; the Commission concedes in its brief that it itself does not consider this concession to be of conclusive character.17
*655In my opinion the foregoing facts, without more, whether looked at singly or altogether, cannot be said reasonably to support an inference that the management or policies of American Gas are under a present domination by Bond and Share. It *656may be conceded that, from impact of personalities in Bond and Share upon those in American Gas at organization time and from such circumstances as the fiscal agency, the presence in the past upon the board of directors, executive committee and proxy committee of American Gas of a substantial number of persons who were connected with Bond and Share, the presence now upon the board of American Gas of some directors who were such during the period of the fiscal agency, the debtor relationship and group purchase and engineering contracts, and perhaps from other relationships thus far commented upon, there 'might possibly have been engendered in American Gas policies or tendencies which reflected and still reflect Bond and Share’s desires. But as a matter of law the court is concerned in this case not with mere possibilities but with reasonable inferences, and I think that not by reasonable inference but only by assumption and conjecture can there be drawn from the facts thus far commented upon the conclusion that they show past relationships which have resulted in a personnel and tradition which make American Gas presently responsive to Bond and Share’s desires. And it will be noted that if the conclusion reached by the Commission is to stand, it must be drawn from the facts thus far commented upon and not from the remainder of the basic facts, upon which I comment below.
Of the basic facts in the case only the following remain for discussion: The business and engineering policies of American Gas (the technique of generation, transmission and distribution of electric energy, construction standards, uniformity of practices and operations, retention or non-retention of non-electric utility properties, depreciation policy, rate structure policy, merchandising policy, policy as to extent of investment retained in subsidiaries, and policy as to financing (since 1928-1931) ) have from the outset been and are now different from those of Bond and Share; these business and engineering policies have been carried into effect from the outset by American Gas’ own separate staff; the attempt of Bond and Share to cause the officers and directors of American Gas to submit to the integration policy of Bond and Share, rather than to carry out its own integration policy through the filing of a formal plan under Section 11 of the Act, failed through unanimous vote-of the board of directors of American Gas including the two who were also directors of Bond and Share; the president of American Gas resigned from the board of American Power and Light Company rather than agree to a proxy statement of the latter to the effect that American Gas is an affiliate of Bond and Share.
These items -of fact cannot be ignored— findings cannot be arrived at by considering only part of the evidence — and they involve both the management and policies of American Gas. These facts, while consistent with all of the other facts in the case, are, in my opinion, wholly inconsistent with the conclusion which the Commission has drawn, i. e., that American Gas is “responsive to Bond and Share’s desires.” When looked at in terms of the accepted definition of substantial evidence as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, these facts support not the inference drawn by the Commission but its opposite, i. e., the finding which American Gas urges ought to have been made in the case — that the “management or policies” of American Gas “are not subject to a controlling influence” by Bond and Share. How can it sensibly be said that the business and engineering policies of American Gas are subject to a controlling influence by Bond and Share when those policies have from the outset been and are now different from those of Bond and Share? Is it to be supposed that Bond and Share compelled a differentiation? There is no-evidence that it did. How can it sensibly be said that the'integration policy of American Gas was subject to a controlling influence by Bond and Share when it also-was different? How can it sensibly be said that the management, including the business and engineering staff of American Gas, is subject to a controlling in*657fluence by Bond and Share when such management and staff have carried out and