V 4 .P 96 //0: 94-H 32-

NOMINATION OF JAMES F. HOOPER

government

Storage m ’M E N T 3 

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hearings

BEFO RE TH E

■ 2 IMITT EE ON PUBLIC WORKS 

■ S UNITED STATES SENATE

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NIN ETY-F OURTH CONGRESS 

SECOND SESSION

ON

THE NOMINATION OF

, F. HOOPER III , TO BE A MEMBER OF THE BOARD

OF DIRECTORS OF THE TEN NESSEE VALLEY AUTHORITY

FEBRUARY 17 AND 18, 1976

SERIA L NO. 94-H32

Printed for the use of the Committee on Public Works

I

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87-520 o

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 1976
COMMITTEE ON PUBLIC WORKS

JENNING S RANDOLPH, West Virginia, Chairman

EDMU ND S. MUSKIE, Maine 

JOSPEH M. MONTOYA, New Mexico 

MIKE GRAVEL, Alaska

LLOYD M. BENTSEN, Texas 

QUENT IN N. BU RDICK , North Dakota 

JOH N C. CULVER, Iowa

ROB ERT MORGAN, North Carolina 

GARY HART, Colorado

HOWARD H. B AKER, Jr., Tennessee 

JAMES L. BUCKL EY, New York 

ROB ERT T. STAFFORD, Vermont 

JAMES A. McCLURE, Idaho 

PE TE V. DOMENICI, New Mexico

M. B arry Meyer, Chief Counsel and Chief Clerk

Bailey Guard, Minority Staff Director

Leon G. Billings and Richard D. Grundy, Senior Professional Staff Members

Richard A. H ellman, Minority Counsel

John W. Yago, Jr., Assistant Chief Clerk; Philip T. Cummings, Assistant Chief Counsel

Harold H. Brayman, Senior Professional Staff Member (Minority)

Professional and research staff: Karl R. B raithwaite, J ames W. Case (Assistant Counsel), Paul Chimes, 

Trenton Crow, Katherine Y. Cudlipp, Paul F. Ebeltoft, Jr., George F. Fenton, Jr., Randolph

G. F lood, Kathaleen R. E. Forcum, Ann Garrabrant, Richard T. Greer, Richard M. H arris

(Assistant Counsel), Wesley F. Hayden, Richard E. Herod (Assistant Counsel, Minority), Veronica A. 

Holland, Ronald L. K atz, Judy F. Parente, John B. Purinton, Jr., Charlene A. Sturbitts, 

E. Stevens Swain, Jr., and Sally W. Walker

(n )

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C O N T E N T S

OPENING STATEMENTS

Page

Baker, Hon. Howard H., Jr., U.S. Senator from the State of Tennessee___ 2

Randolph, Hon. Jennings, U.S. Senator from the State of West Virg inia— 1

LIST OF WITN ESSES

9

February 17, 1976

Bowen, Hon. David, a Representative in Congress from the State of

Mississippi ___________________________________________________ 16

Prepared statem ent___________________________________________ 17

Cochran, Hon. Thad, a Representative in Congress from the State of 

Mississippi ___________________________________________________ 29

Eastland, Hon. Jam es O., U.S. Senator from the State of Mississippi____ 3

Hooper, Ja mes F., I ll , accompanied by H unter M. Gholson, attorn ey_____ 30

Lott, Hon. Trent, a Representative in Congress from the State of

Mississippi ___________________________________________________ 28

McCrone, Dr. Bruce, ass ista nt dean, University College, Michigan State

University, East Lansing, Mich_________________________________ 57

Montgomery, Hon. G. V., a Representative in Congress from the State of

Mississippi ___________________________________________________ 20

Prepared statem ent___________________________________________ 21

Murphree, Dr. David L., professor, Departm ent of Aerophysics and Aerospace Engineering, Mississippi Sta te University____________________ 74

Stennis, Hon. John C., U.S. Senator from the State of Mississippi_______ 5

Prepared statem ent___________________________________________ 8

Thomas, J. T., Il l, representing the Delta Council____________________ 68

Triggs, Gene, executive ass istant to the president, Mississippi Chemical

C orp _________________________________________________________ 60

Prepared statement___________________________________________ 62

Whitten, Hon. Jam ie L., a Representative in Congress from the State of

Mississippi ___________________________________________________ 15

Wise, Louis, general manager, 4-County Elec tric Power Association_____ 69

Prepared statem ent___________________________________________ 71

ft

February 18, 1976

Blackwelder, Brent, Environmental Policy Center___________________ 227

Prepared statem ent___________________________________________ 238

« Brandt, Robert S., Tennessee Chapter, Sierra Club____________________ 192

Prepared statem ent___________________________________________ 194

Brock, Hon. William E.. I ll , U.S. Senator from the State of Tennessee___ 81

Gibson. Jon athan, Tennessee Environmental Council_________________ 92

Prepared statem ent_______________________________________ 105

Hall, Richard M„ Friends of the Ea rth and Brent Blackwelder, Environmental Policy Center____________________________________________ 226

Prepared statem ent_______________________________________________ 229

Morgan, Shirley. Jacksboro, Ten n____________________________________ 184

Prepared statem ent____________________________________________ 188

Savitsky, Bill, executive board member. United Mine Workers, represen ting Arnold Miller, president of the United Mine Workers of America,

accompanied by Dale Lawson, legislative represen tative of UMW_____ 197

Whitehead. Corrine. on behalf of the Between the Rivers Committee_____ 168

Williams, John Philip, East Tennessee Research Corp________________ 149

(HT)
IV

ADDITIONAL MATERIAL

Appendix: „ , _ „ T

t t An Analysis of the Background of James F. Hooper II I.

Mr. Hooper’s response----------------------------------------

Communications relative to the nomination of Mr. Hooi»er.

In supp ort-------------------------------------------------------

In opposition----------------------------------------------------

Hooper, James F., Il l, biographical data--------------------

Pege

245

330

77

241

34
NOMINATION OF JAMES F. HOO PER III

TU ES DAY, F E B R U A R Y 17, 19 76

U.S. Senate,

Committee on Public Works,

Washington, D.C.

The committee met at 9:35 a.m., pursuant to call, in room 4200, 

Dirksen Senate Office Building, Hon. Jennings Randolph (chairman 

of the committee) presiding.

Present: Senators Randolph, Burdick, Culver, Baker, and Stafford.

OPENING STATEMENT OF HON. JENNINGS RANDOLPH, U.S. SENATOR 

FROM THE STATE OF WEST VIRGINIA

Senator Randolph. Your chairman is appreciative of the meeting 

of the committee this morning from the standpoint of those members 

who have come to the opening of the hearings, Senator Baker, Senator 

Culver, and Senator Morgan.

Senator Eastland and Senator Stennis, we are especially delighted 

to welcome you to this hearing. The members of the Public Works 

Committee have an important responsibility in this nomination to 

consider James F. Hooper III, chosen by the President of the United 

States, to be a member of the Board of Directors of the Tennessee 

Valley Authority.

The Tennessee Valley Authority is a unique organization in the 

United States. It was created nearly 43 years ago and was given a 

mission encompassing agriculture, industrial development, navigation improvement, flood control, and, of course, electric power 

production.

Over the years, the TVA has become in effect the Nation’s largest 

electric utility. The TVA has assets of more than $7 billion. TVA 

employs more than 25,000 men and women and the TVA operates 

this huge complex in seven States.

The members of the committee conducted oversight hearings, as 

Senator Baker will recall very well, last spring on all phases of the 

operations of the Tennessee Valley Authority.

It is our intention that we schedule further inquiry this year to 

review the power policies of the Authority.

The size and diversity of the TVA are such tha t a director, man 

or woman, occupies an extremely important position.

The term “Board of Directors” in this instance may be misleading. 

The TVA Board is not merely a policy setting body which holds 

meetings from time to time. The three members of the board are

(1)
2

in fac t the highest level ma nag em ent of the Au tho rity . I t is a full-time 

job.

The dire ctors are responsible for the day-t o-day opera tions and 

the y normally meet more than once a week.

The com mittee mem bers recognize th at Mr. Ho oper’s nomination 

is con trov ersial. There are witnesses who will be heard later who will 

oppose his confirma tion. Th e mem bers of this com mittee, I am sure, 

as does the chairman, come to the hearing open -minded .

Th ere have been no promises, I am certain , by the members of this 

com mittee as to how the y would or would no t vote on the nom ination .

During the next 2 da ys, we shall discuss with the witnesses, and with *■

Mr. Hoo per, the resp onsibilities of this position and the qualifications 

of the Presiden t’s selection.

Th e scheduled witnesses repres ent a diversity of bac kgrou nds and 

intere sts , and I believe th at we will receive inform atio n which can *

help us to make an informed jud gm ent on this vital matter .

Senator Bak er, do you hav e comments?

Senator Bak er. I won’t tak e bu t just a brief mo me nt to give an 

opening sta temen t and won’t long delay our colleagues from Mississip pi, who wish to spe ak on behalf of the nominee.

OPENING STATEMENT OF HON. HOWARD H. BAKER, JR., U.S.

SENATOR FROM TH E STATE OF TEN NESSEE

Senator Baker. Th e Tennessee Valley Au thority will be 43 yea rs 

old in Ma y of this y ear. During its four decades the b asic ma ndate of 

TVA has been unchan ged by Congress and has proven both the 

wisdom of its dra fters in delineatin g its purp ose and providing it the 

tools to respo nd to the needs of the Tennessee Valley and the Nation.

But now in its fifth decade TVA as a resource con serv ation and 

energy producing agency is confronted with a new and more difficult 

challenge than perhap s it has faced at any time in its history.

As the instr um en tal ity th at b rought electric powe r to the people of 

Appalachia and the agricultura l sou theast, TV A has grown tc be the 

larges t electric power pro duc er in the Nation. And in the next 10 

yea rs, the capa city of the TVA power system is projected to double its 

size; and the value of its power assets to triple.

The economies of scale have bro ught prob lems as well as benefits, «

and TVA is faced now with the task of assuring the economic benefit 

of i ts power pro ductio n to the people and indu str y of the Valley who 

have come to rely so heavily upon it.

Th e rate charged for a kilow att of residential powe r in the valley *

decreased for m any y ears aft er the cre ation of th e TVA. But since 1967 

th at r ate has moved con sisten tly higher u ntil i t has retur ned to a level 

com mensu rate with rat es in the early fifties.

While rat es in the valley remain substan tia lly lower than the 

natio nal average, an analysis of TVA ’s financial pic tur e shows th at 

inflation ary pressures are at work which will require careful and diligent efforts on the pa rt of TV A’s managem ent.

Opera ting expenses for TV A’s power program, for inst ance, increased by 41 percen t during the p ast year. In terest charges on TVA’s 

long term de bt increased by alm ost 25 percen t in the same period.

I t is easy to see why the consum ers of TVA power, faced with s pira ling electric rates, hav e tak en so g rea t an inter est in the selection of a
3

new member for TVA’s Board of Dir ectors—for TV A’s Board is its 

manag ement body . All of the powers of the corpo ration are vested in 

the Board and the policies and programs which will det erm ine TV A’s 

performance in the difficult times ahe ad will be developed and overseen by this Boa rd of Directors.

So, Mr. Chai-ma n, it is with grea t concern and interest th at I 

await the testim ony of Mr. James F. Hooper this mornin g. He is 

nominated for a position th at will place him for alm ost the next 

decade in piv ota l control of a d ecisionmaking process vit al to the welfare of my co nstitu ents.

I feel a great resp onsibility, as I am sure th at he can appre ciate, to 

scrutiniz e his qualifica tions. Fo r the m an in whom we place the powe r 

and tr ust of the office of Di rec tor of the Tennessee Valley Au thority 

at this critical jun ctu re in its his tor y must be a ma n of unc ommon 

abi lity . It is n ot an easy measu re to live up to.

Mr. Ch airma n, when I first met Mr. Hooper alm ost 8 m on ths ago 

shortly aft er his nom ination was sent to the Sen ate, I assu red him 

th at he would receive fair trea tm en t from the Public Wo rks Com ­

mittee .

In the mon ths th at followed, this com mittee has con ducted a careful and exte nsiv e inv estiga tion of the nom inee’s bac kgrou nd. In the 

cond uc t of th at investigation, bo th you and I hav e take n great care 

th at the inform ation developed be used only for the execution of our 

comm ittee’s responsibilities in connection with this nomination .

We have determ ined, Mr. Ch air ma n, in fairness to evervone, th at 

the nom inee appear before the Co mm itte e on Pub lic Works to give 

his testim ony and be examined and th at the hea ring no t be conduct ed 

beforehand in the press.

I am pleased to be able to sta te as we begin thes e hearings th at the 

comm itte e and com mittee staff hav e diligently abided by the trad ition s of dig nity and fairn ess which you have established durin g you r 

cha irm ans hip.

1 know t hat the me mbe rs of thi s committee will weigh the no minee ’s 

qua lific ations for the office to which he is nom ina ted fairly and obje ctive ly on the basis of the tes tim ony received toda y and tom orrow and 

in lig ht of all of th e in formation available to us.

We could do no less and I am sure t hat M r. Hoo per expects no more.

Senator R andolph. Th an k you verv muc h, Senator B aker.

I know th at you have gone int o this m at te r very tho rou ghly. You 

hav e made a very carefu l stu dy of the inform ation th at has been 

supplied to us.

You come, as do all mem bers of the com mittee, to listen to the 

testim ony, to evalua te it and to m ake a decision.

Senator Ea stland, would you open our hearing ? Tha nk you very 

much for coming.

STATEMENT OF HON. JAM ES 0. EASTLAND. U.S. SENATOR FROM 

THE STATE OF MI SS ISSIPP I

Senator E astland. T ha nk you .

Mr. Ch airma n and members of the com mittee, I am pleased to 

join my colleague, Senator Ste nnis, in pre sen ting to the com mittee
4

our fellow Mississippian, Mr. Janies Hooper, and in endorsing his 

nomination to the Board of Directors of the Tennessee Valley Authority.

The TVA area is historically an agricultural area. It suffered from 

soil erosion, recurring floods, poor transportation facilities, a lack of 

job opportunities, and, as a result, low per capita income.

TVA was created as a regional concept to treat these ills and develop 

and implented solutions. It has enjoyed success in the development 

of resources for navigation, indurtrial water supplies, and low-cost 

hydroelectric power generation. Its policies have emphasized indus- w

trialization and have paid off well for the investment. It is time now 

for agriculture to be more adequately considered in its programs.

During this century, we have witnessed the migration of millions 

of Americans from the farms to urban areas. The first generation *

moving to the cities was, for the most part, born and raised on the 

farms of this country.

Today, however, our urban population consists of second and third 

generation city dwellers. These people are not intimately familar 

with the source of the food on their tables or the clothes on their 

backs. Living and working, as the majority of them do, in airconditioned and heated buildings, they have only a marginal understanding of the problems created by severe weather for those who work 

the land.

It is my sincere belief that a majority of the citizens of this Nation 

today do not comprehend the economic disaster which can be visited 

upon the farmer, the source of their food, by the weather.

The people are not aware tha t the high cost of machinery and 

the rapidly escalating cost of production are reducing the farmer’s 

chances in his yearly gamble with the land, the weather, and the 

economy. At this point, I am afraid that the people of this country 

do not understand that if the present trend continues, the production 

of food in this country could be seriously impaired, even as we seek 

to deal with a worldwide food shortage coupled with a population 

explosion.

With the exception of a few here in the Senate and a few in the 

House, the policymaking levels of government in this Nation are 

almost devoid of people with the hard, practical experience of farming. <

Today, too many regulations and decisions about agriculture are 

being made by men and women without a farm background. These 

decisions are being handed down by people who cannot possibly understand the total problems of agriculture and who have little input from ♦

those whom they seek to regulate.

The Tennessee Valley' Authority' was created, not as just another 

giant utility, but with a wide ranging mandate to serve the people of 

the Tennessee Valley region, and of America, in numerous ways.

Not the least of these is the mission assignment tha t TVA provide 

the resources for research and development of fertilizer.

Furthermore, the authority was commended to insure tha t the 

products and knowledge derived from research and development be 

made available to the farmer, and tha t the farmer be encouraged to 

utilize the knowledge to increase his productivity.

Mr. Hooper has had 30 years of hard, practical experience in farming operations. It is my firm judgment tha t this experience gives
Mr. Ho oper valua ble insights into bo th the problems of agriculture 

and the problem s of the people. Th e Board of D irecto rs of t he T ennessee Valley Au tho rity needs the ben efit of this experien ce and thes e 

insights in the try ing time s to come.

Mr. Hoope r has demo nstrated throu ghout his car eer an act ive 

inter est in, and inv olvement with, the p eople in the areas of social and 

economic dev elopment. I believe th at his bac kgroun d is such th at we 

can expect from him bala nced judgme nts directed tow ard meeting 

the needs of our citizens, and in car rying ou t the man da te of the 

Congress in esta blis hing the Tennessee Valley Au thority .

Mr. Chairma n, I associate myself with Senator Ste nnis in res pectfully urging action favo rable to Mr. Hooper, and I would like to offer 

for the comm ittee’s conside ration a list of ou tstan din g org ani zation s 

which supp ort this nom ination . Th an k you very much.

I would like to say Mr. Ch airma n, th at Mr. Ho oper is ideally 

qualified to make an outstandin g record on the Board of Direc tors 

of the Tennessee Valley Autho iity.

Senat or R and olph. Th an k you very much, Senator Ea stl an d, for 

your rec ommenda tion and endorseme nt of Mr. Ho oper for thi s im ­

po rtan t position .

Are the re any com ments or quest ion s from mem bers?

Senator S tennis, we are del ighted you are here, sir.

STATEMENT OF HON. JOHN C. STENNIS, U.S. SENATOR FROM THE 

STATE OF MIS SISS IPPI

Se nator Ste nn is. Mr. Chairma n, I certa inl y than k you and the 

mem bers of your comm ittee . I have a pre pared sta temen t, Mr. Ch airman. It is ab ou t seven pages. I ask una nim ous consent, or w hatev er the 

procedure is, th at th at prepare d statem en t be placed in the reco rd and 

1 will make some com ments on some points .

Senator R andolph. Tha t will be done in accordance with yo ur 

wish, Sen ator.

[The statem en t app ears at p. 8.]

Senator Ste nn is. T ha nk y ou, Mr. Chairma n.

I am impressed and wa nt to th an k the chairman, as well as the 

oth er mem bers , for their contr ibu tions, over the y ears they hav e been 

here, to T \ A. I came ea rly enough to be he re as an ex officio memb er of 

the Ap pro priations Comm ittee when TVA was a highly con troversial 

issue.

We had to figh t uphill all the way eve ry tim e there were req uests 

for fun ds for add itio nal pow erp lan ts or any other improvem ent of 

any sub stance . I have been delighted th at your comm itte e appro ved 

the enablin g act, you might say, to make it self-financing.

Now, for several years, I hav e been through TVA’s b ud ge t beca use 

I hap pen to be chairma n of the sub com mittee th at I w as once on as an 

ex officio member. Therefore, I am fam iliar with its work.

Gentle men, I thi nk we need a bal anc ed boa rd of directors for the 

admi nis tra tio n of this proven insti tutio n. It is involved in more th an 

the making of electricity bu t in the electric powe r field it has been a 

reliable and responsible yaids tic k o ver the years. It h as benefited eve ry 

area of our Na tion.
6

Going bac k thro ugh its early history, I rem ember when it was first 

proposed, during World War I—n ot World Wa r II bu t World Wa r I— 

as a fertilize r prod ucing ventu re bu t mai nly for the ma nufac tur e of 

ammu nition .

It took a long time to get around to it, bu t th at was one of the 

reasons adv anced in the early pa rt of the war. 1 rem ember when 

Henry Ford, Sr., mad e an offer for a 99-year lease th at was blocked 

in some way, I think, in the Senate. TVA finally came to fruition 

in the depression and has had a far-rea chin g effect throug ho ut the 

Na tion.

As T say, I think i t need s a b alanced boa rd. There are two mem bers •

there now, one of long experience and anoth er with some few yea rs 

of experience. Mr. Hoo per is a man with an agricultura l backgroun d 

and also a busin ess bac kgrou nd. We had a ma n run for Governor «

for Mississippi once who was introduced by a friend who said, “We 

have often had lawyers as can did ates for Governor, who were also 

farm ers. This time we hav e a farm er can did ate who is also a law yer.”

Senator R andolph. Did he win?

Senator Ste nn is. He won. My point now, of course, is th at we have 

a businessma n here who is also a farm er in the sense th at he knows 

the problem s of the farm ers, the area of fertilizer research , and wh at 

it mea ns, and related ma tte rs.

T hat still is a pa rt of the ir function and a pa rt of the ir activity.

1 know the y are con tinuing to make these contr ibu tio ns to agriculture 

dev elopment. Th ey are now developing, testing , and pro moting the 

use of even be tte r types, including th e new sulfu r-coated urea f ertilizer 

with the slow release of its effect. Tha t is ju st an illustration of how 

mod ern this effort is.

I hav e known Mr. Hooper. I was a form er officeholder in the area 

he and I both come from. I hav e known him a long time. I can’t 

rem ember exactly when I first knew him, bu t it goes back 20 to 25 

yea rs or more.

I hav e k nown him as a very active, vigorous, enterp rising gentle man 

who took pa rt in farm lands, dai ry lands, and like ma tte rs. He is 

very pub lic spir ited and active in civic affairs.

I hav e kn own othe r me mbers of his im media te family from Alabam a.

Th ey were from Alabam a originally. I have know n Mrs. Hoo per for

ma ny yea rs and knew her father before her. I called up frien ds of *

mine in this area when this question of the nominat ion came up and

talked to them , businessmen and others, and a close friend going

back to my college day s, who had been at Columbus in business

when Mr. Hoo per f irst came ther e. •

Th ey gave him wh at I had alre ady understood to be a very strong 

recommendation .

I knew alre ady, as I said, about his act ivities and his place in the 

com mu nity and some of the experiences th at he had.

I recommended him to the Presi dent and reco mmend him here to 

you. He is plainspoken, and with his open life, I think with his background and experience he will mak e a real contr ibu tion to this thre emember board where bala nce is needed. I do n’t recommend him 

because he is from Mississippi. TVA is a natio nal instituti on. It
7

belongs to the Na tion and it serves the Na tion, as I hav e alr eady 

pointed out.

I believe he would app ly himself rigidly to the work and th at he 

would make a real contribu tion and become a p ar t of a going organiz ation which we are really all pro ud of.

I th an k you, sir, and all of you, for your attenti on .

Senator Randolph. Th an k you, Senator Stennis, for your reco mme ndation and end orsement of Mr. Hooper.

Are the re any questions?

« [Senator Ste nnis’ prepared statem en t follows:]
8

STATEMENT OF SEN ATOR JOH N 0 . ST 2N N IS

3EF0R2

COMMITTEE ON PUBLIC WORKS

ON

NOMINATION 07 JAMES F. HOOPER, I I I 

AS A MEMBER OF THE TVA 30ARD OF DIRECTORS

<

Mr. Cha irman, members of th e Comm ittee, I am 

ind eed happy to ap pe ar be fo re you and Join w ith Se na to r 

Eas tlan d in in tr oducin g Mr. James F. Hoope r, I I I , of 

Columbus, M is sis sip p i, and to make a b rie f st at em en t 

in su pp or t of his no mination by th e P re si dent to be 

a member of th e Board of D ir ecto rs of th e Tenness ee 

Val le y A uth ori ty .

I do not have to t e l l you th a t th e Tenness ee Va lle y 

A uth ori ty is a ve ry im po rtan t ag ency. As you know, i t 

was cre ate d by th e Con gress in 1933 in th e in te re s t of 

th e n ati onal defe nse , fo r a g ric u lt u ra l and in d u s tr ia l 

pu rp os es , to improve navig ati on in th e Tenness ee R iv er , 

to co n tr o l th e d e str u c ti v e floo d w at er s in th e Tenness ee *

Ri ve r and M is si ss ip pi River b asin s, and to gen er at e and 

s e l l e le c tr ic pow er. I t has brou gh t many b e n e fi ts to *
9

th e seve n s ta te s in whi ch p o rt io n s of i t s sy ste m ar e 

lo cate d , p a rtic u la rly che ap e le c tr ic pow er. I t has been 

a very su ccessfu l opera ti on.

We a l l ta ke pri de in th e fa c t th a t TVA has dedic ate d 

i t s e l f to th e p rin c ip le of se ekin g, fi n d in g , and ma inta in in g a ba lanc ed ap pro ach to the u n if ie d co nse rv ati on 

and dev elopm ent of th e re so urc es of th e Tenness ee Val ley 

re gio n as Congres s d ir e c te d . I remember a good d eal of 

i t s e a rl y wo rk, — de ve lo pi ng th e Te nnessee Riv er ; 

pro vi di ng a lo w-c os t su pp ly of e le c tr ic power to th e 

re gio n; ch em ical re se arc h and th e in tr o d u cti o n of e x p e ri ­

me nta l f e r t i l i z e r s u sefu l in a g ric u lt u re ; fo re s tr y and 

a g ric u lt u ra l program s; and th e many o th er pro grams pro ­

moting th e economic v i ta li t y of th e Te nnessee Val ley 

re gio n — pro grams th a t a ls o se rv e as a pr ov ing ground 

fo r pro gre ss by th e Nat io n. Thi s work is co nti nuin g to day .

I have known Mr. Hooper fo r a number of yea rs and 

fe e l th a t he is th or ou gh ly q u a li fie d in a l l re sp e c ts fo r 

th e p o sit io n for which th e P re si d en t has se en f i t to 

nominate him. He has an educati o n al bac kgroun d in In du st r i a l E ngin ee ri ng, and is a su ccessfu l bu sin essm an w ith

*

wide ex pe rien ce in m an uf ac tu ring , re a l e s ta te o p e ra ti o n s, 

and fa rm ing.
10

-3-

A si gnif ic an t po rti on of TVA's major a c ti v it ie s 

involve water resources. The nominee is part ic ula rl y 

well qu al ifi ed in th is fi e ld . lie took an ea rl y in te re st 

in it and has had wide and varied exp erienc e in water 

resour ce management. In fa ct, he has been something 

of a pio neer. He was ac tiv e in the formation of the 

or ig in al Tennessee-Tombigbee compact which led to the 

au th or izatio n by th is Committee and the subsequent 

funding of the Tennessee-Tombigbee Waterway. lie is a 

ch ar te r member of the Tombigbee Valley Authority and 

the Tombigbee Water Management As socia tio n, He was 

one of the founders and ch ar ter members of the 

Miss iss ippi Rivers and Harbors Associa tion and served 

as Pre sid ent and Chairman of the Board of th at organiza tio n.

The Tennessee-Tombigbee Waterway w il l connect 

and in terlo ck with the Tennessee Valley Authority 

systems when the Tennessee-Tombigbee is completed, 

and I know th at Mr. Hooper's knowledge and experience 

in the water res our ce fi eld w il l be he lpfu l in coo rdinatin g na vigatio n, in dust ri al development, ri ver port 

development, energy al lo ca tion, re cr ea tional development

4
11

-4 -

x xOOG C G * iv i' O it

The reg ion was larg ely agri cult ura l when TVA f ir s t 

sta rt ed , but its manufacturing and commercial a c ti v it ie s 

have gr ea tly increased over the ye ars. It was ju st two 

or three years ago th a t, fo r the f ir s t time on reco rd, 

new in dust ri al pr oj ec ts announced fo r the reg ion re pr esented an investment of over a b il li o n doll ars . Other 

changes are ev iden t. Green pa stur es , pro duc tive farm s, 

and renewed fo re st s have la rg el y rep laced eroded, worn 

out fi e ld s. While there are fewer people on farm s, 

those there make bett er livin gs. The fo re st resour ce 

has continued to grow in qu al ity and qu an tity and the 

fo re st s themselves remain, not destroy ed by the fo re st 

ind ustry they sup por t.

I believe th at the importance and impact of TVA’s 

fe rtiliz e r, agri cult ura l, and fo re st ry programs, both 

within the reg ion and to our Nation and indeed the world, 

have not been fu ll y recognized. Po ssibly, th is is 

because of the atten tion, the enormous amount of money 

involved, and the foc us, to a grea t ex te nt , by the 

people and themedia, on the e le c tr ic power program. I 

want to say a few words about the fe rtiliz e r and
12

-5 -

a g ric u lt u ra l progam s.

I have poi nt ed ou t th a t one of the pu rp os es fo r 

wh ich TVA was cre ate d was to promote a g ric u lt u ra l 

de velop me nt. I t has been ve ry acti v e and su ccess fu l 

in th is are a. In a d d it io n to th e e le c tr if ic a tio n of 

th e N at io n’ s farm s, i t pi on ee re d in th e re se a rc h , 

develop ment, pr od uc tion and use cf f e r t i l i z e r s w ith 

a hi gh er n it ro g re n c o n te n t. I t play ed an im po rta nt 

ro le in th e dev elopment of f e r t i l i z e r us in g anh ydrou s 

ammonia as a so ur ce of n it ro g en . Th is re su lt e d in a 

g re at in cr ea se in a g ric u lt u ra l p ro d u cti v it y and in a 

s ig n if ic a n t in cr ea se in food and fib e r cr op s th ro ug hou t th e co untry.

Food pro duct io n is one of th e th in g s th a t th e 

U. S. does b e s t. With on ly 11 per ce nt of th e w orl d’s 

c u lt iv a te d cr op land and 0.4 per ce nt of th e w orl d’s 

a g ric u lt u ra l popula ti on, th e U. S. prod uc es nearl y 18 

perc ent of th e w o rl d 's c e re a ls and 70 per ce nt of a l l 

wo rld g ra in ex p o rt s. These ac hie ve men ts ar e poss ib le 

because of th e wide sp re ad use of com mercia l f e r t il iz e r s 

and a g ric u lt u ra l te ch no lo gy develop ed p a rtl y by TVA.

In th e TVA re g io n , th e impact is g re a te r. TVA's
13

-o -

a g ric u lt u ra l p ro je c ts have he lped in cr eas e th e income 

and s o c ia l w el l be ing of th e pe op le in th e re gio n.

The TVA pro gram to in cr ea se and improve pro duct io n, 

marke tin g and management syste ms to fa rm er s and a g r ibusi nes s firm s th ro ug h re searc h and deve lopm en t, 

dem onst ra ti ons, educat io n-t ype p ro je c ts is w ell known 

to many of you. There ar e ov er 141,0 00 far ms in th e 

re gio n and nearl y a ll have b en efi te d from th e pro gra m, 

fo r th e p ast sev era l y ears , in cr ea se d p ro d u cti v it y 

has advanced in th e va lue of Val ley farm pro duct io n 

by abou t $34 m il li o n per ye ar in term s of 1973 d o lla rs , 

far m s a le s now excee d $1 .5 b illio n and th e e ffe c t on 

th e re g io n 's economy is even g re a te r si nce each d o ll a r 

in farm s a le s genera te s ab ou t th re e a d d it io n a l d o ll a rs 

in th e ag ri b u sin ess se c to r.

TVA is co ntinuin g i t s co n tr ib u ti o n s to a g ric u lt u ra l 

develop ment. I t is now engaged in dev el opin g, te s tin g

*

and prom oting th e use of even b e tt e r ty pes of f e r t i l i z e r s , 

in cl udin g a new su lp hur co ated ure a f e r t i l i z e r w ith a 

slow re le a s e . I t is he lp in g fa rm er s to de ve lop b e tt e r 

farm management and i t works continuousl y w it h th e 

co u n tr y 's land gra nt co ll eg es.

67-520 0 - 76 - 2
14

-7-

As I have sa id , Mr. Hooper has a grea t deal of 

experience in farming and he w ill bring to the Board 

knowledge and pr ac tica l experience in agri cu ltura l

matt ers. I believe th at th is enhances his quali fi ca- *

tio ns su bs ta nt ia lly and w il l be of great value toTVA, 

it s Board of Direc tors and ag ricu ltur al in te re st s in 4

ge ne ra l.

Let me add th a t, although TVA covers po rti on s of 

seven sta te s, M iss issip pi, Tennessee and Alabama are 

the major users of its power. It seems very appropri ate to me th at Miss iss ippi should be rep res ented on 

the Board.

Let me st re ss again , Mr. Chairman, th at I believe 

th at Mr. Hooper's varied and broad exp erience qua lifi es 

him uniquely and sp ec ia lly fo r th is important po st.

I str on gly recommended to Presiden t Ford th at Mr.

Hooper be nominated. I recommend ju st as strong ly 

th at th is Committee act favorably on th is nomination.
15

Senator Stennis. May I call your attention to the fact tha t Congressman Jamie Whitten, of Mississippi, is here?

Senator Randolph. We would be glad to accommodate Representative Whitten. Do you wish to come over and make a statement?

STATEMENTS OF HON. JA MIE L. WHITT EN , HON. DAVID R. BOWEN,

HON. GILL ES PIE V. (SONNY) MONTGOMERY, HON. THAD COCHRAN, AND HON. TRE NT LOTT, REPRESEN TA TIV ES IN CONGRESS

FROM TH E STATE OF MISSISS IPPI

Mr. Whitten. We have a meeting of the Public Works Appropriations Committee beginning at 10 with the Chief of the Corps of 

Engineers there. For that reason, I appreciate your letting me speak 

in advance.

I would like to agree with the fine statements made by the Senators 

and those to be made by my congressional House colleagues in favor 

of Mr. Hooper. We are very proud of his record. We are very much 

interested in his confirmation.

Senator Randolph. Thank you, Representative Whitten. I would 

like to ask you a question. How long have you known Mr. Hooper?

Mr. Whitten. About 12 or 14 years well, and before tha t I was 

acquainted with him. I can vouch for him in every way I have known 

him, and I know him well.

Senator Randolph. I am sure your statement reflects your approval. 

I only want, while you are here, to have your statem ent tha t you 

know him.

Mr. Whitten. I have worked with the TVA since 1943, so I think 

that speaks for my interest in the work tha t it has done and my 

interest in its continuing the fine job tha t it has done.

Senator Randolph. Thank you very much, Representative.

Do you have any questions?

Senator Baker. No. We are just delighted the Congressman could 

be here and give his statement.

Mr. Whitten. Thank you.

Senator Randolph. Any other questions?

Jamie, before you leave, you spoke about having something to do 

with the Tennessee Valley Authority as long ago as 1943. I voted for 

the Tennessee Valley Authority as a Member of the House of Representatives in 1933, so we both have a long interest in this.

Mr. Whitten. Mr. Chairman, you measured your fish first. I was 

the one who wrote the language to let them use the revenues 1 year 

when they couldn’t get the appropriation and I wrote the language 

to pay one-fourth of the money back each 10 years to take advantage 

of the ups and downs of the water. So we have been in there together.

Senator Randolph. Is the Authority solvent at the present time?

Mr. Whitten. If the country is, because it belongs to the country.

.Senator Randolph. Thank yoil.

We have with us three Representatives besides Representative 

Whitten—Representatives Lott, Bowen, and Cochran.

I am sure all members of our committee would want to accord to 

our colleagues of the House a courtesy in this matter. If they would 

wish to, please come forward and testify.
16

STATEMENT OE HON. DAVID BOWEN. A RE PRESEN TA TIV E IN 

CONGRESS FROM THE STATE OF MI SSISS IPP I

Mr. Bowe n. 1 am Congres sman Bowen, from Mississippi. I hav e 

a sta temen t 1 would like to leave with the com mittee, if 1 mig ht.

Briefly, 1 would like to say th at Jim Hoo per is a constituent of 

mine. 1 have know n him since 197 2 when he was elected to the Congress. It has been his du ty as a very pro minent Rep ublican leader in 

my State to oppose me politically.

Nonetheless, I am very ent husiastic ab ou t his nom ination to this .

position and I would wholeh eartedly concur with the Pr esiden t’s 

recommenda tion to the Sen ate in th at respect.

I do have a sta temen t I would like to mak e a pa rt of the record, if 

I mig ht. 4

Senat or R andolph. Repre sen tative Bowen, as we have done with 

the statem en t of your colleague, Re prese nta tive Whitten , your comments on this m at ter and the k nowledge you have of Mr. Hoo per will 

be included in the record.

Th an k you very much, Mr. Bowen, for coming before us.

[Congressman Bow en’s s tat em en t follows:]
17

STATEMENT OF C ONGRESSMAN DAVID BOWEN • 

BEFORE THE SENATE PUBLIC WORKS COMMITTEE 

IN SUPPORT OF THE NOMINATION OF JAMES F. 

HOOPE R AS A MEMBER OF TH E BOARD OF DIRECTORS OF THE T ENNE SSEE VALLEY AUTHORITY, 

FEBRUARY 17,1976

Mr. Chairman and Members of the Senate Public Works 

Committee, I appreciate the op portunity to make a statement 

in support of the nomination of a distinguished constituent 

of mine, James F. Hooper, as a member of the Board of 

Directors of the Tenn essee V alley Authority. I have had the 

privilege of knowing Jim Hooper for several years. Although 

he is a prominent Republican leader in Mississippi, as is his 

wife, who is Republican National Com mit tee wom an, and it has 

been his duty to oppose me, I am mor e than happy to give him 

my endorsement because I feel that he is well qualified for 

the p osition for which he has been nominated by the P resident

Mr. Ho op er ’s professional background in engineering, 

business, and agriculture, his expertise in the area of 

waterway resource development, and his lifelong public 

spirited commitment to the de velopment of his community, 

commend him highly for this important post.

When Donald McBride retired from the TVA Board in May 

of last year, he said that the new director should be versed 

in natural resource development. I wholehea rtedly concu r in 

this view, and that is precisely the reason that I endorse 

Jim Hooper's nomination. His credentials in this field are
18

outstanding. He has held the position of Chairman of the Board,

President and Vice President of the Mi ssissippi Rivers and 

Harbors Association. He is a charter member of b oth the 

Tombigbee V alley Authority and the Tombigbee Wate r Management 

Authority. He has served on the Water Resources Advisory 

Committee of three Republican presidential candidates. He is 

thoroughly familiar with the entire Tennessee Valley area.

I feel that Mi ssissippi deserves to have representation 

on the TVA Board of Directors. As you know, the other two 

directors are Tennesseans. The d evelopment of the TennesseeTombigbee Waterway, the major allocation of T VA power to 

Mississippi,and related industrial and agricultural development 

in Northeast Mississippi all point up the importance of 

appointing a Miss issippian to the TVA Board.

