McDonald

The appeal is from a decree confirming a plan of composition under the provisions of the Bankruptcy Act relating to the composition of indebtedness of local taxing agencies, 11 U.S.C.A. §§ 401-404 .

No extended review of the history of the Banta Carbona district or detailed analysis of its financial structure or difficulties need be undertaken. The district early defaulted in the payment of interest on its bonded debt and by 1932 had begun to borrow from its general fund to replenish the bond interest fund. Since that time, with the approval of the District Securities Commission of California, it has been operating pursuant to a local statute permitting reductions in annual levies for bond purposes where named adverse conditions are found to exist. Prior to the *969 institution of the present proceeding its bonds were selling at figures varying from a high of 59 in 1931 to a low of 19 in 1932 and 1933.

In 1938 the district arranged for a loan with the Reconstruction Finance Corporation and thereupon filed its petition for composition. 1 The plan provided for the payment of 61 cents on each dollar of principal of outstanding bonds and warrants. Of this amount the R.F.C. furnished…