continue to carry out business and engineering policies different from those of Bond and Share? How can it sensibly be said that the management of American Gas is subservient to the influence of Bond and Share when the board of directors, including two who are also directors of Bond and Share and who would, according to the theory of the Commission, vote responsively to the desires of Bond and Share, unanimously vote to carry out an integration policy different from that of Bond and Share,18 and when the president of American Gas resigns a directorship in a Bond and Share subsidiary rather than agree to a statement that American Gas is an affiliate of Bond and Share? To the contrary of supporting the conclusion of the Commission in the case, the significant facts confirm a statement made by Mr. Inch in respect of the relationship of Bond and Share to American Gas that “In that company, we still hold a minority interest but we do not in any way supervise its operations nor have we ever done so. * * * ... first of all, the Bond & Share Co. used its money and its credit to go out and get some operating properties to put together. When they were put together in this particular case it organized the American Gas & Electric Co. and then that went off on its own . . . (Italics supplied)19
The Commission attacks the significance for the independence of American Gas from a controlling influence by Bond and Share of the items of fact now under discussion not by denying them but only by contending that the policies involved are not of vital importance. But this contention is I think clearly without warrant. The business and engineering policies above described of a public utility obviously involve the very reason for being and way of life of such a company and determine its success or failure for stockholders, creditors and consumers. And the integration policy of a registered holding company— which, as explained above, American Gas itself is, whatever the outcome of this case *658—is vital to its life, to the preservation of its properties, under the “death sentence” provision of the Act. It is apparent from what is stated in footnote 16 that it was the intention of Bond and Share, had American Gas agreed not to file a formal plan of its own under Section 11, to regroup the properties of American Gas if necessary to the reintegration of Bond and Share;
If, under the facts in this case — where the company alleged to be exercising controlling influence owns but 17.51% of the voting stock of the alleged subsidiary, where but two out of the fifteen directors of the alleged subsidiary have any present connection with the other company, where there is no relationship of debtor ’ and creditor and no present financial supervision by the alleged controlling company, where the business and engineering policies of the alleged subsidiary are materially different from those of the alleged controlling company and are carried out by a separate staff, and where the board of directors of the alleged subsidiary, including two members who are also directors of the alleged controlling company, are shown to have acted, in a matter vitally affecting the integration policy of the two companies, in accordance with the interest of the alleged subsidiary and contrary to the desire of the alleged controlling company — if in such a case it is proper to hold that the alleged subsidiary is in fact a subsidiary, what case can arise under the statute in which a non-subsidiary status will be declared? Refusal by the Commission to recognize non-subsidiary status in such a case as the instant case is equivalent, I think, to writing into the statute a fourth independent condition, such as was named in Pacific Gas & Elec. Co. v. Securities and Exchange Commission, supra which in effect puts it within the unfettered discretion of the Commission — without reference to the evidence — to determine that a subsidiary status exists.
I am forced to the view in this case that the conclusion of ultimate fact of the Commission has been reached by assumption and conjecture rather than according to inference rationally drawn from the basic facts. There is, to my mind, no coherent relationship between the basic facts and the conclusion reached by the Commission. The decision of the Commission, in my opinion, denies to American Gas the benefit of the rational significance of the basic facts which is that the “management or policies” of American Gas “are not subject to a controlling influence, directly or indirectly,” by Bond and Share. I think the order of the Commission should be reversed.