The interdependence of the Tennessee-Tombigbee and the 

Tennessee Vall ey Authority systems calls for knowledgeable 

management to coordina te navigation, industrial and agricultural 

development, river port development, energy allocation, recreational deve lopment and flood control. Few peopl e in the 

region have the knowledge and expertise in these areas that 

Jim Hooper possesses. He would in my judgment be in a unique 

position to make a significant contribution to the TVA Board.

*
19

I am confident that James F. Hoope r would command the 

respect of both Democrats and Republicans in serving the 

best interests of the Tennessee V alley Authority and the 

people of the area. It is a pleasure for me to join with the 

other Membe rs of the Mississippi Congressional delegation in 

endorsing Jim Hoope r for appointment to the TVA Board.
20

Se na tor R an do lph. Rep re se nt at iv e M on tg om er y ha s joined his 

colleague s. Is it yo ur des ire, Rep re se nt ativ e, to place yo ur st at em en t 

in the rec ord or remain with us du rin g th e hearings?

STATEMENT OF HON. G. V. MONTGOMERY, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF MISS ISSIPPI

M r. M ontgom ery. T o pla ce my st at em en t in th e reco rd, M r. 

Cha irm an , an d ju st co m m en t th at he is ce rtai nl y a good man an d I 

to ta lly su pp or t him fro m my congres sio nal di st rict . I live so uth of 

Jim , but he is ou ts ta nd in g an d I would lik e to su bm it my st ate m ent 

for th e rec ord .

Se na to r R an do lp h. In accordan ce w ith yo ur des ire, yo ur sta te ­

m en t will be inclu de d.

[Th e st at em en t follows:]
21

Testimony of Rep. G. V. Montgomery, D-Miss.

Before Senate Co mmittee on Public Work s 

Regarding Nomination of James F. Hoope r 

To TVA Board of Directors

Mr. Chairman. I appreciate you and members of the 

• Committee allowing me this oppo rtunity to speak on behalf

of the nomination of James F. Hooper of Columbus, Mississippi,

It to the Board of Directors of the Tenness ee Valley Authority.

I have known Mr. Hoop er for several years and have always 

found him to be a person of outstanding abilities and a person 

who approaches each task assigned hi m with dedication and

determination. I know he will continue to ex hibit these 

traits once he assumes the important position of one of three

directors of TVA.

As an example of the wide support Mr. Hooper enjoys in 

the State of Mississippi, I request permission to include at 

the conclusion of my testimony resolutions of support from 

the Rivers and Harbors Association of Mississippi, Mis sissippi 

Legislature and the East Miss issippi Council. These unqualif ied 

statements of support and recommendation come from the peopl e 

• who have worked closely wit h Jim Hoope r over the years. The y know

firsthand his abilities and his experiences in fields that are 

a important to the future of the Tennessee Valley A uthority.
Mr. Chairman. I urge you and the other Members of the Senate 

Public Works Committee to report favorably the nomination of 

James F. Hooper as a member of the Board of Directors of TVA.
23

MISSISSIPPI RIVE RS AND HARBORS ASSO CIATION 

IN AN NU AL MEETINC ON OCTOBER 24, 1975 

BI LO XI , MISSISSIPPI

A RESOLUTION SUPPORTING JAMES F. HOOPER OF COLUMBUS, 

MISSISSIPP I FOR UN ITE D STATES SENATE APPROV AL OF HIS APPOINTMEN T 

TO THE BOARD OF DIRECTORS OF THE TENNESSEE VA LL EY AUTH ORIT Y.

WHEREAS, Pre sid ent Ger ald R. Fo rd has appo inte d Jam es F. Hooper to 

fill the va ca nc y on the th re e me mb er Bo ard of D irecto rs of the Te nn es se e 

V alley A u th o ri ty ; and

WHEREAS, Hon or ab le W illia m L. Waller and Hon or ab le W illia m W in te r, 

G ove rn or and Lie ut en an t G ove rn or of M is sis sip pi and Sen ators Jam es O. 

Ea stland and John C. Ste nnis and Co ng ressman Jamie L. 'W hitte n, G. V . 

Mon tg om er y, Dav id R. Bo wen , Th ad Co ch ran and T re n t Lott, co mpo sing the 

en tire M is sis sip pi dele gat io n to the Un ited State s C ongre ss, have 

rec om me nded and o ffi c ia ll y endo rs ed James F. Ho oper fo r th is re sp onsib le 

positio n; and

WHEREAS, bo th houses of the le gis la tu re of the State of M is sis sip pi 

have unani m ously en dor se d the ap po intm en t of M r. Ho op er; and

WHEREAS, the Ten ne ss ee -T om bigb ee Waterwa y is pre se n tly under 

construction th ro ugh M is sis sip p i, and its in te gra tion and in te rl o c k in g w ith 

the Te nn essee V alle y A u th o ri ty Systems w il l re quir e kn owle dgea ble ma nagement to assis t in the coord in ating navig ation, in d u s tr ia l deve lo pm ent, riv e r 

p o rt de ve lopm en t, energ y allo cation, re cr eatio nal de ve lopm en t an d flo od 

control between the tw o sy stem s; and

WHE REAS, James F. Ho op er was one of the fo unders of the R iv ers and 

H arb ors A ss ociatio n of M is sis sip pi and se rved su cc es sive te rm s of Vice 

P re sid ent, P re sid ent, and Cha irm an of the Bo ard and co ntinued as a bo ar d 

mem be r fo r many ye ars in w hic h offices he se rv ed w ith d is ti n cti o n ; and

WHEREAS, th ro ugh his able leaders hip and re co rd of ac co mplishm en t 

in w ate r re so ur ce s deve lopm en t, he was th ru st in to the do minan t ro le 

of leadin g the M is sis sip pi R iv ers and Harb ors Ass ociatio n to su cc es sful 

ma nageme nt of our gre ate st natu ra l re so urc e - wate r;
24

NOW, TH EREFO RE, BE IT RES OL VE D BY TH E BO ARD OF DIR EC TO RS 

OF RIVER S AN D HA RB OR S ASSO CIA TIO N OF M IS SIS SIP PI, T h a t we do h e re b y 

u n a n im o u sly endors e th e a p p o in tm e n t o f James F. H ooper by P re s id e n t G e ra ld 

F o rd to m em bers hip on th e B o a rd o f D ir e c to rs o f th e Tenness ee V a ll e y A u th o rit y 

and u rg e h is speedy a p p ro va l b y th e U n it e d S ta te s S enate .

BE IT FU RTH ER RES OLV ED T h a t w e co m men d th e e ff o rt s o f o u r C o n g re ssio n a l D ele gation and o f o u r G o v e rn o r and L ie u te na nt C o ve rn o r in th e ir s u p p o rt 

o f Ja mes F. H oop er, and we u rg e th a t th e y co n ti n u e in e v e ry w ay to advocate 

h is m em bers hip on th e B oard o f D ir e c to rs o f T V A .

BE IT FU RTH ER RES OL VE D T h a t copie s of th is re s o lu ti o n be se nt to th e 

H o no ra b le G era ld R. F o rd , P re s id e n t o f th e U n it e d S ta te s, to th e H o no ra b le 

J e n n in g s R a nd olp h , C h a ir m a n o f th e Com m itte e on P u b li c W ork s o f th e 

U n it e d Sta te s S enate , to th e M is s is s ip p i D ele gation to th e th e U n it e d Sta te s 

C o n g re ss, to the H onora ble W illia m L. W a ll e r, G o ve rn o r o f th e S ta te o f 

M is s is s ip p i, to th e H ono ra b le W illia m F. W in te r, Lie u te n a n t G o ve rn o r of 

th e State o f M is s is s ip p i, and th a t co p ie s be ma de a v a ila b le to th e p re s s .

PASSED AN D AD OPT ED TH IS i HE J <f~ DA Y OF

MIS SIS SIPPI RIVE RS AND HA RB OR S ASSOCIA TI ON

M a urice D antin

C hair m an o f th e B oard P re sid e n t
25

SENATE CONCURRENT RESOLUTION NO. 59 7

A CONCURRENT RESOLUTION SUPPORTING JAMES F . HOOPER OF COLUMBUS, 

M IS S IS S IP P I, FOR APPOINTMENT TO THE BOARD OF DIRECTORS OF THE TENNESSEE 

VALLEY AUTHORITY.

WHEREAS, P r e s i d e n t G e ra ld R. F ord w i l l s h o r t l y ma ke an a p p o in tm e n t 

to f i l l a v a c a n c y on th e th r e e me mb er B oar d o f D i r e c t o r s o f th e T e n n e ss e e 

V a lle y A u t h o r i t y ; and

WHEREAS, G o v e rn o r W il li a m L . W a lle r an d L i e u te n a n t G o v e rn o r W il li a m 

F. W in te r o f th e S t a t e o f M i s s i s s i p p i h a v e o f f i c i a l l y e n d o rs e d Ja m es F . 

H ooper o f C olu m bus, M i s s i s s i p p i , f o r t h i s r e s p o n s i b l e p o s i t i o n ; an d

WHEREAS, S e n a to r s J a n e s 0 . E a s tla n d and Jo h n C. S te n n is an d C ongre ss m en 

Jam ie L . W h itte n , G. V. M ontg om er y, D avid R. Bow en , Tha d C o ch ra n and 

T r e n t L o t t , co m posi ng th e M is s i s s i p p i d e l e g a t i o n to th e U n it e d S t a t e s 

C o n g re s s , h a v e a l s o reco m m en de d and o f f i c i a l l y e n d o rs e d Jam es F . H ooper 

f o r t h i s a p p o in tm e n t; an d

WHEREAS, th e S t a t e o f M i s s i s s i p p i i s sec o n d o n ly to T e n n e ss e e a s a 

c u sto m e r o f th e A u th o r ity f o r e l e c t r i c p o w e r, f e r t i l i z e r and o t h e r g o o d s 

an d s e r v i c e s , and a c i t i z e n o f t h i s s t a t e s h o u ld t h e r e f o r e s e r v e on th e 

B o ard ; and

WHEREAS, t h e T e n n e sse e-T o m b ig b e e W at er w ay i s p r e s e n t l y u n d e r c o n ­

s t r u c t i o n th ro u g h M i s s i s s i p p i , and i t s i n t e g r a t i o n and i n t e r l o c k i n g w ith 

th e T e n n e ss e e V a lle y A u th o r ity s y ste m s w i l l r e q u i r e k n o w le d g e a b le m an ag em en t 

to c o o r d in a te n a v i g a t i o n , i n d u s t r i a l d e v e lo p m e n t, r i v e r p o r t d e v e lo p m e n t, 

e n e rg y a l l o c a t i o n , r e c r e a t i o n a l d e v e lo p m e n t and f lo o d c o n t r o l ; and

WHEREAS, Ja m es F . H ooper i s e m in e n tl y q u a l i f i e d f o r . a p o s i t i o n on 

th e B oar d o f D i r e c t o r s o f th e A u th o r it y , b e in g a fo rm e r U n it e d S t a t e s 

A ir F o rc e p i l o t and a g ra d u a te e n g in e e r w ith e x t e n s i v e b u s i n e s s , man uf a c t u r i n g , r e a l e s t a t e and fa n n in g e x p e r ie n c e ; an d

WHEREAS, h e i s a p io n e e r i n w a te r r e s e a r c h and d e v e lo p m e n t b e in g a 

c h a r t e r mem be r and p a s t p r e s i d e n t o f th e M i s s i s s i p p i R iv e r s a n d H a rb o rs 

A s s o c ia tio n an d b e in g a c h a r t e r me mb er o f th e T om big bee V a lle y A u th o r it y 

and fo rm e r v ic e - c h a ir m a n o f th e Tom bi gb ee R iv e r V a lle y W ate r M an ag em en t 

D i s t r i c t :
26

NOW, THEREFORE, BE IT RESOLVED BY THE SENATE OF THE STATE OF M IS SI SS IP PI , 

THE HOUSE OF REPRESENTATIVES CONCURRING THEREIN, T h at we do here by jo in 

th e re co m m en da tion of our C o n g re ssio n al D e le g a ti o n , G ov er no r and L ie u te n a n t 

G ov er nor su p p o rti n g James F. Ho op er fo r ap poin tm ent to th e Bo ard of 

D ir e c to r s o f th e T en nes se e V all ey A u th o rit y .

BE IT FURTHER RESOLVED, T hat we commend th e e f f o r t s of ou r C o n g re ssio n al 

D e le g a tio n , G ov er no r and L ie u te n a n t Gov er no r in t h e i r su p p o rt of James 

F. Ho op er an d we urg e th a t th ey c o n ti n u e in ev ery way to adv o cate h is 

ap p o in tm en t to th e Boa rd .

BE IT FURTHER RESOLVED, T hat c o p ie s of t h i s r e s o lu tio n be s e n t to 

th e H onora ble G er al d R. F ord , P re s id e n t of th e U n it ed S ta te s , to th e 

M is s is s ip p i D e le g a ti o n to th e U nit ed S ta te s C o n g re ss, to th e H on or ab le 

W il li am L. W a ll e r, Gov erno r o f th e S ta te of M is s is s ip p i, to th e H ono ra bl e 

W il li am F. W in te r, L ie u te n a n t Gov er no r of th e S ta te of M is s is s ip p i, and 

t h a t c o p ie s be made a v a ila b le to th e p r e s s .

ADOPTED BY THE SENATE ADOPTED BY THE HOUSE OF REPRESENTATIVES

M arch 13, 1975 March 13 , 1975

SPEAKER PRO TEMPORE 

HOUSE OF REPRESENTATIVES
December 16, 1975

27

F O Bo> i«a

Columbus Mississippi M70I

Trkpbooe Ml 328-0223

Hon. Jennings Randolph 

United States Senate 

Washington, D. C.

Dear Senator:

The 17 county East Mississippi Council, a grass roots civicpolitical organization of 1,600 members, representing nearly 

one fourth of the populat ion of the State of Mississippi, 

wishes to go on record as commending to you the nomination 

of Mr. James Hooper as board member of the Te nbessee Val ley 

Authority.

At a regularly scheduled meeting, the Executive Committee 

authorized the Executive Director to "write a letter of 

commendation in behalf of Mr. Hooper, who is from the East 

Mississippi Council region, and who is a fellow Mississippian."

A copy of this letter will be transmitted to the President 

and to the Mississippi Congressional delegations.

We a ppreciate the opportunity to express our interest.

c • *•» * 

MS

SkClMlM*

BJH/pp

Sincerely,

Di Ch*»l»« Wiighl

Dentui. MS

Cha»M McElroy

SiwfcviM*. MS

O»l<» M| QI

Toget her We Can D o S o Much
28

Senator Randolph. We have two other Members who wish to 

sit with Mr. Hooper now, who are from the delegation. Would you 

desire to speak before we question Mr. Hooper?

STATEMEN T OF HON. TRE NT LOTT, A RE PRESEN TA TIV E IN 

CONGRESS FROM THE STATE OF MI SS ISSIPP I

Mr. Lott. I do, Mr. Chairman. I do have a subcommittee meeting 

too. I wanted to sit with him and present a very brief statement.

Senator Randolph. Representative Lott, we are very happy to 

have your statement.

Mr. Lott. Mr. Chairman, I feel very comfortable here at my 

first opportunity to appear at a confirmation hearing. I feel much more secure now tha t we have our two distinguished Senators from Mississippi sitting in front of us. It helped me as I want to present this 

statement. It is a real pleasure to be here, Mr. Chairman, before you and 

Senator Baker and Senator Culver. Senator, you look the same, even 

though you made a little move since last year. I represent the Fifth Congressional District of Mississippi, Mr. 

Chairman, which is the southernmost part of the State, down on the 

coast. We don’t unfortunately, benefit from TV A, but I am a native of 

north Mississippi and have heard all my life about the fine things tha t the Tennessee Valley Authority has done and has accomplished 

for the people in our area. We are all very proud of what it has done. We know tha t today it becomes even more important not only 

just from the power standpoint but conservation, water resources, 

agriculture, and so many other areas. I am fully cognizant of how important this particular hearing is, 

that we are selecting a new director. I have paid very close attention to the investigation proceedings in the hearing, and know it has been 

a very thorough one. I feel tha t the results will reflect th at we have a very fine qualified 

gentleman here in Mr. James F. Hooper. Mr. Chairman, I am here today to emphatically place my name 

among those who have found James F. Hooper to be eminently qualified for a position with the Board of Directors of the Tennessee Valley 

Authority. I endorse his nomination and I strongly urge this committee, as well as the full U.S. Senate, to confirm him without further 

delay. Jim Hooper, as those who know him will tell you, is a man with 

impeccable credentials in water resources management. He has 

served effectively as a charter member, president, and chairman of 

the Board of the Mississippi Rivers and Harbors Association. He is a charter member of the Tombigbee Valley Authority. He is 

a charter member and vice chairman of the Tombigbee Water Man­ agement Authority. In short, he is well versed in those areas of interest 

for which the TV A was originally created. What strikes me as even more important, however, are his credentials as an agriculturist. He is a farmer, a tree farmer. He knows full well what TVA can do and should do as far as reforestation is 

concerned. He knows what the TVA Act means when it calls for
29

agricultural and industrial development of the valley. And he knows, 

by virtue of his broad experience, what it means when it calls for 

improvement of navigability and for flood control.

Senator Stennis commented on a very important point, I thought. 

We do need a balanced board for TVA. We need people who understand the different aspects of what TVA can do and what i t has done 

and can look to the future and has no particular preconceived notions 

of what problems there might exist for TVA but can only be looking 

to the future of what it should do in the future.

Members of this committee, Jim Hooper has worked all his adult 

life for the very goals outlined bv the TVA Act. You know his credentials. You are familiar with his broad list of accomplishments. 

Jim Hooper is a good man. More importantly, he is a good man for 

the Tennessee Valley Authority.

Jim Hooper has the active support of his friends, his associates, his 

State, and his industry. I urge you to give him the support and 

approval of this committee and of the U.S. Senate.

I am very pleased to join his friends, associates, his State, the 

congressional delegation, and his industry in supporting his nomination. Thank you very much.

Senator Randolph. Thank you very much, Representative Lott.

Any questions by members?

Do you know the other two members of the board?

Mr. Lott. I do not. I know’ their background and I have looked 

into what TVA has been doing recently. I do not know them personally.

Senator Randolph. Presumably you made the statement t ha t you 

want a balanced board, having the knowledge of their background?

Mr. Lott. Jus t some general knowledge of their background.

Senator Randolph. I see. Thank you very much, Representative 

Lott.

Representative Cochran.

STAT EMENT OF HON. THAD COCHRAN, A RE PR ES EN TA TIVE IN 

CONGRESS FROM TH E STATE OF MISSISS IPPI

Mr. Cochran. Thank you, Mr. Chairman. I take pleasure in joining 

my colleagues from Mississippi, Mr. Chairman, in endorsing the 

nomination of Jim Hooper as a member of the Board of the TVA 

Authority. I, too, was born up in north Mississippi in Pontotoc 

County, and spent 20 of my early years there, and in Tippah County. 

These are areas tha t are served by TVA.

Although my congressional district is in the southwest part of 

Mississippi and we do not benefit from the power generation function 

of the Authority, I do have a very good overall knowledge of the work 

tha t TVA has done in Mississippi and the great benefits it has provided 

to our people. I am very interested in seeing a good qualified person 

be confirmed as a new member of this Board.

I have the honor, Mr. Chairman, of serving over on the House side 

as a member of the Public Works and Transportation Committee. 

During my very short tenure in the House I have become somewhat 

familiar wdth the problems of the Authority and the necessity of 

having a very competent Board to administer the work of tha t 

Authority.

67 -5 20 0 - 76 - 3
30

I can say th at in talkin g with friends of mine in the Columbus 

area who have known Jim Hoo per longer th an I hav e, I have never 

hea rd a word of criticism abo ut his chara cte r or his ability as a busines sman; I think thi s says a lot for him as a person. I have known 

him personally for ab ou t 4 years and, Mr. Ch air man, I hav e found 

him to be a very open and candid person who seems quite intelli gen t.

I thi nk he would acqu it himself hon orably and capab ly as a ha rdworking m ember of thi s board , and I commen d him to the com mittee.

Tha nk you, Mr. Ch airma n, for giving me the op po rtu nity to be 

here and say these few words.

Senat or R andolph. Th an k you, very much, Re pre sen tative 

Coc hran.

Are the re any questions?

How m any mem bers are in the House dele gation from Mississippi?

Mr. Cochran. That is it, five, Mr. Chairma n.

Senator R andolph. I understood there were five, and all five have 

app eare d here toda y. Repre sen tative s Whitten , Lo tt, Bowen, Coc hran, 

and Montgomery. That is wh at you call a solid cadence. We are very 

app rec iative of the testim ony given by the mem bers of the House 

delegation.

Th an k you very much.

Mr. Cochran. Th an k you, Mr. Chairm an.

Senat or Randolph. Mr. Hooper, the mem bers of the Co mm itte e 

on Public Works will hea r your testimony at this time.

STATEMENT OF JAM ES F. HOOPER II I, ACCOMPANIED BY HUNTER 

M. GHOLSON, ATTO RNEY

Mr. H oop er. Th an k you, Mr. Chairm an. Would you prefer I read 

my sta temen t and the n hav e my witnesses later; or would you ra th er 

hav e them first? It might be bes t if I read my sta temen t.

Senat or R andolph. Mr. Hooper, we realize th at when you use the 

ter m “w itnesses” th at these are persons who will testify on your 

behalf, as have the two Sen ators and the members of the House 

dele gation, the five Re pre sen tative s from Mississippi.

It would seem to us a practic al procedure for your statem en t—I 

pres ume the stat em en t has been mad e ava ilab le to those who might 

wish to read it, Mr. Hooper. Has th at been done?

Mr. Hoop er. So far as I know, Senator.

Sen ator R and olph. Th e sta temen t has been circulated. So, in the 

m at te r of your giving the entire sta tem en t, wi thou t obje ction, we will 

inclu de it in the record. Then you mak e such com ment as you w’ould 

desire upon the s tatemen t itself, focusing attention on points th at yo u 

would wa nt to bring to the att en tio n of th e mem bers of the co mm ittee. 

You proceed as you desire, however.

Mr. Hooper. All r igh t, sir. The s tatemen t th at I have m ade covers, 

as we know7

, a very wide sub ject. I have tried to condense it as best 

I could.

When the Te nnessee Valley A uth ority was created in 1933, Congress 

spelled ou t the responsibilitie s and obje ctives. Congress state d th at the 

Tennessee Valley A utho rity was crea ted for the pu rposes of p rom otio n 

of wa ter navig ati on; control of floods in the Mississippi Riv er and 

Tenn essee Riv er Basins; generation and dis tributio n of electric power;
31

pro duction and impro vem ent of fertilizers for ag ric ult ure; and 

adv ancem ent of the physical, social, and economic develop me nt of the 

Tennessee Valley region. Du rin g the las t 43 yea rs the Au thority has 

diligently sou ght to impleme nt the objectives of Cong ress.

Seven hundred miles of locks, dams and rese rvoirs pro vide a 9-foot 

navig ational channel thr ough four Sta tes .

B? con trollin g the flow of wa ter thr ough rese rvoirs and dam s, the 

Autho rit y has significantly redu ced or elim ina ted the dis ast rou s flood 

con ditions in the Valley region. Un der cert ain condition s the Autho rit y 

can reduce the flood crest on the Mississippi Riv er by appro xim ate ly 

2 feet.

Th e benefits of the Au thority , the refore extend outside the im ­

media te Tennessee \ alley region to the people of south ern Illinois, 

Missouri, Arkan sas, Lou isiana, and Mississippi.

Elect ric power is distr ibuted over a large portion of a seven St ate 

area. Histo rically and in keeping with the man da te of Congress, the 

Au thority has been able to pro vide power for domestic and rural use 

at the lowest possible rate.

Fertiliz er pro duction, researc h, and edu cation , con ducted at the 

Muscle Shoa s facility has been made ava ilab le to eve ry St ate in the 

union thr ough a u nique contr actual arrang em en t between the A utho rity a nd the ag ricultura l colleges of land g rant universities.

To day, mo st commercial fertilizer pro duction directl y inc orp ora tes 

the dev elo pm ent s of the Ten nessee Valley Au thority . Thi rty to forty 

perce nt of the increase in agric ult ura l production in this co un try since 

1933, is dire ctl y attribut ab le to the increased use of fertilize rs p rim ari ly 

deve loped b y the Ten nessee Valley Au thority .

The adv anc e in the physical, social, and economic develo pm ent of the 

Ten nessee Valley region durin g the pa st 43 years has been nothing 

short of dra ma tic . Ce rta inl y the significant increase in farm p roduction 

and sign ificant priva te capital inve stm en t in indu stry loc ating on the 

wa ter sys tem cre ated by the Autho rit y has been of pri ma ry 

importance .

Un fortu natel y, since the beg inning of this decade, we hav e seen a 

com bin ation of unem plo ym ent , inflation , and the energy crisis prese nt 

us all with com plicated prob lems. Th e s olu tion to many of these pro blems will require a sign ificant and , in some cases, painful ad justmen t 

on the p ar t of the people, no t only of the T ennesse e Valley region, bu t 

of thi s country . Th e rec ent oil embargo brou gh t home to us the finite 

na ture of our n atur al resources and o ur dep end ence on low c ost energy. 

Th e esc alation of agr icu ltural production expenses, particu larly in 

the are as of fertilizer cost and availabilit y, seriously imp els our food 

pro duction capacity. \V ate r is one of our few renewa ble resources. 

How ever, it is certainl y possible for the Ten nessee Valley region to 

experien ce a wa ter famine in the foreseeable future if this critica l 

resource is no t pro per ly man age d.

It would appe ar ine vitable th at m ore electric power will be req uired 

as a su bs tit ut e for dim inis hing oil and gas reserves. Th e problem of 

wh at fuel will be used to supply the a dditio nal generation of ele ctricity 

thus becomes param ount.

Many hav e said th at the fas t bre ede r or fusio n process nuclear 

rea cto r is the obvious answer since the process does no t use up finite 

resources. Would th at the choice were th at simple. Cur re nt est im ate s
32

range from 15 to 30 years before the fast breeder or fusion process 

reactor is commercially available in an acceptable condition.

The further use of conventional reactors is dependent upon the 

availability of low-cost high quality uranium. It seems to be generally 

accepted at this time tha t all proven reserves of high quality uranium 

at a reasonable price are committed to conventional reactors already 

under contract.

Unless and until additional reserves of low-cost high quality uranium 

are found and/or the fast breeder reactor becomes commercially available, we must rely upon our present known coal reserves to supply 

existing plants and for future expansion. Coal is not, however, an 

absolute or easy answer.

Our coal reserves, though enormous, are finiate. Given the present 

known natural gas reserves, it is quite possible that the gasification of 

coal to produce nitrogen for agricultural use may become more important than the use of coal as a source of electricity.

Agriculture cannot supply our food and fiber needs without nitrogen 

fertilizer. As indicated, limited natural gas supplies may prohibit the 

use of gas as a feed stock for nitrogen.

The Tennessee Valley authority has a mandated responsibility to 

agriculture at least equal to the requirement to generate electricity. 

Because of the extreme importance of coal, I think it proper tha t the 

Authority take an aggressive position in all phases of coal development, including increased mining capacity, gasification for nitrogen, 

combustion efficiency, and desulfurization technology.

TVA should encourage the increased mining capacity of existing 

coal mines, giving due and proper consideration to all environmental 

factors.

The TVA water management system is, in my opinion, one of the 

bette r systems ever created. Beginning with rainfall, it makes the 

highest and best use of this renewable resource for transportation, 

generation of hydroelectric power and industrial use. VV ithin a few 

short years, the Tennessee Valley water transportation system will be 

connected to the Tennessee-Tombigbee system thereby providing a 

much shorter route between the industrial and agricultural centers of 

the Midwest and the Gulf of Mexico.

It is inevitable tha t the entire system will provide the Tennessee 

Valley region with additional industry and the attendant job opportunities for the people of the area.

One aspect of water development and management is of particular 

concern to me. This is the problem of our underground aquifers. A 

50-inch-plus annual rainfall in the Tennessee Valley area has made 

us as complacent about water as we once were about cheap oil.

The fact is tha t we have been withdrawing more water from our 

underground aquifers for industrial and domestic use than we have 

been returning. Consequently, water tables throughout the TV A 

mandate provides for reducing runoff by reforestation and land cover 

to reduce siltation and give better absorption of rainfall.

In Europe and some of the more arid portions of the United States, 

it is my understanding tha t significant progress had been made in 

accelerating rainfall use by canal absorption channels built adjacent 

to reservoirs and, in some instances, the installation of pumping 

stations to pump water back into the aquifers.
33

The growing industrial, municipal, and agricultural needs of the 

area dictate tha t the harvesting and underground storage of winter 

rains is imperative if we are to have ample supplies of water in the 

future. TVA should be able to follow its traditional role of demonstration and education in this area with good results.

We must not underestimate the benefit to our society of adequate 

food supplies and the importance of food exports to our hum anitarian 

goals, foreign policy, and economic development. The productive 

capacity of this country is in jeopardy today.

• In many areas the rate of production per acre resulting from 

present seed and fertilizer technology has peaked and is leveling off. 

Fortunately, many of our university laboratories are making real 

progress in genetics tha t holds promise of double and triple our

• present per-acre rate of production.

It is important to understand, however, tha t genetic improvement 

of seeds offers only a potential increase. Unless the proper nutrition 

is supplied to the genetically, improved seed, the potential increase in 

production is lost.

The Tennessee Valley Authority, through its contracts and relations 

with colleges of agriculture throughout the Nation, has the ability 

to develop and maintain a coordinated research delivery system to 

insure tha t the nutritional needs of genetically improved food and 

fiber products is met. The Tennessee Valley Authority’s sponsorship 

of experimentation by agricultural colleges and its relationship with 

county agricultural agents and others provides a direct link between 

the test tube and the farmer.

I would like to mention at this point one significant environmental 

problem with which the Tennessee Valley Authority should be able 

to deal directly. That is the problem of nitrogen pollution of our water 

system by agriculture. In my opinion, this represents a potential 

disaster and dictates tha t priority be given the development of a 

slow release form of nitrogen at the earliest possible date.

I share with each of you a genuine concern about our environment 

and the problems we are now facing. My concern arises from 30 

years of personal experience with soil erosion, siltation, and the pollution of our water supply.

• Until a few weeks ago, I had not had the opportunity, although I

had read extensively about it, to view firsthand the strip mines in 

eastern Tennessee. I believe that I can state unequivocally th at I am 

unalterably opposed to any strip mining unless it is accompanied by 

-• proper and effective land reclamation procedures.

I am pleased to state that the State of Mississippi has apparently 

recognized the problems encountered in other areas of our country 

and is presently moving to enact laws providing for proper safeguards 

prior to the wholesale introduction of strip mining into the State.

I believe tha t the four major areas which I have discussed energy, 

water, food, and the environment, are interlocking and interacting. 

It is my position tha t the Authority cannot allow itself to become 

preoccupied with one area at the expense of any other area.

I believe tha t we must renew our emphasis on research; tha t technology holds fantastic promises for the future. In making the decisions 

of today we must remain at all times cognizant of the potential effects 

those decisions may have on the future.
34

No magic wan d exists. It is imperative th at we keep our option s 

ope n; continu e our research in all areas and hope th at bre akthr oughs 

can be achieved which will help alleviate some of our prob lems w ith ou t 

cre ating more drast ic problems.

TVA has a responsibility in the decisionmaking process to seek and 

balanc e the n eeds of society with the cost to society of resou rces used 

to me et those needs. The objective mu st be the wise use of huma n and 

na tural resources to benefit the most people over the gre ate st period 

of time.

I was born, reared , and edu cated in the St ate of Ala bam a and hav e 

lived and farm ed in the State of Mississippi since World Wa r II . I 

have seen wh at electric power means to small com munities and farms. 

I have seen the ind ustrial dev elopment of our area and the jobs made 

available to the people by ind ustry, bo th lar^e and small, located 

because the T ennessee V alley Au tho rity made sites and electric power 

available.

I thi nk m y pers onal love affair with the T ennesse e Valley A utho rit y 

beg an when I witnessed the dra ma tic effects of TVA developed fertiliz er on demo nstration farm s. I have seen worn ou t and eroded acres 

reclaim ed and made pro duc tive.

I have seen choice beef produced on gras s pastu res mad e possible 

by TVA technolo gy. I hav e seen ma rginal lands prod uce trees. 

Throu gh the help of the Tennessee Valley Au thority , the enslaving 

bon ds of the one-crop system in the Sou th were broken.

When you consider the fact th at tod ay the re is anoth er natio n th at 

must p lant 3 acres to each plante d in this c ou ntry; which mu st emp loy 

10 people in agricu lture to each 1 employed in this coun try ; and which 

must still import food to feed all of its people, including its farme rs; 

pro per credit and su pp ort mu st be given to the magnificent job which 

the Tennessee V alley Au tho rity and the Am erican farmer hav e done.

Personally, I am distres sed to thi nk th at any human being must go 

hungry. TVA has the ability to help unle ash a new corn ucopia of food 

th at may eventua lly insure th at no one is hungry.

TVA also has the a bility, given the prop er mo tiv ation a nd decisions, 

to insure th at the energy need s of the people of the Tennessee Valley 

region are me t a nd at the same time insure th at th e dese crations of the 

pa st are no t repeated and the natur al be au ty of the environme nt is 

pro tected and preserved for the e njo ym ent of generation s to come.

Sen ator Randolph. Tha t completes your s tatemen t, Mr. Hoop er.

Mr. Hoop er. Yes, sir.

Sen ator R andolph. We note the presence of Hun ter Gholson.

Mr. Gholson. T ha nk you.

Sen ator R andolph. You are an att orne y app earing with Mr. 

Hooper?

Mr. Gholson. Yes, sir.

Senator Randolph. We are delighte d to hav e you at the witness 

table.

Mr. Gholson. Th an k you.

[Biographical da ta of Mr. Hooper follows:

Biographical Data—J ames F. Hooper III

1. James Fullerton Hooper III was born September 3, 1915 in Selma, Alabama 

He attended the public schools of Selma and graduate d from Selma High Schoo 

in 1933.
35

2. From 1935 through 1939 Hooper attend ed Auburn University in Auburn, 

Alabama where he majored in Industrial Engineering.

3. On October 8, 1941, Hooper entered the United States Army Air Corps. 

He earned his pilot wings and served until discharged on September 25, 1945.

His first major assignment was as a Squadron Commander w ith th e Air Training 

Command at Columbus, Mississippi. While in the Air Training Command, he 

was an instructor pilot and check pilot for other instructor pilots. Also during the 

one and one-half years in Columbus, Hooper participated in the development of 

the original flight train ing manuals used by the Train ing Command for teaching 

both tran sition and instrum ent flying.

Hooper spent the next three and one-half years assigned to Research and 

Development at Wright-Patterson Field, Dayton, Ohio. He was assigned

* responsibility for and developed the protective headgear now worn by pilots and 

other aircrew members. Research and applied technology in the then new field 

of plastics was an integral part of the protective headgear project.

4. From September, 1945, to the present, Hooper has been actively and 

continuously engaged in the agric ultural field including the ownership and

• operation of a 2500 acre farm in Lowndes County, Mississippi. His agricultural 

endeavors have included tree farming, beef cattle, dairy cattle and row crops. 

Farm operations were gradually concentrated on the dairy operation.

On December 31, 1974, the farm real esta te was sold, however, dairy cattle, 

machinery and equipment were retaine d and the dairy operation continues.

5. From 1950-1957, Hooper was a partner in a canning pla nt located in 

Columbus, Mississippi. The business was incorporated late in 1957, as Columbus 

Canning Company, Inc., and in 1958 was sold to an investor group from Atla nta, 

Georgia.

6. From 1955 to the present, Hooper has marketed those portions of the original 

farm real estate th at were unadap table for agricultu ral use but were, because of 

wooded and rolling terrain, suited for homesites.

7. Since the early 1950’s, Hooper has maintain ed an intense and active inte rest 

in water resource development and managem ent. This interest developed because 

of water related problems personally experienced in farming endeavors, including 

floods, drought, diminishing w’ater tables, internal drainage problems, siltation 

and erosion.

Working toward possible solutions to these problems led to active involvem ent 

in and with numerous organizations devoted to the efficient development and 

management of water resources. Hooper was one of the founders of the Mississippi 

Rivers and Harbors Association and has served this organizatio n both as President and Board Member. He was a charter member of the Tombigbee Water 

Management Dis trict and waa appointed to successive term s on the Board by 

Governors Coleman, Barnett and Johnson of Mississippi. He was appointed by 

Governor Coleman to the original Board of the Tombigbee Valley Authority 

(predecessor of the Tennessee-Tombigbee Waterwa y Development Authority) 

and was named a member of the Water Resource Advisory Boards for Republican 

presidental candidates in 1960, 1964 and 1968.

8. Hooper is married to the former Virginia Reid Fite of Columbus, Mississippi.

• They are the pare nts of three children: Mrs. Ralph E. Rood, a landscape arch itect

and member of the American Society of Landscape Architects; Dr. James F. 

Hooper IV, a resident a t the University of Kentucky Medical C enter in Lexington, 

Kentucky; and P. F. Hooper, a farmer and agricultural stud ent.

The Hooper’s are members of St. Pau l’s Episcopal Church in Columbus, Mississippi. He is a Trustee of the Mississippi Kidney Foundation, former Board 

Member of th e Lowndes County (Miss.) Farm Bureau, member of the Air Force 

Association and the Columbus-Lowndes Historical Association.

Senator Randolph. Senator Stafford, thank you for joining us 

this morning for this hearing.

Mr. Hooper, the chairman feels tha t it is appropriate and fair 

in the questioning of the witness th at we agree to a 10-minute period 

for each member. Tha t would include not just our questions b ut the 

responses.

That will give an opportunity to members, other than the Chair, 

to occupy the time. I have always felt tha t tha t is a necessary procedure to be followed.
36

Mr. Hooper, I have familiarized myself with your statement.

I, of course, can agree with you that our oil and our natural gas 

reserves are being depleted. I know that, of course, because of the 

situation in the State in which I live. I realize it full well because 

I worked in the oil and gas fields as a young man.

My father was an oil and gas producer. So when I talk to you about 

these subjects, I have a certain background which I hope will help 

us to understand these issues.

You said the problem of what fuel will be used to supply the 

additional generation of electricity is paramount. Of course, I concur *

with that statement.

