“Fair and Equitable” Distribution of Voting Power Under the Public Utility Holding Company Act of 1935

In the Public Utility Holding Company Act of 1935 Congress gave the Securities and Exchange Commission the task of investigating voting power distribution among security holders in electric and gas holding companies and their subsidiaries. If the Commission finds that the corporate structure or continued existence of any company in a holding company system “unfairly or inequitably” distributes voting power among the investors in the system, it is the Commission’s duty to order the offending corporation to take “such steps as the Commission shall find necessary” to cure this condition. This paper is an attempt to ascertain what the Commission considers an unfair or inequitable distribution of voting power and the steps necessary to eliminate it.