 American Gas is itself a registered holding company under the Act, and as such it and its subsidiaries are subject to the provisions of the Act and to the jurisdiction of the Commission affecting holding companies and their subsidiaries. The ease involves, therefore, no question as to this regulated status of American Gas and its system. American Gas seeks recognition and declaration that it is not a subsidiary of Bond and Share so that the provisions of the Act and the Commission’s orders to effectuate them shall,’ as to American Gas, be directed to it and its system separately and not as a part of the larger and more complicated system of Bond and Share.

 The Commission does not contend that American Gas is “controlled” by Bond and Share 'within the meaning of that word in clause ,(i) of Section 2(a) (8), (B), or that it is “an intermediary company” within the meaning of clause (ii).

 To safeguard the integrity of findings of ultimate fact arrived at by inference, the law has established certain principles with reference to the dependability of inferences : (1) An inference to be • reasonable must be warranted from all fhe evidence, otherwise a fact reasonably infer-able from a single fact or group of facts might be inconsistent with the totality of proven or conceded subsidiary facts. As said in National Labor Relations Board v. Union Pacific Stages, Inc., 9 Cir., 1938, 99 F.2d 153, 177, where the court interpreted the meaning of Section 10(e) of the National Labor Relations Act, 29 U. S.C.A. § 160(e), providing that “the findings of the Board as to the facts, if supported by evidence, shall be conclusive”: “But the courts have not construed this language as compelling the acceptance of findings arrived at by accepting part of the evidence and totally disregarding other convincing evidence.” In short, a trier of fact may not ignore a part of the evidence. In National Labor Relations Board v. Thompson Products, Inc., 6 Cir., 1938, 97 F.2d 13, 15, the court said in respect of Section 10(e) of the Act-: “It means that the one weighing the evidence takes into consideration all the facts presented to him and ¡all reasonable inferences, deductions and conclusions to be drawn therefrom and, considering them in their entirety and relation to each other, arrives at a fixed conviction. . . . Testimony is the raw material out of which we construct truth, and, unless all of it is weighed in its totality, errors will result and great injustices be wrought.”
(2) If two equally probable but inconsistent inferences may be drawn from the same facts, a finding of fact cannot reasonably be based upon either of them; in such a situation the evidence is equivocal. Pennsylvania Railroad Co. v. Chamberlain, Administratrix, 1933, 288 U.S. 333, 53 S.Ct. 391, 77 L.Ed. 819. In that case the Court said: “We, therefore, have a case belonging to that class of cases where proven facts give equal support to each of two inconsistent inferences; in which event, neither of them being established, judgment, as a matter of law, must go against the party upon whom rests the necessity of sustaining one of these inferences as against the other, before he is entitled to recover [citing authorities].” (288 U.S. at page 339, 53 S.Ct. at page 393, 77 L.Ed. 819). See also Cupples Co. Manufacturers v. National Labor Relations Board, 8 Cir., 1939, 106 F.2d 100. As illustrated in that case: “The evidence that the Company welcomed the organization of an independent union of its employees and preferred such a union to any other, and made haste to recognize the Association as the sole bargaining representative for all of its employees, is not a sufficient factual basis for the finding of interference, domination and support. This for the reason that, while such evidence is consistent with the hypothesis that the formation and administration of the independent union was interfered with, dominated and supported by the Company, it is not inconsistent with the contrary hypothesis, and therefore supports neither.” (106 F.2d at page 114)
(3) AAThere two different inferences may be drawn from undisputed facts, that which is the more probable is the one which must be drawn. National Labor Relations Board v. Sands Mfg. Co., 1939, 306 U.S. 332, 59 S.Ct. 508, 83 L.Ed. 682; Appalachian Electric Power Co. v. National Labor Relations Board, 4 Cir., 1938, 93 F.2d 985.
(4) A fact may not be inferred from a proven fact or facts where unimpeached and uncontradicted testimony consistent with such proven fact or facts but inconsistent with the fact sought to be in*647ferred, is in the record. Pennsylvania Railroad Co. v. Chamberlain, Administratrix, supra; Cupples Co. Manufacturers v. National Labor Relations Board, supra; Foote Bros. Gear & Machine Corporation v. National Labor Relations Board, 7 Cir., 1940, 114 F.2d 611. This proposition was phrased as follows in the Pennsylvania Railroad case: “And the desired inference is precluded for the further reason that respondent’s right of recovery depends upon the existence of a particular fact which must be inferred from proven facts, and this is not permissible in the face of the positive and otherwise uncontradieted testimony of unimpeached witnesses consistent with the facts actually proved, from which testimony it affirmatively appears that the fact sought to be inferred did not exist. . . . A rebuttable inference of fact, as said by the court in the Wabash Railroad case [Wabash R. Co. v. De Tar, 8 Cir., 1905, 141 F. 932, 935, 4 L.R.A.,N.S., 352], ‘must necessarily yield to credible evidence of the actual occurrence." And, as stated by the court in George v. Missouri Pac. R. Co. . . . [1923, 213 Mo.App. 668, 674, 251 S.W. 729, 732], “It is well settled that where plaintiff's case is based upon an inference or inferences, . . . the ease must fail upon proof of undisputed facts inconsistent with such inferences.’ ...” (288 U.S. at pages 340, 341, 53 S.Ct. at pages 393, 394, 77 L.Ed. 819) In the Cupples Co. Manufacturers case the court stated : “evidence which merely furnishes grounds for suspicion and conjecture proves nothing, and . . . the Board, like a jury, may not disregard the uncontradieted testimony of unimpeached and credible witnesses.” (106 F.2d at page 105) In the Foote Bros. Gear & Machine Corporation case the court said: “In reaching our conclusion we wish to make it clear that . . . (c) A statement which alone may afford substantial support for a fact finding may lose its weight entirely in the fact of uncontradieted facts inconsistent with it. . . ..” (114 F.2d at page 622)
In short the rules of logic and reasoning which are necessary to the accomplishment of the type of adjudication guaranteed under our system of law must be applied by the Oommission, as by any trior of fact, in reaching its findings. Consolidated Edison Company v. National Labor Relations Board, 1938, 305 U.S. 197, 59 S.Ct. 206, 83 L.Ed. 126; National Labor Relations Board v. A. S. Abell Co., 4 Cir., 1938, 97 F.2d 951; National Labor Relations Board v. Bell Oil & Gas Co., 5 Cir., 1938, 98 F.2d 406; Cupples Co. Manufacturers v. National Labor Relations Board, supra; Magnolia Petroleum Company v. National Labor Relations Board, 5 Cir., 1940, 112 F.2d 545.