You have also included this language: “We must rely upon our 

present known coal reserves to supply existing plants and for future 

expansion.” *

This statement, of course, is one that I can agree with very quickly, 

as a Senator from a State which is the second in coal production in 

the Nation.

As of June 1975, Mr. Hooper, according to the annual report of 

TVA, the generating capacity on the TVA system was 26,726,630 

kilowatts. Additional generating capacity now under construction 

or planned would add another 21 million kilowatts over the next 

decade. However, the bulk of this additional capacity will be in 

nuclear powerplants.

Seven nuclear powerplants, if we are correctly informed through 

the report, will involve 15 generating units. These, as I have indicated, 

are under construction or are on the planning boards. Another eight 

combustion turbines or pump storage units are under construction.

I have stated these situations, based upon what you have indicated 

in your statement.

Mr. Hooper, would you agree tha t the present TVA construction 

schedule is pronuclear, tha t it does not rely on the abundant coal 

resources t hat exist within the TVA service area? Will you comment, 

please?

Mr. Hooper. Senator, I have to agree with your statement, as 

far as I can determine. I have no intimate knowledge of this but as 

far as I know what you are saying is correct. I have read tha t it is 

pronuclear. •

Senator Randolph. Mr. Hooper, then I presume tha t you would 

be prepared to work toward a greater reliance on coal?

Mr. Hooper. No question.

Senator Randolph. On the generation of power in TVA. Is tha t ‘

correct?

Mr. Hooper. It is inevitable, Mr. Chairman.

Senator Randolph. Three powerplants involving eight generating 

units are yet to be approved by the Nuclear Regulatory Commission.

Are you prepared to urge that these be coal-fired plants?

Mr. Hooper. Senator, I would have to say that, from what I know 

of it at the present, I am not completely informed, but from what I 

see of it, this would have to be done. We move both nuclear and coal.

From what I can determine, this is a dead-end situation in the nuclear 

at this point.

Certainly a breathing period has to be in here until we find out 

where we are going.
37

Senator R andolph. The Ch air would place in the reco rd the 

gen era ting capacit y und er con struction of plants as of Ju ne 10, 1975.

This breakd own will ind icate in detail wh at the chair ma n has 

referred to in the m at ter of pow erplants. W ith ou t objection, we will 

include it.

[The ma terial referred to follows:]

GENERATING CAPACITY UNDER CONSTRUCTION OR PLANNED, JUNE 30, 1975

Combustion turbines—Gallatin.......................................................

Browns Ferry nuclear un it 3...........................................................

Sequoyah nuclear............................................................................

Raccoon Mountain pumped storage...............................................

Watts Bar nuclear............................................................................

Bellefonte nuclear............................................................................

Proposed Hartsville nuclear (scheduled work start, 1976) 1

.......

Proposed Phipps Bend nuclear (scheduled work start, 1977) 

Nuclear plant being considered for western area.......................

Scheduled

commercial

Units Kilowatts operation

4 325,200 1975

1 1,152,000 1976

2 2, 441,160 1977-78

4 1, 530, 000 1978

2 2, 539, 800 1978-79

2 2, 664, 000 1980-81

4 5,148, 000 1981-83

2 2, 574, 000 1983 84

2 2, 814, 000 1983 84

Total 23 21,188,160 .......................... .........................................................................................................

1

 Scheduled start of onsite work is subject to approval by the Nuclear Regulatory Commission.

Senator R andolph. Mr. Hooper, you hav e sta ted in your p rep are d 

materi al, and I am quoting you directly—

It is generally accepted at this time th at all proven reserves of high quality 

uranium at a reasonable price are committed to conventional reactors already 

under contract.

Tha t is your stat em ent. Additional reserves of low cost, hig h-q uality 

ura niu m mu st be found. As you pointed out, and I quote—

The further use of conventional reactors is dependent upon the availability of 

low cost and high qua lity uranium.

Tha t is the end of the quote.

Mr. Hooper, would you agree th at there conceivably could be a 

sho rtage of low-cost, high-q ual ity ura niu m in the fut ure ? Would this 

no t jeop ardize the economic via bility of the nuclear plants which are 

now planned for the TVA?

Mr. H oop er. Sen ator, as I understand it, it affects no t only TVA 

bu t any oth er utility involved in the futur e use of n uclear because in 

the pas t, as I understand it, the balance betw een the high cos t of 

cap ital was balanced off by low-cost fuel.

When yo ur fuel star ts rising, the n you be^in to approach a zero and 

possibly go pa st uneconomic, as far as coal is concerned.

Senat or R andolph. We will come bac k to these matters , perha ps 

late r. Then there is the question of n uclear safety.

Mr. H ooper. Nuclear safety?

Senat or R andolph. Yes, sir.

Mr. H oop er. I hav e no positive problem s with the opera tion of the 

slant itself. I am concerned about the repro cessing of the sp en t fuel, 

hav e been unable to get any s ati sfa cto ry position on th at . As far as

" understand it, this is a dead-end.

Senat or R andolph. Mr. Hooper, during fiscal y ear 1975, tw o of the 

three units at the Browns Fe rry N uclear Power Plan t were tak en ou t of 

service as the res ult of the fire th at dam age d electrical cables. I hav e
38

asked you about nuclear safety. It would be a concern to you, would 

it n ot?

Mr. H ooper. Definitely.

Senator R andolph. Would you adv ocate th at the TVA slow down 

its con stru ctio n program until pend ing safety and rad ioa ctive waste 

dispo sal problems are solved?

Mr. H ooper. It would be prem atu re for me to say exactly wha t I 

would or wou ldn’t do. I would certain ly say I am very concerned and 

would wa nt to examine it very carefully.

Senat or R andolph. I think th at is a fair response at this point.

Mr. Hoop er. Yes.

Senat or R andolph. The Ch air asks unanimous con sen t to place in 

the record at this p oin t a sta temen t which I issued on Fe brua ry 11 in 

reference to nuc lear powe r and the unresolved safety anti radioa ctiv e 

was te disposal problems th at plagued, frankly, the con tinuan ce of a 

nuc lear power program in the United States.

I may refer l ater to some p ar ts of th at sta temen t. W ith ou t ob jection,

I would place it in the record at this point.

[The sta temen t referred to follows:]

Washington.—“Nuclear power, after 25 years, continues to be plagued by 

unresolved safety and radioactive waste disposal problems.” U.S. Senator Jennings 

Randolph declared here Wednesday.

The failure of the nuclear industry to find adequate solutions to these critical 

problems has led to the recen t resignation of three General Electric engineers 

and a top official of the Federal Nuclear Regulatory Commission.

Randolph observed that the “safety of existing nuclear power facilities has been 

compromised by the industry’s pursuit of an ever-increasing number of plants.” 

On January 26, the Vermont Yankee Nuclear Power Corporation pla nt was 

ordered shut down following the failure of computer tests of the reactor’s safety 

system, Randolph noted.

Quoting from an earlier statem ent of March, 1975, the Senator added: “If our 

country is to become energy self-sufficient we cann ot allow the advocates of 

nuclear energy to carry us down the road to disaster in the 1970’s and 80’s th at 

they did in the 1950’s and 60’s.”

Commenting on the Federal Energy Research Program, Randolph also noted 

th at the fiscal year 1977 budget “perpetuates the bias toward nuclear power and 

nuclear weapons development th at has historically plagued Federal energy 

programs. It also fails to emphasize solutions to the problems of conventional 

fission reactors.” Instead, Randolph added, “the budget of the energy Research 

and Development Administration calls for significant expansion of breeder reactor 

research—a second generation technology—before the first system is proven 

environmentally sound.

“Our country ’s positive energy future must depend on greater coal utilization 

rathe r than expanded nuclear research,” the Senator declared.

U.S. Senator J ennings R andolph.

Senat or R andolph. Mr. Hooper, you stated th at you are un ­

altera bly opposed to any strip mining unle ss it is accompanied by 

pro per and effective land reclamatio n procedures.

I believe, Mr. Hooper, th at the record will show th at over the y ea rs 

the TVA has co nsistently opposed strong Federal legislation in surface 

min ing reclam atio n. Do you support such legislation or are you 

prepar ed to advocate the use of TV A’s pur cha sing power to foste r 

imp roved surface mine reclamatio n by yo ur coal supplies?

Mr. Hoop er. Sen ator, as to however the problem is to be solved is 

anoth er question, wh eth er it should be a Fed eral law or wh eth er it 

shou ld be State laws or whether the com pan y itself can enforce it.

The only thing I am saying is th at you are spinning y our wheels if
39

you, in using up one resource, are destroying another resource by the 

waste in your water system. Since it is unnecessary, it can be reclaimed, 

then I think it must be done.

Senator Randolph. The chairman would agree with you in your 

statement th at there must be effective land reclamation procedures. He 

understands at this time the comment you have made. Perhaps we will 

return to it at a later period in the questioning.

I have completed 10 minutes.

Senator Baker.

> Senator Baker. Thank you, Mr. Chairman.

Before I question you, I might say, Mr. Hooper, you are in a tough 

spot partly because the chairman and I disagree on most of what you 

just talked about. The chairman and I don’t often disaagree, but when

• we do so, we do so with gusto.

Let me quickly say at the outset tha t I don’t think there is any way 

on God’s earth tha t this country is going to meet its energy re quirements in the future unless it relies on coal, gas, oil, nuclear, and every 

other energy source it can find.

I think it would be the height of folly if we discarded any of them.

I have to tell you right now t hat you are caught up the middle a t this 

point with the most fundamental of energy debates. That is, whether 

or not we go forward with nuclear or whether we depend on coal, the 

tradeoffs in each case are substantial.

For instance, if you don’t go forward with nuclear, you are going to 

have greater reliance on coal. As that relates to economic concerns, 

does it mean you are going to have full reclamation of surface mining? 

I hope so. You don’t have it now. Does it mean vou are going to inte rnalize the cost of producing coal? If so, what effect will th at have on 

the price of a ton of coal?

What are you going to do about the sulfur t hat is emitted from th e 

smokestack? What will that do to the cost of electricity?

Nuclear power is essentially known. It does not insult the environment in any way. It does not depend on fossil fuels. It does not discharge as much heat as a steamplant. It does not discharge any sulfur. 

It does not require surface mining of coal or the reclamation of coal 

or the prevention of acid limestone run off.

M I will get around to asking you a question in a minute. I wan t to

tell you you have to have all those things. I think it would be extremely 

unfortunate if we, by confirming you or recommending to the Senate 

tha t you be confirmed, set a policy that the TVA Board should set in

• their own deliberation and not embargo or exchange for this kind of 

information.

I am going to take you back over some of these questions and see 

what answers we get.

Let me ask you this. Wholly aside from the fundamental confrontation between nuclear power and coal, are you telling this committee 

tha t you would recommend tha t TVA discard and abandon its present 

plan for presently designed nuclear powerplants?

Mr. Hooper. Senator, to answer you indirectly, and I will come 

around to directly, I have tried to point out the fact tha t there are 

problems in both areas of generation. I have pointed out and made 

specific note of some of the problems in the use of coal, such as the 

gasification and get anything to the sulfur extraction.
40

I am also quite aware, and have tried to point out, tha t there are 

big problems in the nuclear field. I can’t agree with you more that we 

need both.

So far as stopping anything tha t is in construction, as I understand 

it, anything they have already contracted for has already contracted 

for the low cost, high quality uranium.

My concern is 10 years from now, where they are going to start up 

with higher costs of uranium.

Senator Baker. That is not the question I asked you. I asked 

whether or not, as a member of the Board of Directors of TVA, you 

would vote in favor of discontinuing present plans for future construction of nuclear plants.

Mr. Hooper. How far further?

Senator Randolph. I am talking about the ones tha t are now 

planned.

Mr. Hooper. The ones tha t are now planned and have uranium 

under contract?

Senator Baker. No; tha t is not the question I put. I believe there 

are 10 altogether tha t are planned and tha t could be provided for I 

suppose under the additional bonding authority that we gave to TVA.

While you are conferring with counsel, let me hasten to say I think 

TVA ought to rely more on coal. I think it ought to fully take account 

of the coal potential for its future plants. The point I am asking you 

is for clarification of the answer I understood you to give to the chairman, tha t is, would you vote in favor of abandoning presently planned 

nuclear plants?

Mr. Hooper. Senator Baker, my answer is this. I would have to 

know, I would want to know as an individual, regardless of whether 

I am on the board, whether or not they had the low cost, high quality 

uranium available for such a plant. I would also like to know more 

about the recycling of the fuel in the present reactors. That would 

determine my decision.

Ssnator Baker. It is my understanding that TVA now has plans 

and we have provided funding tha t presumably would cover the 

completion or the construction of 17 presently planned or future 

nuclear generating units between 1976 and 1985.

Those are the ones I am talking about. As a member of the board, 

would you vote to discontinue those or would you vote to go forward 

with those; or do you know?

Mr. Hooper. My answer is if I knew tha t they had low cost, high 

quality uranium available for those plants, then to go ahead with 

them. But tha t is a critical point to me, where the line crosses.

Senator Baker. The chairman indicated tha t TVA had always 

been opposed to strong surface mine control legislation. I would 

gently and deferentially disagree with the chairman and point out 

that TVA endorsed the bill that the Congress passed and which 

President Ford vetoed. Clearly that was the first time that TVA, as 

far as I know, has done that. But they did support that.

Are you familiar with the bill that Senator Randolph and I helped 

pass in the Senate and the Congress and tha t President Ford vetoed? 

Are you familiar with its general terms?

Mr. Hooper. Generally, yes, sir.
41

Senator Baker. And tha t it generally provides tha t if you surface 

mine coal you have to essentially p ut the ground back the way you 

found it.

Mr. Hooper. Yes.

Senator Baker. Not exactly, but essentially to restore it to its 

former topographical form. Tha t is the bill TVA supports and I 

support and the bill that President Ford vetoed. And I think the 

chairman supported it.

I believe the United Mine Workers supported it. I think tha t is 

» right. What would be your position?

Mr. Hooper. As far as the specifies of the bill, I am not familiar 

with it. But as you are stating it, the general statements you have 

made, I agree with you.

• Senator Baker. The TVA Board endorsed tha t proposal as passed

by the Congress. Would you have disagreed with tha t proposal as 

you now understand it?

Mr. Hooper. As I now understand it, no.

Senator Baker. Mr. Chairman, my 10 minutes are up, but I am 

finished. I will come back.

Senator Randolph. Howard, there are only two of us present 

right now. If you would wish to proceed, you do it. Then I will come 

back and gently but earnestly disagree.

Senator Baker. Why don’t you go ahead?

Senator Randolph. Remember the bill to which you refer was one 

in which there were pluses and minuses. We attempted to try to 

present a bill which was balanced insofar as possible.

Presently, Mr. Hooper, there are no coal-fired electric powerplants 

under construction for operation between the present time and 1984. 

Tha t is the reason I stressed what I did about the nuclear program. 

I don’t believe that situation would lend itself to your making a 

statement, Mr. Hooper—I certainly would not—tha t there is a recognition of coal in the service area. Would you comment?

Mr. Hooper. Are you asking me is there a recognition? Is that 

what you asked?

Senator Randolph. es. I have given you the number of plants 

and what type plants they are, sir.

• Mr. Hooper. Senator, if I may say it this way, I think it is a 

mistake to limit this discussion to nuclear or coal. In my opinion, we 

are going to need all sources of energy. We must pursue them all.

There are a whole lot of them. Some of them are called esoteric

• things. I can see a definite place for solar energy.

Senator Randolph. I do too.

Mr. Hooper. If we are to sit here and discuss back and forth just 

these two, it will be a mistake.

Senator Randolph. We will discuss more than that, Mr. Hooper. 

Mr. Hooper. I understand, but I am trying to p ut that perspective 

in. From what I have been able to determine, we could be in a serious 

condition as a nation from a complete lack of energy or inadequate 

energy. We must pursue every possible way we can.

Senator Randolph. Of course tha t is true, Mr. Hooper. It is no t 

the time for me to lecture on this subject. But I would remind you 

tha t in 1944 I coauthored the Synthetic Fuels Act with Senator 

Ma honey of Wyom ing.
42

I recall very well wh at we did because we were attempting to find 

if it was feasible to hav e gasification, to have liqu efac tion, to use oil 

shale, to use coal as the base for motor fuel and also for aviation fuel.

With anoth er young man I flew from Mo rganto wn, W. Va., to 

Nation al Air port here, 175 miles across mo untainous ter rit ory in a 

single engine plane. Tha t plane was fueled with aviatio n gasoline 

made from West Virginia coal. You see, we knew wh at this was all 

ab ou t a long time ago in this cou ntry.

We were attempting to find no t the cost per unit, bu t to find ou t 

if we do it here. Why were we doing that? Because along the east 

coast and the New England wat ers the sub marines were in acti on 

even then, cu tting off, Senat or Ste nnis, the petroleum supplies at 

th at time in connection with World War II.

So it was a serious matter. The legislation passed. The pro jects 

went forw ard. The pla nts were establis hed . The pilo t program s were 

in-being. And, as so often happen s in this country , when the U- boats 

went home, America we nt back to sleeping again, in reference to the 

energy prob lems th at were to be magnified with the mobility of an 

America, which has been increasing through the years.

It was in the fifties th at the program flattened ou t with no appro ­

priations for the pro gra ms th at were rea dy to move. We shou ld hav e 

had a fuels and energy policy for the Un ited States of Ame rica the n, 

bu t instead the program died.

I came to the Senate of the United State s in 1958. I rem ember v ery 

well, h aving been ou t of Congress over a period of 11 yea rs and bein g 

unab le as a legislator to pursue th at which I had worked on. I did so 

and offered ma ny, man y item s of legislation to brin g int o being a 

commission composed of the proponen ts of policies th at wou ld be 

carefully ev alu ate d, including public m embers, Members of th e S ena te, 

Membe rs of the House, appointme nts made by the Presiden t of the 

United States. We did no t pa ss such legislation.

In 1961, aft er a failure in 1959 to hav e the Congress respon d, I 

stood as a witness. I did no t sit as you did because I f elt very st rongly 

about wh at I was saying.

I said “E ach ye ar th at we delay the est ablishm ent of the fuels and 

energy policy for the Un ited State s of America, per hap s brings us 1 

year nea rer to dis aster .”

Those words were true ; the y continu e to be true. Fran kly , they are 

tru e tod ay. We have no t developed the dependence upon our own 

ability in this co un try to provide the fuels and the energy for this 

Na tion and we have been at the mer cy of those cou ntries who could 

no t only su pply us but could also cease s upply ing us a t any time.

All of this is a m at te r of record. Th e hearing s are very replete 

throughout the yea rs.

Then a little lat er we determ ined th at , havin g failed in these ear lier 

efforts, at least in the S ena te of the Un ited State s we would try to call 

on the Com merce Comm itte e on which Senator Ba ker serves. Ot he r 

com mittees of the Senat e joined with the Public Wo rks Comm itte e, 

the Interio r and Insular Affairs Comm ittee, and the Jo in t Co mmittee 

on Atom ic Energ y and we would see wh at we could do to b ring a body 

of energy legislatio n to the Sen ate and ult im ate ly to the Congress, 

which migh t help us to do what we shou ld h ave done before.
43

We act after the fact. It is more noticeable in this m atter of energy 

than perhaps any other segment of our life.

I have talked too long on tha t subject. Ordinarily, T would no t do 

so, but, in this instance, I am familiar with the subject matter about 

which I speak. I have worked on this subject for a long, long time. I am 

thoroughly in agreement with Senator Baker and others that, of 

course, we want to develop all the forces of energy and fuel in the 

United States of America which are possible and feasible to develop.

All that I have said, and I would repeat, is that we are attempting 

here, as you are being considered as a member of the Board, Mr. 

Hooper, to have you think of perhaps the varying viewpoints that will 

be expressed here in reference to what we are doing.

We are talking, Mr. Hooper, about supplying the electric power 

needs of TV A service areas, and we are talking about the next 10 and 

15 years. All tha t I have to do is to look at the record and see what 

now is programed. This means new powerplants, doesn’t it?

Mr. Hooper. Yes.

Senator Randolph. And it means that TVA is building, according 

to its own annual report, nuclear powerplants. My question, a very 

proper question, one th at I am not excited about but one tha t I am 

in dead earnest about: Are you prepared to work for a greater utilization of coal within the Tennessee Valley service area? It does not 

seem to me tha t TVA’s present construction schedule is balanced.

It is unbalanced. It is pronuclear. I want a balanced schedule. T hat 

is what I have been asking and advocating.

Mr. Hooper. Senator, if I may respond just a moment. I am quite 

aware of your comment of vour record in trying to, if I may use the 

phrase, wave a red flag about an impending energy shortage. I have 

read the minutes of these hearings. I would like to suggest to you tha t 

maybe you can share my frustration in trying to wave a red flag 

about an impending agricultural crisis. You just don’t get anywhere 

with it. You had a much stronger forum, of course.

I don’t want to act after the fact in agriculture. That is my whole 

thrust of this.

Senator Randolph. I noticed on television yesterday morning, two 

farmers from the drought-stricken areas of the Far West whose crops 

were completely obliterated. I listened to both those farmers talk.

I thought, what patience they have. One man was saying, “We 

have lost our crop this year. All tha t we can do is get ready and prepare, hopefully, for a crop next year.” There is a certain patience 

about farming. I understood it again as I have before, in the comments 

made by those two farmers.

The doctor heals and the lawyer pleads and the miner gets precious leads, bu t 

this or th at, what-e’er befalls, the farm er he feeds them all.

Russia doesn’t know that today, with all of its planning, with 5- 

year programs one after the other. I shouldn’t make this comment, 

but you have got to love the land. You must have a certain percentage 

of production to justify your working to please some commissar or 

some official. And then you go not one iota beyond that. You are 

working within just a plan.

People who love the land understand what it means to till it and to 

bring it into production.
44

Senator Baker. Mr. Hooper.

Mr. Hooper. Yes, sir.

Senator Baker. One final word about the coal-nuclear confrontation. I am sure you understand tha t I am not trying to put you in a 

box. I really do believe that the country’s best hope for energy independence is a reliance on nuclear power and coal for power generation. 

The Congress and the President have mandated tha t many electric 

plants which currently use gas and oil must convert to them.

There isn’t the slightest doubt but that coal is going to be in great 

demand for many reasons. In my mind, there is no doubt tha t coal 

ought to be considered as a prime fuel in the future by TVA.

All 1 want to establish is, th at if you are confirmed as a member of 

the Board of Directors of TVA, that you will take account of the 

facts as you find them and take that job without prejudgment on the 

outcome. on have to tell me that or I am going to vote against 

you. You have to say one way or the other right now.

Mr. Hooper. If I understand you, you are saying, do I have a 

preconceived position, and therefore against or for. What I would 

answer is that I must go into this thing with an open mind. I think 

tha t it has to be evaluated. 1 would have to have more detail before 

I would ever go into any commitment one way or the other, other 

than we need all the energy we can get from every direction.

Senator Baker. And the remaining part I won’t belabor anymore. 

That is whether or not you indicated to the chairman that you would 

recommend tha t you abandon present plans for nuclear construction.

1 am opposed to that. I think it would be the height of folly to go 

backward. The fact that the Browns Ferry p lant went offline cost the 

consumers untold millions of dollars in increased electric sot.T hat 

fire never involved a single aspect of the nuclear reactor.

If it had been a steam generating plant burning coal, it would have 

been the same fire. That is for ajother day and another debate.

Are you familiar with TV A’s participation in the demonstration 

breeder reactor?

Mr. Hooper. The fast breeder; yes, sir, reasonably.

Senator Baker. D o vou understand tha t TVA is one of the partners 

in that effort to build a demonstration plant along with Commonwealth Edison and a consortia of other private power companies?

Mr. Hooper. Yes, sir.

Senator Baker. What is your view on whether TVA should continue 

in tha t role as one of three partners?

Mr. Hooper. Senator, I can’t have any positive view because I 

don’t know what their participation is. I don’t know what the cost 

to TVA is or from whence the funds would be refunded.

Senator Baker. What is your idea? What do you think of the desirability of building a demonstration breeder reactor?

Mr. Hooper. I would think it would be a great thing if it can be 

accomplished.

Senator Baker. You can certainly build it.

Mr. Hooper. What is that?

Senator Baker. ou can certainly build a demonstration breeder. 

Russia has already built two. France has built one and England. 

I here is no doubt tha t it can be built. The question is, what do you
45

think of the concept effort of the private power and the Government 

combined.

Mr. Hooper. I see nothing wrong with a partnership. I think it 

should be encouraged.

Senator Baker. So your question is as to the desirability and the 

economic feasibility in the breeder reactor in the future as a prime 

power source for the United States. Is tha t what your reservation 

goes to?

Mr. Hooper. I didn’t understand the first part of the question.

Senator Baker. Your reservation, that is, you can’t say until you 

know the facts, tha t concern, tha t doubt goes to whether or not the 

breeder reactor will become a prime power source in the future, rather 

than a reservation as to whether we should build an experiment with 

a demonstration plant.

Mr. Hooper. Yes.

Senator Baker. We have a really tough time, Mr. Hooper, as 

you know, in the TVA region because of escalating power rates. It 

has reached extraordinary proportions in the stress and the difficulty 

tha t it has caused. By way of just a brief preface, TVA is in a unique 

responsibility position, because not only is it a giant utility—the 

largest not only in the country but in the world—but by its low 

residential rates over the years, TVA has effectively induced lowincome people and elderly people to use electricity for space heating. 

Do you understand about that?

Mr. Hooper. I am very aware of that.

Senator Baker. It is the space heating load where the enormous 

seasonal increases in rates have hit. People who had power bills of 

$20 and $30 a month ago now have $80 or $100 bills because of space 

heating. More often than not, with low-income families and frequently 

with the elderly, if they used space heating, they did so because it 

was cheap to install space heating.

They frequently do not have adequate insulation, so in cold weather, 

with increased fuel costs, they get hit harder than anybody. Would 

you agree with me th at some special attention must be given to that 

problem in recognition of TVA’s special responsibility to low-income 

and elderly people in our service area?

Mr. Hooper. Senator, I couldn’t agree more. It is upsetting. As 

you say, you didn’t benevolently do it, but we certainly encouraged 

people to get into this position.

Senator Baker. We took great pride in the fact we could use lowcost TVA power to heat homes in our region, where they couldn’t 

in other parts of the country, because of the low rates and low cost 

cost of installation. That was true and tha t was right, wasn’t it?

Mr. Hooper. I would answer it this way: certainly with a fixed 

income situation, this is a disaster.

I would also call your attention to the fact that tha t same person 

is paying two and three times as much for their food as they were years 

ago.

Senator Baker. There is a bottom to every well. If you get a $150 

Social Security check or a $200 check and your power bill is $150 

and your food bill has doubled also, it may well run past the bottom 

of th at well.

67 -520 0 - 76 - 4
46

Wha t T am drivin g at is this: Would you, as a m ember of the b oard 

of TV A, engage a ctiv ely in an effort to explore techniqu es for lowering 

the impac t or lessening th e imp act of space heati ng costs to low-income 

and elde rly families in the TV A area?

Mr. Hoop er. S ena tor, I st ar t even farth er back .

I thi nk we ought to do eve rything we c an to increase the efficiency 

of combustion in the area and the efficiency of trans mission . Any thing 

we wa nt to reduce, we hav e to get the cost down.

As far as specifics, as insu lation, it is ridiculo us to be wa sting this 

he at ou t into the air.

Senator Baker. W ha t would you do ab ou t it? How would you feel 

ab ou t a TV A program for low-cost loans to consumers to ins ula te 

their homes?

Mr. H oop er. I hav e hea rd th at proposed. I do n’t know enough of 

the details to tak e a position on it. It makes sense to get in sulation in 

the re to stop wastin g the power.

Sen ator Baker. Mos t times when you hav e a family on low or 

med ium incom e who installs resistance heat, they did so because it 

was cheap and it is clea rly no t as efficient as other systems.

Do you see any merit in the possibility of exploring low-cost loa ns 

for imp roving home heati ng system s?

Mr. H oop er. I think it is very im po rta nt.

Senat or Baker. Do you think TVA ou gh t to consider gettin g into 

th at ban kin g business; or dc you thi nk the y ou gh t to make recomme ndations to Congress in th at r esp ect; or both?

Mr. Hooper. As to wh at the specifics are, all I am saying is, I think 

it m ust be done and we mus t do anyth ing we c an to relieve the s ituation. TVA has an even furth er inte res t because it h as to do with their 

peak power load.

If the y can reduce it, the y are no t only helping the ind ividual but 

the y are help ing them selves. Is th at a congressional functio n or a 

banking functio n? I don’t know.

Senator Baker. You recognize the problem?

Mr. Hooper. Oh, certainly; it is a treme ndous prob lem.

Senator Baker. The stat ut e requires th at, to be a Direc tor of the 

Tennessee Valley Au tho rity, you must dev ote yourself as a full-tim e 

businessm an to the busin ess of the corporatio n. Would you do th at?

Mr. H oop er. Yes, sir.

Senator Bak er. And th at all Direc tors must profess a belief in the 

feas ibility and wisdom of the TVA Act. Can you now profess th at 

fully?

Mr. Hoop er. There is no question.

Senator B aker. And th at the Direc tor shall tak e up residence at or 

near the he ad qu arter s of TVA?

Mr. H oop er. That is correct.

Senator Baker. No Direc tor shall have any financial interest in 

any public utility corporation engaged in the business of dis tribu tin g 

and selling powe r to the public. Do you?

Mr. H oop er. No ; I do not.

Senat or Bak er. No Direc tor shall have a ny financial inter est in any 

corporatio n engaged in the ma nufac tur e, selling, or distr ibu tio n of 

fixed nitroge n or fertilizer or ingredients thereof.
47

Mr. H ooper. I do not.

Se na tor Bak er. Or an enterprise th at ma y be adv ersely affec ted 

by the success of TV A as a pro ducer of f ertilizer or power.

Mr. Hoop er. No.

Senator Baker. I might add or of coal or nuc lear power. You have 

no int ere st in either of those?

Mr. Hooper. I hav e no t—finan cial intere st.

Senator Baker. Mr. Hooper, the TVA Self-Fin ancing Act was 

passed with the assistance of the cha irm an, who was instr um en tal in moving th at legislation. It was passed in pa rt thr ough the efforts of my father who served in the Congress and repr esented the Second 

Cong ressional Di str ict of Tennessee in his lifetime for ma ny yea rs. It was hailed and is now' hailed as the device by which TVA became 

self-su ppo rtin g and avoid ed the confrontation betw een public and pri vate power inter est in the Congress by beco ming self-financing, 

by issuing bonds pledging the reve nue, and th at is still the law. We recent ly increased TV A’s bon ding au thority from $5 billion 

to $15 billion, which ought to build some sort of pow erp lants. Th e 

point of the m at te r is th at TV A’s debt to equit y rat io is now abou t 

65 per cent de bt and 35 perce nt eq uity—if y ou think of eq uit y as the 

Go vernme nt’s contribu tion, othe r than the sale of bonds by th e agen cy 

itself. W ha t is you view on how far the agency can go in its de bt equity ra tio, or wh eth er there is any limit to how far the agency can go and still provide the services and perform the fun ctio ns requ ired by the 

act?

Mr. H oop er. T he only overall com me nt I can m ake to tha t, Senator, 

is th at the debt ratio of the acc um ulated int ere st charges as the y affect the cost of po wer are critical. I think th at has to be ke pt under 

control. Tha t is m y feeling ab ou t it.

Se na tor Bak er. How are you going to do that? There is no t much 

likelihood th at the Congress is going to appro pri ate much money to build you r ste am pla nt, wh eth er it is nuclear or coal fired. You are going to have to do it ou t of borrow ed mon ey or earnings. That gets you squ are up aga inst the next dilemma, which is even gra nder 

th at th at betw een the chairma n and I abou t nuc lear power.

Senator Randolph. I have to interru pt, Howard. I know' it is no t 

an either/or.

Se nator Baker. No; it i sn’t. You have to hav e both.

Se nator R andolph. We were talkin g ab ou t b alan ced energy p rod uction. I pointed up, of course, some of the very serious doub ts th at I 

have had, no t ju st t od ay b ut in the past, about nuc lear power. Senator Baker very pro perly responded ab ou t his belief in the program. I would stress, and I thi nk How ard would con cur with me, 

th at we are talkin g about a balanced program for the futur e.

Senator Baker. We are, indeed.

Mr. Hoope r, th at gets you up again st the question of how far y ou can go in the dev elopm ent of n uclea r cap acity. Is it y ou r feeling th at you should provide the capacit y for the electrical need s of the region, or th at a viab le alt ern ati ve is to reduce the expansion of TV A’s electrical generating c apacity ?

Mr. H oop er. Senator, the word “via ble ” leaves a quest ion in my 

mind. I would call it a very un fo rtu na te s itu ati on if wre h ad to reduce.
48

I would much prefer to meet the needs. On the other hand, if the cost 

is getting out of line to the point that it is really not usable, then you 

have to cut it back. I would hope, and I think we are all sitting around 

hoping, that some of these technological breakthroughs will solve this 

for us before we get to the crisis point.

I know the MHD program was magnificant: 50 percent increase 

per Btu from coal is an unbelievable advantage. If we get tha t in 

all of these things, we will get back in line. Tha t is where it has to 

come from, better efficiency.

Senator Baker. Let me put one final question which you can answer *

later. TVA was conceived of, as I guess, the first Federal regional 

development project—for the whole Tennessee River system—and 

given the responsibility to develop the valley in an integrated and 

useful and coherent way. *

I confess sometimes I think that emphasis, tha t is coherence of a 

regional development, has shifted to the production of electricity 

and flood control. There are some other elements. I would like you to 

comment, if you care to a little later, on how you would revitalize 

the concept of a balanced regional development role of TVA as distinguished from being just the world’s largest power generator.

Thank you, sir. You can do it now or wait.

Mr. Hooper. I can answer it in a general way now. The words: 

interest, emphasis, priority—I think probably comes back to funding.

As to as far as balancing up, you can’t expect all of the investment 

being in power and expecting everything to balance up.

I think we are talking more about emphasis in terms of looking at 

the programs. I am speaking now primarily of agriculture, which is 

regional development. I understand tha t they are doing a good job in 

giving community advice on how to rehabilitate communities.

This is an area in which the main thing I am concerned about at the 

moment is the emphasis on agriculture, because it is a present emergency need.

Senator Baker. You have a broad charter in the TVA Act. The 

reason I suggested you might want to think about i t is because as you 

do, you realize tha t there is a whole range of opportunities tha t TVA 

could take advantage of for regional development tha t have never 

been undertaken. •

Sometime before these hearings are over I would like you to think 

about that and see if you have any new ideas about how TVA could 

better serve tha t role as a coordinator of regional development.

Mr. Hooper. One thing I am very high on, and it has been men- *

tioned, is the recharging of our aquafiers. The reason TVA can do this 

is that the difficulty of Columbus, Miss., putting its water plant in the 

ground, then Meridian is going to get the water.

So why would Columbus do it. You have to get each town doing 

this, and this is where you get a regional integrated situation.

Senator Baker. Mr. Chairman, I think it might be well to point 

out tha t in deference to Mr. Hooper’s position, the exchange we have 

had here, the nature of the questions t hat have been presented to him 

and his answers emphasizes the fact that TVA at this juncture in its 

history is at the crossroads of virtually every important domestic 

confrontation or issue before us.
49

Whe the r it is powe r pro duc tion, con servation, envir onme nta l 

development, tra nspo rta tio n, agricu lture, the ma nufac tur ing indu str y, 

comm erce, all of them are involved one way or the othe r in the m an da te 

or in the act ual activities of TVA.

So the ap po intm en t of a director of this agency has ex tra ordina ry 

importance , in th at TVA is supp osed to be a model on which we try 

new ideas and demo nstrate to the res t of the cou ntry.

Senator R andolph. Tha t is tru e, Senator Baker. T hat cer tainly , 

in conside rable pa rt, is the reason for the questions th at are being

* asked of Mr. Hoope r at this time.

Mr. Hooper, we have the Clean Air Act on the books. We are now 

bringing am endm ent s to th at a ct to the Senate. We have the En vironmenta l Pro tec tion Agency. We hav e the State air pollution control 

» officers, and in all of these there is req uir em ent of a co nstan t emission

lim itation app roa ch for the control of air pollution .

Available technique s for the c ontrol of su lfur dioxides are low sulfur 

coal, coal washing, and chemical scrubbers.

Senat or Baker very properly included in his com me nt and the 

questio ning the valu e of scru bbe rs. He didn ’t say th at we were no t 

developing scrubb ers, th at the y were no t now in use, bu t there was a 

question ma rk implied, and very pro per ly so, as there are in ma ny 

areas of ho w to deve lop th at e nergy source wi tho ut defiling, of course, 

the env ironment.

A m ajo r o bsta cle to a grea ter b urnin g of coal, Mr. Hoo per, has been 

a reluctanc e on the pa rt of some utilities in our co un try to install 

stack gas scrubb ers to meet these clean air sta ndard s.

TVA accoun ts for more than half the sulf ur dioxide emissions in 

the so uth east. Yet, TVA is in the process of in stalling only one scru bber 

unit.

Mr. Hooper, I thi nk it is a fair statem en t for me to make th at this 

is the situatio n. It is also fair for me to ask you if yo u are pre pared to 

su pp ort the ins tallation of scrubber s on all un its iden tified by EP A 

as need ing necessa ry scrubbers?

Mr. H ooper. Sen ator, as I un derst and it, the one ins tal lat ion th at 

you have des crib ed and is a joint tes tin g by EP A and TVA to de termine the efficiency of the typ e scrubber, the y hav e at the same time 

a

set up a program of shutt ing down variou s coal pla nts if in fac t an

inversion occurs in th at area and have on stan db y the low sulfur coal 

so th at the y cannot abuse the air during those cer tain bad we ath er 

conditio ns.

• To answer yo ur question, I would very muc h like to know the 

efficiency of th at scrubber. I think possibly a lot of design technique 

will be learn ed. I would sincerely ha te to go ou t and spen d $100 

million and find ou t you are cre ating more of a problem in the disposal 

of the ma ter ial you are using.

In other words, the lime stone gets to be a problem. I have hear it 

can swam p us in pollute d lime stone. I would say 1 was very intere ste d 

in this. I think this is the very app roa ch for EP A and TVA to coordina te the ir efforts to determ ine, record eve rythin g, and from there 

det erm ine wh at to do.