 It was persuasively pointed out by Judge Garrecht, dissenting, that such a construction of the Act was not tolerable. He said:
“From the discussion in Congress at the time the Act was under consideration and as well from the fair and ordinary meaning of the language, the phrase ‘subject to a controlling influence’ does not mean, as the Commission found and the majority opinion determined, that appellant was required to ‘demonstrate’ that its management and policies were not ‘susceptible to control’ by North American. *648‘Subject to a controlling influence’ is not the equivalent of ‘susceptible to a controlling influence.’ ‘Susceptible’ and ‘subject’ are not interchangeable or synonymous terms. The word ‘susceptible’ connotes an especial liability to mental or emotional impressions. Advisedly that expression was not used in the statute. But the word ‘subject’ is used, and here it occurs in relation with ‘control’, and in that sense it can be correctly defined as meaning ‘under rule, authority, or domination’. Thus, ‘subject to a controlling influence’, as stated in the statute, is not the same thing as ‘susceptibility’ to a controlling influence as expressed by the Commission. One phrase refers to an actually existing state; the other might be applied to express some future condition which uncertain events might possibly bring about. In considering this aspect of the matter it is important to keep in mind that under the statute the Commission is in a position to act at once if ever the susceptibility should become an actuality, even if the Commission had theretofore granted petitioner an exemption at a time when the facts showed a lack of any actual and existing control or controlling influence.
* * $
“In vesting the Commission with the duty of ascertaining ‘control’ or ‘subject to a controlling influence’ of one company by another Congress did not imply that a potential facility to exercise control was sufficient to establish such controlling influence. If this alone were sufficient the Congress would -not have made provision for the exemption.” (127 F.2d at page 391)
In respect of the fourth and independent condition which the majority construed the statute to include, Judge Garreeht added:
“It seems to me that the opinion of the Court has added to the Act by judicial construction conditions not imposed by Congress and by which the Commission has been relieved of the obligation which requires that the findings be sustained by substantial evidence.” (127 F.2d at page 392)

 See Webster’s New International Dictionary (2d ed. 1942) p. 2509, 3d column.

 Id. at 580, 3d column.

 The word “influence” is the present participial form (influens,-entis) of the Latin verb infiuo, mei, mens, ere, meaning “To stream in, throng in, invade.”

 See Webster's New International Dictionary (2d ed. 1942) p. 1276, 1st column.

 Id. at 1908, 2d column.

 Id. at 1492, 3d column.

 American Gas lias apparently made no short term loans since 1928 and there were no public securities offerings between 1931 and 1937 bjr American Gas or any of its subsidiaries. But since 1937 American Gas for itself and six of its subsidiaries has, without service by or consultation with Bond and Share or Ebasco Services, Inc. (the service subsidiary of Bond and Share), carried through refinancing operations aggregating §5250,000,000 in par and face amount.

 It is to be noted that 2 members of a board of 15 and 1 member of an executive committee of 5 is almost exactly the mathematical representation to which a stockholder holding 17%% of voting securities is entitled. (The executive committee consisted of 7 members in 1926, 5 now.)

 Mr. G. N. Tidd (with American Gas since formation in 1906).
Mr. Henry II. Wohrliane (on bo-ird of directors of American Gas since 1910).
Mr. Harrison Williams (a director of American Gas since 190G).
Mr. Frank B. Ball (a director of American Gas since 1923; originally with the Electric Company of America, he came over into American Gas at its formation).
*650Mr. M. F. Millikan (commenced service with American Gas in 1914).
Mr. J. F. McMillan (with American Gas since 1925, commencing as assistant secretary and treasurer).
Mr. Duncan T. Campbell (with American 'Gas since 1907, when he came to Scranton Electric Company, a wholly •owned subsidiary of American Gas).

 D.C.S.D.N.Y.1937, 18 F.Supp. 131, affirmed 2 Cir., 1937, 92 F.2d 580, affirmed 1938, 303 U.S. 419, 58 S.Ct. 678, 82 L.Ed. 936, 115 A.L.R. 105.

 American Gas utilizes large units and high pressures and temperatures in its generation of electric energy while Bond and Sliare tends more to the use of small units and lower pressures and temperatures.
American Gas utilizes steel in its transmission line construction to a far greater extent than Bond and Share.
American Gas uses power transformers of a lower insulation or voltage class than the actual operating voltage of the transmission line accompanied by lightning protection equipment. The practice on Bond and Share properties is substantially the reverse, those companies using transformers of a voltage or insulation luting considerably above the nominal voltage of the system.
*651American Gas has a uniform practice on all of its properties for relay protection while Bond and Share properties have no unified practice.
American Gas has a sj-stom of standards and specifications which are used regularly by all of its operating companies in the course of their operations. These standards and specifications cover practices in distribution standards, meter standards, safety manuals, material and methods used in line construction, for power transformers, power and control cables, etc. In many of these phases Bond and Share has no corresponding practices which are uniform for all of its subsidiaries.
Companies in the Bond and Share group are divided into groups with a sponsor for each group who acts as a liaison officer between the local companies of the group and the central organization ; this type of organization does not exist in the American Gas group, which latter company and its service company have direct contact with its operating subsidiaries.
It has been the policy for years of the American Gas to dispose of properties that supply utility service other than electric service while there are many companies in the Bond and Share group that provide gas and transportation service. In 1930, 98% of Hie gross revenue of the American Gas group -was derived from electric service and in 1939, 99% of the gross revenue was from electric service. Substantial portions of the revenue of the subsidiaries of Bond and Share are derived from services other than electric service.
American Gas has a different policy with respect to merchandizing of electrical appliances from that of the Bond and Share group.
American Gas has a uniform policy with respect to rural electrification while Bond and Share has no such uniform policy.
American Gas has on its properties universally a block type of residence rate and uniform rate structure for commercial and large power consumers while companies in the Bond and Share group have a variety of types of rates.
American Gas furnishes a complete advertising service to its subsidiaries while Bond and Share does not.
Bond and Share furnished supervisory service to its subsidiary companies at a figure higher than cost until 1935 while American Gas has furnished such service to its subsidiaries at cost since 1912 with the exception of construction engineering service which it has furnished at cost since 1932.
American Gas has a different depreciation policy for its subsidiaries than Bond and Share.
It has been the practice of American Gas to retain not only the common stocks but substantial amounts of the bonds and preferred stocks of its operating subsidiaries and, while it has made substantial reductions in its investments in its subsidiaries through sales of bonds and preferred stocks of such subsidiaries, it has at all times maintained and still maintains a substantial investment in such subsidiaries represented by both senior securities and common stocks. On the other hand, Bond and Share and its subsidiary holding companies have sold all or the major portion of the bonds and preferred stocks of operating companies acquired by them.