Senator R and olph. At th at p oin t, I am going to go ask Mr. Gr un dy 

to stat e for the record, and if he doesn ’t have the inf orm ation he can 

obtain it, in reference, to what Senator Baker mentioned, the transfer
50

over, as it were, from oil and natural gas to coal for electric generating 

plants, the Federal Energy Administration has in effect ordered that 

transfer of how may units.

Mr. Grundy. I believe it is 74 electric powerplants that have the 

capability to burn coal, are in the process or being ordered to switch 

to coal.

Senator Randolph. Mr. Hooper, you understand tha t in some instances this can be done without a scrubber. There are certain percentages of those utilities who can do it without installation of 

equipment. <

Yet they have been reluctant to make this changeover. There are 

some in the transition era. There are some, of course, who need the 

highest techniques, whether it is scrubbers or whatnot to qualify, is 

tha t correct?

Mr. Grundy. That is correct, Senator. The majority of the plants 

require additional particulate controls, but it is understood on these 

plants that will be converting to coal, tha t the majority of them can 

meet the sulfur restrictions by use of the available fuel. They were 

purposely chosen that way.

Senator Randolph. For the record, Mr. Grundy is the secretary of 

our Senate fuels and energy study which I mentioned.

Mr. Hooper, the Tennessee Valley Authority continues to advocate 

an alternate method of meeting ambient standards for sulfur dioxide 

around its coal-fired steam plants. This alternative control system 

uses a combination of tall stacks and meteorological forecasting to 

reduce emissions temporarily during unfavorable dispersion conditions 

with the use of low sulfur coal or a reduction in the generation of 

tha t power.

According to TVA’s 1975 annual report, to which I made reference, 

over the last 6 years some $60 million has been spent on tall stacks at 

the Kingston Shawnee Willow Creek steamplants.

Mr. Hooper, during tha t intermittent control technique, the various 

techniques for sulfur oxides are not permitted under Federal law.

Are you prepared, as a proposed director of TVA, to support the use 

of continuous emission controls?

Mr. Hooper. The continued use of emission controls?

Senator Randolph. Yes. M Mr. Hooper. Yes, sir.

Senator Randolph. Continuous?

Mr. Hooper. Rather than intermittent, tha t they are presently 

doing? *

Senator Randolph. Yes.

Mr. Hooper. As I understand it, their understanding with EPA 

is based upon the results of their present testing. If based on that, then 

they would make the decision. Tha t is my understanding. I don’t 

know.

Senator Randolph. The intermittent controls are not permitted 

by Federal law.

Mr. Hooper. As I say, I don’t have the detailed knowledge of it.

My understanding was that they had, what do you call it, an intermediate period where they can test this and in the meantime go 

through the intermediate business until they find it out. I feel like a 

solution of this is in the desulfurization technique.
51

I am much more in favor of try ing to get the sulf ur ou t before you 

blow it u p in the air than to wor ry ab ou t r ecaptur ing it.

Senat or R andolph. I think, Howard, the in term itt en t con trols 

can be used only as long as the scr ubber s are no t installed. I believe 

th at is c orre ct.

Mr. Hooper. Yes.

Senator Baker. I think the real stat us of the situatio n is th at you 

can use i nt er m itt en t controls p resently. It is sort of up in the a ir ab ou t 

how long TV A and oth er utilities can use in term itt en t con trols be-

* fore con tinuous control measure s are requ ired.

Senator R and olph. Tha t is correct.

Senator Baker. Th at, of course, is before us now, Mr. Chairma n, 

in the mark up of the clean air amend ments.

* Senat or R andolph. Yes; Mr. Hooper, you hav e ind icated th at 

the Tennessee Valley Au thority was created for the purposes of 

generation and the dis tributio n of elec tric power in the advancem ent 

of the physical, social and economic dev elopm ent of the Tennessee 

Valley region.

I think th at the TVA m andate, Mr. Hoo per, is to adv anc e the economy within the service area and within App alachia. Do you consider 

the TVA’s purchase of coal from outside this region to be consistent 

or i nco nsistent with the ma ndate th at I have marie reference to in this 

connection?

Mr. Hooper. Sen ator, I am tho rou ghly confused bu t I am aware of 

wh at you said. I hav e tried to find answers, and I have no answers. 

I do n’t know why. It is certainly on the surface inc onsisten t. Wh y 

the y are doing it, I do n’t know.

Senat or R andolph. How ard.

Senator Baker. Th an k you, Mr. Chairma n.

Mr. Hooper, I thi nk one of the prim e conside rations in passing on 

the qua lific ations of a nominee for the TVA Board ought to be his or 

her busine ss experience wh at your b usin ess career h as been to date?

Mr. H ooper. I will back up and say it this way. Wh en I was 

discharg ed from the service at the end of World War II , I had been 

engaged for ab ou t 3 y ear s in adv anc ed research in plastics. It was an 

infant indu str y. Th e opportu nit ies for emplo ym ent were in the big 

a Ea ste rn towns. I di dn ’t wan t to raise my children in th at area, so I

went back delibe rately to Mississippi.

I am prefacing m y com ments to you by sta tin g it this way . I never 

sou ght a fortun e in money. I am no t a je t set person. I was more 

» concerned w ith the quali ty of life for m yself an d m y family.

Wi thin th at fram ewo rk, I we nt back and helped and have been 

con tinuou sly farming for 30 years, 7 days in the week. On occasions, I 

have engaged in othe r businesses, bu t th at h as been my basic business 

and has rem ained my basic business.

I am glad to say t hat I edu cated my family and we live comfortably. 

In my thinking , I feel satisfied with my business career as it supplie d 

my goals.

Senator B aker. Mr. Hooper, the staff of the committee, in resp onse 

to a req uest of the committee, and I think largely as a result of cert ain 

allegations made with respec t to yo ur business activities in new spapers, 

conduc ted a ra th er extensive field inv est iga tion, as you are aware.
52

In the course of that investigation, they compiled a report which was 

kept confidential for the use of the committee only, and which I believe 

you and your counsel had a chance to see.

Mr. Hooper. Yes.

Senator Baker. I am going to mention for you certain particular 

situations and ask you to describe for us your involvement with and 

relationship to those particular endeavors.

The first one is the Hooper Dairy Farm partnership. Would you 

describe that for us?

Mr. Hooper. The Hooper Dairy Farm partnership? «

Senator Baker. Yes.

Mr. Hooper. In 1965, I went in partnership with a man from 

Memphis, who had large and vast experience in farming operations.

The thrust and idea of what we set out to do was to set up a factory- *

type dairy operation which would require tremendous sums of capital 

but it seemed to be the way to go in the future of dairying rather than 

the small isolated dairies.

We made a lot of progress in it until the period of 1969, in which 

Mr. Brooks—who was the partner and who in turn was involved in a 

number of businesses, scattered all over the South for the matter—a 

partner of his in an entirely different venture committed suicide. When 

lie did, it made a tremendous demand on Mr. Brooks for their involvement in some other enterprises. This caused Mr. Brooks to first seek 

reorganization, which lasted about 8 or 9 months, and then finally 

take complete bankruptcy.

1 was a very small side line of a very large situation.

Senator B aker. Were you and Mr. Biooks equal partners?

Mr. Hooper. What is that?

Senator B aker. Were you and Mr. Brooks equal partners?

Mr. Hooper. Yes, sir.

Senator B aker. When you are speaking of the Hooper Dairy Farm, 

you and Mr. Brooks were the Hooper Dairy Farm partnership?

Mr. Hooper. For tha t particular period, yes. Before it was mine, 

and since it was mine.

Senator B aker. Did the Hooper Dairy Farm partnership go into 

bankruptcy?

Mr. Hooper. No, sir. 

e

Senator Baker. Did it turn out to be a profitable or unprofitable 

operation?

Mr. Hooper. The only way you can answer that, Senator, is we 

were involved in the startup period. And where we were in a very *

expensive operation leading toward a productive and profitable level 

at the time we got some call, due to this bankruptcy.

Senator Baker. This is Brooks’ bankruptcy, not yours?

Mr. Hooper. That is right.

Senator Baker. He was your partner in the Hooper Dairy Farm.

Is that what caused the Hooper Dairy Farm to cease operations?

Mr. Hooper. That is correct.

Senator Baker. What did you contribute to the partnership,

Mr. Hooper?

Mr. Hooper. At the time that we went into the partnership, the 

balance sheet, as I recall, was $350,000 in land, cattle and machinery.

We worked out an agreement where he would contribute certain
53

am ounts and I would contr ibu te cer tain am ounts anti we would come 

up equa l. This was changed as we went forward thr ough the 4 years , 

but th at is the basic partners hip .

Senat or Baker. What finally came of the partnership ?

Mr. Hoop er. The ba nk ruptcy court exam ined my relation to Mr. 

Brooks as far as potent ial assets for his creditors and determi ned th at 

there were none. I agreed to tak e over indebtedn esses belo ngin g 

specifically to the partners hip in exchange for dissolving the par tn er ­

ship. We just washed it ou t and I took over and we nt ahead and 

operated it.

Senator Baker. W ha t loan s did you tak e oyer?

Mr. H oop er. The maj or loan was in the Fi rst Colum bus Na tio na l 

Bank.

Senator B aker. These had been orig inated by the partn ersh ip and 

you assumed them in fact for abandonm ent of the tru ste es’ cla im 

aga inst the partners hip ?

Mr. H oop er. It was a com binatio n of agre eme nts. That is correc t.

Senator B aker. For the i nte rest of time , I am going to run throu gh 

these quickly and then come back to them for detail if nec essary.

Would you also tell us a little ab ou t the Stan da rd Union Life 

Ins ura nce Co.?

Mr. Hooper. Yes, sir. Th is was one of Mr. Bro oks ’ pro perties . At 

one point one of the reasons, or the reason, he went into the insu rance 

business was to use land as ad mi tte d reserves again st which to write 

insu rance.

At the time he wen t into it he proposed th at I should pu t in land 

and he wo uld issue me sto ck if the insu rance commissioners a cce pted it.

They did no t accept it as a reas onable reserve. The land was 

return ed to me, and th at is the beginning and end of my relationship 

with the Standard Union Life Insura nce Co.

Senat or Baker. Were you an officer or director of th at com pan y?

Mr. Hooper. 1 was an officer for abo ut a 3- or 4-m onth period. As 

I understand it, it required three officers.

Senator Baker. Were you involved in the ma nageme nt of the 

com pany?

Mr. Hoo per. No, sir, in no way.

Senator B aker. Or the ad mi nis tra tio n of its affairs ?

Mr. Hooper. None at all.

Senator B ak er. Was the comp an y’s license to do business in one or 

more St ates revo ked at the tim e you were an officer?

Mr. H ooper. The word “r evoked” is no t proper. Th e ch arter is in 

Ala bam a, or was in Ala bam a. A rig ht to do business is an annual 

renewable by each State and you subm it, as I un de rst an d it, the 

assets of the corpo ration on the 31s t of Dec ember and they make a 

decision.

Then if the y want to, they let you go ahe ad or no t. Aou do n’t 

revoke. It is j ust failure to renew.

Senator Bak er. Tha t is wh at I me ant. Were you an officer or 

dir ector a t the time th at the r ight to do business in one or more States 

was no t renewed?

Mr. Hooper. I was still an officer. Ares, sir, at the time the S tate of 

Tennessee notified the com pan y, Mr. Brooks, th at they would no t
54

accept this property, we agreed he would return it to me. Tha t was 

the end of it. Exactly when it was stopped, 1 don’t know.

Senator Baker. But the property, the real estate tha t you put up 

as a contribution to the capital of the company, 1 assume, was not 

accepted as a qualified reserve by the State of Tennessee. When that 

was not done, their right to do business in the State of Tennessee was 

not renewed and the company then reconveyed tha t real estate to 

you?

Mr. Hooper. That is correct.

Senator Baker. Did you go off the board then?

Mr. Hooper. Yes.

Senator Baker. What happened to the company?

Mr. Hooper. At the time of Mr. Brooks filing for reorganization, 

in October of 1969 I believe, I had pledged the stock of that company 

on some venture of his in which he borrowed money from a bank in 

Little Rock, and the hank took over the company in satisfaction of 

their loan. That is my understanding of it. I didn’t know anything 

about it.

Senator Baker. Do you know whether the bank lost anything as a 

result of that loan? Did the bank collect on tha t loan?

Mr. Hooper. I have no knowledge, sir.

Senator Baker. You were not involved in tha t transaction?

Mr. H ooper. No, sir.

Senator Baker. Did tha t insurance company go into receivership 

or bankruptcy?

Mr. Hooper. I don’t know, Senator. My understanding is no, 

tha t it is still operating.

Senator Baker. Tell us a little about Little River Farms, Inc.

Mr. Hooper. It is in a very similar category as the insurance 

company. Again, it was one of the many properties tha t Mr. Brooks 

owned and operated.

Senator B aker. Were you a partner in tha t operation also?

Mr. Hooper. No, sir.

Senator Baker. How were you involved with it?

Mr. Hooper. It was a milk distribution store. We call it a milk 

jug store. You know, they sell milk direct. I t was a property tha t had 

to do with some other people that Brooks was involved in, in a number 

of things. It is a complicated situation.

At any rate, he asked me to go look at it. I went with him and did. 

He bought it and, as much as I could, I tried to keep track. That is 

the word I used. He asked me to try to keep track of what was happening in the sense of talking or being available to the manager. And 

tha t I did. I would report to Mr. Brooks when they were passing 

through.

Senator Baker. Were you an officer or director of that company?

Mr. Hooper. Yes, sir. There was a period when I was a director.

Senator Baker. But this also was a Brooks company?

Mr. Hooper. That is correct.

Senator Baker. What happened to it when Mr. Brooks went into 

bankruptcy?

Mr. Hooper. An attempt was made to sell it. During the time when 

he was asking for reorganization and apparently they were going to 

give him permission, he was unable to sell it.
55

As I understand it, it finally went und er, for taxe s I belie ve. Th e 

court aba ndo ned it.

Senator Baker. Did you make or lose any money in th at 

transa ction?

Mr. Hooper. I n which one—L ittle River Farms?

Senat or Baker. Yes.

Mr. Hooper. No, I did not. I neith er mad e nor lost.

Senat or Bak er. Were you invo lved in a loan to Little River Fa rm s 

or did you assum e some of the ir liabilities to a M arietta bank aft er 

the ba nk ruptcy of Mr. Brooks?

Mr. Hooper. No, sir.

Senator Baker. Tell us briefly, if you will, ab ou t the Columbus 

Canning Co.

Mr. Hooper. The Columbus Canning Co. was a com pan y where 

thre e of us wen t tog eth er and sta rte d a business in Colum bus rig ht 

aft er World War II, in the early fifties, the purp ose of which was to 

create anoth er marke t for agr icu ltural products where at th at time 

there was nothing bu t a cotto n sit ua tio n and a lot of lab or with no 

jobs

We struggled with it quite a while, try ing to develop the acreage 

as well as the sales of vegetab les because it offered a v ariety of incomes 

at various time s during the year. As an off-season business, we got in 

the ma nufac tur e of pet food. This beca me a pri ma ry fun ction of the 

com pany. It became very large.

In 1957, 5 yea rs from the time we sta rte d, we inc orp ora ted it. In 

1958, we sold it to some people from At lan ta, because the cap ital 

requirem ent s were far beyond wh at we had ever envisioned gettin g 

into . We sold it in 1958. In the la tter pa rt of 1959, thi s pa rti cu lar 

grou p of people were involved in a numb er of oth er businesses.

It is my understandin g that one of the ir oth er ventu res pu t them 

in bad trouble and the y simply sh ut the thing down and walked away 

from it.

Senat or Baker. Was Mr. Brooks involved in that?

Mr. Hooper. N o, sir; he had n oth ing to do w ith it.

Senator Baker. Was the Stan dard Union Life Ins ura nce Co. 

involved?

Mr. Hooper. Sir?

Senator Baker. Was the Stan da rd Union Life Ins ura nce invo lved 

in the affairs? Or did the y acquire any of the assets of the Columbus 

Da iry Farm ?

Mr. Hooper. Oh, no, sir. In fact, th at was 10 yea rs before.

Senator Bak er. Are ther e other business relationships or undertaking s of a ny m ajo r co nsequence th at yo u have been involved in over 

the course of this period, Mr. Hooper?

Mr. Hoop er. No, s ir; none.

Senat or Bak er. I am sure we will hav e oth er que stions ab ou t these 

at oth er times. Le t me conclude my segment of que stio ns, Mr. Ch air ­

man, by ask ing one general one.

Have you you rself ever been in bank ruptcy ?

Mr. H ooper. N o, sir.

Senator Bak er. H ave you yourse lf ever been in receivership?

Mr. H oop er. No, sir.

Senator Baker. Or an y o ther sort of solvency proceeding?
56

Mr. H ooper. N o, sir.

Senator Baker. Ha ve you ever had any land or claim filed again st 

you b y any gover nm ent for unpaid taxes or obligations?

Mr. H oop er. N o, sir.

Senator Bake r. Ha ve you ever been indicated or convicted in 

con junction with any of you r activities?

Mr. H oop er. N o, sir.

Senator Baker. You have, however, been involved in the con veyance and reco nveyance of propert y involved in a first partn ers hip 

and the n lat er inco rporation in an insu rance com pan y th at went into <

ba nk ruptcy or receivership. This was the Broo ks transa ction and 

the Hooper Da iry Fa rm s and the Sta ndard Union Life Insura nce Co.

You had propert y in those t hat wen t into b an krup tcy?

Mr. Hoop er. No, it was Standard Union Life and was ret urn ed to *

me and lat er on, several mo nth s late r, it was tak en ov er by the ban k.

Senator Baker. Of course, at the time these tra nsactio ns occu rred, 

including the abando nm ent of the tru ste es’ claim and the reconveyance of the pro perty to you, the p rop erty itself would have been in the 

constru ctive jurisdiction or control of the cou rt. It was reconveyed 

to yo u w ith the con currence of the co urt, is t hat correct?

Mr. H ooper. T ha t is correct.

Senator B ake r. T hat is all I have, M r. C hairm an.

Senator R andolph. T ha nk you, Sena tor Baker.

I have no furth er q uestion s at this time, Mr. Hoo per, to ask of you .

There are Dr. Bruce McC rone of Michiga n State Unive rsity;

Gene Trig gs of the Mississippi Chemical Co rp.; Tol Thomas, Jr., of 

Mississippi, app earing on behalf of the De lta Cou ncil; Louis Wise 

the rep res ent ative of the Ele ctric Pow er Associatio n for a fourcounty area in Mississippi; and Dav id Mu rph ree , of Mississippi St ate 

University . Those five w itnesses have come to tes tify in your beha lf.

Senator Baker and I hav e dete rmi ned th at we will recess and we 

will come back pro mp tly at 5 minutes aft er 12. T hat will give us an 

op po rtu nity to run to app rox imately 12:30 or 12:35. Then th at will 

conclude the hearing for tod ay.

Senator S tenn is, do you hav e any com ments?

Senator Ste nn is. I than k you very much, Mr. Chairma n. It was 

good to come before you. I thorou ghly enjo yed hea ring Mr. Ho oper’s «

testinion y. I thou gh t it was splendid and well pu t. It was in-depth 

con sideration of these m ajo r policy m atters . I thou gh t it was res ponsive 

and good.

Senator R andolph. Th an k you, Senator. *

We will be back at 5 a fte r 12.

[Whereupon, at 11:49 a.m ., the com mittee recessed, to reconvene 

at 12:10 p.m. the s ame day.]

AFT ER RE CE SS

[The com mittee reco nve ned at 12:10 p.m ., Senator Randolp h, 

chair ma n of the com mittee, presiding.]

Senator R andolph. The five gen tlem en, your nam es have n’t been 

called, bu t you form yourselv es in to a panel, please.

Mr. McCrone, ide ntify yourself for the record and the position you 

hold and m ake your s tatemen t in reference t o the sub jec t m atter.
57

STATEMENTS OF DR. BRUCE McCRONE, ASSISTANT DEAN. UNIVE RSITY COLLEGE, MICHIGAN STATE UNIVERSITY. EAST LANSING,

MICH.; GENE TRIGGS. ASSISTANT TO THE PRESIDENT, MISSISSIPP I CHEMICAL CORP.. YAZOO CITY, MISS.; TOL THOMAS II I,

GREENWOOD, MISS., ON BEHALF OF THE DELTA COUNCIL; LOUIS

WISE, GENERAL MANAGER, 4-COUNTY ELECTRIC POWER ASSOCIATION, COLUMBUS, MISS.; AND DAVID L. MURPHREE, PROFESSOR, DEPARTMENT OF AEROPHYSICS AND AEROSPACE

ENGINEERING, MIS SISS IPPI STATE UNIVERSITY, STARKEVILLE,

MISS.

Dr. M cCrone. I am Dr. Bru ce McCrone, assis tant to the dean of 

the Un ive rsi ty College, Michi gan St ate Un ive rsity. I am a person al 

frien d of the nominee.

Senator R and olph. Will you proceed, please?

Dr. M cCrone. I first mad e the acquain tan ce of J am es Hooper III 

in 1966 w hen I was teac hing at Mississippi State College for Wom en 

and working as vice chairma n of the Lowndes Co un ty, Colum bus, 

Miss., Hea ds tart program. Although I was working actively with the 

Youn g De mo cra ts and Mr. Ho oper backed the other political pa rty 

we sha red man y mu tua l concern s ab ou t the pro blems facin g the 

com mu nity. Jim Hoo per and I did no t always agree on solutions to. 

problem s, bu t I always found him honest and willing to discuss prob ­

lems with an open mind . He has a deep love for his na tiv e region and 

a com passion for his fellow man.

When the later great Se nator from Ne bra ska , George W. No rris 

first envisioned the concept of Federal wa ter power reg ula tion in th e 

Tennessee Valley, he was also conc erned ab ou t the develop me nt of 

ni trat e fertilizer for a gricultural prod uct ion .

He believed th at the Valley could become a model for social exp erime nta tio n. Althou gh ma ny public officials of the da y wante d to sell 

the Muscle Shoals power and ni trate pla nts th at had pro duc ed 

explosives for the war effort, Norris wante d to pu t these reso urces 

to work for peace.

On May 25, 1928, his original bill passed the U.S. Congress, bu t 

it was vetoed by Pre sident Calvin Coolidge. On Marc h 3, 1931, his 

bill again passed Congress only to be veto ed by Presi dent He rbert 

Hoover.

A broade ned con cept of the original Norris idea bore frui t on 

Ma y 18, 1933, and the Tennessee Valley Au thority was born. The 

Ten nessee Valley Au tho rity was authorize d to co nstru ct dam s and 

pow erp lan ts, sell electric power, sell nitr ogen fertilizers and develop 

the economic and social well-being of the area. The Autho rit y serves 

the power need s of seven State s and a land area of 80,000 squ are 

miles.

I person ally su pp ort the idea of one of the first directors , Da vid 

E. Lilienthal, th at the Tennessee Valley Au thority is more th an a 

regio nal pro gram. It is an experim entation th at has natio nal as well 

as inter na tio na l implications.

The research and scho larly work gener ated by the Autho rit y ha s 

treme ndous imp lica tion s for the ecological system s of the wo rld .
58

If we are to develop and increase the world’s food and fiber supply, 

fertilizer production, research, and education must be continued and 

expanded.

Although we at the Morrill Act, State Land-Grant Colleges and 

Universities are working to increase agricultural production through 

many sources, our contractural agreements with the Authority have 

made many of the breakthroughs possible.

The Authority’s responsibility is not only to the region but to the 

Nation. Much of the research on alternative sources of power, water 

management, water pollution, water tables and agriculture at Michigan State University is directly related to the work of the Tennessee 

Valley Authority and the National Fertilizer Institute at Muscle 

Shoals, Ala.

The Institute serves scholars throughout the United States and 

many foreign national. Knowledge gained by university scholars is 

directly transferred to all the farmers in the various States through 

the cooperative extension service of the Land-Grant Colleges of 

Agriculture and in seminars held for farmers each year on the various 

campuses throughout the Nation. The A uthority can and does act 

as a clearinghouse for the feedback of research data from the colleges 

and universities to scholars at other institutions and throughout the 

world.

The Tennessee Valley Authority which has the Nation’s only large 

scale laboratory and experimental center for the development of 

fertilizer must use these facilities to actively participate in solving 

the environmental problem of nitrogen pollution of our rivers and 

streams.

This pollution of the environment is not only being caused by the 

use of fertilizer for agriculture, but also by homeowners who have 

increased their use of fertilizer on lawns and gardens. If the world is 

to implement the proposals put forth at the World Food Conference 

in Rome, we must have increases in fertilizer production on a worldwide scale.

With adequate stocks of fertilizer available we could increase 

agricultural production by as much as one-third. However, these 

increases in food and fiber production through the use of fertilizer 

and new genetic techniques must not come at the expense of our 

rivers and streams.

Given the nature of the world food crisis with widespread hunger 

and starvation, nations of the world will atte mpt to increase food and 

fiber production regardless of the long-term consequences.

Wo must develop these new techniques now. Our best hope is to 

develop fertilizers tha t can be released in time capsule form and not 

be affected by heavy rains causing rapid runoff.

Another area where I share a deep commitment with the nominee 

is on the problems caused by strip mining in the United States. 

Although there are many who believe tha t strip mining should be 

prevented by the Tennessee Valley Authority through the use of its 

purchasing power in contracts with coal mine owners.

We, however, must recognize that this is national problem and can 

only be resolved by the establishment of a sound national policy. 

The Authority through its research facilities and knowledge gained 

through years of work on reforestation must become a resource 

facilitator and develop new knowledge that will aid in wiping out the 

“shameful blight” already created by years of neglect.
59

Current research on soils and soil erosion whether created by man 

or nature offers hope for the restoration of the scarred land. Research 

on forestation, land cover, and the development of fruit trees by the 

Authority in recent months show hopeful signs for the future.

The creation of ponds, lakes, wildlife and recreation areas also 

show promise as a way to recreate the lands tha t have been stripped. 

Our research effort in this task must be given high priority by the 

Authority. Hopefully, we will have an adequate national policy in 

the future.

♦ As plans are developed allowing mining of the needed coal, with 

safeguards built-in for restoration, the research work of the Authority 

in this area will be needed in establishing plans and guidelines.

It is unrealistic to expect the coal mine operators to be able to

* develop the staff anti knowledge necessary for restoration. The staff 

of the Tennessee Valley Authority have the expertise along with the 

land-grant colleges and universities to create a staff of consultants 

who can work with the coal interests in developing individual plans 

for each area affected.

Finally, I would like to address myself to the problem of renewing 

the water tables of the various areas of the United States. We have 

over the past 20 years been creating a crisis in many regions of the 

Nation.

Florida, California, and parts of the Southwest are in serious 

difficulty. We are taking out more water than is being replaced by 

natural forces. In certain areas, we have overpopulated, overconcreted, 

and destroyed natural areas tha t replenish the water tables in all 

sections of the Nation.

I believe we have reached the point where we can no longer rely on 

nature alone to replace water tables at adequate levels. In my own 

areas of Michigan, many home wells have dried up because large 

city and commercial wells have reduced the water tables drastically.

We must find manmade ways to build up the water tables throughout the United States. Increased research is needed not only in how 

to clean up our rivers, streams, and lakes but on how to improve the 

state of our aquifers. Certainly, this Committee on Public Works 

must take a leadership role and the Tennessee Valley Authority must 

« continue its leadership role in experimentation.

Mr. Hooper has been a personal friend for 10 years. I became 

involved in this hearing by giving a speech at one of the three great 

universities of Tennessee, and I found in the newspapers all kinds of

• articles saying that he was some sort of ecological nut.

Other articles said that he was a dishonest man. I volunteered to 

appear on his behalf because none of these charges were true. It 

would be easy for me, as a professor of ecology and a professor of 

political science, to, in effect, be an opponent to Mr. Hooper because 

it is fashionable to oppose Government institutions.

Unfortunately, I know Mr. Hooper and I think he would make an 

excellent addition to the directorship of TVA.

Senator Baker. Mr. McCrone, we thank you very much. T hat will 

be a very useful statement and very helpful to this record.

The next witness is Mr. Gene Triggs. Mr. Triggs is assistant to the 

president of the Mississippi Chemical Corp., Yazoo City, Miss. 

Mr. Triggs, you may proceed with your statement in whatever way 

you wish.
60

STATEMENT OF GENE TRIGGS, EXECUTIVE ASSISTANT TO THE 

PRESIDENT, MISS ISSIPPI CHEMICAL CORP.

Mr. Triggs. Senator Baker, my name is Gene Triggs, from Mississippi Chemical Corp. One of my responsibilities is to serve as director 

of corporate planning and development. In this connection, I work 

closely with TVA and keep up with what they are doing.

I have a prepared statement. I would like to tell you briefly what it 

says and then touch on some of the highlights.

Senator Baker. Without objection, Mr. Triggs, entire statement <+

will be received and printed in the record. (See p. 62.)

You may proceed.

Mr. Triggs. Thank you very much. I want to tell you about my 

company so you will know how involved we are in fertilizer and <

relate the importance of fertilizer to agriculture and agriculture to 

world food needs, and also say just a little bit about what TVA is 

doing in the area of fertilizer research as background for our support 

of the nominee.

Mississippi Chemical Corp, was started some 27 years ago and is 

presently one of the largest, if not the largest—it is the largest in our 

area—fertilizer manufacturer in the South.

Last year we produced in excess of 2% million tons of fertilizer.

We have some 22,000 farmer/owners who are located in eight Southern 

States. Senator, we do a little business in Tennessee but not a lot.

It is mostly in Alabama, Arkansas, Louisiana, Texas, Missouri,

Georgia, and Florida.

In addition to that, we have a potash facility, a potash mine out in 

New Mexico.

I don’t think there is any doubt about the importance of agriculture 

and the importance of food production. We ought to be aware of the 

fact tha t at least one-third of the total food production of this country 

is attributable directly to the fertilizer t hat is used under the crops.

Fertilizer technology has made considerable progress in the past 25 

years due primarily to the research being done by TVA’s fertilizer 

research and development programs. I can atte st to the fact tha t 

these programs have been and continue to be of substantial value to 

Mississippi Chemical Corp, and to virtually every other fertilizer „

producer in the United States.

We are currently operating under four separate TVA license agreements at our Pascagoula fertilizer complex. As you are probably 

aware, the TVA does grant these licenses on the patented processes at «

a nominal fee, which is used to cover the cost of the patent applications.

The Mississippi Chemical Corp, recently added a mixed fertilizer 

plant which allowed our customers to use scarce and increasingly 

expensive fertilizer n utrients more efficiently.

TVA does research that no one industry could do or is equipped to 

do. On the other hand, by TVA working jointly with industry, a 

strong unbeatable team approach produces the results tha t will 

accrue to the benefit of everyone.

Senator Stennis mentioned earlier today about slow release of 

nitrogen. I have in my remarks the use of sulfur and formaldehyde 

coated urea as examples of the research being done by TVA. This will
61

res ult in g reater efficiency and sav ings in th at considerable pl an t food 

is lost for a loss to the farm er.

TVA has a pa tented process th at they have developed th at redu ces 

gre atly the am ou nt of oil and na tural gas th at is req uired in the 

granula tio n of mixed fertilize r. Of course, this has resulted in lower co st 

nitrogen, the elim ination of side dressing, which of course reduce s an 

extra trip across the field.

TV A’s Fe rtilizer Devel opme nt Ce nter at Muscle Shoals is a focal 

point for the exchange of inf orm ation amo ng produc ers throug ho ut

* the co un try . TVA has assisted several companies, including our own,

in the design of scrubbers for pollution control.

I could go on and on and lis t the variou s rese arch proje cts th at 

TVA is carry ing on in con nection with the fertilizer ma nu factu rin g

» process.

Le t me sum marize by giving wh at I think are the bro ad objectives 

of TVA, which we cer tainly endo rse.

One. To decrease the consu mp tion of energy in fertilizer processes.

Two. To conserve non renewable raw ma terials, which is extrem ely 

im po rta nt.

Three. To deve lop tech nology th at does no t req uir e na tura l gas 

and oil.

Four. To minimize pollution.

As the voice of agr iculture becomes weaker, due to bein g fewer in 

num ber, when legislators and othe r leaders must listen to an increasingly urban con stitue ncy th at often fails to realize the im pa ct or the 

importance of the American far me r to the consumer, to our co un try ’s 

bala nce of paym ents, and to hu ngry people around the world, it 

becomes increasingly more im po rtan t to hav e men in high places 

with a bro ad visio n and un derst andin g of the total prob lem.

We believe th at such a ma n is James F. Hoope r II I. We strongly 

urge favorable conside ration of his ap po intm en t to the Ten nessee 

Valley Autho rit y Board of Direc tors.

Se nator Bak er. Th an k you very much.

[Mr. Trigg s’ prepar ed stat em en t follows:]

67 -520 0 - 76 - 5
62

Mississippi

Chemical

Corpo rati on

Feb rua ry 12, 1976

Honora ble Jen nin gs Randolph, Cha irman

Publ ic Wor ks Com mit tee

Dirk sen Sena te Off ice Buildi ng

Washing ton, D. C. 20515

Mr. Chairman:

My name is Ge ne T riggs . I am the Execut ive Ass ist ant to the 

Pre sident of Mis sis sip pi Chemica l Corpora tio n and serve as Director 

of Cor porate Plann ing and Developm ent. It is my res pon sibility to 

keep app raised of new de vel opm ent s in agr icu ltu re and in the fertilizer industry. To do so I must work close ly wit h TVA and keep up 

with w hat they are doing.

First, let m e tell you a little about my compa ny. Mis sissippi 

Che mical Cor poration w as organi zed as the world 's first farm er-owned 

nitroge n fer tilizer mak er 27 ye ars ago. The com pan y has grown to be 

the South's largest fer tilizer m anufacturer. The vast maj ori ty of 

the fertili zer pro duc ed is. sold to and used by Mississip pi Chemic al' s 

22,000 farm own ers in the eight southern stat es of Mississ ippi , 

Alabama, Arkansas, Loui sian a, Texas, Miss ouri, Georgia and Florida. 

Additi ona l farmer -ow ner s are located in the rich farming areas of the 

Midw est w her e the dem and for MCC fer tilizer is great. These areas
63

Honorable Jennings Randolph -2- February 12, 1976

are easily served by barge from the Gulf of Mexico up the Mississippi, 

Ohio and Missouri Rivers. Mississippi Chemical's stockholder-farmers 

are the beneficiaries of an efficient fertilizer manufacturing program 

as evidenced by the fact that while maintaining reasonable prices, 

approximately $250 million has been paid back to its customers 

during the past 27 y ears— the largest amount paid by any cooperative

in the world.

There can be no doubt but that American agriculture has made 

unparalleled progress during the past 50 years. However, despite 

outstanding advances in agricultural technology and stepped-up 

fertilizer use, food production has failed to keep pace with world 

needs. The result is that nearly one billion people— one fourth 

of the world's population— are today undernourished. World population, growing at the average annual rate of two percent, increased 

during the last ten years by 700 million people or from 3.2 billion 

in 1964 to almost four billion last year. At the same growth rate 

over the next decade, world population will increase by about 855 

million people, more than the total population of India today. And 

looking even further ahead, as noted by Secretary of State Henry A. 

Kissinger at the United Nations sponsored World Food Conference in 

Rome last November, world population "...is projected to double by 

the end of the century. It is clear that we must meet the food 

needs that this entails...we must act now and we must act together 

to regain control over our shared destiny. If we do not act boldly,
64

Honorable Jennings Randolph -3- February 12, 1976

disaster will result from a failure of will."

As the world's largest producer of grains, the United States 

must do all that it can to help increase urgently needed food supplies 

The importance of greater use of chemical fertilizers in conjunction 

with other modern farming techniques is well-known. The rapid 

increase in fertilizer usage in the U.S. since World War II is amply 

documented. Today practically all corn acreage, 80% of all cotton 

acreage, and probably 66% of all wheat acreage is being fertilized.

It is obvious that U.S. agriculture must carry a heavy share of the 

burden of world food production and that fertilizers are extremely 

important to this effort— accounting for at least one-third of the 

total production.

Fertilizer technology has made considerable progress in the 

past twenty-five or thirty years— much of it due to research carried 

on by TVA's fertilizer research and development programs. I can 

attest to the fact that these programs have been and continue to be 

of substantial value to Mississippi Chemical Corporation and 

virtually every other fertilizer producer in the United States. We 

are currently operating under four (4) separate TVA license agreements at our Pascagoula fertilizer complex. As you are probably 

aware, TVA grants these licenses to their patented processes for a 

very nominal fee which is designed to recover the patent application 

expenses.

Mississippi Chemical Corporation has recently added a liquid 

mixed fertilizer plant. This product will allow our customers to
65

Honorable Jennings Randolph -4- February 12, 1976

utilize scarce and increasingly expensive fertilizer nutrients more 

efficiently. This can become an important asset for conservation 

of energy and minerals as well as an aid in decreasing or helping 

eliminate our country's balance of payments deficit. A portion of 

this plant is covered under a TVA license. During its design we 

used data developed by TVA's Fundamental Research group. To our 

knowledge some of this data was not available from any other source.

Frequently our engineers visit with TVA personnel gathering 

information which will benefit our operations and farmer customers. 

Another trip is scheduled this week to discuss nitric acid and other 

develop ments.

TVA does research that no one industry could or is equipped 

to do. On the other hand, by industry working with TVA, sharing 

practical problems and experiences, a strong unbeatable team approach 

produces results that can accrue to the benefit of everyone. TVA's 

work on slow release nitrogen from using sulphur and formaldehyde 

coated urea are examples of important research being carried on at 

the present time. Considerable nitrogen is being lost through 

leaching and too rapid release— faster than the crop can use. If 

successful this could result in greater efficiency and plant food 

savings to the farmer.

TVA has patented a process which will greatly reduce the amount 

of oil or natural gas required in the granulation of mixed fertilizer

They have pioneered in the development of high nitrogen grades 

of mixed fertilizer using urea. The savings here are threefold:

(1) Lower cost nitrogen,
66

Honorable Jennings Randolph -5- February 12, 1976

(2) Elimination of necessity for side-dressing thus 

reducing a trip to the field and conserving energy, and

(3) By obtaining a higher analysis the weight of fertilizers required is reduced, saving freight costs and the 

energy expended in transport.

TVA's Fertilizer Development Center at Muscle Shoals, Alabama 

is a focal point for the exchange of information among producers 

to the effect of improved efficiency for all.