 Section 11, sub-section (b), of the Public Utility Holding Company Act of 1935, makes it the duty of the Commission to require each registered holding company and each subsidiary thereof to take such action as the Commission shall find necessary to limit the operations of the holding company’s system of which such company is a part to a single integrated public utility system, and to such other businesses as are reasonably incidental, or economically necessary or appropriate to the operations of such integrated public utility system. Sub-section (o) permits any registered holding company or any subsidiary thereof to submit *652a plan to the Commission for thei divestment of control, securities, or other assets, or for other action by such company or subsidiary thereof for the purpose of enabling such company or subsidiary to comply with the provisions of sub-section (b). Sub-section (e) further provides that if the Commission shall find such plan, as submitted or as modified, necessary to effectuate the provisions of sub-section (b) and fair and equitable to the persons affected by such plan, the Commission shall make an order approving such plan; and the Commission, at the request of the company, may apply to a court to enforce and carry out the terms and provisions of such plan.
Upon the passage of the Act, American Gas received a letter from the chairman of the Commission sent to all important holding companies under date of August 3, 1938, urging all such companies to file, by December 1, either a formal integration plan under Section 11, sub-section (e), or at least a tentative suggested program for complying with Section 11. American Gas was thus confronted with the question whether it should adopt an independent integration policy so that the provisions of the Act and the Commission’s orders to effectuate them should be addressed to American Gas and its system directly and separately and not as a part of the system of Bond and Share. Believing that its system was one which met the requirements of Section 11, and that it was accordingly in a position to file a formal plan seeking an independent integration, American Gas replied on August 8 through Mr. Tidd to the letter of August 3, advising the Commission chairman that a formal plan would be filed; and the officers of American Gas went forward with the work of preparing such a plan. Up to that time there had been no consultation with Bond and Share and American Gas sought no such consultation. At the end of October, 1938, Mr. Groesbeck told Mr. Tidd that the members of the staff of Bond and Share were at work on a reply for Bond and Share to the letter of the Commission of August 3 and invited Mr. Tidd to luncheon to be advised of its nature. Mr. Tidd went to the luncheon accompanied by Mr. Philip Sporn (vice-president and chief engineer of American Gas and Electric Service Corporation, a vice-president of American Gas itself, and chief engineer of all of' the subsidiary companies of American Gas). Mr. Inch was present. He showed a rough outline, including sketch maps, of an informal proposal which he had in mind filing on behalf of Bond and Share; this seemed to include, among the properties dealt with, those of American Gas. This material was taken away by Mr. Tidd and Mr. Sporn and after further examination of it by the latter and consultation between the officers of American Gas, it was determined that it was neither wise nor proper in the interest of American Gas for any of its officers to express an opinion as to the feasibility of the tentative proposals in the draft furnished by Mr. Inch — this for the reason that the proposals seemed to the officers of American Gas to be based upon premises opposed to the position which it seemed necessary for American Gas to take with respect 'to its status under Section 11. Therefore, Mr. Tidd, Mr. Millikan, Mr. Sporn and Mr. Burchill went to the offices of Bond and Share and met Mr. Groesbeck, Mr. Inch and a Mr. Murphy and a Mr. Phillips of the Bond and Share organization. At this conference Mr. Inch urged upon the four officers of American Gas that they abandon the intention of filing a formal plan under Section 11 and expressed the belief that such a course was a most unwise one. But the four officers of American Gas expressed an equal conviction that filing a formal plan under Section 11 was a sound and appropriate course for American Gas and left the conference. It was then decided as a result of this disclosure of opposing policies and views of the officers of American Gas and those of Bond and Share that it was inappropriate that American Gas should be represented in Section 11 proceedings before the Commission by the same firm of lawyers which was representing Bond and Share, and for that reason the officers of American Gas promptly selected and engaged a different firm to represent American Gas in the Section 11 proceeding and in the instant proceeding. The officers of American Gas then continued their work on the formulation of the formal plan and an outline in some detail of its nature and contents was made up and submitted to a meeting of tho board of directors of American Gas on November 7, 1938. At that meeting the vote of the board, including Mr. Groesbeck and Mr. Farrar, was unanimous in favor of the independent integration policy and formal plan of American Gas.
The tentative plan of Bond and Share was filed on December 1, 1938. It included the American Gas system in the integration proposals of Bond and Share. Later Bond and Share filed an amended tentative plan which included American *653Gas in its integration proposals and which required exchanges, sales and purchases of properties of companies within the Bond and Share system, including American Gas. Mr. Inch testified before the Commission in the Bond and Share integration proceedings on September 1, 1940, as follows:
“Q. Corporately or as a matter of ownership, how could the regrouping shown by Map No. 3 be made? Is there in each group a diversity of holding company ownership?
“A. There is in every group a diversity of holding company ownership. That of course means that there would have to be in this integration plan, as probably in any integration plan for any companies, changes in ownership of property, exchanges, sales, purchases, and so forth. The fact that all of the holding companies shown here — the four principal holding companies own the securities of their subsidiaries by very large majority, representing in nearly all cases all or substantially all of the common stock, puts the intermediate holding companies, of course, in a position to cooperate in any plan for any such change in ownership as might be required. In turn, the Electric Bond & Share Company, which is the largest owner of the holding companies which own these properties, is, again, in a position to initiate and carry through any such changes of ownership as might be found desirable or necessary in bringing about the reintegration of the Bond & Share system.
“Q. Are all of these utility properties ■shown on Map No. 3 now parts of the Electric Bond & Share system, including for the moment in that system the American Gas & Electric Company?
“A. Yes, they are.
“Q. And it is for that reason that you think that Electric Bond & Share could function, with respect to the groups, just as the holding companies might function with respect to the properties within a group ?
“A. That is correct.
“Q. Who is the largest holder of the voting securities in each of these intermediate holding companies?
“A. The Electric Bond & Share Company.
“Q. In each case, does that holding represent more or less than 10 per cent?
“A. In every case it represents more than 10 per cent of the voting securities of the intermediate holding companies concerned.
“Q. Is there in any case a comparable Mock of voting securities outstanding in other amounts?
“A. There is no comparable situation in any of those intermediate holding companies to the stock position of Bond & Share in the said companies.
“Q. Do you believe it would be feasible to regroup these utility properties in the manner here portrayed?
“A. I believe that with the approval of the Commission it would be not only possible but probably simple.”
From the foregoing it is apparent that it was the intention of Bond and Share, had American Gas agreed not to file a formal plan of its own under Section 11, to regroup the properties of American Gas if necessary to the reintegration of Bond and Share.

 The Commission asserts that Mr. Tidd and Mr. Burchill testified that “while petitioner [American Gas] has been subject to a controlling influence by Bond & Share, that condition ceased to exist when Mitchell [Mr. S. Z. Mitchell, a former director and member of the executive committee of American ¡Gas and a substantial stockholder] retired in 1933 as chairman of petitioner’s board.” The Commission then argues that Mr. Mitchell’s retirement did not signify, any change in the relationship between the two companies because Mr. Groesbeck succeeded him. But examination of the record shows that Mr. Tidd testified as follows:
“Q. Did Electric Bond & Share Company have a controlling influence over the American Gas & Electric Company at any period in the American Gas & Electric Company’s history?
“A. I think it did, very early, when the company was first formed, although I will have to qualify that again, because I think for the first two years it was-under the charge of Mr. Doherty as-President. The Bond & Share looked more particularly after the money re*655quirements. Mr. Doherty had charge of the operation for two years.
“Q. How long would you say that the controlling influence exercised by the Electric Bond & Share Company over the American Gas & Electric Company lasted?
“A. Well, I think if there was any controlling influence it was in the way of raising money, but the Bond & Share never have operated our properties. [Italics supplied]
“Q. IIow long would you say that controlling influence that you referred to lasted?
“A. Well, if raising of money is a controlling influence, for selling of securities, I think that ceased at practically the time that Mr. Mitchell left. [Italics supplied]
“Q. 1933?
“A. 1933.”
The record shows Mr. Bu-rchill’s testimony to be as follows:
“Q. Without asking you for a legal conclusion and certainly not implying one of my own in this question, let me ask you this: Assuming that there might have been at one time relationship between Bond and Share and American Gas which might ha/oe been considered as lodging in Bond and Share a controlling influence over American Gas, do you think it has disappeared, and if so, when? [Italics srtpplied]
“A. I am quite convinced that it has disappeared; on the assumption that there was something which you asked me to assume, I ain quite convinced it has disappeared, and I am equally clear in my mind that it came to an end in 1933, when Mr. S. Z. Mitchell left the Board of Directors and left the Executive Committee. [Italics supplied]
“Q. That was shortly after all the fiscal services of Bond and Share had, themselves, "been discontinued as far as American Gas is concerned?
“A. Tes, the fiscal services of any importance, as has been testified, were pretty well terminated, the public offering of securities, at any rate, in 1928.
“The Examiner: — Why should the disappearance of this assumed control have coincided with the departure of Mr. Mitchell?
“The Witness: — Well, because it has never been clear in my mind, I don’t know whether it is in anybody else’®, whether Mr. Mitchell in the action he took in the American Gas and Electric Board was acting as the representative of Electric Bond and Share, but assuming for the purpose of answering your question that he was, Mr. Mitchell, because of his personality, because of his intimate association with the company from its beginning, because of his large personal holding in the company, I think was able to exert an influence the like of which no other one man could exert, and the Executive Committee in that year, 1933, was made up of seven members. When Mr. Mitchell resigned from the Board and from the Executive Committee the membership was reduced to six, and it was subsequently reduced to five, and today there is only — and since, —well, for the last three years, at any rate, there has been only one person on there that I would in my non-legal fashion describe as the Bond and Share designee — Mr. Groesbeck, I don’t know whether he is or not, but that is my reason, if I have answered the question, that Mr. S. Z. Mitchell because of his personality, I think because he was in a position, whether he did or not, to influence the American Gas and Electric Board in a way that no other person since can. [Italics supplied]
“The Examiner: — Tou feel that because of his earlier associations with Ele.etric Bond and Share and his large holdings ho would be more inclined to regard American Gas and Electric policies from the Bond and Share viewpoint than any successor would?
“The Witness: — No. I hope I haven’t misled yon on that. I have considerable doubt that he did so regard it. I happen to feel that American Gas having come into being as early as it did in 1906, when the Bond and Share Company was only a year or so old, that as the companies have gone ahead, I really believed that Mr. Mitchell looked on one as one thing and Bond and Share as another, in both of which he had two kinds of interest, financial interest and the interest of a builder and' — —
“By Mr. Ballard:
“Q. (Interposing) Director ?
“A. Director, but I was assuming for the purpose of answering your question that Mr. Mitchell, inasmuch as he was a paid oflicer of Electric Bond and Share and was not a paid officer of American Gas, that it might be assumed or argued that when he came to American Gas Board meetings and sat there and talked he was representing Electric Bond and Share. [Italics supplied]
*656“Q. Of course, he was the chief executive of Bond and Share through the decades when Bond and Share was doing the financing for American Gas, was he not?
“A. That is correct, yes, sir.”
Tfie foregoing makes clear that the gist of the testimony of these two witnesses was merely that if there was influence and if Mr. Mitchell in the action he took on the board of American Gas was acting as a member of Bond and Share, the influence ended with his resignation.