TVA has assisted several companies in the design of scrubbers 

for pollution control, in the preparation of formulations that will 

minimize the amount of pollution, and in other ways to help manufacturers meet new pollution standards. The list of research projects 

is too long to mention here, but can be summarized in the overall 

mission— "to develop new and improved fertilizer products and 

processes in order to lower the cost of fertilizers and increase 

their effectiveness.”

Allow me to summarize by giving the broad objectives of the 

current TVA program:

(1) To decrease the consumption of energy in fertilizer

processes,

(2) To conserve non-renewable raw materials,

(3) To develop technology that does not require natural 

gas and oil, and

(4) To minimize pollution.

We at Mississippi Chemical Corporation support these objectives.

As the voice of agriculture becomes weaker and weaker--due to being
67

Honorable Jennings Randolph “6- February 12, 1976

fewer in number— when legislators and other leaders must listen to 

an increasingly urban constituency that often fails to realize the 

impact or importance of the American farmer to the consumer, to our 

country's balance of payments, and to hungry people around the world, 

it becomes increasingly more important to have men in high places 

with a broad vision and understanding of the total problem. We 

believe that such a man is Mr. James F. Hooper, III and we strongly 

urge favorable consideration of his appointment to the Tennessee 

Valley Authority Board of Directors.

Thank you.

Yours truly,

Gene A. Triggs 

Executive Assistant 

to the President

GAT/pd

cc: Senator James 0. Eastland

Senator John C. Stennis
68

Senator B aker. The next witness is Mr. Tol Thomas III. Would 

you tell us for the record what the Delta Council is?

STAT EMENT OF J. T. THOMAS III, RE PRESEN TIN G TH E DELTA 

COUNCIL

Mr. Thomas. Yes, sir. I have it in my statement.

Senator Randolph. All right, sir.

Mr. Thomas. So I won’t ad lib.

My name is J. T. Thomas I II. I am a farmer from Holmes County, 

Miss. I am a past president and a director of Delta Council and am 

now serving as chairman of the agricultural committee. Delta Council 

is an area economic development organization representing the 18 

delta and part-delta counties of Mississippi.

This area, comprising approximately 5,500,000 acres of alluvial 

land, is one of the most productive agricultural areas of the world. 

Income from agriculture represents the principal source of livelihood 

for the almost one-half million people who live and do business in this 

section of Mississippi.

My purpose in appearing here today is to strongly endorse and urge 

the approval of the nomination of James F. Hooper III to the position 

of Director of the Tennessee Valley Authority.

I have personally known Mr. Hooper for many years and I believe 

him to be eminently qualified to serve as a Director of the Tennessee 

Valley Authority. Not only does he have training in the field of industrial engineering, he is also qualified by experience in agriculture 

and water resources development. Both of these fields are of vital 

importance to the entire area served by the Tennessee Valley Authority

Income from agriculture is of overriding importance to Mississippi, 

as it is to other States located in the TVA service area. At one time, 

TVA was deeply involved in agriculture and its work in this field led 

to the use of anhydrous ammonia as a source of nitrogen for agriculture. This single development contributed tremendously to the welfare 

of farmers and consumers throughout the entire Nation.

Without neglecting other important activities of TVA, we feel 

sure th at Mr. Hooper’s knowledge of and interest in agriculture would 

contribute to a renewal of involvement in agriculture by TVA with 

emphasis on the reduction of nitrogen costs to farmers.

I would like to point out here tha t the cost of input items tha t are 

absolutely necessary for crop production have been escalating at a 

very rapid rate and tha t these higher production costs not only 

contribute to higher producer risks, but must either be passed on to 

the consumer or absorbed by the producer.

When passed on to the consumer, these higher costs are immediately 

reflected in the Cost of Living Index. When absorbed by the producer, 

these same costs must be subtracted from farm income.

Since farm profit margins are already very thin, any increases 

in production costs tha t cannot be passed on will jeopardize the 

ability of the farmer to produce the food, feed, and fiber that is 

essential to consumers.

My point here is tha t the renewed involvement of the Tennessee 

Valley Authority in the field of agriculture with emphasis on reducing
69

the cost of fertilizer is of great importance to the entire Nation. 

When you consider the fact t hat we will add nearly 100 million people 

to our population by the year 2000, the productive capacity of agriculture becomes of added importance to the Nation’s welfare.

In conclusion, I wish to point out tha t Mr. Hooper’s nomination 

has been strongly endorsed by the Governor of Mississippi, by the 

Lieutenant Governor, by all members of the Mississippi Legislature 

who unanimously passed a joint resolution supporting his nomination 

and by members of the Mississippi congressional delegation to the 

Congress of the United States. To these endorsements, we can add 

the strong support of the farmers of our area.

One other statement, Senator. Anhydrous ammonia has increased 

in the last 34 years and ammoniate nitrite has increased 181 percent. 

Therefore, as a farmer, we are concerned about this and we hope that 

TV A, with the direction and help of James Hooper, would simplify 

and aid us in this problem.

Thank you very much for giving me this opportunity to speak.

Senator Randolph. Mr. Thomas, thank you very much for your 

statement.

The next witness is Mr. Lewis Wise.

STAT EMENT OF LOUIS WI SE, GEN ERA L MANAGER, 4-C0U NTY 

ELECTRIC POW ER ASSOCIATION

Mr. Wise. I want to thank you for allowing me to appear before 

you in endorsing Mr. Hooper, Mr. Chairman and Mr. Baker. If 

you would allow me to do so, I would like to file my statement for 

the record and then make a few extra remarks.

Senator Randolph. That is agreeable, sir.

Mr. Wise. Gentlemen, I am Louis Wise, general manager of 

4-County Electric Power Association, which is a misnomer, since 

we serve 26,500 members in 7 counties. I am also on the board of 

directors of the Tennessee Valley Public Power Association.

I am scheduled to take the vice presidency of TVPPA next month 

and the presidency next year. Through tha t organization, practically 

all distributors in the valley deal with the TVA Board.

I have been in this business since 1939 and, consequently, I have 

known personally every TVA director who has ever been confirmed 

by this committee, from Lilienthal and Drs. Morgan on through to 

the present ones.

I understand tha t Mr. Hooper, if confirmed, is scheduled to take 

Don McBride’s place. He is the last one who retired.

Since I have dealt with these men, I know tha t Mr. Hooper can 

come up to the standards of any of them. He is capable. He is well 

qualified, he is honest and he is a hard worker. I have known Jim 

since the early forties in a personal and business way. I know nothing 

in my entire knowledge of Mr. Hooper which would detract from 

his being a good director for TVA. .

One of the particular things that hurts TVA is their lack of responsiveness, at least that is what they are accused of—I think that is 

true—both to the Congress and to the constituency of the valley.

Jim’s appo intment to this board would certainly help alleviate tha t 

situation, because he certainly would make a responsive director.
70

Living in the valley, tak ing power from one of the distr ibutors of 

TVA power and usin g it through his life-time practically, I am sure he 

would recognize the need s of the valley and cer tainly could be ap ­

proached and be comp lete ly responsive.

Gentlemen , I hav e worked with Jim in wa ter resources, as set ou t 

in my sta temen t, in his dealings with the Mississippi Leg islature, and 

his dealings with indu str y throu ghout my entire career with the 4- 

Co un ty Ele ctric Pow er Association with TVA.

I find he is very cap able in dealing with all of these groups. li e has 

the unanim ous endorse me nt of the North Mississip pi Indu str ial Developme nt Associatio n. He has the unani mo us end orsem ent of the 

Northea st Mississippi Pub lic Power Association, which is comprised 

of all of the powe r distr ibu tors in Mississippi served by TVA and, as 

has been st ated , all of the State and congressional officials.

Th e only thing I can add to wh at I have said is th at 1 am confide nt 

th at Mr. Hoo per will mak e a great d irecto r for TVA. 1 urge the com ­

mittee to ratif y his n om ination .

Senator R and olph. T ha nk you very much, M r. Wise.

Mr. Wis e. Th an k you.

[Mr. Wise’s prepar ed statem en t follows:]
71

STATEMENT OF LOUIS WISE, GENERAL MANAGER 

4-COUNTY ELECTRIC POWER ASSOCIATION 

BEFORE THE SENATE COMMITTEE ON PUBLIC WORKS 

INJSUPPORT OF THE NOMINATION OF JAMES F. HOOPER 

TO THE TENNESSEE VALLEY AUTHORITY BOARD OF DIRECTORS 

. February 17, 1976

Mr. Chairman and Gentlemen of the Senate Committee on Pub lic Works:

My name is Louis Wise. I am General Manager Of 4-County E le ctr ic Power Ass oc iatio n,

with hea dqu arte rs in Columbus, M is sis sip pi. 4-County E le c tr ic Power Ass oc iatio n is a 

ru ra l e le c tr ic power as so ciatio n financed by REA and CFC, and which ob tains it s power 

from the Tennessee Valley A uth ority . The As sociation, a t the present tim e, serves TVA 

e le c tric it y to over 26,500 farms and small town fa m ilie s in a seven cou nty area in 

no rthea st M is sis sip pi. I am als o speaking to you as a re pr es ent at ive o f the Northeast 

Mississ ippi Pub lic Power Ass oc iatio n whose members have unanimously endorsed Mr. Hooper 

fo r the im po rta nt pos t of D irecto r o f the Tennessee Valley A uth ority .

I want to thank you fo r th is opportunity of app earing be fore you and to make th is 

statement on be ha lf of the nominatio n o f Mr. Hooper. I have known him fo r many ye ar s, 

both in a business and personal way and I fe el th a t in his re co rd , as fa r as I know, 

the re is no thing th at would pre ven t him from doing an excelle nt jo b as a D irecto r of 

TVA. Mr. Hooper f i r s t became associated in a business way w ith our Ass oc iatio n and me, 

of course, as Manager, while his a c tiv it ie s were in dairyin g and general farm ing and 

a ft e r th a t, and while he was s t i l l in the dairyin g and c a tt le business, w hile he was 

an owner of Columbus Canning Company which was also loc ated on 4-County E le c tr ic Power 

Ass oc iatio n's power lin e s. I can tru th fu ll y say th a t a ll of my de alings w ith him in 

con nection w ith the se rv ice of e le c tric it y to his farms and ot he r op erations have been 

e n ti re ly sa tisfa cto ry and I feel th at the same good re puta tion in business would be 

o f benefit to him in carr yin g out the work requ ire d o f TVA D irect ors .

In connection with water resources a b ility and in te re s t, I was pri vile g e d to work 

w ith Mr. Hooper along w ith many othe rs in the org an izatio n of the Riv ers and Harbors 

Ass oc iatio n o f M is sis sip p i, an or ga niza tio n which was suc ce ss fu lly laun ched.
72

2 - Louis Wise

Mr.Hooper was a member o f th is org aniz ation's Board o f D irect ors fo r many yea rs and 

served as its Preside nt and Vice Preside nt du rin g the early and d if f ic u lt years. At 

the present time I am privileged to serve as Vice Presiden t o f th is Orga niz ation and 

consequently, I am in a positio n to know d ir e c tl y o f the gr ea t contr ib ution th at Mr. 

Hooper made.

I would also li k e to introd uc e in th is statem ent an ex ce rpt from a le tte r th a t I

wro te to the then Governor J. P. Coleman of M is si ss ip pi in answer to a request from

Mr. Coleman fo r sug gestion s of nominees to the Tombigbee Valley A uth o rity , which he

was or ga nizing. I t was my pleasure to suggest James F. Hooper and I quote:

Jim worked a c ti v e ly ag ains t us in the f i r s t primary but 

vote d w ith us du rin g the second primary and, fr a n k ly , did no thing 

du ring the f i r s t primary th a t hurt. I be lie ve th a t he w ill be 

w ith us from now on.

Jim has been Chairman of the Flood Co ntrol Committee o f the 

Chamber of Commerce fo r several yea rs and has a c ti v e ly worked w ith 

General Pic k and othe rs in tr yin g to develop the riv e r over the 

past six ye ars. He is thorou ghly fa m ilia r w ith what has gone on 

before in th is work and shows a very keen in te re s t in the development o f the watershed. I be lie ve th a t he and Birney could work 

ou t as an exce lle nt team from th is cou nty and could and would 

ac t as a spear-head in th is work. In c id e n ta lly , both Birney and 

Jim own th e ir own businesses and w il l have pl enty o f time and I 

be lie ve enough money o f th e ir own to do what the y th in k necessary 

to promote the work o f the Tombigbee Valley A uth o rity . That fa c t 

counts quite a lo t in my choice.

I als o had the p ri v ile g e of workin g with him on the Tombigbee Valley A uth ority and als o 

w ith him when the Tombigbee River Va lle y Water Management D is tric t was organized and 

members of the Tombigbee Valley A uth ority were auto m atically made members of th at 

group. Mr. Hooper was very active in working w ith the le g is la tu re and w ith our 

group in the passage of the necessary le g is la ti o n cre ating the Tombigee River Valley 

Water Management D is tric t. Mr. Hooper and his fa m ily are long time members of St.

Paul Episcopal Church in Columbus and they a ll have enjoyed a fi n e re pu ta tio n 

in the community. He has served in many ca paci ties in c iv ic l if e in Columbus and is
73

3-Louis Wise

well respected in every way. I believ e that the majority of the people in Columbus 

or Lowndes County would un he sitatingly endorse his nomination to th is important 

position.

Gentlemen, I want to urge you both as an individ ua l and as a rep resenta tive of 

the Power Distributo rs in the Mississipp i D is tr ic t of th e’ Tennessee Valley Au thority 

to act favora bly on the nomination of Mr. Hooper fo r Director of th is gre at orga nizatio n. We need a man who has lived in the area effected by the ope ration of th is 

Organization and i t is my personal opinion that Mr. Hooper w il l make a very fin e 

Director and give cre dit to the Board of TVA. TVA must func tion as a ground roots 

organization fo r the be ne fit of the people of the va lle y and we fee l th at Mr. Hooper is 

well qualif ie d to do ju s t that.

Thank you fo r allowing me to appear before you.
74

Senator Randolph. Dr. Murphree.

STATEMENT OF DR. DAVID L. MURPHREE, PROFESSOR, DEPARTMENT OF AEROPHYSICS AND AEROSPACE ENGINEERING, MISSISSIPPI STATE UNIVERSITY

Dr. Murphree. Mr. Chairman, I am testifying today not as a 

representative of any organization, but as a registered professional 

engineer actively engaged in research and development of magnetohydrodynamics (MHD), a new technology for the utilization of 

coal for electrical power generation.

Coal is our Nation’s most abundant fossil fuel. MHD electrical 

power generation can provide a reliable and efficient coal-burning 

powerplant having one of the lowest possible impacts on the environment.

Such systems, which can burn high sulfur content coal, show 

promise of overall plant efficiencies in converting the coal’s energy 

into electricity in excess of 60 percent, which would be 50 percent 

better than the most advanced steam turbine plants burning lowsulfur content coal. Also, air pollution is virtually eliminated with the 

MHD system. A division of MIID was recently created within the 

Energy Research and Development Administration (ERDA).

Mr. James Hooper has demonstrated an abundant enthusiasm for 

the development of MHD. We have had numerous discussions on 

MIID electrical power generation. Mr. Hooper recently visited Dr. 

John B. Dicks, Director of the Energy Conversion Division of the 

University of Tennessee Space Institute, to see firsthand a project 

sponsored by ERD A on the direct conversion of coal into electricity 

by the M ill ) process.

Although this is in the heart of the TVA region, and is also the only 

location in the world where MHD electrical power has been generated 

by burning coal, no present member of the TVA Board has visited the 

University of Tennessee Space Institute to observe the MIID technological process of electrical power production. Mr. Hooper is indeed 

eager to be aware of the current state of the art in MHD energy 

technology.

Mr. Hooper has also demonstrated an extreme interest in other 

advanced electrical power generation technologies. It is indeed 

encouraging to see, from both an engineering viewpoint and from 

the viewpoint of the public welfare regarding future electrical power 

recpiirements and protection of the environment, that the President’s 

nominee to the TVA Board of Directors is so vitally interested in 

merging technology into the electrical utility operation of TVA.

Both Dr. Dicks and I have enjoyed our many discussions with 

Mr. Hooper related to the technical development and commercialization of MHD. It has been both pleasing and gratifying to us, as 

professional engineers, tha t Mr. Hooper has the ability to converse 

about and appreciate the complexities of such an advanced electrical 

power generation technology.

It has been my observation that Mr. Hooper has an open mind 

regarding various methods of electrical power generation and an appre-
75

ciation of both the present and the future overall energy situation. I 

support wholeheartedly the nomination of Mr. Hooper to the Board 

of Directors of the Tennessee Valley Authority.

Senator Randolph. Thank you, Mr. Murphree.

Mr. Murphree, thanks for counseling with us and also Messrs. 

McCrone, Wise, Thomas, and Triggs. Your statements in full will be 

included as part of the printed record.

Are there any further comments any of you would have?

Thank you very much, gentlemen.

Senator Baker, you have a comment to make in reference to our 

procedure and to part of the record which has been presented to the 

committee today.

Senator Baker. Mr. Chairman, thank you very much.

I indicated this morning, when we were examining Mr. Hooper on 

his business dealings, financial transactions over the years th at I would 

treat with them generally and would want to return to those things 

later.

It seems to me, Mr. Chairman, and I frankly discussed this with 

Mr. Hooper and with his counsel, that everyone would be better 

served—the committee, the Senate, Mr. Hooper, and everybody else— 

if we simply printed the staff report now as a committee document 

for release, together with the formal reply tha t Mr. Hooper has already prepared to certain parts of it and which has been submitted to 

us, rather than going through a long laborious afternoon by handling 

it by question and answer. It is a very, very definitive work.

I believe, Mr. Hooper, you and your attorneys have been over it 

with the committee staff. It can be printed and available to the public by the first of the week, I am told. Rather than going over the thing 

in detail here, I would hope, Mr. Chairman, tha t if Mr. Hooper and 

his counsel would not object, we would simply order the staff report on 

Mr. Hooper’s business transactions printed as an apppendix to these 

hearings together with his reply to it.

Senator Randolph. You have heard the statement of Senator 

Baker in reference to this matter. Do you, Mr. Hooper, or your 

attorney wish to make a comment?

Mr. Gholson. We have no objection to tha t procedure, Mr. 

Chairman.

Senator Baker. Mr. Chairman, I would hope tha t you, as chairman, would order the committee report which we have in draft to be 

printed, together with Mr. Hooper’s reply as a committee document 

and also to be made a part of this hearing record.

Senator Randolph. Senator Baker, tha t will be done and we will 

proceed as you outline, making it available as quickly as possible. I 

am not sure how long it would take to do that, but we will move it 

at once. (See appendix, p. 245.)

We will therefore recess until tomor ow morning when we will 

return at 9:30, and continue the hearing.

[Whereupon, at 12:38 p.m., the committee recessed, to reconvene 

at 9:30 a.m., Wednesday, February 18, 1976.]
4
COMMUNICATIONS SUPPORTING THE NOMINATION OF MR. HOOPER

*

r

United States Senate,

Committee on Armed Services, 

Washington, D.C., September 9, 1975.

Hon. J ennings R andolph,

Chairman, Committee on Public Works,

United Stales Senate,

Washington, D.C.

Dear M r. Chairman: I have received several le tters sup porting the nomination 

of Mr. James F. Hooper as the Director of the Tennessee Valley Authority.

Since i t is not clear that copies of these lette rs were sent to your Committee, 

I am enclosing copies thereof so th at they may be a pa rt of the official files on 

this nomination.

With warm personal regards, I am 

Sincerely, J ohn C. Stennis.

[Enclosures: (4) a/s.]

Owen Cooper,

Yazoo City, Miss., September 4, 1975.

Senator J ohn C. Stennis,

Senate Office Building,

Washington, D.C.

Dear Senator: Than k you for the position take n in regard to the nomination 

of Jim Hooper to the TV A Board. Jim will bring to the Board agric ultural representation it sorely needed. TV A 

can contribute much more to agriculture in the future, but it can be done only 

with at least one person on the Board who is dedicated to this accomplishment.

Keep up the good fight.

Sincerely, Owen Cooper.

Delta Council, 

Stoneville, Miss., August 25, 1975.

Senator J ohn C. Stenn is,

Senate Office Building,

Washington, D.C.

Dear Senator Sten nis: We und erstand th at hearings before the Senate 

Public Works Committee will be held on Mr. James F. Hooper’s nomination to 

the Tennessee Valley Auth ority Board sometime in September and we wanted 

to express our strong interest in Senate approval of Mr. Hooper’s nomination.

I know Mr. Hooper personally and believe him to be eminently qualified for 

this position. Not only does he hold a degree in industrial engineering from 

Auburn University, he is also experienced in agriculture and we believe t ha t it is 

very important for at least one of the TV A Board members to be agricultu rally 

oriented. As you know, the charter of the TV A places a great deal of emphasis on the 

agricultural nature of TV A activities and specifically in the field of fertilizers. 

At one time, the TV A was very activ e in this field and its work led to the use of 

anhydrous ammonia as a source of nitrogen for agricu lture. In recent years, 

however, activities have been direc ted in other areas, primarily in electric power 

generation. While we do not suggest th at this field is not of great importanc e, 

we believe th at agriculture is also of major importance and th at Mr. Hooper would 

make a great contribution in this field as well as in other areas of TV A activity. 

(77)

67-520 0 - 76 - 6
78

I know th at you have already contacted the President in support of 

Mr. Hooper’s nomination. I wanted you to know, however, that agric ultural 

interests in Mississippi are very much in accord with the action* tha t you have 

taken and we certainly hope th at the Senate Public Works Committee will give 

prom pt approval to his nomination.

With best personal regards,

Yours very truly,

B. F. Smith, Executive Vice President.

Pontotoc Electric Power Association,

Pontotoc, Miss., July 14, 1975. Hon. J ohn C. Stenn is,

U. S. Senate,

Dirksen Senate Office Building,

Washington, D.C.

Dear Senator Stenn is: We are forwarding herewith for your information, 

copy of a resolution adopted by the Board of Directors of Pontotoc Electric 

Power Association on July 9th, 1975.

Your interest in this ma tter is greatly appreciated.

Yours very truly ,

J. C. Sneed, Jr., Manager,

Pontotoc Electric Power Association.

Whereas, the President of the United States has recommended th e appointm ent 

of James F. Hooper as a director of the Tennessee Valley Authority and confirmation of this appointment is pending before the United States Senate; and

hereas, James F. Hooper has lived in Alabama and Mississippi a good pa rt of 

his life, thus being familiar with the problems and prospects of the region served 

by the Tennessee Valley Authority; and

Whereas, Mr. Hooper has been active in Water Resources Development and 

has worked hard to bring about progress together with sound ecological planning; 

and

Whereas, Mr. Hooper possesses an outstanding record in military and civilian 

pursuits;

Now, therefore, be it resolved, That the Board of Directors of this Corportion 

strongly recommends the confirmation of James F. Hooper as a Director of the 

Tennessee Valley Authority.

Unanimously adopted this the 9th day of July, 1975.

I certify th at the above is a true and correct copy of a resolution adopted by 

the Board of Directors of Pontotoc Electric Power Association on the 9th day 

of July , 1975.

C. P. J ohnston, Secretary.

Mike P. Sturdivant Plantation,

Glendora, Miss., September 1, 1975. Senator John C. Stenn is,

Washington, D.C.

Dear Senator Sten nis: I have studied the background of Mr. James F. Hooper 

II I and have had the pleasure of meeting him personally. I would like to add my 

personal endorsement to that of many farmers in this area who would seek agricultural representation on the TV A Board.

I would appreciate anything you can do to help Mr. Hooper secure this app ointment.

With kindest regards,

Mike P. Sturdivant.

The Capitol,

Jackson, Miss., February 13, 1976. Hon. J ennings Randolph,

Chairman, Committee on Public Works,

U. S. Senate, Washington, D.C.

Dear Senator R andolph: It is with pleasure th at I recommend favorable 

consideration by the Committee for confirmation of Mr. Jim Hooper as a member 

of th e Tennessee Valley Authority.
79

Mr. Hooper of Columbus, Mississippi, resides in the TV A area and is privy to 

the problems and possibilities of TVA. Since TVA is proceeding with plans for 

constructing a nuclear powered electric generating plant in our State, it is felt th at 

confirmation of Mr. Hooper is highly desirable.

In conducting a unified program of resource conservation, development and use, 

the Board of Directors of the Authority should not all be residents of the same 

State. Mr. Hooper is qualified to serve in a manner that will bring credit to the 

Authority.

Sincerely,

Cliff Finch, Governor.

» J. Ashton Greene & Associates Enterprises I nc.,

Pass Christian, Miss., February 13, 1976.

Hon. J ennings R andolph,

Hon. Howard Baker,

Hon. Members, Senate P ublic Works Committee,

* U.S. Senate,

Washington, D.C.

Gentlemen: We support the nomination of the Hon. James Hooper of Columbus Miss, to be a member of the TV A, and earnestly request th at you approve 

this nomination both in Committee and on the Floor.

Senators Stennis and Eastland, I have been informed, are both in favor of 

this nomination.

With very best wishes and high regards.

Respectfully,

J. Ashion Green.

NOM INAT ION OF JAMES F. HOOPER III

W EDN ESD A Y, FE B R U A R Y 18, 19 76

U.S. Senate,

Committee on P ublic Work s,

Washington, D.C.

The com mittee met at 9:40 a.m ., pu rsua nt to recess, in room 4200, 

Dirksen Senate Office Building, Hon. Jen nin gs Randolp h (chairma n 

of the com mittee) presiding.

Present: Senator s Randolp h, Gra vel, Bentsen, Burdick, Baker, 

Stafford, and Domenici.

Senator R and olph. Th e hearing of the Pub lic Wo rks Co mm itte e, 

which began yeste rday on the no mi natio n of Jame s F. Hooper II I, 

of Mississippi, to be a member of the B oar d of Directo rs of th e T ennessee Valley Au thority , con tinu es in its second day.

We are very ha pp y to have with us the Honorab le Bill Brock, a 

U.S. Senator from Tennessee, as the firs t witn ess this morning. 

Th an k you, Bill, for coming.

STATEMENT OF HON. WILLIAM E. BROCK II I, U.S. SENATOR FROM 

THE STATE OF TENNESSEE

Se nator B rock. Th an k you, Mr. Chairma n. I app rec iate the 

op po rtu nity to appear tod ay. I will try to be brie f and suc cin ct but 

cover m atters as carefully as I can because it is an im po rtan t matter. 

If I have one purpose, it is to convinc e—I know the chair ma n kno ws 

the are a as well as his ran kin g memb er does— every me mb er of this 

com mittee to un derst and the awesome significance of TVA to our 

area, ju st how terrib ly im po rtan t it is, and how the decisions of the 

TVA affect the lives of the people of the valley.

Senator R and olph. Bill, your colleague and my colleagues were 

even talkin g ab ou t coal ye ste rday in reference to the Tenne ssee 

Valley Autho rit y and some other form s of energy.

Senator Brock. I understand th at.

Senator Bak er. We agreed th at we were bo th right.

Senator R and olph. Yes.

Senator Brock. W hatev er you said, I am with you. I did hear 

about th at con versation and I appre cia te it very mu ch because th at 

is the k ind of d ilem ma we face. I t is a v ery difficult problem .

Senator Bak er. Incid entally, in th at resp ect, if I can in te rrup t 

my colleague from Tennessee, the re is an editorial in one of the daily 

new spapers in Wash ing ton on thi s ene rgy subje ct th at so rt of rel ate s 

the fac t th at you and I bo th were ma kin g yeste rday, Mr. Ch air man, 

th at there are no good choices in thi s field, th at we are going to have 

to avail ourselves of every op po rtu nity wre have if we have any 

exp ectation of meetin g this prob lem.

(81)
82

Sena tor R andolph. Tha nk yo u, How ard. That c ertain ly is correct.

Senator Brock. On August 20, 1975, I wro te Presi dent Ford 

req uesting t hat M r. Ho oper’s no min atio n to the Board of Dir ectors of 

the Tennessee Valley Au thority be withdrawn . My r equest was based 

on one fact—I had seen nothing to indicate th at Mr. Hooper had the 

necessary experience or professional qualifications to help set policy 

for the larges t utility in the Na tion. Today , I am here to req uest th at 

this com mittee reject Mr. Ho oper’s nom ination for the same reason.

The Tennessee Valley Au thority has a tremendo us im pact on all 

Tennesseans. Un fortu nately, its recent impact on the consumers of «

electric power has been disa stro us. TVA ha s been killing the c onsumer 

through rapid and inexp licable increases in the price of electri city .

Le t me snare with you an exam ple th at was broug ht to my at tention.

A 68-year-old wom an from middle Tennessee is living on her social •

sec uri ty paym ents alone. Like thousa nds of other elderly, she has a 

total m onthl y income of around $300. H er electric bills were ave raging 

$68 a month, almost 25 perce nt of he r total income. This alone is cause 

for alar m.

La st mo nth her electric bill jum ped from $68 to $160. This is over 

50 perce nt of her to tal income for electr icity expenses! This is more than 

an un fortu na te situatio n— this is a disaster. It is a dis aster th at has 

been visited on every home, on every farm, and in every business 

across the Tennessee valley.

It is a di saster tha t ha s been inflicted by one org anization; 97 perce nt 

of all electricity consumed in Tenn essee is p rodu ced by the Tenn essee 

Valley Au tho rity. Thu s, the decisions mad e in the TV A board room 

in Knox ville reverb era te across my State and the surro undin g Sta tes.

The people of Tennessee and the Tennessee V alley cann ot continu e 

to carry this heavy burden . Fo r 30 years TVA has tried to convince 

our citizens to go all electric. To a large exten t they have succeeded, 

as the y succeeded in providing our valley with unique service at a 

realistic cost—until now.

Now, an all-electric home carries a different prom ise to people of 

low incom es. Already, powe r rates are consuming more of the ir disposable incom e tha n at any time since the early fifties. This must be 

changed.

The disastrous increase in electri city rat es has had oth er conse- •

quences. Pub lic trus t in TVA is at an alltime low. Once considered a 

a friend of the valley, public opinion polls ind ica te th at TVA is no 

longer considered an agen cy working for the people. Th is trag ic loss 

of confidence has perm eated our e ntir e society, and paralle ls the cyni- •

cism we h ave seen attack oth er Gover nm ent agencies.

Althou gh, I might add, paren the tically, in mo st of those cases, as 

the case in Tennessee, the decline is no t wanted because mo st agencies 

and this pa rticular agency, labor diligently to serve as best the y can.

Thus, the n ext Board memb er will help guide the Tenn essee Valley 

Autho rit y throug h wh at all of us realize will be a difficult time for 

energy related concerns— particular ly for this one which has suffered 

such a de va sta tin g erosion of confidence.

In the nex t few years, TVA will make crucial decisions on a whole 

host of energy, env iron mental, and consumer matters . What should 

the future role of nuc lear powe r be in mee ting the energy needs of 

the Tennessee Valley? How whould the desire for cheap energy be
83

bala nced with the equally strong desire for a safe and he alt hy environme nt? Wh at can TV A do to arr est the rapid increases in electric 

power rates th at have occurred in the las t several years?

In addition to these many decisions, the Tennessee Va lley Au thority m ust m ake decisions concerning m any o the r aspects of its m anageme nt role of the resources of my Sta te. TVA prov ides flood control, 

waste ma nagem ent , energy research and dev elopment, car pooling 

pro jects, fertilizer research, min eral prog rams, rural fire assistance, 

health service dem onstration pro jects, fore stry research, fisheries and 

t wate rfowl wetlan ds ma intena nce and dev elop ment pro grams, str ip

min ing rec lam atio n projects, and recr eational facility operation s.

As this list implies, TVA is big business. And the TVA is big. It 

has total assets of $6.6 billion which would ran k it amo ng the top 15 

» com panies on the Fo rtu ne 50 0 list. In 19 75 this qua si-gover nm ent

corporation had opera ting reve nues of $1.2 billion. The se reve nues 

came from 2.5 million custome rs, ma kin g TVA the Nat io n’s larges t 

powe r produc er. It is stag gering to consider the im pact this org anizati on has on the day-t o-d ay lives of every Tennessean.

In add ition to the size and com plexity of TVA ma nageme nt alone, 

the new director faces a unique situatio n. As the com mittee knows, 

the cu rre nt two Board mem bers are divided on ma ny fun dame nta l 

policy issues. Thus, the nomination tak es on added significance, for 

whoever assum es the third directors hip will immedia tely be in the 

position to cas t the deciding vote on many crucial issues. Th e new 

director will repres ent the swing vote, thu s the ma ny burde ns ou tlined above will fall squarely on nis shoulders.

Since Mr. Hooper’s nam e was sen t to the Sen ate, I hav e examined 

his record very carefully. I have been una ble to find anyth ing in Mr. 

Hooper’s record to convince me th at he is the rig ht man for this 

difficult job. As I said earlier, I appear here tod ay in opposition to 

his nom ination . I shall do every thing in my power to see th at his 

nominat ion is rejected .

This is not a pleasan t task , and I find myself in a very unc omfortable 

role. Bu t, TVA has reached the crucial stag e in its dev elo pm ent as 

an organization and its service to our people. Ever-increa sing powe r 

rates hav e underm ined its strong supp ort amo ng citizens of the valley, 

• its env ironm ent al policies are late in ma tur ing , and its respo nsiveness

to consumers is unsatisfactory .

Ye ste rda y the com mittee heard Mr. Hoo per defer on a numb er of 

que stio ns posed by Chairma n Randolp h and Senat or Baker. Th is is 

• no time for on-the-job training. We must have a director cap able of

assuming the job and acting carefully and decisively at once. Jame s 

Hoo per is no t the person.

And, Mr. Chairma n, as much as I dislike it, I m ust also call the committee’s a tte ntion to the serious charges a bo ut the n ominee’s judgm ent 

in a series of priv ate business venture s. Q uestions have been raised th at 

cannot be ignored. I see no ev idence th at M r. Hoo per is gu ilty of illegal 

con duc t. But, the facts assemble d do raise serious que stio ns on judg ­

ment, and on thes e grounds alone I believe it is sufficient to ask the 

Presi dent for a new nominee.

In sum and substance , aft er reviewing extensively the nom inee’s 

business record, I can find no record of success in any instan ce. Some 

of the w itnesses to follow’ me will, I gathe r, elaborate in some d etail on 

the various e nterprises of Mr. Hooper.
84

Ye sterday, the com mittee also briefly considered Mr. Ho oper’9 

busin ess bac kgroun d for the record. Le t us again review some of these 

dealings. The Hoo per Da iry Farm pa rtn ers hip of Columb us, Miss., 

which Hoo per ope rated from 1965-69 with Ev erette Hope Brooks of 

Memphis never mad e a profit.

Standard Union Life Insura nce Co., of Greenville, Ala., was a small 

stru ggling firm which Hooper served as vice pre sident and director. 

The firm was suspended from doing business in some State s while 

Hoo per was an officer, not abl e Tennessee and Georgia.

Questions hav e been raised as to wh eth er or no t the Hoo per Da iry 

Fa rm was, in fact, an asset of St andard Union Life Insura nce Co., The 

ba nk ruptcy referee ultimately did acc ept th e retu rn of the p roperty to 

Mr. Hooper.

Bu t, I respectfully sugg est the com mittee consider th at the real 

reason for th e r eturn of th e p rop erty was t hat M r. Bro oks’ half i nterest 

had never been defined. Eve n more dam aging, the propert y was so 

burdened by add itio nal mortgag es as to have no real value, rega rdless 

of the definition of ownership.

Lit tle Riv er Far ms, an At lan ta dairy processing plan t with several 

Georgia retail outlets, was anoth er Hoo per v ent ure . Mr. Hoope r was a 

director and stockh old er of this financia lly str ap pe d com pan y which 

lat er went broke. Serious questions have been raised in the staff rep ort 

about the tran sfe r of f unds betw een this c ompan y and o the r firms with 

which Mr. Hoo per was involved.

Oth er records placed before me show th at a canning com pan y 

operated by Mr. Hooper went broke twice. Also, a low-cost housing

S

'oject backed by the Farm ers Hom e Ad mi nis tration and under Mr. 

ooper’s guidanc e, got into financial trou ble.

Let me ju st repe at the sta temen t I mad e earlier. In sum and substan ce, after revie wing the nom inee ’s business record, I can find no 

record of success. And ye t this is a terrib ly large busin ess th at he will 

be managing.

I do no t wish to dwell on such topics, Mr. Chairma n. Bu t because 

Mr. Hoo per lack s any positive prio r experience in the field of public 

utilities , ma nag ement, env ironm ent al concerns, engin eering, con servation, or sop histica ted con serv ation pricing tech niques, the m atter of 

his judg me nt becomes param ount. The se questio ns which hav e been 

raised cann ot be ignored.

In sum ma ry, the Tennessee Valley Au thority now faces the most 

difficult period in its history. It s tra ditio nal ma ndate to provide 

electric power at the lowest possible cost is seriously que stio ned in 

this time of env ironm ent al and con servation concerns.

Recen t rate increases have undermined TV A’s tradit ion al su pp ort 

among consumer groups and done irrepara ble dam age to people 

all across the valley. Nowhere is the tra de off be twee n our e nergy and 

env ironmental goals more sha rply drawn th an in the gen eration of 

electric power.

TVA ’s decisions in this area, because of its special position in the 

electric utility indu str y, have an im pact th at extends far beyond the 

bounda ries of my Sta te.

The nex t member of the Board must be someone who possesses 

a unique com binatio n of experience, com petence, and bro ad pers pective in jud gm ent. Therefore, I urge this com mittee in the strongest
85

possible terms to reject Mr. Ho oper’s nom ination . Th e people of 

Tennessee and the people of the Tennessee Valley deserve more than 

a good man . Th ey dem and the best and most qualified man or wom an 

available. I will he gratefu l for your efforts to see th at thi s person is 

found and placed on the TVA Board of Directo rs.

I than k you so m uch for g iving me the o pp ortun ity to tes tify tod ay.

Se nator Randolph. Th an k you very much, Senator Brock.

When did you int ere st you rself in thi s subje ct matter, Senator?

Senator Brock. Mr. Ch airma n, in this pa rticular nomination I 

intere sted myself in the fall of 19 74 , some 6 or 8 mo nth s before the 

ret ire me nt of the then-d irector, Mr. McBrid e. On th at pa rticular 

occasion, I conta cted the Pre sidential Personnel Office a nd told them 

th at the vac anc y would occur in Ma y of 19 75 . I urged the ir early 

and very precise att en tio n to the m at ter because of its importance 

to Tennessee, and th at they begin the n a search for the most qualified 

possible person.

Senator R andolph. Did the White House assure you th at th at 

would be the proc edure it would follow?

Senator Brock. It did, bu t it was no t followed.

Senator R andolph. You hav e con tinu ed your concern, yo ur 

intere st, and your att en tio n in the nomination of a person to serve 

on the Board until your app ear anc e tod ay, is th at correct?

Senator Brock. For about a year and a half now, sir; yes, sir.

Senator R andolph. Did you, Senator, recommend one or more 

persons for such position?

Senator Brock. I sen t a numb er of r6sum6s to the White House 

for the ir conside ratio n. I felt it might be som ewh at pre sump tuo us 

for me to try to single ou t one, because I thou gh t a numb er were 

qualified. I felt th at I would like the P res ide nt to bring in some outside 

perspectiv e and to use his best jud gm ent. I did try to see th at the 

Pre sident had before him every person who had expressed an inter est 

and who had the qualifications I thou gh t were esse ntial to this job. 

1 recommended no one person.

Senator Randolph. I hope this is a pro per question. I think it is, 

Senator.

Do you have knowledge of othe r Sen ators in the Tennessee Valiev 

Au tho rity region who reco mmended or suggested or discussed witli 

the admi nis tra tio n possible nam es to fill this position?

Senator Brock. I have knowledge, personal knowledge, of several 

Sen ators who have done thi s; yes, sir.

Se nator Randolph. T ha nk you.

Senator Baker.

Senator Baker. M r. Ch airma n, than k you very much.

Senator Brock, would you agree with me th at the TVA is tru ly an 

im po rta nt national asset and no t a regional or State of Tennessee 

asset?

Senator Brock. I cou ldn’t agree more.

Senator Baker. And th at in ma ny ways its futur e ought to be 

well before it and no t behin d it, and th at the importance att aching 

to this nomination is m ore than ord ina ry?

Senator B rock. Tha t is my whole point, Sen ator. I appre cia te yo ur 

saying it more clearly than I did.
86

Senator Baker. I didn’t say it more clearly. I just said it differently.

But it really is a matter of extraordinary importance to us in the 

Tennessee area. I think, as well, it is of extraordinary importance to 

the country.

Senator Brock. I agree with you.

Senator Baker. Tha t is the sense I got from your statement of 

today. I respect you for it. I have not expressed an opinion on this 

nominee. I have both publicly and privately withheld any recommendation in that respect, in part because of my concern for my position 

as ranking minority member of this committee which has to make the <

initial recommendation, and in part because I wanted to hear how 

these matters develop.

There will be a whole range of issues before the Board of TVA, of 

course, in the years ahead. You have identified many of them. One ’

of them, of course, has to do with rates, with the cost of electricity 

and fuel systems, conservation practices, and the like.

I am not going to burden this record with further interchange with 

you on how well or not well this nominee might serve in tha t respect.

Let me ask you this one general question. Does the fact tha t Mr.

Hooper is from Mississippi, and is not from Tennessee or was not 

recommended by you to the President of the United States, have 

anything to do with your evaluation of his existence in this respect?

Senator Brock. None whatsoever. As a matter of fact, several of 

the persons whose names I did suggest for White House consideration 

and whose qualifications were adequate were from outside my State.

As a matter of fact, most of the people I supported for the Preisdent 

were not from the State of Tennessee. I did feel we had two or three 

qualified from Tennessee and I thought very strongly tha t the location 

should have nothing whatsoever to do with the nominee, tha t his 

ability, his integrity, his qualifications, professional competence, his 

background and experience, his dedication to the consumer and conservation are the things that should determine the nominee.

Senator Baker. I haven’t said this in public before bu t I have said 

it privately, but I think it might serve this record well:

At this particular time we have many Tennesseans and there are 

many people no doubt in the seven State TVA area who could serve 

with distinction on the Board, but I personally feel that the agency •

and the area might be well served by drawing its expertise from outside 

the TVA service area.

That does not prejudge the qualifications of this nominee, but rather 

is meant to be a statement of agreement with the point you just made. •

Senator Brock. Thank you.

Senator Baker. Mr. Chairman, I have no further questions.

Senator Randolph. Senator Bentsen.

Senator Bentsen. Mr. Chairman, at the request of the distinguished 

junior Senator from Tennessee, I have called another hearing which 

star ts a t the present moment and I have to go to chair that. I welcome 

him over there when he leaves here. I am very interested in this 

nomination.

Senator Randolph. It gives me opportunity for 30 seconds to say 

tha t the modus operandi of the Senate leaves much to be desired.

Senator Brock. I couldn’t agree more.
87

Senator Randolph. Some day we will realize, and I keep playing 

the same old record, tha t we should have legislative days and committee days and they won’t be intertwined.

Senator Baker. And we will have office hours too.

Senator Brock. I agree and link arms with you on tha t issue. We 

shall prevail one of these days.

Senator Baker. Serious, Mr. Chairman, I think you are not only 

right, but you are probably the first one to make a major issue out of 

it. Unless we do that, sooner or later the legislative process is going to 

> bog down and stop because i t is impossible to keep a schedule that,

each of us get every day with three committees to attend and 

Senate.

Senator Randolph. Forgive me for interjecting this.

• Senator Domenici?

Senator Domenici. Thank you, Mr. Chairman.

Before I ask a few questions of Senator Brock, might I ask Senator 

Baker in your last remark with reference to the national significance 

of TVA and your comment tha t perhaps it would be in order to take 

someone out of the area, do you mean outside of the seven-State area 

that it serves? Is tha t what I understand?

Senator Baker. I don’t presume to speak for anybody except 

Tennessee, and I say tha t with great peril to my political future. I 

am saying the President ought to feel free to consider people not only 

outside Tennessee b ut outside the seven-State area because TVA is in 

fact a national asset.

I want to hedge it quickly by saying there are lots of folks who 

could do a good job from Tennessee, but maybe we ought to look a 

little broader.

Senator Brock. We say th at with some assurance, Senator, because 

we have never had anybody come to Tennessee who didn’t become a 

better Tennessean. They just fall in love with the State, it is so 

beautiful.

Senator Domenici. Let me make one other comment, this one 

addressed to you, Senator Baker. As a member of the committee, I 

appreciate the way you have handled this nominee and your position 

to this point because, although you will obviously be called upon to 

. vote here soon, we serve with you and since you are from Tennessee,

which is one of the States affected, I have to vote and I am pleased 

that you are coming to the hearings without having taken a strong 

position and with what I consider to be a very excellent approach to

• the problem of letting us do some judgment judging on our own without having our ranking member already having made up his mind 

personally.

I don’t know how I am going to vote, but I consider the responsibility a very great and difficult one. I am both on my own judgment, 

and to some extent, on your thinking also. I am pleased th at you have 

not seen fit to render the hearings rath er useless with reference to your 

position by already taking one.

Senator Brock, just a couple of questions. I understand now emphatically tha t your opposition to this nominee is not because he is from 

Mississippi. Is tha t correct?

Senator Brock. I almost wish he was from any place else because I 

have so many friends there and I have such respect for those who are
88

my colleagues and my frien ds from the House. It is a t err ibl y, terribly 

difficult position for me to be in.

I am no t opposed to Mr. Hoope r as a man. I ju st wa nt someone 

qualified .

Se nator D omenici. I know, you have answered th at . Fo r myself, I 

must tell you th at a numb er of people have ind icated th at is wherein 

the opp osition comes. I wa nt to make sure you have answ ered my 

quest ion em pha tica lly so th at when I am asked I can say th at the 

junio r Senator from Tennessee is n ot promoting a Ten nessean for this 

job ove r someone from Mississippi. Is th at correct? 4

Se nator Brock. That is an absolute stat em en t of fact.

Senator Domenici. With reference to the nom inee’s business expe ­

rience, as one goes thr ough yo ur sta temen t, you hav e ind icated th at 

he has no t had any serious success and thus perha ps lack s business <

judg men t. Am I properly sum marizing yo ur position to thi s point?

Senator Brock. Yes.

Senator Domenic i. Let me ask you, Sen ator Broc k, with reference 

to his num erous busin ess ven ture s, you do no t con tend th at he is 

guilty of malfeasance, chic anery, or any kind of disc retion in th at 

job th at indicates anyth ing oth er tha n perha ps bad judgme nt or 

lack of competence in making business decisions. Is th at corr ect?

Senator Brock. T hat is correct. I will sta te furth er in his defense 

th at , in read ing extensively on this matter , the deposition he made 

in the ba nk rup tcy proceeding, for example, I came away with the 

feeling th at Mr. Hoo per may have been abused by some who were 

very sharp in the ir prac tices. I know how th at can happen.

Senat or Domenic i. Senator Brock, as I review some of those, it 

app ear s to me th at when one sta tes his inv olvement and/o r ran k on 

a piece of paper, it might ind icate—because there are high-so unding 

titles like a dire ctor or vice pre sident or vice chair ma n— th at some 

of those title s might ind icate th at he is really one who could ma ke 

all decisions, while as a m at te r of fac t in ma ny of those instan ces 

he was par t of a collective decisionmaking process and it certa inl y 

mi gh t no t have been the one conclusive as to their success or failure.

Is th at no t correct in ma ny of the ventures?

Senator Brock. That is correct.

Senator Domenic i. One last question. You make a point in yo ur #

statem en t th at he has been rather indecisive in answering some 

specific questions regard ing the TVA and, I assumed tied into th at , 

the pa rt of your statem en t whether you ind icate th at he doesn ’t 

hav e the kind of specific experience with reference to run nin g thi s #

kind of uti lity and related enterprise.

I am som ewh at disturbed , and I don ’t ask this que stio n facetiously.

I would like you to give me your version. I think if we had someone 

who was, be he from outside the region or be he in it, th at th at person 

would be burdened by an equal kind of prob lem, in th at there would 

be those saying he has alre ady made up his min d, he alre ady know s 

all the answers, he is alre ady experienced in the field and if he wa sn’t 

on the rig ht side of w hat those people tho ught, he would be chastised 

for th at .

Well, this Sen ator feels th at th at is no t wha t we need at this pa rtic ula r point in time. Fro m wha t I have read , I thi nk we need sou nd 

judg men t and a total open min d with reference to whe rein the TVA
89

is going. I am hav ing some trouble understandin g how one could 

be ope nminded and ye t hav e those qualifications you imply he ou gh t 

to have an op po rtu nity to have.

Would you care to com ment on that?

Senat or Brock. Yes; I would very much so.

In the conclusion of my statem en t I say, “T he next me mb er must 

be someone who possesses a unique com binatio n of experience, 

confidence, and a bro ad pers pective in judg men t.”

I do no t say he has to be an engineer. That was the qua lification

* for the firs t 20 years of TVA’s Board.

Senator Domenici. T o be a what?

Senator Brock. An engineer. We hav e a good engineer on the 

Board. We have a very bright young man who was head of the Ten-

* nessee Dep artm en t of Con servation, who brin gs with him th at commi tm ent and concern.

I am looking for a person who has breadth and who has great and 

demo nstrated qualities of ju dgme nt.

Sen ator, I cou ldn ’t agree more with you. The one person I do n’t 

wa nt is someone who is so d elighted by his back ground and experience 

th at he is we aring blinders like a horse and he can’t see, he has no field 

of vision, he has no sense of pers pec tive because these problem s are 

no t simple of solution. The re is no rig ht solution. There is no perfect 

answer.

The Senator from West Virginia knows full well in choosing betw een 

various energy supplies—str ip mining, and gasification of coal— and 

then the com petition between the nuclear and fast bree der. We are 

deeply involved in th at in TVA as opposed to the liquid metal or the 

water-coo led reac tors.

You do n’t have to hav e som ebody who is an exp ert in th at kind of 

technology. You can hire th at kind of tech nician. Th e person you 

need is the man who can sta nd back and see the forest and no t get 

hun g up on the trees.

If anybody can show me in here where this individ ual, as fine as he 

may be and with the fine su pp ort th at he has, has demo nstra ted th at 

jud gm ent, I do n’t know where it is. I ca n’t find it in there. It is th at 

th at I critic ize, no t the lack of professional experience or engineering 

» experience, the only single academ ic qua lification. That is no t wh at

bothe rs me.

Wh at bothe rs me is th at a nice person who seems to hav e been 

taken advanta ge of by oth ers and with some fairly sharp practic es,

* who has mad e a numb er of errors in judg me nt and who has ye t to 

hav e a real success th at would warrant me to say, well, maybe he had 

a couple of bad experiences bu t his judg me nt finally came to the fro nt 

and he has shown wh at he has. I cann ot find it in this rega rd.

Senator Domenici. I have one las t questio n, Mr. Chairma n. I, too, 

am scheduled to be at two oth er meetings.

I reg ret th at I ask you this q ues tion , Senator Brock , bu t I am going 

to any way. In the early pa rt of yo ur statem en t you seem to have a 

genuine concern about the people of yo ur State with reference to increased utility rates. You hav e gone to great lengths in yo ur st at eme nt ind icating wh at a disaster th at has been and you cite some 

examples.
90

You do n’t expect a nominee to come before us for confirmation and 

go before the people of the Tennessee Valley ind icating he can solve 

th at prob lem and lower the rates ; on the oth er side, th at perhap s the 

Boa rd he is joining has no t done the righ t job and therefo re the rat es 

have been increased dispro portio nat ely or improperly , do you?

Senator Brock. Sen ator, I do. And I do no t in a sense th at some ­

body is going to come before us and say, “H ey, I hav e a magic wan d.

I can solve all of these pro blems.” None of us hav e th at. Bu t I exp ect 

som ebody to express some concern abo ut it.

Mr. Hooper testified yeste rda y before this com mittee, and he made <

one fine sta temen t. It was a good sta tem ent. I agreed with vir tua lly 

every thi ng he said in it until he got to the questions. And it dem onstr ated strip-m ining reclam atio n, soil conserv ation, things th at I very 

much believe in is within TVA’s competence and jurisdiction . ’

But he didn ’t spend a whole lot of time talkin g ab ou t rates. You 

ca n’t imagine, Sen ator, unless you live in Tenn essee, the fru str ati on 

of people of our State rig ht now. When they hav e a problem and have 

a comp laint to mak e, where do the y go? S ena tor Ba ker and I and the 

Congressmen hav e no control over TVA. Ne ith er does any one else in 

the Fed eral Government. If the y have a comp laint, they have no 

place to go.

We could n’t even get open Board mee tings down the re until I 

introd uced legislation ab ou t a y ear ago. I finally got the Board meetings opened up and then we found ou t mo st of the decisions were 

being made before the Board meetin g so the y we ren ’t re ally th at open 

any way. You ca n’t imag ine the fru str ati on of the people in Tenn essee 

when TVA said, “We hav e an energy crisis. We wan t all you good 

folks in Tenn essee with all these electric homes to cu t down your 

thermostats and cu t off the lights and use less air-condition ing and 

less he at .”

Our people did. We had a tremendo us con servation program rig ht 

in my hometow n. So w hat hap pens? Within 30 days after we had the 

con servation program going in full swing, TVA comes ou t and says,

“Our reve nues have fallen off so we are going to hav e to increase the 

powe r charged per kil ow att-hour because we are getting less mo ney.”

The people said, “W ha t you are doing is penalizing us for being 

con servative for redu cing our use of elec tricity. Somebody is wrong -

ab ou t th at. ”

Wh y in the dickens ca n’t we have a pric ing policy th at mo tivate s 

con servation instead of consum ption?

We can. Where was the testim ony dire cted in th at area? I do n’t *

see it. I do n’t hea r it. And ye t th at is fundam ental insofar as the 

people of Tenn essee are concerned. They wa nt som ebody to come on 

th at Boa rd who is going to open it up. Th ey wa nt someone who will 

listen. They wa nt somebody who will tak e a new po int of view and 

try a few things. TVA was a yards tick. It was proposed as one for 

the Na tio n. Where is i t now? W hy isn’t it being used as a y ard stick to 

test alt erna tiv e pricing mechanisms, new technique s of conserv atio n 

and env ironm ent al pro tection? It can be. Well, le t’s get a Boa rd 

memb er who will thi nk in those terms.

Senator Domenic i. I can app reciate your answ er and I genuinely 

believe I understand yo ur concern and the kind of person you would 

like to be on the Boa rd. I app rec iate you r fran kness.
91

Thank you, Mr. Chairman.

Senator Randolph. Thank you, Senator Domenici.

Senator Brock, you spoke of the Tennessee Valley Authority as a 

yardstick. There is a feeling tha t I have had from time to time—as 

one who voted for the original TVA legislation in 1933— tha t the TVA 

was not a yardstick so much anymore but a walking stick.

By that I mean th at we were bringing into being a unique institution 

in government and that it was to work the will of the people in a 

certain area covering a number of States.

Then there was the feeling within the Tennessee Valley Authority 

hierarchy tha t we move into other States.

Would you think tha t there might be a possible invasion of TVA 

into the public utilities that were operated through our private 

industry system?

Senator Brock. Yes. They began to encroach on territories outside 

of their jurisdiction; yes, sir.

Senator Randolph. I think the hearings would indicate tha t that 

was being done. I will not use this occasion, of course, to go back over 

tha t situation. But it did exist and we questioned very, very often 

as to jus t what TVA was, how far it was to go, the mission tha t had 

been spelled out in the original legislation, and of course the changes 

made as we moved along.

You would feel, then, tha t TVA is unique, not a private entity in 

the industrial sense of our country, and has a very important role to 

continue to perform. In no wav should TVA move into other areas 

of the country where, frankly, if you will begin to study the utility 

rates, they are not much different from one part of the country to 

the other.

There are many forces at work which cause increased rates, not 

only for electricity but for na tural gas, across-the-board.

The increased rates, due to many, many factors, are really astounding. The American family today is hard pressed often to meet 

the costs of ju st the heating of homes. Businesses are up against it 

many times in the operation of the machines to manufacture products 

tha t move to the markets. This is a very big problem and a great 

concern of yours, I am sure, as it is and should be of the members 

not only of this committee but the Congress of the United States.

You would feel then tha t mission of TVA is not nationwide. Is 

tha t correct?

Senator Brock. Absolutely. They have enough to say grace over 

at the right end of the valley, Senator. They don’t need to mess with 

anything else. I hope they will concentrate there and do a bette r job 

where they belong.

Senator Randolph. Thank you, Senator, for coming and witnessing 

before the committee.

Senator Brock. Thank you so much.

[Applause.]

Senator Randolph. In the Senate itself, the presiding officer would 

admonish those in the audience not to express by applause, or by the 

opposite of applause, approval or disapproval of what a witness is 

saying. However, this chairman is a very flexible person to a point.

Senator Baker. It depends on which point.
92

Senator R andolph. To a point. Le t us con tinue to hear the wi tnesses. If we wa nt to congratula te them , move quickly ou t into the 

corridor and shake both han ds. You know wh at I mean.

All right. Let ’s have now a panel of witnesses. I think it would be 

a pro per way to hear Mr. Gibson, Mr. Williams, Mrs. Morgan , Mr. 

Brand t, and Mrs. Wh iteh ead.

Presu ma bly , Mr. Gibson, because you are listed first, we would 

begin with you.

STATEMEN TS OF JONA THA N GIBSON. TENNESSEE ENVIRONM ENTAL

COUNCIL; JOHN PH IL IP WILLIAMS. EAST TEN NES SEE RESEARCH

CORP.; SH IRL EY MORGAN. JACKSBORO, TE NN.; ROBERT S.

BRANDT, ON BEHALF OF TENNESSEE CHA PTER, SIE RR A CLUB:

AND CORRINE WHITEHE AD , BENTON, KY., ON BEHALF OF TH E

BETWEEN THE RIV ER S COMMITTEE

Mr. Gibson. Mr. Chairma n, I might explain. I am Jo na than 

Gibson. I am speakin g joint ly tod ay with Mr. Jo hn Williams, on 

my right, whose testim ony will follow my own. If I mig ht, I will 

introd uce the oth er panel mem bers with whom I am pers onally 

acq uai nte d bu t who are appearing here on their own.

Bob Br andt is n ext to Mr. Williams; the n Miss Shirley Morgan and 

finally Miss Corrine Wh itehea d. We will be spe aking in this ord er: 

myself, Mr. Williams, Mrs. Wh iteh ead, Mrs. Mo rgan, and finally Mr. 

Br an dt, if th at is s atisfa cto ry to you, sir.

Senator R andolph. Yes, i t is en tire ly sati sfa cto ry to the comm ittee.

Mr. Gibson. Sir, I hope the com mittee will feel free to ask any 

que stio ns of us at any time in our testimony .

Senator R andolph. Yes, we will keep flexible. We might even 

in te rrup t while you are ma kin g a sta temen t. We might wait until 

all five of you hav e c onclude d. We will see how it develops.

Mr. Gibson, if you will iden tify yourself, the o rganizatio n for which 

you app ear, and make wha t preliminar y sta temen ts you think you 

could make so th at the mem bers of the com mittee would understand 

exa ctly who is s pea king and for the group th at you represe nt.

Mr. Gibson. Th an k you. I am Jo na than Gibson, rep resenting the 

Tennessee En vir onme nta l Council, which is a statew ide con servation 

organization based in Nashville, Tenn.

1 am speakin g joint ly tod ay with Mr. Jo hn Phi lip Willaims of the 

Eas t Tenn essee Research Corp., whose testim ony will follow m y own. 

We and our org anizations believe th at the ap po int me nt of Jam es F. 

Hooper to the Board of Dir ectors of the Ten nessee Valley Au tho rity 

would be a disaster for TVA, the Tenn essee V alley, and the nation.

We wa nt to set for th the reasons for o ur opp osition to Mr. Ho oper’s 

confirm atio n. I hav e app end ed to my statem en t a list of 14 org anizations w ith a me irb a. > hip of o ver 3,000 individuals which have a pproved 

our testim ony tod ay, and the y would like for the record to show 

their endorse men t.

As the com mittee knows, the Tennessee En vir onme nta l Council 

pa rticip ate d with a numb er of oth er Tennessee Valley consumer, 

env ironm ental, and lab or groups in presen ting testim ony we hope 

was useful at the TVA oversight hearing s las t Ma y.
93

However, I want to sta te at the ou tse t th at we have no t come here 

tod ay to debate the pros and cons of pa rticular TVA pro grams or 

policies. No r do we base our opposition to Mr. Hooper’s ap po intme nt on the difference between his views and ours on nuc lear power or 

strip mine rec lam atio n or wa ter resource projects.

Indeed, we don’t know wh at Mr. Ho oper’s views are on the issues 

facing TVA. We do n’t feel this com mittee obtained satisfac tor y 

answers from Mr. Hoo per y est erd ay. Bu t it is n ot Mr. Ho oper’s p oin t 

of view which is our pri ma ry concern.

Inste ad, we are concerned, and deeply concerned, abou t the fut ure 

of the Tennessee V alley Auth ority as an institution of immense regional 

and nat ion al significance. We wish to spe ak about the qualifications 

required of the person app ointed to TVA’s B oard of Dir ectors at this 

critical point in its h isto ry.

In T ennessee TVA has a gre ate r im pa ct on the S ta te ’s e nviro nm ent 

than any othe r single insti tut ion , including State government.

More than 99 per cent of our p opula tion is served with electric power 

gen erated by TVA. In return, app rox imately 63 perce nt of TVA’s 

power revenues are derived fioin Tennessee consumers. Tw entythre e of TV A’s 33 ma jor dam s and 8 of its 12 steam plants are 

in Tenn essee. Fo ur of the seven nuclear pow erplants designed to 

meet TV A’s nuclear gen erating capacit y over the next decade will 

be loca ted in our Sta te.

Yet the Tennessee Valley Au thority is no t a concern merely of 

Ten nesseans or of Senators and Congres smen from the Tennessee 

Valley. TV A’s policies exert an influence far beyond the boundarie s 

of its sev en- Sta te region. TVA is the Nation’s larg est supplier of 

electric power. It is the co un try ’s largest purch ase r of coal, and the 

greates t user of str ip mined coal as well. It is planning the utili ty 

indu stry ’s largest nuc lear gen era ting capacity. As a consequence , 

the practic es of TVA provide a national yardstick for the m anagem ent 

of energy supply and dem and.

As a pub lic agency with va st experien ce and tech nical resources, 

TVA can and should serve as a model for reconciling en ergy prod uct ion 

with env ironm ent al pro tection. With the availabi lity and cos t of 

energy of nationwid e concern and independence in energy resources 

a m atter of national policy, the ap po int men t of a new dir ector to the 

board of the co un try ’s larg est electric ut ility will hav e consequence s 

of clear and resounding nat ion al significance.

Because of its unique sta tus as a Federal Corpo ration , TVA is a 

largely autonom ous institut ion . As Presi dent Roo sevelt observe d in 

his message in 1933 asking Congress to cre ate the TVA, it is “a corpor ation clothed with the power of gover nm ent bu t possessed of the 

flexibility and ini tia tiv e of a priva te enterpri se.”

Th e three-mem ber Board of Direc tors mak es virtu all y all decisions 

regard ing the Autho rit y’s policies and program s. Because of the 

powe r ves ted in the TVA Board and because of the far-reach ing 

imp lica tion s of its decisions, the ap po intm en t of TVA ’s next directo r 

is of ex ceptional importance.

The chara cte r of TVA is a reflection of the c haracte r and the visio n 

of its directors. The individ ual confirmed by the Senat e will assume 

one -third of the respon sibility for ch artin g TVA’s course for the next 

9 years.

6 7 -5 2 0 0 - 76 - 7
94

At present, TVA’s two dire ctors are divided on several matters of 

ma jor policy con frontin g the agency. Th e vote of the third director 

may well det erm ine TV A’s future course on a numb er of critical 

and controv ersial issues. In eva luating Mr. Ho oper’s nom ination, this 

com mittee must consider the varie ty and grav ity of the question s 

which it will be his respon sibility to decide.

Of the $10 billion increase in TVA’s bond ceiling approved by this 

comm itte e, how will the new director vote in regard to issuance of 

bon ds an d disp osition of their reve nues? How will be insure th at 

TVA’s rates rem ain at reasonable levels, levels which inclu de the 

social and env ironm ent al costs of produc ing powe r and which encourage energy con servation in line with national energy goals? W ha t 

will be his stance concerning TVA ’s nu clear power program , pa rti cu ­

larly in the light of reliability questions raised at Bro wn’s Fe rry and 

dem and justifi cation vigorously disputed at licensing hearings for the 

Ha rtsville plant?

What will be the new D ire cto r’s position with r egard to amend me nts 

rec ently proposed to the TVA A ct? Three such amend me nts ha ve been 

introduced by Senator Bill Brock of Tennessee, whose testim ony this 

morning we appre cia te very much .

These would require by law th at TVA Board mee tings be open to 

the public, establish a Citizen Review Com mission for TVA, and 

man da te a joint energy conserv ation stu dy with FEA . Com men dable 

tho ugh these proposals ma y be, there is no reason th at reform s should 

have to be forced on TVA from outside . Will the new Board member 

have the vision and initiative to keep TVA resp onsive and to make 

such changes when the tim e for chan ges has come?

How will the app ointee view TVA’s responsib ilities for air p ollu tion 

control at its coal-fired steam plants? Mr. Ho oper told the com mittee 

yeste rda y th at he had reserved judgme nt on this question unt il the 

results were in from scrubber demo nstra tio ns at Wid ow’s C reek. This 

clearly missed the point th at the use of in te rm itte nt controls is prohib ited by law, a law wr itten by this comm itte e and furth er str en gthened in rec ent clean air ame ndm ents.

The que stio n the n, is, will TVA’s new Board member adv ocate 

policies consistent with the spirit of env ironm ental p rotection laws, or 

will he con tinu e TVA’s claim of im mun ity from pollution con trol 

sta nd ards with which it doe sn’t agree?

Now th at th e A utho rit y no longer c ontem pla tes buy ing th e P eabody 

Coal Co., wh at alt ern ati ves will the Direc tor recommend to assure 

long-term availabilit y of coal? Will thi s be easte rn or wes tern coal, 

high sulf ur or low sulf ur, deep mined or str ip min ed, and wh at price 

will TVA pay for coal supplies?

How will the n ext Direc tor respond to a c itiz ens’ s uit and a D ep ar tmen t of the Interio r req uest con tendin g th at , under the Endangere d 

Species Act of 1973, TVA must preserve the ha bi ta t of the snail 

darte r, even if thi s means haltin g the Tellico proje ct on the Li ttl e 

Tennessee Riv er?

These are not que stions for the Pub lic Wo rks C om mittee to decide, 

at lea st no t in a daily man agerial sense. Th ey are decisions for the
95

TVA Boa rd of Directors. If he joins th at Boa rd, Mr. Ho oper mus t 

answ er all these questio ns and ma ny more. Th e issue before the com ­

mi ttee today is sim ply w het her M r. Hooper is qualified to ma ke public 

policy decisions such as these. Th e unanimo us senti me nt of the organ izations which Mr. Williams and I rep res ent is most em phati cally 

th at he is not. And these sen tim ents are shared by virtu ally every 

businessm an, power distr ibu tor, and friend of TVA with whom we 

hav e spoken ab ou t this nomination .

W ha t s tand ard, then, wh at criter ia of talent a nd com petence shou ld 

this com mittee apply in judging a nom inee to the TVA Board? Le t me 

set the record straight on w hat we, in the T ennessee Valley, think th at 

we and the Na tio n deserve. And let the record show th at we intend for 

the same rigorous qualifications and sta nd ards to app ly no t only to 

► Mr. Hoope r bu t also to any successive nominee to the vacan cy which

now exists.

As the com mittee knows, the TVA Act itself is ra th er unspecific in 

the at trib ut es requ ired of a TVA Direc tor.

As the com mittee also knows, the TV A Act was w ritten in 1933, an d 

only two members of the 94th Congress were Members of the bod y at 

th at time— the distinguish ed cha irm an of this com mittee and the 

Honorab le Re prese nta tiv e Wright Pa tm an of Texas.

The social, econom ic, and env ironm ent al con ditions of th e Tenn essee 

Valley and the N ati on ha ve changed considerably since 1933, and m uch 

more is required of a Direc tor tod ay than is lite rally set forth by the 

TVA Act.

We believe th at the next Di rec tor of TVA must possess six indisp ensable qualifications:

1. He m ust have the professional bac kgrou nd, either through educa ­

tion or experience, to deal comp ete ntly with the tech nica l issues of 

energy dev elopment, supply, and con servation.

2. He must possess proven manag eria l ability to adminis ter the 

larges t electric utility and regional dev elopm ent agency in the Un ited 

State s, with total asse ts of $5}2 billion and a bu dget in 1975 of over 

$1 billion.

3. He must hav e a demo nstrated comm itm ent to reso urce c onservation and environme nta l pro tection tog eth er with an un derst andin g of 

the legal, scientific, and economic issues invo lved in pursu ing these 

obje ctives.

4. He must possess the capacity for ask ing the rig ht questions, for 

exercising ind ependent jud gm ent, and for mak ing difficult decisions. 

He mu st be able to com munica te both with TVA’s supp orter s and 

with TV A’s critics, and to acc ept constru ctive r eco mm end ations from 

bo th qu arter s. He mu st be able to defe nd and explain TV A’s action s 

where nec essary and to advocate inn ovation and reform where 

app rop riate.

5. Th e Direc tor must be free of any financial asso ciation which 

might give rise to conflict of in terest or bias of persp ective.

6. Fin ally and perha ps mo st im po rta nt, the next TVA Direc tor 

must be an ind ividual of high integ rity and unquestion able pers onal 

rec titude, a person whose lead ership of this unique in stitu tio n will 

prove a cre dit to the region and to the Na tio n.

Ou r organ izations and num erous o the rs urged the Presid en t to seek a 

nom inee of thes e creden tials long before Mr. Ho oper’s nam e was pro-
96

posed. Regional and natio nal n ewspapers have art icu lat ed the need for 

ap po int me nt of a qualified individual.

I am appen din g a numb er of these editoria ls to my sta temen t and 

ask th at t hey be included in the record.

Senator R andolph. W ith ou t objection. (The stat em en t appears a t 

p. 105; the editorial appears at p. 129).

Mr. Gibson. Yet, rem ark ably, these entre ati es we nt unh eeded. 

Senator George No rri s’ high hopes for a nonpolitical TVA hav e been 

abandoned; clearly partisan mo tivations h ave prev ailed in selection of 

the prese nt nominee. Our dis appointme nt and disp leasure at Mr. 

Ho oper’s n omination were in no way mollified bv the knowledge th at 

several qualified and highly recommended individuals were passed 

ove r by the W hite House in f avo r of a candid ate whose sole distinc tion 

appears to be his popu lar ity with pa rty leaders in Mississippi.

In c on tra st to the m any individ uals of recognized and e xtraordina ry 

qualifications who might have been before this com mittee tod ay, 

James Hoope r mee ts virtu all y none of the criter ia set forth above.

He h as no know n exp ertise in the critical field of energy supply. He 

possesses no t even the admi nis tra tiv e com petence to manag e his 

pers onal b usiness affairs, all of which have e nde d in either b an krup tcy, 

finan cial loss, or civil litigat ion . His record gives no in dication of fa miliar ity with or adv ocacy of th e ethi c of en vironme nta l pro tec tion, par ti ­

cularly in terms of the complex issue of air an d wa ter pollutio n control.

Mr. Hoo per h as said th at while he doe sn’t have a knowledge of the 

ma ny technical issue con frontin g TVA, he ret ain s an open mind on 

these issues. At the same tim e, he h as alr ead y sta te d :

I know of no other Republican, with a chance for White House appointment, 

who, conscientiously, as I can, could stick in there and uphold Red Wagner’s 

hand. (Nashville Tennessean, June 22, 1975).

Mr. Hoo per seems to hav e cas t his allegiance before understandin g 

the tech nical choices. When he himself has come under criticism , he 

has responded in vin dic tive and intem perate fashion. Such beh avior 

hardly reflects the intellectual inde pendence and open-m indedness we 

seek in a T VA Dir ector.

Fin ally , the inform atio n which has come to light on Mr. Ho oper’s 

finan cial dealings and business associations raise s serious and disturbing questio ns ab ou t his personal judg men t and principles.

Th is might be a point, Mr. Chairm an, where I could interje ct some 

response to Mr. Ho oper’s con ten tions ab ou t th e q ualifications he would 

bri ng to the TVA boa rd. He claimed ye ste rday wha t TVA needs is a 

Di rec tor with an agricultura l backgroun d. By no means do we i nte nd 

to belittle TVA’s role in agricultural develop me nt nor to suggest th at 

more sho uld n’t be done in this area.

But le t’s look at the sta tistic s for a mo me nt. If we look at TVA’s 

annual rep ort, we find th at in 1975 the Autho rit y spent $961 million 

on its power program. Some $35 million was spen t on nonpow er programs. Of this sum, only $1.8 million was spen t on agr icu ltural 

development.

Th us the am ount spent on agr icultural pro gra ms is only 0.2 perce nt 

of the am ount allocate d to TVA’s pow er program.

Fu rth er, in reviewing the agen da for eig ht of the nine TVA Board 

meetin gs held between Au gust 14, 1975, and Fe brua ry 12 of this year, 

we find th at the TVA Direc tors considered a total of 292 item s, only 

9 of which, or 3 percen t, were related to agricultura l prog rams.
97

Th us our conte ntion is th at the bac kgrou nd which Mr. Ho oper 

would bring to the Board, with the agricultura l interest which he has, 

sim ply wo n’t be highly relevant to the ma jor policy and bu dg etary 

decisions con fronting TVA.

These are the rea sons we h ave all along argued again st Mr. Ho op er’s 

ap po int me nt to the TVA Board. In the 8-long mo nth s since his nomination, the re has emerged ye t one more reason, a reason which is the 

mo st compelling of all for his rejectio n. The reason has to do with the 

fac t th at TVA is at a critical and extrem ely con troversial junc ture in 

its history.

Co ntr overs y is no t som ething n ew to TVA. Bu t the sto rm which is 

brew ing now and the winds of public disaffection which are alread y 

blowing challenge the very purpose a nd cre dib ility of the in sti tutio n.

I am confident th at positive changes and creativ e solutions will 

emerge, bu t the issues are seiiou s ones and are far laig er th an the personalities of the thr ee men who sit on TV A’s Board of Directors.

We can recall the b itte r stru ggle which led to President Ro osevelt’s 

removal of Ar thur Morgan from the TVA Board and to a joint congressional inv estiga tion of TV A. It would indeed be tragic if again, as 

in 1938, the energies and best efforts of the peop le of the region, and 

perhap s of this com mittee, were to be div erted from the su bstan tiv e 

issues by a continuing dispute ove r the chara cte r and com petence of 

TVA’s leadership.

Yet, this is precisely wh at Mr. Ho oper would bri ng to the TVA 

Board —continuin g personal controvers y, fu rth er g riev ances to TVA’s 

critics, dim inished respec t amo ng TV A’s friends.

Our pub lic ins tituti ons, and especially TVA, need the fai th and 

confidence of the public. Mr. Hooper appa rently fails to un derst and 

this fact. He seems n ot to realize th at the prolo nged controvers y over 

his r ep utation will severely damage —and has already da ma ged—TVA.

He has no t thou gh t high ly enough of TVA to withd raw himself 

from the nomination, with all the opportu nit ies he has been given, 

and to spa re the institut ion this loss of confidence. Th is is the mo st 

severe of all ind ictme nts ag ain st Mr. H ooper and the most fundame nta l 

of reasons why this com mittee should find him un fit to become a 

TVA Director.

When Mr. Ho oper’s nomination was first ann ounce d, we in the 

Tennessee Valley were app alled and offended by the low estee m held 

for our region and for the Tennessee Valley Au tho rity.

We app lauded this comm ittee’s decision to pos tpone hearing s to 

perm it a full inv estigation of Mr. Ho oper’s bac kgrou nd. Th e long 

delay of thes e proce edings has in no way diminished our total and 

unaltera ble opposition to Mr. Ho oper’s nomination; the passage of 

time has not, and will not, reconcile us to havin g Mr. Hooper as a 

Direc tor of TVA.

How ever, we are acu tely conscious th at the Autho rit y is facing 

im po rta nt decisions with less th an full leadersh ip. We mus t pu t this 

nominat ion beh ind us and allow TVA to get on with the busin ess 

ahead.