 It cannot be determined from the record whether Mr. Groosbeck at the luncheon to which he invited Mr. Tidd and at which Mr. Inch and Mr. Sporn were present, acquiesced in the view expressed by Mr. Inch. So far as the record shows, he may have invited Mr. Tidd as a mere accommodation — for a discussion of the question to be raised by Mr. Inch — or he may have then shared, or at the moment acquiesced in, Mr. Inch’s view. As the incident is thus equivocal as to Mr. Groesbeck’s then attitude, no inference as to the same can fairly be drawn from it. Rut assuming that in this luncheon discussion Mr. Groesbeck was influenced by Mr. Inch, it is clear that when the time came to vote as a director of American Gas he threw off that influence and voted in accordance with the views of the other directors of American Gas. Therefore, if the record shows anything concerning his being influenced, it shows that he was influenced either by his own judgment or by that of his fellow directors in American Gas and not by Bond and Share.
It is noteworthy that there is no evidence in the record, and no contention in the case, that any of the directors or officers of American Gas are or have been lacking in independence of judgment or in faithfulness to the interest of American Gas in any manner either critical or incidental; and in view of the undisputed success of American Gas as a business enterprise (the record shows that American Gas has never since its organization suffered default or delay in the payment of interest or preferred dividends nor any interruption of dividends on common stock since such dividends were inaugurated in 1912) a contrary inference is warranted. Moreover, the long periods over which many of the directors have served tend to prove them independent and faithful. Long continued occupancy of responsible managerial positions in business is not often the result of subservience or unfaithfulness.
It is but fair to add that while it is shown in the record that Mr. Inch sought to persuade American Gas, i.e., its officers and directors, to act in accordance with the integration policy of Bond and Share, there is no evidence and no suggestion in the case of impropriety on his part or that he knew or thought that such a course would be against the interest of American Gas and its shareholders, creditors and consumers.

 This statement of Mr. Inch, which was stipulated into the present record, was made on March 28, 1935, before the Committee on Interstate and Foreign Commerce of the House of Representatives, in connection with the hearings then being held by that Committee prior to enactment of the Public Utility Holding Company Act of 1935.