We h ave d one everyt hin g possib le t o persuade the P resid en t to w ith ­

draw Mr. Ho op er’s name an d s ub mit a nominee with abilities commensurate to the pos t. We h ave called on our Senators and Con gressm en to
98

ask the Presi dent to withd raw the nomination . We hav e asked top 

officials in FE A, EP A, and the Council on En vir onme nta l Qualit y to 

urge the Presi dent to look again for a profe ssionally qualified appo intme nt.

We hav e done every thing bu t come to Wash ing ton and beg Mr. 

Ford to give us the rig ht person for the job. And why? Beca use we 

wante d to spare the Pre sident, and this com mittee, and no t lea st of 

all Mr. Hooper, the em barrassm ent and the waste of time and re ­

sourc es require d for confirm ation hearing s on a nominee so sad ly 

defic ient in qualifications.

I t gives us no pleasure to implore this com mittee to reject a nom inee 

of the Pre sident as totally unsuite d for a position of public tru st. Our 

concern for TVA leaves us no choice. We urge the com mittee to 

recommend aga inst con firm ation of Mr. Hooper. We ask the U.S. 

Senate to reject his nomination . We req uest Presi dent Ford to give 

us an appointme nt wo rth y of the nat ion al significance of TVA.

Senator R andolph. Th an k you.

Mr. Gibson, do you know Mr. Hooper pers onally?

Mr. Gibson. I have nev er me t Mr. Hoope r person ally ; no, sir.

Senator R andolph. Ha ve you corr espo nded with him personally ?

Mr. Gibson. No, sir.

Senator R andolph. You hav e never asked his viewpoint or opin ion 

by letter or in any othe r way on the matters th at y ou have discussed 

with the com mittee?

Mr. Gibson. I hav e seen a mem orandu m which Mr. Hoo per wro te 

himself in response to some alleg ations which were made which will 

be deta iled later. That is my only corresp ondence or com municatio n.

Senat or R andolph. Does the E nvironm ental Council in your State 

tak e a vote among yo ur mem bers as to the position which was sta ted 

by you as you come to the com mittee tod ay?

Mr. Gibson. This position tod ay was endorsed by our executive 

comm itte e which opera tes in the interim between board mee tings. 

Th is is the formal ma nner of aut hor izin g a stat em en t by the council.

Senator R andolph. You will understand th at I am no t inq uir ing 

improperly . I am tryi ng, as we do with all witnesses, to identif y th e 

witness with the o rganizatio n th at he repr esents.

Mr. Gibson. Yes, sir.

Senat or R andolph. W ha t is the mem bers hip of your council in 

Tenn essee?

Mr. Gibson. Th e council is an association of organizations essentially.

Senator R andolph. Organizations?

Mr. Gibs on. Th ere are some 34 org ani zation s which are members 

of the council, and som ething over 50 individ ual members.

I might add, Mr. Chairma n, th at th e end orsements which I spoke of 

earlier are end orse men ts of some mem bers of our council and other 

organizati ons which are no t members. I do have th at in writin g 

from the ir various org ani zation s as foim al actions of the ir grou ps, 

and th at will be subm itted for the record. (See p. 115.)

Senat or Rand olph. Of course, we will wish you to use the record 

to give us wh ate ver info rma tion is necessa ry in conn ection with the 

council, as you feel the council’s views are reflected in yo ur st at emen t toda y.
99

How long has the council been active in this matter, from the 

beginning when there was no one even men tioned by nam e— Mr. 

Hooper or someone else?

Ha ve you tried to be active with this situatio n in calling to the 

attention of people the need for a new dimension or a new outlook 

or, as y ou have said here on page 7 of your sta temen t, speaking of the 

person to fill this position, “H e mu st be able to defend and explain 

TVA’s actions, where necessary , and to adv oca te inn ovation and reform where ap prop ria te.”

* Th e reas on 1 hav e followed this line of que stio ning is because you, 

Mr. Gibson, have ind icated the place of Tennessee and all the T ennessee Valley Au thority dev elopment from the sta nd po int of the impoundm ent s of water, and so forth, in the impact upon Tennessee.

* Mr. Gibson. Yes, sir.

Senator R andolph. Ha s yo ur council been active or have you 

expressed yourself about the Tennessee Valley Au thority and wh at 

apparen tly you believe a dire ctio n is or is no t good in which it is or 

has been going. You said so in this sta temen t. I wa nt to know, have 

you been doing th at over a period of time?

Mr. Gibson. Yes, we have. We have been active ly involved in 

corresp onding with TVA dir ectly and with pub lic officials on matters 

concern ing the au th or ity’s act ivities. Our org aniza tion is pre sen tly 

sponsoring a series of regional sympos ia on TVA and the E nviro nm ent, 

in which we are looking at all thes e energy que stio ns and resource 

ma nageme nt issues. This is desig ned as a form of pub lic edu cation to 

ac qu aint th e citizens of the region with some of the critica l issues facing 

TVA and allow them to make up the ir own minds.

I mi gh t add th at our org ani zation has been act ive ly inter ested 

in this nomination since long before Mr. Ho oper’s nomi natio n was 

suggested, as I said, and did corresp ond w ith the W hite House in May, 

listing the qua lific ations which have been set forth before you tod ay 

as the prereq uisites for the nomination.

Senator R andolph. I than k you. I know th at will be helpful to the 

members of the com mittee as we evalu ate yo ur testim ony.

You spoke here: “to advocate inn ovation and refo rm where ap propr ia te .” I was rem embering a pa rt of the qu otation from Ab rah am 

* Lincoln when he said, “T he dog mas of the qu iet pa st are inad eq ua te

to the sto rm y presen t.” You are thinking ab ou t th at a little, ar en ’t 

you, as you speak here?

Mr. Gibson. I hope th at the next director, whoever he ma y be, will

* hav e yo ur reco llection of th at qu ota tio n.

Senator R and olph. Se na tor Bak er?

Senator Bak er. That is a pr et ty good sized bill for the next one. I 

will look forw ard to that.

Mr. Gibson, you mentioned wha t you thou gh t a dir ector ought 

to be. Le t me spe ak in a lit tle more general terms ju st for a second 

ab ou t TV A’s role as dist inguished from the directo r’s role, no t th at it 

is dir ectly relevant to our con sidera tion of a nom inee for the Boa rd 

bu t because I would like to hav e your opinion and this is a good 

foru m for it.

Mr. Gibson. Ce rtainly.

Se na tor Bak er. The cha irm an is right, of course. TVA has come 

throu gh a per iod of relative tra nq uillity since the sto rm y times in its
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early development. I think I am right, tha t its future ought to be well 

before it and not behind it. But I didn’t elaborate on what I thought 

TVA’s future ought to be. Right now give me some vignette of what 

you think TVA’s role ought to be in the future.

Mr. Gibson. As I have stressed in the testimony, TVA’s role is 

largely one now of an electric utility. I think this is an area where it 

can show an incredible amount of leadership to the Nation. We have 

here a system serving over 2.4 million customers.

Senator Baker. You think it ought to be essentially tha t of a 

utility? It is the largest utility in the world. T suppose it is inevitable 

tha t is going to be its major role. But it troubles me a little tha t tha t 

certainlv isn’t what it was conceived of initially, to be a major utility.

Mr. Gibson. It has achieved many other purposes. What I am suggesting is tha t in TVA we have the potential for very, very rapid 

adjustments, for experimentation with some concepts like Senator 

Brock was suggesting, energy conservation measures.

What could we do, for example, with a revolving loan fund set 

up to finance heat pumps and insulation? What could we do with 

some peak-load pricing techniques with changing the inverted rate 

structures for example. TVA is experimenting, as you know, in 

Chattanooga with just that. But these are not systemwide approaches.

I think tha t is one of our organization’s basic complaints with the 

authority, tha t these are really cosmetic and we haven’t really talked 

in the large about energy conservation as a way of life. It has been 

voluntary. It has been induced through publications and through 

press releases if it has been induced a t all.

But we haven’t seen any financial incentives to encourage this. 

FEA has some very exciting ideas in tha t field. Why FEA and TVA 

aren’t working closer to implement these, I don’t know. I remember 

Mr. Robert Seamans in Knoxville in October. He was asked a 

question with regard to the National Plan for Energy Research 

Development.

The question was: “ What is TVA’s role? How do you view TVA as 

part of the national energy program, and why wasn’t TVA mentioned 

in the ERDA report?” He referred to a solar system in Oak Ridge 

and said the omission was an oversight. In my opinion, it was a very 

grievous oversight. I don’t mean to belittle the other roles of resource 

management, but tha t is where we are as a Nation. TVA is way 

behind the times and we are facing some critical energy shortages.

Senator Baker. What about its regional development role? Do you 

see in the next 20 years substantial function of TVA in that respect?

Mr. Gibson. I think it is going to have to go in a different direction, 

Senator. I assume th at it will maintain tha t role. Tha t role of course 

could be performed by local governments if TVA weren’t doing it. It 

could be performed by another kind of organization, like the Appalachian Regional Commission, if TVA weren’t doing it.

But let’s assume TVA will continue to do it. Look at a different 

kind of industrial promotion in the valley. Take the waterfront industries for which TVA takes primary credit. If you do a simple division 

there, you find tha t a number of jobs created per dollar of plant investment is only one-half of the national average.

When you talk about furthering the economic growth of the valley, 

shouldn’t you be looking a t labor intensive industries perhaps, rather
101

th an the large heavy power user, the chemical pla nts , for exam ple, 

which tu rn ou t a lot of valu e add ed pro ducts bu t don’t emp loy ma ny 

people?

This is anoth er way TVA could go. I personally would like to see 

them move in th at dire ction as anoth er bra nd, you mi gh t say, of 

regional develop ment.

Senat or Baker. W ha t new fun ctio ns would you visualize for TVA?

Mr. Gibs on. One, no t nece ssarily a new fun ctio n so mu ch as a new 

attit ud e, I would like to see is greater responsivenes s and g reater work

• with some of th e State agencies in N ashville and in o ther S tate capital s.

Before the St ate legi slature are ma ny mea sure s havin g to do with 

resource develop me nt and energy. I think TVA could bring to bear its 

exp ertise in wor king more closely with legislators themselves and with

• Go vernm ent officials in draftin g legislation designed to furth er the 

concept of pa rtn ership in solving some of the region’s prob lems. In 

Tennessee we have had a hard time talkin g to one anoth er, St ate officials and TVA.

Senator Baker. Le t me ask you two questio ns and let me weight 

the im pact of them first by telling you the y ma y no t be wh at the y 

appear to be. That is, I am no t implying any attit ud e or po int of 

view to you, nor am I inferring any with the sta temen ts you alread y 

made. But I think the record migh t be well served with these two 

questions.

By and large, do you thi nk the Tennessee Valley are a has been 

be tte r off by reason of TVA or worse off over the las t 40 years ?

Mr. Gibs on. B etter off.

Senator Baker. Substan tially?

Mr. Gibson. Subst antially.

Senator Baker. So it has been a success?

Mr. Gibs on. I thi nk un do ubted ly it has been a success.

Senator Baker. And you thi nk it will con tinue to succeed in the 

future ?

Mr. Gibs on. I am no t optimistic, Senator, no t unless it changes.

Senator Baker. Tha t gets me to the second que stio n. If you were 

able to ord er and dete rmine the destiny of TVA on yo ur own, which 

none of us, of course, are, wh at would you do w ith it? Would you sell 

it? Would you keep it? How would you chang e it? W ha t would you do?

Mr. Gibs on. Sen ator, thes e are very approp ria te que stio ns for a 

nominee for the directo rship.

Senator Baker. Th ey are prec isely wh at we are talkin g abo ut. 

5 I guess th at is really wh at we finally get down to.

Air. Gibs on. It is wh at we get down to really. W ha t does T VA’s 

ma nageme nt wan t to do with it?

Senator Baker. W ha t does the coun try wa nt to do?

Mr. Gibs on. W ha t does the coun try ultim ately wan t to do? I 

have some personal ideas. I thi nk th at perha ps we could look a little 

furth er at a greater role for t he co nsumers in the m anagem ent of T VA ’s 

affairs. I do n’t simp ly mean by inserting a p ublic pa rticip ati on clause, 

as in the Wate r Pollution Control Am end ments, in the TVA Act, 

although it wo uld n’t hu rt to charge it form ally with public pa rti cipa ­

tion resp onsibilities . Th e Cit izen Review Comm itte e ha s been sug ­

gested. Tha t, I think, may have some drawbacks.
102

One alt ern ative th at is bein g talk ed ab ou t in the valley, with 

increas ing frequency, I think is turnin g TV A back over to the consumers, a cooperative at large, as it were. I am no t su re I like th at idea. 

These are the kinds of things we are h earing down there, because these 

are some of the problem s th at have occurred.

Also, S enator, if I might add, it migh t be th at we h ave accomplished 

a grea t nu mb er of TVA ’s functions in terms of flood co ntiol and navig ation and th at perha ps we shou ld rem andate the TVA. Perha ps we 

shou ld more closely del ine ate wha t its resp onsibilities for the future 

are, in terms of wa ter reso urce projects, particular ly.

Senator Baker. TVA was formed in the thirtie s, of course, and as 

you are well aware, it w as created on the suggestio n of Senator Norris 

and Presi dent Roo sevelt to be an ext rao rdinarily autonomous, pub lic 

corporatio n. It is really unique in the American political experience, 

in th at it is responsible to no one.

I t has a chart er which gives it autono my o ver a l arge por tion of our 

daily lives and o ur economic and social welfare.

We have created, in add itio n to th at, a pre ced ent th at deters 

‘‘political inv olv em ent” in TVA’s affairs. There have been huge 

presidential deb ates ab ou t th at . To reinforce the idea th at TVA 

was on its own, a thre e-m an Board of Dir ectors implied a three- ma n 

Board of Administrators. You pu t them down there to run this and 

we bu ilt a wall around them and said you are on yo ur own. I really 

do think th at has worked rem ark ably well.

Tu rning it back over to local groups, or more consum er pa rti cipa ­

tion on a Citiz ens Advisory Council, maybe the rig ht thi ng to do bu t 

it is very much at variance with the original idea of a strong centralized 

autono mous TVA.

So what you are talkin g ab ou t is a fu ndam ental change in the nature 

of the concept of the Valley Au tho rity if those things were to be 

undertaken.

Mr. Gibson. That is correct, Senator. I think th at a lot of people 

wa nt some fun dam ent al changes. I would prefer to see these changes. 

I thi nk this is the th ru st of m y testimony.

I can envision some of the testimony th at will follow coming from a 

Boa rd of Directors which asks, as you ask, wha t is required 20 years 

from now, and which begins to sugg est those changes and make those 

changes and urge those changes upon this c om mittee and the Congress 

ra th er then people outsid e h aving to say, look, wake up, h ere is w ha t is 

needed and here is where we are going.

Senator Baker. W ha t I am about to say next is a little reckless for 

a politician , and I ought no t to say it at all, but I am going to.

One of the principal reasons TVA has the image problem th at you 

describe is because it has los t its inn ovative spirit. Frankly , I would 

like to see us find new roads and new challenges and new opportunities 

for TVA. I am no t sure though , in order to do th at that we ha ve to pu t 

TVA back into the ma ins tream of eve ryd ay political affairs or turn 

it ove r to the consumers or mak e it a gia nt coo perativ e or sell it to 

private enterprise.

I thi nk TVA in the prese nt for ma t can be restr uc tured, revitalized 

and red irec ted so th at i t once more is the useful resource ma nageme nt
103

project tha t it once was. The fact tha t it also happens to be the 

largest power producer in the world ought to create an opportunity to 

demonstrate new techniques in conservation, environmental technology and the like.

Mr. Gibson. I s TV A not like any other agency or institution? 

It is a reflection of its leadership.

Senator Baker. I think it ought to remain unique, in my own personal view. I thank you very much, sir. We no doubt will have a 

chance to discuss this over time. I value your opinion.

Mr. Gibson. Thank you, sir.

Senator Randolph. Thank you.

Senator Stafford, do you have questions or comments?

Senator Stafford. Thank you, Mr. Chairman.

I just have one or two questions. I am sorry, Mr. Gibson, tha t I 

wasn’t able to be here during your formal testimony. We in the Senate 

all suffer from too many subcommittee assignments. I have fallen 

victim to that this morning.

Could I ask you briefly how you perceive the future of TVA in 

terms of the sources of its energy? Do you perceive it in terms of 

becoming basically a nuclear generated system or a coal generated 

system or a combination of nuclear and coal generation?

Mr. Gibson. Senator Stafford, I think-----

Senator Baker. Can 1 interrupt a second? I can’t resist the te mptation to point out that since 1934 we have come to the place where, 

when the power options are put, the only one omitted is hydro-electric 

power. And that is what TVA was built for in the first instance.

Senator Stafford. I would be glad to include that.

Senator Baker. TVA has dammed up every river it can find, so 

there is not much left to do in tha t area.

Senator Stafford. That is why I didn’t include it.

Mr. Gibson. I think we suggested in some remarks tha t it is not an 

either-or question. Clearly, we have to exert ourselves in every technology and with greatest rapidity. In the Nashville area, for example, 

there is a controversy over the Hartsville powerplant, a very big plant 

which is far from being over.

There is a great deal of concern about the safety aspects and about 

the economics, more and more about the economics, of nuclear power. 

While we wouldn’t make the suggestion the three plants which are on 

line and designed now, although not under construction, should be 

abandoned, I have to think tha t perhaps their construction date could 

he put off by serious conservation measures.

V hat can we do? The State of Tennessee contended at the Nuclear 

Regulatory Commission’s hearings on the Hartsville plan t tha t there 

are nonstructural alternatives to supplying energy. The State made 

a very creditable presentation at those hearings. I think the authority should be exploring these avenues, although not necessarily to 

get us out of the nuclear technology field. We have problems with 

coal as we do with nuclear, clearly.

I think tha t a presentation tha t was made in the Hartsville hearings 

suggested that we could put the construction date back a little bit so 

we can see, for example, how well the various systems function when
104

Bro wn’s Fe rry goes back on line and if we hav e any more prob lems 

there than a nyw here else. Th is will give us a l ittle m ore brea thi ng space 

before we go on to n ucl ear te chnology. We thi nk we are pro bab ly going 

to have to go to it.

Senator Baker. I did n’t intend my las t rem ark s as criticism of 

your description of TVA, Senator Stafford. I thi nk you may hav e 

misunders tood me. Ju st before you got here, this witn ess and I had 

had a free-flowing and philosophical discussion ab ou t the history of 

TVA and your statem en t hap pened to fit into th at thou gh t stream. 

My com men ts were no reflection on yo ur question. I apologize, if 

they app eare d to be.

Senat or Stafford. None is needed. And I didn ’t tak e it th at way. 

I was trying to learn really wh at this witness perc eived to be the futur e 

of generation of electricity in TVA.

Mr. Gibson. T hope I haven’t hedged too much on you.

Sen ator Stafford. I have to ask you, Mr. Gibson, are you and the 

people you are speakin g for tod ay inh ere ntly opposed to gen eration of 

electricity thro ugh nuc lear power?

Mr. Gibson. We are no t inh erently opposed; no, sir.

Senator Stafford. You are no t inh ere ntly opposed?

Mr. Gibson. No, sir.

Senator Stafford. How do you perceive Mr. Hoo per in terms of 

his outlo ok for the f utu re of TVA in terms of coal versus nuclear versus 

a com bina tion of the three?

Mr. Gibso n. Sen ator , I am extremely confused by Mr. Hooper’s 

outlook . I wish I knew. Th e questions th at were asked yeste rday 

were asked on precisely thi s point. Fi rst of all, we seemed to get an 

answer th at he would abandon nuc lear tech nology, even those plants 

th at are und er design now, and go all coal.

Th en we seemed to get an answer th at, no, ev eiything un der the Sun 

was needed, incl uding the Sun, and th at he would go with the nuclear 

powerplants. I believe thi s was if we could be assured th at a lo w-co st 

sup ply of cheap ura niu m was assured. I do n’t know wh at the time 

fram e there was, wh eth er it was the initial placem ent of uranium in the 

cores, or wh eth er it was the supplies th at are going to be needed for 

replenishment, or w hat. I do n’t know Mr. Ho oper’s views on this.

Senat or Stafford. Th an k you. Th ank you, Mr. Cha irman.

Senat or R andolph. Th an k you, very much, Senator Stafford.

You reared the ugly head of nuc lear energy again. I shall ju st let 

it bow its head and no t discuss it.

Th an k you very much, Mr. Gibson, for your testimony.

Mr. Gibson. Th an k you, Mr. Chairma n.

Sen ator R andolph. I am sure it will be care fully reviewed by ail 

mem bers of the com mittee. The re is no need for me to explain why 

other mem bers are no t here. They are in oth er com mittee meetings, 

or subcom mittee meetings. I had the same problem. Senat or Ba ker 

has had the same problem.

We have com mitted ourselves to being here for all the tes tim on y 

because we feel we hav e a responsibility. For th at reason, we have 

been present.

[Mr. Gib son ’s prepar ed statem en t and the end orsem ents and editorials referred to d uring th e testim ony follow:]
105

HEARINGS ON THE NOMI NAT ION OF JAMES F. HOOP ER 

TO THE BOAR D OF DIRE CTOR S OF TVA

TESTIMONY OF JONATHA N GIBS ON 

TENNESSEE ENV IRO NMEN TAL COUNCIL 

FEBR UARY 18, 1976

The Tenn esse e Enviro nmental Council is a stat ewid e asso cia tio n of 

cons erva tion o rganiza tion s based in Na shvil le, Tenness ee. I am spea king j oint ly 

today with Mr. John Philip W illi ams of the East Tenn esse e Rese arch Corp orati on, 

whos e test imony will follo w my own. We and our orga niza tion s believe that the 

appo intm ent of J ames F. Hooper to the Boar d of Direc tors of the Tenn ess ee Valley 

Auth orit y would be a disa ster for TVA, the Tenn ess ee Valley, and the nation.

We wa nt to set forth the reasons for our total and unal tera ble opposit ion to 

Mr. Hoop er's confi rmati on. I have appende d to my stat emen t a list of organ izat ions 

whic h have appr oved our test imony today, and they woul d like for the record to 

show thei r endorsem ent.

As the Comm ittee knows, the Tenn ess ee Enviro nment al Council parti cipa ted 

with a numbe r of o ther T ennesse e Vall ey cons umer, env iron ment al, and labor groups 

in pres enti ng test imony we hope was useful at the TVA over sig ht hearings last May. 

However, I want to s tate at the o uts et that we have not come here today to d ebate 

the pros and cons of part icul ar TVA prog rams or policies. Nor do we base our 

oppo siti on to Mr. Hoop er's app oin tmen t on the diff ere nce betw een his views and ours 

on nucl ear power or stri pmine recl amat ion or wate r reso urce projec ts. Indeed, we 

don't know what Mr. Hooper's views are on the issues facing TVA. We hope the

•»

Comm ittee can find out, but it is not Mr. Hoop er's point of vie w wh ich is our 

primar y concern.

•* Instead, we are conc erne d - and dee ply c once rned - abou t the futu re of

the Tenn esse e V alley Authorit y as an inst itut ion of immens e regional and national 

significance . We wish to speak abou t the qual ifi cat ion s requ ired of the person
106

appointed to T VA's Board of Direct ors at this critical point in its history. We 

think it is appr opri ate that cons erva tion o rga nizatio ns shoul d be t estifying on 

the m atter o f TVA's leadership, beca use TVA was founded firs t and foremost as a 

con serv atio n organi zatio n. The Authority' s broad man dat e gre w o ut of the c onservation move ment of the early 1900's, out of the conc ern of G ifford Pinchot and Teddy 

Roosev elt for prot ecti on of the nati on's natural resourc es. TVA was charged with 

navigation and flood control, reforestati on, agric ultural and industrial dev elopment, and even national defense . TVA's founder s had the conc ept of a totally new 

kind of a genc y wh ich woul d plan and mana ge the reso urces of an e ntire river basin. 

And the vision of these men has been fulfilled.

In Tennessee, for example, TVA has a g reat er impac t on the state's enviro n 

men t than any othe r sing le institution, includ ing state govern ment. No o ther state 

depends for its very econ omic livelihood upon TVA as Tenn esse e does. Nor does any 

othe r state cont ribu te as m uch to TVA's self -sup port ing powe r program. More than 

99% of our population is served with electric power gene rate d by TVA. In return, 

appr oxim atel y 6 5 % of TVA's powe r revenues are derived from Tenn essee consu mers 

through munici pal dist ribu tors and rural coope rati ves, and through direct sales to 

industries and federal facilitie s located in Tennessee. Twen ty- thr ee of TVA's 33 

majo r dams and eight of its 12 steam plants are in Tenn essee . Four of the seven 

nuclea r power plants desi gned to me et TVA's nucl ear generat ing capa city over the 

next decade will be located in our state.

Yet the Tennesse e Vall ey Auth orit y is not a c once rn merely of Tennessean s 

or o f Senators and Cong ress men from the Tenn esse e Valley. TVA's policies exert an 

influenc e far beyond the boundarie s of its seve n-st ate region. TVA is the na tion' s 

largest supp lier of elec tric power. It is the co untr y's largest purc haser of coal, 

and the great est user of stripmined coal as well. It is plan ning the utilit y 

industr y's largest nuclear gene rati ng capaci ty. As a conse quenc e, the p ract ices of 

TVA provide a national yardsti ck for the mana gem ent of ener gy suppl y and demand.
107

As a public agency with it s vast experience and tec hnica l resources, TVA can and 

should serve as a model fo r reco nc iling energy production with environmental 

protec tio n. With the a v a ila b ilit y and cost of energy of nationwide concern and 

independence in energy resources a matter of national polic y, the appointment of 

a new Director to the Board of the co un try 's larg es t e le ctr ic u t ilit y w il l have 

consequences of cle ar and resounding national sign ifica nc e.

Because of it s unique status as a fed eral corporation, TVA is a la rg ely 

autonomous in s ti tu ti o n . As President Roosevelt observed in his message asking 

Congress to create the TVA, i t is "a corporation clothed with the power of government but possessed of the fle x ib il it y and in it ia tiv e of a pr ivate ente rp rise ." TVA 

has ne ith er to receive formal au thorization from Congress fo r it s pu blic works 

proje cts nor to ju s tif y it s ele ctr ic rates to any regu latory body. Yet TVA has a 

Congressional ap propriation fo r the curre nt fiscal year of $100 m illio n . It s power 

program is completely se lf- su pp or tin g, with system revenues in fisca l 1975 of 

$1.2 b il li o n and a stat ut or y bond ceilin g of $15 b il li o n fo r system expansion.

TVA employs over 25,000 persons who are covered by it s own c iv il service system. 

It s own legal s ta ff defends it s prac tic e in the courts. I t is subje ct to no in te rnal requirements fo r public partic ip ation. In sh or t, the three-member Board of 

Direc tors makes v ir tu a ll y a ll decisions regarding the Auth orit y's polic ie s and 

programs. Because of the power vested in the TVA Board and because of the fa rreaching implica tio ns of it s decis ion s, the appointment of TVA's next directo r is 

of exceptional importance.

The cha racter of TVA is a re flection of the cha racter and the vision of 

the Directo rs who provide it s lea dership. The individu al confirmed by the Senate 

w il l assume on e-third of the re sponsib ility fo r charting TVA's course fo r the 

next nine years. At present, TVA's two Directors are divided on several matters of 

po licy confronting the agency. The vote of the th ir d Director may well determine
108

TVA's future dire ction on a n umber of critical and contr overs ial issues. In 

eval uati ng Mr. Hooper's nomination , this Commi ttee must cons ide r the v arie ty and 

gravity of the quest ions whic h it will be his resp onsi bili ty to decide.

Of the $10 billion incr ease in TVA's bond ceiling appr oved by this 

Commit tee, how will the new Dire ctor vote in regard to issuance of bonds and 

dis pos itio n of their reven ues? How will he i nsure that TVA's rates remain at 

reso nabl e levels, levels whic h include the social and envir onmen tal costs of 

prod ucing power and w hich enco urag e energ y conse rvat ion in line with national 

energ y goals? What will be his stanc e c once rning TVA's nuclear power program, 

part icul arly in the light of reli abil ity questi ons raised at Brow n's Ferry and 

demand just ific atio n vigo rous ly dispute d at licensing hearings for the Hartsvill e 

plant? What will be TVA's posi tion on o ther nuclear issues, includ ing the breede r 

reactor at Oak Ridge; long -te rm contract s for urani um exp lor atio n and minin g in 

Wyoming, New Mexi co, and South Dakota; and the Nucl ear Regu lato ry Commis sion' s 

proposal for a nuclear ener gy park just south of TVA's Land Betw een the Lakes 

recr eati on area?

What will be the new Director' s positio n with regard to amendment s 

rece ntly propose d to the TVA Act? Three such amen dmen ts have been introduced by 

Senator Bill Brock of Tennessee. Thes e would require by law that TVA Board me et ­

ings be o pen to the public, esta blis h a Citizens' Revi ew Commiss ion for TVA, and 

mand ate a joint energ y conser vati on study wi th FEA. Commend able though these 

prop osals ma y be, there is no reason that reforms should have to be fo rced on TVA 

from outside . Will the new Board membe r have the v isio n and initiativ e to keep 

TVA resp onsi ve and to mak e such chan ges when the time for c hanges has co me?

How will the appo inte e view TVA's respo nsib ilit ies for air pollut ion

control at its coal -fir ed stea m plant s? Offici als of the Envir onmental Protection 

Agency have left no doubt they beli eve that under the Clea n Air Act w ritt en by this 

Comm itte e TVA must install scrubb ers for control of sulfur diox ide emission s. TVA
109

officials have slated just as loudly that ttiey have no intentio n o f installin q thes e 

devices. The Supr eme Court has rece ntly heard argumen ts by the Stat e of Kent ucky that 

TVA must obtain permits under its EPA- appr oved air poll utio n control program . Alabama 

has sued TVA for $11 m illi on in damages for cont inu ed viol atio n of air qual ity st an ­

dards at its Wid ow's Cree k steam plant. Will TVA's new Board memb er advo cat e policies 

consis tent with the spiri t of envir onmental protec tion laws, or will he cont inu e TVA's 

claim of immunity from poll ution control stan dards with w hich it doe sn't agree?

Now that the Auth orit y no longer contem plat es buyi ng the Peab ody Coal 

Company, what alterna tive s will the Dire ctor reco mmend to a ssur e long -ter m 

avail abili ty of coal? Will this be e aste rn or wes ter n coal, high-su lfur or lowsulfur, deep mine d or stripmined , and what pric e will TVA pay for coal supp lies?

How will the next Dire ctor respond to a citize ns' suit and a Depa rtmen t of the 

Interior request contend ing that, unde r the Endange red Species Act of 1973, TVA 

must preserve the habitat of the snail darter, even if this mean s halting the 

Tellico projec t on the Little Tenn esse e Rive r?

Thes e are not ques tion s for the Public Work s Conm ittee to decide. They 

are decisions for the TVA Board of Directors. If he j oins that Board, Mr. Hoop er 

must answer all these ques tion s and m any more. The issue befo re the Comm itt ee 

today is si mply whet her Mr. Hoop er is qual ifi ed to m ake public policy decisio ns 

such as these. For reasons whic h we shall enumerate , the unan imou s sent imen t of 

the orga niza tion s whic h Mr. Will iams and I repr esen t is most emp hat ica lly that 

he is not. And these sentiment s are shared by virt ual ly ever y busi ness man, power 

distri butor , and friend of TVA with whom we have spok en abou t this nomination .

What standard , then, what criteria of talen t and compet ence shoul d this 

Corrmittee ap ply in judg ing a nominee to the TVA Board? Let me set the recor d 

straight on w hat we in the Tenn essee Vall ey think that we and the nati on deserve.

And let the record show that we intend for the same rigorous stan dards to a pply 

not only to Mr. Hoope r but also to a ny succes sive nominee to the vaca ncy whic h 

now exists or m ay occur.

67 -520 0 - 76 - 8
110

As the Committee knows, the TVA Act it s e lf is ra th er unsp eci fic in 

the a tt ri b u te s re qu ire d o f a TVA D irecto r. According to Se ction 2, " a ll 

members o f the Board shall be persons who pro fess a b e li e f in the fe a s ib il it y 

and wisdom o f th is A ct. " In add itio n, no D irecto r may have "any in te re s t in 

any business th at may be ad ve rsely affected by the success o f the Co rpo ration 

as a producer o f concentra ted fe r til iz e r s or as a pro ducer of e le c tric pow er."

As the Conmittee also knows, the TVA Act was w ri tt e n in 1933, and on ly two 

members of the 94th Congress were members o f the body at th at time - the d is ­

tin gu ishe d chairman o f th is Committee and the Honorable Re pre sentative Wright 

Patman of Texas. The s o c ia l, economic, and enviro nm ental co nditio ns o f the 

Tennessee Valley and the na tio n have changed co ns iderab ly sinc e 1933, and 

much more is re qu ire d o f a D irecto r today than is lit e r a lly se t fo rt h by the 

TVA Ac t. One has on ly to re ca ll men of the ca lib re o f L il ie n th a l, Morgan, 

and Clapp to perce ive the Pre sid ential appointments which recognized th is fa ct 

and to re alize the high standa rds to which th is nomination sho uld conform.

We th ere fo re belie ve th at the next D irecto r o f TVA must possess six 

ind isp en sable q u a li fi c a ti o n s :

1. He must have the pr of es sion al background - e it h e r through education 

or experien ce - to deal comp ete ntly with the te ch nic al issues of energy development, supp ly, and co ns erva tio n.

2. He must possess proven managerial a b ility to ad minister the la rg est 

e le c tric u t i l i t y and re gion al development agency in the Un ited States, with a 

to ta l assets o f $5S b illio n and a budget in 1975 o f over $1 b il li o n .

3. He must have a demonstrated commitment to res ource co nservation and 

enviro nmental pro te ction toge ther with an understanding o f the le g a l, s c ie n tif ic 

and economic issues invo lved in pursu ing these obje ctives.

4. He must possess the ca pa city fo r asking the rig h t qu es tio ns , fo r 

exerc is in g independent judgment, and fo r making d if f ic u lt de cisions. He must 

be able to communicate both w ith TVA's supporters and w ith TVA's c r it ic s ,
I l l

and to accept constructive reconriendatio ns from both quarters . He must be able 

to defend and exp la in TVA's ac tio ns where necessary and to advocate inno va tio n 

and reform where ap pr op ria te.

5. The D irecto r must be free o f any fi n a n cia l ass ociatio n which might 

give ri se to c o n fli c t of in te re s t or bias o f pe rspe ctive.

6. F in a ll y and perhaps most im portant, the next TVA D irecto r must be 

an in div id ual o f hig h in te g rit y and unquestionable personal re ctitu d e . He or 

she must be a person in whose hands the re side nts of the Tennessee Valley can 

w ith confide nce pla ce the a ffa ir s o f TVA, a person whose lead ersh ip o f th is 

unique in s tit u tio n w il l prove a c re d it to the region and to the natio n.

Our org anizatio ns and numerous othe rs urged the Pr es iden t to seek a 

nominee o f these cre dentials long be fore Mr, Hooper’ s name was proposed. Regional 

and natio nal newspapers have a rt ic u la te d the need fo r app ointme nt o f a q u a lifi e d 

in d iv id u a l. I am appending a number o f these e d it o ria ls to my state me nt and 

ask th at the y be inclu de d in the re co rd . Yet, rem arkably , these entreaties went 

unheeded. Senator George N orr is ' hig h hopes fo r a n o n -p o liti c a l TVA have been 

abandoned; c le a rl y partisan m otivatio ns have pr eva ile d in sele ction of the pre sent 

nominee. Our disappointme nt and disp leas ur e at Mr. Hooper's nomin ation were in 

no way m o ll if ie d by the knowledge th a t several q u a lifi e d and hig hly reconmended 

in d iv id u a ls were passed over by the White House in fa vo r o f a candidate whose sole 

d is ti n c ti o n appears to be his popula ri ty w ith party lea ders in M is sis sip pi.

In co ntrast to the many in div id uals of recognized and extraord in ary 

q u a lifi c a ti o n s who might have been be fore th is Committee today, James Hooper 

meets v ir tu a ll y none of the c r it e r ia se t fo rt h above. He has no known exp ertise 

in the c r itic a l fie ld of energy su pp ly. He possesses no t even the adm in is tr ative 

competence to manage his personal business a ffa ir s , a ll of which have ended in 

e ith e r ba nk ruptcy, fin a n cia l lo ss, or c iv il li tig a tio n . His rec ord giv es no 

in dic ation o f fa m il ia rit y with or advocacy o f the eth ic of environme nta l pro te ction

Mr. Hooper has sa id th at while he doesn 't have a knowledge o f the many te ch ni ca l
112

issues confronting TVA, he re ta in s an "open mind" on these iss ue s.

At the same tim e, he has alread y sta te d, "I know o f no oth er Republican, with 

a chance fo r White House appointme nt, who, conscie ntiously , as I can, could 

s ti c k in there and uphold Red Wagner's han d," (N ashvi lle Tennessean, June 22,

1975). Mr. Hooper seems to have ca st his alle gia nce be fore understanding the choices. 

When he himse lf has come under c rit ic is m , he has responded in v in d ic ti v e and intem perate fash ion. Such behavior ha rd ly re fl e c ts the in te ll e c tu a l independence and openmindedness we seek in a TVA D irecto r. F in a ll y , the in fo rm atio n which has come to li g h t 

on Mr. Hooper's fi n a n cia l de alings and business as so ciat ions ra is es se rio us and 

dis tu rb in g questions about his personal judgment and p ri n c ip le s .

These are the reasons we have a ll along argued ag ains t Mr. Hooper's 

appointment to the TVA Board. In the eig ht long months sin ce his nomination, 

there has emerged yet one more reason , a reason which is the most comp elling 

o f a ll fo r his re je ctio n , The reason has to do with the fa c t th at TVA is at a 

c r it ic a l and extreme ly co ntrovers ia l ju nct ure in it s h is to ry . Controvers y is 

not something new to TVA. Indeed the agency was born in the throes o f the 

Muscle Shoals deb ate; i t weathered a decade o f arguments aga inst public power; 

i t su rvived the Dixon-Yeates co ntrove rsy in the F if tie s . But the storm which 

is brew ing now and the winds o f public d is a ff e ctio n which are alread y blowing 

ch allenge the very purpose and c r e d ib il it y of the in s tit u tio n .

I am co nfid en t th at positiv e changes and cre ative solu tions w il l emerge 

from the pre sent co ntro ve rs y, but the issu es are se rio us ones and are fa r la rg er 

than the pers onalit ie s o f the three men who s it on TVA's Board o f D irecto rs .

We can re ca ll the b it te r st ru ggle which led to Pres iden t Roo se ve lt's removal of 

Arthur Morgan from the TVA Board and to a jo in t Congressional in vestigation of 

TVA. I t would indeed be tr a g ic i f again - as in 1938 - the energ ies and best 

e ff o rts o f the people of the region - and perhaps o f th is Committee - were to 

be div erted from the su bs tantive issues by a co nt inuing disp ute over the ch arac ter 

and competence o f TVA's le ade rship. Yet th is is pre cis ely what Mr. Hooper would
113

br ing to the TVA Board - co ntin ui ng personal co ntrove rs y, fu rt h e r grievances 

to TVA's c r itic s , dim inish ed res pe ct among TVA's fr ie nds.

Our public in s tit u tio n s , and especia lly TVA, need the fa it h and 

confidence o f the people whose live s are affecte d by these in s tit u tio n s .

Mr. Hooper ap pa re ntly fa il s to understand th is fa c t. He seems no t to re a lize 

th at the prolonged co ntrove rsy over his re puta tion w il l se ve rely damage - and 

has alre ad y damaged - TVA. He has not thought hig hly enough o f TVA to withd raw 

him se lf from the nomin ation - w ith a ll the opport unitie s he has been giv en - and 

to spare the in s tit u tio n th is loss o f co nfiden ce . This is the most severe of 

a ll indictmen ts ag ains t Mr. Hooper and the most fundamental o f reasons why th is 

Committee should fi n d him u n fit to become a TVA D irecto r.

When Mr. Hooper's nom ination was f i r s t announced, we in the Tennessee 

Valley were ap palled and offended by the low esteem held fo r our region and 

fo r the Tennessee Valle y A uth ority . We applauded the Com mittee's dec ision to 

postpone hearings to pe rm it a fu ll in ve stig a tion of Mr. Hooper's background. The 

long delay o f these proceedings has in no way diminish ed our to ta l and unaltera ble 

op pos iti on to Mr. Hooper's nomina tion; the passage o f time has no t - and w il l 

not - re concile us to having Mr. Hooper as a d ir e c to r o f TVA. However, we are 

ac ut ely conscious th at the A uth ority is fa cing im po rta nt de cision s w ith less than 

fu ll le ade rship. We must put th is nomination behind us and allo w TVA to ge t on 

w ith the business ahead.

To th is end we have done ev eryth ing pos sible to persuade the Pr es iden t 

to withd raw Mr. Hooper's name and submit a nominee w ith a b il it ie s commensurate 

to the po st. We have tr ie d every approach to the White House which private 

citiz e n s could employ. We have calle d on our Senators and Congressmen to ask 

the Pr es iden t to withdraw the nomina tion. We have asked top o ffic ia ls in FEA,

EPA, and the Council on Environmental Q ualit y to urge the Pr es iden t to look again 

fo r a pro fe ssio nally q u a lifi e d appointme nt. We have done eve ryth ing bu t come to 

Washington and beg Mr. Ford to give us the rig h t person fo r the jo b. And why?
114

Because we wanted to spare the President, and th is Conmittee, and not least 

of a ll Mr. Hooper the embarrassment and the waste of time and resources require d 

fo r confirmatio n hearings on a nominee so sadly deficie nt in qualif ic ations.

I t gives us no pleasure to implore th is Committee to re je ct a nominee 

of the President as to ta ll y unsuited fo r a po sitio n of pu blic tr u st. Our 

concern fo r TVA leaves us no choice. We urge the Committee to recommend against •

confirmatio n of Mr. Hooper. We ask the U.S.Senate to re je ct his nomination. We 

request President Ford to give us an appointment worthy of the national sign ifica nc e 

of TVA.
115

The unders igned o rganization endors es the testi mon y of 

Jonathan Gib son of the Ten nes see Env ironm ent al Cou ncil and John P. 

Williams of the East Ten nes see Res earch Corpora tion pre sen ted at 

hearings of the Sen ate Publ ic Wor ks Committ ee on the nominatio n of 

Jeunes F. Hoo per to the Boa rd of Direc tor s of TVA, Feb rua ry 18, 1976.

We urge the Committee to recomme nd aga inst con fir mat ion of 

Mr. Hooper. We ask the U.S. Sen ate to rej ect h is nom ination. We 

request Pre siden t Ford to g ive us an app oin tme nt w ort hy of the

national sig nif ica nce of TVA.

Name of org anization:

^ ‘fr'ctao*' ,

Num ber of memb ers: f o

Mai lin g addres s:

M i s s L c v e i Sfr.-

h S , % 3 1

Signed by:

V- x < <

| C_ -______ Da te : 1 1

Position:
The undersigned organization endorses the testimony of 

Jonathan Gibson of the Tennessee Environmental Council and John P. 

Williams of the East Tennessee Research Corporation presented at 

hearings of the Senate Public Works Committee on the nomination of 

James F. Hooper to the Board of Directors of TVA, February 18, 1976.

We urge the Committee to recommend against confirmation of 

Mr. Hooper. We ask the U.S. Senate to reject his nomination. We 

request President Ford to give us an appointment worthy of the 

national significance of TVA.

Name of organization

Number of members:

Mailing address:

Signed by:

Position:

/o O

l o t x

________________________

— ■ J 

_______ Date: Zd K&& 71___
117

Jonathan 

Williams 

hearings 

James F.

The undersigned organization endorses the testimony of 

Gibson of the Tennessee Environmental Council and John P. 

of the East Tennessee Research Corporation presented at 

of the Senate Public Works Committee on the nomination of 

Hooper to the Board of Directors of TVA, February 18, 1976.

We urge the Committee to recommend against confirmation of 

Mr. Hooper. We ask the U.S. Senate to reject his nomination. We 

request President Ford to give us an appointment worthy of the 

national significance of TVA.

Name of organization: C L E A H

Number of members:

Mailing address: ? , 0 . ' B e x |O 3

M S '3,77-37

Signed by:

Position: Date: H , l

c17 G
118

Un fortun ately the members of th ia or ga niz ation have no t

bad tha op po rtun ity to read

Xha-undersig&ed-eEgMisajfien-ei'tderees the testimony of 

Jonathan Gibson of the Tennessee Environmental Council and John PWilliams of the East Tennessee Research Corporation presented at 

hearings of the Senate Public Works Committee on the nomination of 

James F. Hooper to the Board of Directors of TVA, February 18, 1976.

BUT - We urge the Committee to recommend against confirmation of 

M r . Hoop er. We ask the U.S. Senate to reject his nomination. We 

request President Ford to give us an appointment worthy of the 

national significance of TVA.

Name of organization: B n T lr ow ntr i. * «tl oa CquboII of Memphis_____

Number of members: Average monthly n ew sl ett er s - 30 0.____________

Mailing address: P« 0« Box 45 26 , Memphis, Ten nes see 5810 4_____

Signed by: ZTMx?. Z?, _________

Position: Se er eter y___________ Date: Feb. 15, 1976 __

At re qu es t of Pre siden t Joseph D, Haas
119

The undersigned organization endorses the testimony of 

Jonathan Gibson of the Tennessee Environmental Council and John P. 

Williams of the East Tennessee Research Corporation presented at 

hearings of the Senate Public Works Committee on the nomination of 

James F. Hooper to the Board of Directors of TVA, February 18, 1976.

We urge the Committee to recommend against confirmation of 

Mr. Hooper. We ask the U.S. Senate to reject his nomination. We 

request President Ford to give us an appointment worthy of the 

national significance of TVA.

♦

Name of organization

Number of members:

Mailing address:

Signed by:

Position:

Georgia Pover Project

approx. 500-600 statewide

c/o Col. H. Ed Martin Jr. 1000 Candler Bldg.

Atlanta, Georgia 30303

Neill Herring / C A/]; j

V ic e - P r e s id e n t D a te : 9 Ffcb 76
120

The undersigned organization endorses the testimony of 

Jonathan Gibsori' of the Tennessee Environmental Council and John P. 

Williams of the East Tennessee Research Corporation presented at 

hearings of the Senate Public Works Committee on the nomination of 

James F. Hooper to the Board of Directors of TVA, February 18, 1976.

We urge the Committee to recommend against confirmation of 

Mr. Hooper. We ask the U.S. Senate to reject his nomination. We 

request President Ford to give us an appointment worthy of the 

national significance of TVA.

Name of organization: / f a

Number of members:

Mailing address:

Signed by:

C'

£L<z—t

Posi tion: Da te :
121

The undersigned organization endorses the testimony of 

Jonathan Gibson of the Tennessee Environmental Council and John P. 

Williams of the East Tennessee Research Corporation presented at 

hearings of the Senate Public Works Committee on the nomination of 

James F. Hooper to the Board of Directors of TVA, February 18, 1976.

We urge the Committee to recommend against confirmation of 

Mr. Hooper. We ask the U.S. Senate to reject his nomination. We 

request President Ford to give us an appointment worthy of the 

national significance of TVA.

Name of organization

Number of members:

Mailing address:

Signed by:

Position:

________________________________________

r

____________ Date: Date: /5~ W 76
122

The undersigned organization endorses the testimony of 

Jonathan Gibson of the Tennessee Environmental Council and John P.

Williams of the East Tennessee Research Corporation presented at 

hearings of the Senate Public Works Committee on the nomination of 

James F. Hooper to the Board of Directors of TVA, February 18, 1976.

We urge the Committee to recommend against confirmation of 

Mr. Hooper. We ask the U.S. Senate to reject his nomination. We 

request President Ford to give us an appointment worthy of the 

national significance of TVA.

•

*

Name of organization:

Number of members:

Mailing address:

Signed by:

Position:

/ ’jLo.u u j h J

___________________________

IQ3 73- ht-iScL f (£ o-lc 37^,50

A I /

Pa t d(. dc« t ______ D ate: 10 f 76
123

The undersigned organization endorses the testimony of 

Jonathan Gibson of the Tennessee Environmental Council and John P. 

Williams of the East Tennessee Research Corporation presented at 

hearings of the Senate Public Works Committee on the nomination of 

James F. Hooper to the Board of Directors of TVA, February 18, 1976.

We urge the Committee to recommend against confirmation of 

Mr. Hooper. We ask the U.S. Senate to reject his nomination. We 

request President Ford to give us an appointment worthy of the 

national significance of TVA.
The undersigned organization endorses the testimony of 

Jonathan Gibson of the Tennessee Environmental Council and John P. 

Williams of the East Tennessee Research Corporation presented at 

hearings of the Senate Public Works Committee on the nomination of 

James F. Hooper to the Board of Directors of TVA, February 18, 1976.

We urge the Committee to recommend against confirmation of 

Mr. Hooper. We ask the U.S. Senate to reject his nomination. We 

request President Ford to give us an appointment worthy of the 

national significance of TVA.

Name of organization:

Number of members:

Mailing address:

Tennessee Scenic Rivers Association

850

P.0. Box 3104, Nashville, Tennessee 37219

Signed by: Dick Creswell

President Position: Date: February 12, 1976
125

The undersigned organization endorses the testimony of 

Jonathan Gibson of the Tennessee Environmental Council and John P. 

Williams of the East Tennessee Research Corporation presented at 

hearings of the Senate Public Works Committee on the nomination of 

James F. Hooper to the Board of Directors of TVA, February 18, 1976

We urge the Committee to recommend against confirmation of 

Mr. Hooper. We ask the U.S. Senate to reject his nomination. We 

request President Ford to give us an appointment worthy of the 

national significance of TVA.

Name of orga nization: i' - i JeX- F aV <5

Number of members: — ____________________________________________

Mailing address: • M x £>

Signed by:

;

 TL > a i n S

Position:

c u w

f o x D a t e : £ xC xxUt

87 -520 0 - 76 - 9

127

The undersigned organization endorses the testimony of 

Jonathan Gibson of the Tennessee Environmental Council and John P. 

Williams of the East Tennessee Research Corporation presented at 

hearings of the Senate Public Works Committee on the nomination of 

James F. Hooper to the Board of Directors of TVA, February 18, 1976.

We urge the Committee to recommend against confirmation of 

Mr. Hooper. We ask the U.S. Senate to reject his nomination. We 

request President Ford to give us an appointment worthy of the 

national significance of TVA.

Name of organization:

Number of members: 7- QQ ---------------------------------------------------------

Mailing address:

Signed by:

Position: T f a t - X L i - n 9 - / / 0 / /fe
128

The undersigned organization endorses the testimony of 

Jonathan Gibson of the Tennessee Environmental Council and John P. 

Williams of the East Tennessee Research Corporation presented at 

hearings of the Senate Public Works Committee on the nomination of 

James F. Hooper to the Board of Directors of TVA, February 18, 1976.

We urge the Committee to recommend against confirmation of 

Mr. Hooper. We ask the U.S. Senate to reject his nomination. We 

request President Ford to give us an appointment worthy of the 

national significance of TVA.

*

Name of organization: // ( - i ,'/• /■.)/>y

Number of members:

*7

< 7 6

A

Mailing address: ///: t

...>• A. t . / S r c y

Signed by:

7 ■

Position:

£>

6 •6V (cv'.sb • <■ 4 > Date: [
129

T te T’.JN NE SSHA N

SILLIMAN EVANS SR. (Publisher. 1937-1955) SILLIMAN EVANS JR. (Publisher, 1955-1961)

AMON C. EVANS. President and Chief Administrative Officer

JOHN SEIGENTHALER. Publisher .

ALLEN PETTUS 

Vice President

JOHN BIBB 

Spor-'" Editor

Page 4-B

EDWARD FREEMAN 

Managing Editor

RALPH SAUNDERS 

Treasurer

LLOYD ARMOUR. Executive Editor

EUGENE WYATT 

Associate Editor

RUTH BENNETT 

Secretary

Sunday, Ju ly 20, 1975

Mr. Kscoer Nor The Man u

For TVA Directorship

M

R. JAMES F. Hooper is not the righ t 

person to become a TVA director 

and President Ford should withdraw his 

nomination.

Not only has Mr. Hooper failed to 

exh ibit a single qualifying trait for the job, 

but his background is replete with evidence of his lack of qualifications.

This is not because of his business 

failures, which have now become well 

known. Competent men occasionally run 

into a streak of bad luck and suffer 

tem porary business reverses.

But Mr. Hooper’s failures are characterized by a dismal consistency and a 

pattern of man ipulation and wheelerde aling which raise da ng er sig nals 

against puttin g this type person on the 

TVA board.

Some indicatio n of Mr. Hooper’ s unfit-' 

ness for the TVA board is to be found in the 

bankruptcy court record of Mr. Hooper's 

business partner, Mr. Evere tt Hope 

Brooks.

The record is an almost impenetrable 

swamp of questionable business practices 

such as check-swapping and the frequent 

transfer of funds between accounts. The 

sworn testimony smacks — in the ter m inology of Watergate — of “ money laundering.”

M r. Hooper and M r. Broo ks we re 

partners in a business enterprise, Mr. 

Hooper’s dairy in Columbus, Miss., where 

the TVA nominee lives. They were business associates in a small insurance company then based in Alabama and a now 

bankrupt da iry processing concern in 

Atlan ta, which they acquired for $5,000 

from a man who had just bought it for $100

— along with its $335,000 in debts.

The man fro m whom they bought the 

Atlanta fir m — Mr. Henry L. McM ahan, 

who stayed on as manager of the da iry 

processing operation. Litt le Rive r F arms

— testifie d that when he needed money to 

ca rry on the operations of Little River 

Farms he would telephone Mr. Hooper. 

La ter he would get checks from Mr. 

Brooks. He said that some of the checks 

would be made out to him personally and 

that he was instructed by Mr. Brooks to 

deposit the money in his personal account 

and then write “ back to back” checks on 

his account and deposit the money in the 

account of Li ttle River Farms.

Mr. McMahan testified tha t in all he 

received $133,000 from Mr. Brooks, of 

which $54,000 was drawn fro m the insurance company, Standard Union Life. Mr. 

Brooks was president of Standard Union 

and Mr. Hooper was a fellow director in 

both Standard Union and Little. Rive r 

Farms.
130

Mr. McMahan said the money was 

handled in that way “ for reasons unknown." M r. Hooper says he only did what 

Mr. Brooks suggested tha t he do.

Standard Union was in fina ncial trouble 

at the time. So was the da iry processing 

plan t. Mr. Brooks went bankrupt a few 

months aft er the purchase of Little River 

Farms.

In December. 1963, less than a yea r 

before Mr. Brooks went bankrup t, Mr. 

Hooper’s 1400-acre farm at Columbus, 

then held in pa rtne rship with Mr. Brooks, 

was transferred to Standard Union Life 

for $10 "an d other con side rations.”

On August 19,1969, the Standard Union 

board of directors — consisting of Mr. 

Brooks, Mr . Hooper and Mr. Brooks's wife 

— voted to convey the Mississippi farm 

back to Mr. Hooper.

That Mississippi farm was a “ cond uit"

for a strange pattern of fina ncial manipulatio n with Mr. Brooks depositing more 

than $500,000 over a period of years fro m a 

va rie ty of sources — including $100,000 

from Standard Union Life.

Mr. Hooper, in his deposition in the 

ban kruptcy case, was unclear about the 

meaning of these unusual business arrangements.

He acknowledged tha t his fa rm ’s account was a “ conduit” that Mr . Brooks 

used fo r financial dealings.

He said he put money into the account of 

the farm at Mr. Brooks's instruction and 

took it out the same way. "Boom, boom! 

In and out," he testifie d as he told how. on 

one occasion, he turned $65,000 over to 

Little River Farms.

Although testim ony showed that he held 

a third of the stock in Little River, Mr. 

Hooper testified tha t he held stock only 

"f or about 10 minu tes" and denied at one 

point tha t he knew the “ de fin ition " of 

stockholder.

Mr . Hooper says there was nothing 

"w ro ng" in anything he did. He has not 

been charged, indicted or convicted of any 

crim inal conduct.

But is this the man who should pla y a 

majo r role, in the adminis tra tion of a 

federal agency which holds $5 billio n in 

assets, docs a gross volum e of SI biilio n a 

year and handles $400 million in pu rchases? Obviously not. It is hard to belie v e P re sid e n t Ford kn ew of M r. 

Hooper’s background when he nom inated 

him to the TVA board.

This newspaper, which began its inve stigation of M r. Hooper’s background several weeks ago, s till has not been able to 

piece togethe r the full story of all Mr. 

Hooper's business arrangeme nts. The

Tennessean is seeking to acquire access to 

documents now on file in federal c ou rt in 

Memphis and is looking into other records 

in Alabam a, Georgia, Mississippi and 

Arkansas. But enough of a pa ttern is clea r 

to lead The Tennessean to oppose Mr . 

Hooper as a TVA director.

TVA is facing one of the most trying 

periods in its history and it needs people of 

stature and proven ab ility at its helm .

TV A’s consumers don’t want to have 

their ele ctric power rates set and other 

impo rta nt policy decisions made by a 

person of Mr. Hooper's dem onstrated 

ab ility in finan cia l sleight-of-hand.

The Senate Public Works Com mittee, 

which has delayed confirm ation hearings 

on Mr. Hooper's nom ination, should go 

through the nominee’s record with a 

cr itic al eye.

Sen. H ow ard B a ke r, R -T enn., a 

member of the com mittee, has expressed 

a keen interest in findin g out about Mr. 

Hooper’s business practic es as reflected 

by the bankrup tcy cou rt record. It is 

hoped that Senator Baker will use his 

prestige to have the com mittee sta ff probe 

all of Mr . Hooper's background and will 

use his sk ill in cross exa min atio n to help 

elic it all of the facts.

Hopefully the F BI. which was supposed 

to look into Mr. Hooper's record before the 

White House nominated him , w ill do a 

better job of pro viding a fu ll record to 

Preside nt Ford.

If the President then persists in pushing 

M r. Hooper instead of with draw ing the 

nomination, it will be obvious tha t political considerations in this administration 

transcen d all else in the selection of TVA 

board mem bers.
131

T-e TE N N E SSE A N

SILLIM AN EVANS SR. (Publish er. 1937 1955) SILL IM AN EVANS JK. (Publisher. 1955-1961)

AMON C. EVANS. President and Chief Administrative Officer

JOHN SEIGENTHALER . Publisher

AL LE N PETTUS 

Vice President

JOHN BIBB 

, Sports Editor

EDW ARD FR EE MA N 

Managing Editor

RALPH SAUNDERS 

Treasurer

LLO YD ARMOUR. Executive Ed ito r

EUGE NE W YAnAssociate Ed itor

RUTH BENN ETT 

Secretary

A u g u s t 2 ? , 1 9 7 5

New Name

P

RESID ENT Ford ’s ill-conside red nomination of M r. James F. H ooper of 

Columbus, Miss., to be a TV A boa rd 

,m em be r continues to draw mounting opposition, even from some who would be 

expecte d to look fo r reasons to side with 

the President.

Sen. W illia m E. Brock, R-Tenn., an 

un comprom ising conserv ative who has 

never held much sympathy for the TV A 

concept, is among the latest to choke on 

the Hooper appointme nt and to note the 

nominee’s singu lar lac k of qu alifica tio ns 

fo r the post.

“ As fa r as I know , Mr. Hooper seems to 

be a v ery nice m an," Senator Brock said 

last weekend. “ Bu t I studied his record 

care fu lly and I ju st can ’t find a single fie ld 

where he has qu alifica tio ns that reco mmend him for wh at is re ally a cr isis 

situa tio n in the opera tion and management of an agency lik e TVA.”

Senator Brock said he was pre pared to 

make a one-man effo rt, if necessary, to 

prevent M r. Hooper's c on firmation. “ Ou r 

people need a new m an on the TVA boa rd 

whose ba ckgro und experien ce and special 

ab ilitie s ar c such as to giv e the people 

hope some thing w ill be done to p ull T VA’s 

co st of pro ducin g po wer dow n,” he 

said.

M r. Bro ck ’s rejection of M r. Hooper is 

not an in dica tio n that the Tennessee senato r has had any basic change of view

For TVA Post

towa rd TV A. or pu blic power, or othe r 

progressive government policies wh ich 

many Tennesseans reg ar d as v ital to their 

welfare.

However, it is an in dica tio n t ha t persons 

of all po litical persuasion — w ith the 

exception of M r. Fo rd and the congressional delegation from M r. Hooper’s home 

state — are of one mind in ju dg ing the 

Colum bus da iry m an to be u nfit fo r a TVA 

board post.

Anyone Senator B rock wou ld approv e of 

fo r the TVA jo b m ight not be accepta ble to 

a m ajo rity o f those who wan t to see T VA 

progress and fu lf ill its origin al mission to 

serve as a ya rd stick for the cost of e le ct ric 

powe r pro duction. Bu t that would be a 

dis agree ment based on d iffe ring p olit ic al 

philosophies. When it comes to rec og nizing M r. Hooper’s lack of qua lificat ions , it 

is easy fo r alm ost everyone to agree.

Senator Broc k said he hoped it would not 

become necessary fo r him to lead an 

effort to bloc k Mr. Hooper’ s conf irm at ion. 

This is the hope throu gh ou t the valley. M r. 

Fo rd should with dra w M r. Ho oper’s nomination and nam e anoth er, more qualified person for the TV A post.

The President w ill not fin d a nomin ee 

who w ill be supporte d by everyone. But he 

sho uld a t least be able to fin d a pe rson of 

sa tis fa ctor y qu alifica tio ns who would not 

be opposed by every one except his political backe rs.
132

T ie TEPslNESSEAN

SILL IM AN EVANS SR. (Publisher. 1937 1955) SILLIMAN EVANS JR. (Publisher, 1955-1961)

AMON C. EVANS, President and Chief Adminis tra tive Officer

JOH N SEIGE NTHALER. Publisher LLO YD ARMOUR, Executive Ed ito r

AL LE N PETTUS 

Vice President

JOHN BIBB 

Sports'Edito r

EDWARD FREEMAN 

Managing Editor

RALPH SAUNDERS 

Treasurer

EUGENE W YATT 

Associate Ed itor

RUTH BENNETT 

Secretary

Pa ge 12 Thursday , Sep tem ber 11. 1975

Mr. Ford Should Withdra w 

Mr. Hooper's Nomination

T

HE WASHINGTON Post is the latest 

new spaper challenging the qualification s of Mr. James F. Hooper to se rve 

as the new director of the Tennessee 

Valley Authority.

The liberal national ne wsp aper, located 

in the nati on’s ca pital, joins publications 

within the Tennessee Valley to say tha t 

there are very rea l reason s why Mr. 

Hooper should not be n amed to the threeme mb er TVA dir ector ate .

Conservative U. S. Sen. William Brock, 

the Tenn essee Republican who usually 

sup por ts President F ord, has said he will 

lead the fight aga inst Mr. Hooper, who 

was picked by the Pre sid ent to be a TVA 

director . The Tennessean was on record 

ea rly editoria lly opposing Mr. Hooper. 

This new spaper published a series of 

artic les discussing Mr. Hooper’s past 

business a ctivities and found this record 

did not comm end him to the job for which 

he was nominated by the Pre sid ent.

Mr. Hooper has serv ed as an official of 

business enterp rises whose accounts were 

used — by his own term — as a “c onduit” 

to tra nsfer funds. The re are docu ments 

and testimony to indicate tha t he was a 

Central figure in a check-sw apping op era ­

tion in which money went from one conce rn he served as a director to ano ther on 

whose board he serv ed.

In some of his own past testimony Mr. 

Hooper’s role as a dire cto r was clouded by 

his unc ertainty as to w hether he was on 

the com pan y’s board at a given time. I

Mr. Hooper’s posture has been not to 

talk with newsmen about his pa st busin ess

aff airs — despite the fact tha t he wa nts to 

be nam ed to th e board of a federal age ncy 

tha t controls a multi-billion dollar opera ­

tion.

To be as kind as possible abou t it, Mr. 

Hooper h as nothing in his p ast to in dicate 

tha t he is up to t hat sort of an assignment. 

And various eleme nts of his backgro und 

arg ue aga ins t his appoint men t. Considering his record as a director in private 

enter prise s it is not surp rising th at opposition to his appo intm ent now has re ached 

the nation’s capital.

Reports are tha t Mr. Hooper w ants to 

appear before the Sen ate com mit tee con ­

side ring his nomination and “c lear his 

name .” Since he h as not been accused of 

illegal or unlawful acti vity , that is har dly 

neces sar y. But sur ely he should have the 

right to offer whate ver testimony and 

docume nts the re might be to ca st his 

nomination in the mos t favorable light.

That, however, will not change the fac t 

tha t Preside nt Ford should nev er hav e 

calle d upon a Mississippi dairy farm er of 

Mr. Hooper’s standin g to take on a mon ­

umental task tha t touches in a rea l way 

the enormo us ene rgy needs of this na ­

tion.

Whether or not Mr. Hooper appears 

before the Senate com mittee to testify in 

his own behalf, the Pre sid ent, in the 

int ere st of TVA, should with draw Mr. 

Hooper’s name from consideration a t the 

earliest pra ctical moment and name a 

TVA directo r who is com mitted to public 

power needs and conserv atio n pro gram s 

tha t will lead the country in a time of acute 

energy sho rtages.
133

'iin< T E N N E S S E A N

S e p te m b e r 1L|., 197$

Common Concern For TVA

T

HE TENNESSEE congressional delegation’ s almost solid opposition to 

Mr. James F. Hooper as a TVA board 

member is an encouraging sign of agreement on the seriousness of the problems 

facing ele ctric power consumers in the 

valley.

Members of Congress of widely divergent political philosophies are pra ctically 

unanimo us in th eir op inion that Mr. 

Hooper could contribu te nothing to the 

solution of the problems.

Sen. Willia m E. Brock, II I, a conservative Republican, has expressed the view 

that Mr. Hooper lacks qualifications and 

has said he would lead a floor fight against 

the Mississippi Republican’s confirmation to the TVA post if that becomes necessary.

Rep. James H. Quillen, Republican 

from the Firs t Distr ict, has said Mr. 

Hooper’s nomination has led to so much 

critic ism that he feels the Mississippian’s 

appointment “ would not be in the best 

interests of TV A...” Both Senator Brock 

and Representative Quillen have called on 

President Ford to withdraw M r. Hooper’s 

nomination.

The state’s other Republican senator. 

Mr. Howard Baker Jr., has not comm itted 

himself public ly on the issue because he is 

the ranking Republican on the Public 

Works Com mittee which w ill hold confirmation hearings on Mr. Hooper's nomination. It is understandable that the senator would want to keep an open mind on 

the question un til the hearings have been 

conducted.

Ano ther Re pu blican congressma n. 

Rep. John J. Duncan of Knoxville, has 

opposed Mr. Hooper’s nomination, as 

have Democrats Joe L. Evin s, Ed Jones 

and Marilyn Lloyd. Other than Senator 

Baker, Rep. Robin L. Beard, Republican, 

and Harold Ford, Democrat, are the only 

members of the delegation who have not 

announced their positions.

Although there is a wide varie ty of 

political opinion represented in the delegation, including differences w ith respect 

to the merits of public versus private 

power, there is near-unanimous agreement on the need to strengthen TVA and 

protect it from being undermined by 

mediocre board members.

This reflects a concern for the people of 

the va lley and th eir economic well being. 

Although there may be wide disagreement among the delegation members 

about what policies TVA should follow, 

there seems to be no disagreement that 

the valley deserves the best qua lifie d 

persons possible on the TVA board making decisions that affect the pocketbook of 

every power user in the state.

It is too bad that TVA and its customers 

get this kind of positive representation 

from some in Congress only in a period of 

energy crisis. It is the kind the valley 

could use more of at all times.
134

T ie TE N N E SSE A N

O c to b e r 1U» 1 9 7 5

Playing Politics With TVA

SPEAKING IN Knoxville last week. 

Pre sid ent Fo rd said he will let his nom ination of Mr. Ja mes F. Hooper to the board 

of the Tennessee Valley Authority ta ke its 

course in the Senate. However, it mu st be 

asked if the hearings of the Senate Public 

Works Committee, scheduled for la te this 

mon th, se rv e any us eful pu rpos e or 

whether they simp ly dela y the filling of 

the bo ard ’s third seat, now vacant for 

almost five months.

Inve stigations by this new spaper and 

others have cast serious doubts about the 

quality of service which Mr. Hooper, a 

Mississippi business man , could r ender to 

the TVA. His past business activit ies do 

not comm end him for the post. They 

indicate he was a cental figure in one 

check-swa pping operation , and tha t other 

businesses with which he was associa ted 

were used as a “conduit” — his own ter m 

— to tra nsfer funds.

In addition to editorial opposition from 

this newspap er, Mr. Hooper faces numer ous congressio nal adversa rie s, including Sen. William E. Brock, R-Tenn. 

Senator Brock, uncompromising in his 

con servatism and almost unswervin gly 

loyal to President Ford , said, “But I 

studied his (Mr. Hooper’s) reco rd ca re ­

fully and I jus t ca n't find a single field 

where he has qualifications tha t recommend him for what is really a crisis 

situation in the operation and managemen t of an agency like TVA."

That is the cru cial point. TVA is facing a 

crisis: F ormer sup porters are now asking 

if the age ncy ha s joined the ran ks of the 

big, priva te utilities and is gouging the 

public. This is a most serious cha rge 

against an agency established to serv e the 

public and to be a “ ya rdstick” to me asu re 

the cost of producing energy.

The third seat mus t be filled by a man 

who can arg ue the public interest and 

ass ure the people tha t they are being 

serv ed well by the agen cy. Mr. Hooper is 

not such a m an ; since publication of fact s 

about his past, Mr. Hooper has avoided 

rep orters .

Perha ps, he believes he can ans wer his 

critics during the Senate hearings. Howev er , the P re si den t in dic at es he ha s 

doubts about his nom inee’s su ccess with 

the comm ittee. In Knoxvillethe Presi dent 

said he has a back-up list rea dy, but 

thought it p rematu re to discuss it until the 

Senate acte d.

A Repu blican sou rce told a repo rte r that 

the adm inistrat ion ’s “ga me pla n” is to let 

the nomination die in c omm ittee. Such a 

ma neu ver will let the President go back to 

Mississippi Rep ub lica ns wi th clea n 

hands.

That m ay be good politics and it may be 

the best tha t TVA can expect from a 

Republican adm inistra tion, but it should 

be a sourc e of ou trage to the vo ters of the 

Ten ness ee Valley region.
135

T ie TEN N ESSEA N

: Page 4-B Sunday, November 30, 1975

AAr. Hooper's Nomination 

Should Not Be Revived

THE NOMIN ATION of Mr. James F. 

Hooper II I, Columbus, Miss., dairym an 

and businessman, to be a TVA board 

member will die with the expiration of this 

session of Congress.

President Ford could re-submit the 

-nomination in January, but he would be 

■wise not to do so. The appointment is 

cle arly in trouble in the Senate and the 

chances are good that confirmation will 

be denied.

; The Senate Public Works Committee 

.has had the nomination since June 12 but 

has taken no action. Hearings were finally 

set for Dec. 8-9. But two of Mr. Hooper’s 

strongest supporters, Senators James 

Eastland and John Stennis, Mississippi 

Democrats, have asked that the hearings 

be postponed until after the fir st of the 

year, and the committee has complied.

The senators said the reason they wanted a delay was tha t the two-day hearings 

would not provide sufficient time for the 

discussion. However, their request was 

interpreted by some as meaning that the 

Mississippi senators had given up on Mr. 

Hooper's nomination.

But Mr. Hooper maintains his nomination is verv much alive and says he will not 

ask the President to remove his name 

from consideration for the TVA post.

This is unfortunate, for any attempt to 

force the nomination through is bound to 

lead to a leng thy confirmation battle 

which can only be a detriment to TVA.

Perhaps no board nomination in the 

history of TVA has been as controversial 

as Mr. Hooper's. The nominee’s lack of 

qualificatio ns for a TVA board seat has

drawn opposition from both sides of the 

po litical fence.

Even Sen. William Brock, R-Tenn., who 

would be expected to support Mr. Ford, 

has balked at Mr. Hooper’s nomination. 

Senator Brock said he had studied the 

nominee’s record carefully “ and I just 

can ’t find a single field where he has 

qualificatio ns that recommend him for 

what is really a cris is situation in the 

operation and management of an agency 

like TV A.”

The nomination should not be revived 

after the firs t of the year. Too much time 

and money have already been spent in 

trying to put Mr. Hooper on the TVA 

board. The Senate Public Works C om mittee disclosed recently that the cost of its 

investigation of Mr. Hooper’s business 

dealings had pushed the committee over 

its budget for the current fiscal year and 

made it necessary to request an additional 

$20,000 to get through the rest of the year. 

The committee said it needed $16,000 of 

the money to pay the General Accounting 

Office for personnel "bo rro we d” for the 

Hooper investigation.

It is not known what the Senate committee investigators found out about Mr. 

Hooper’s business dealings. But it seems 

possible that Senators Eastland and Stennis had some indication of what it was 

when they asked that the confirmatio n 

hearings be postponed past the date when 

the nomination would autom atically expire.

The best interests of everyone — TVA 

and its customers, the Ford ad ministration and M r. Hooper himself — would be 

better served if the nomination were 

permitted to rem ain expired.
r

lhr: T E N N E S S E A N

Pa ge 4-B_______________________________________ Sunday, Fe br ua ry 15. 1976

Mr. Hooper's Nomination 

Should Not Be Approved

THE SENATE Public Works Commi ttee will begin hea ring s this week on 

the nomination of Mr. Ja mes F. Hooper 

to the Tennessee Valley Authority’s 

board of direc tors. It should rej ect the 

appointee.

Pe rhap s no board nomination in the 

history of the TVA has been as contro versial as Mr. Hooper’s. His lack of 

qual ificatio ns for the TVA post has 

drawn opposition from both political 

parties, from citizens, from publications in the Valley, and from The

Washington Post.

Sen. William Brock has expressed the 

view that Mr. Hooper lacks qua lifications. The sen ator said he had studied 

the nom inee’s r ecord carefu lly “ and I 

iust ca n’t find a single field where he 

has qualifications that recomm end him 

for what is really a crisis situation in the 

op er at io n and m an ag em en t of an 

age ncy like TVA.”

The stat e’s other Republican senator, 

Sen. Howard Baker, has declined to 

com mit himself publicly b ecause he is 

the ranking GOP member of th e committee which will hold confirm atio n 

hearings on Mr. Hooper.

Rep. Ja mes H. Quillen, Republican 

from the Fir st District, has said Mr. 

Hoo per’s nomination has led to so much 

criticism tha t he feels the a ppointm ent 

“ would not be in the best intere sts of 

TVA.”

Another Republican, Rep. John Duncan of Knoxville, has opposed the nomination, along with Democratic Reps. 

Joe L. Evins, Ed Jones and Marilyn 

Lloyd.

This new spaper was on reco rd early 

in opposing Mr. Hooper editorially. It 

had examined closely Mr. Hooper's

past busine ss activities and in a series 

of a rticle s, dealt with tha t record.

It can be said tha t the re is a wide 

var iety of political opinion represented 

in th e co mbine d op po sit ion to Mr. 

Hooper. There is a varia nce of philosophical outlook even for the TVA and 

its policies. But the re is broad ag reement amo ng the opposition that the 

Tennessee Valley and the TVA vita lly 

need the most highly qualified person 

ava ilab le on the board.

The TVA’s role in resource s, flood 

control, and the gene ration of electrica l 

power for the region, including its entry 

into nucle ar power generat ing pla nts, 

mak es it m andat ory that its top le adership be exceptio nal and well-qualified 

to ma ke decisions t ha t affect the pocketbooks, the quality of life and the 

public saf ety of reside nts in the Valley.

It is hoped that me mbers of the 

com mittee considerin g Mr. Hooper 

take these vita l fac tors into acco unt 

when the hea rings get und er way.

The com mittee has , or should have , 

before it the resu lts of its own expensive 

investiga tion. It was disclosed last fall 

that the probe of Mr. Hooper’s business 

dealings had pushed the com mittee 

over its budget.

It still isn ’t publicly known wha t the 

co m m itte e in ves tigat ors fou nd out 

about Mr. Hooper and his business 

dealings, but presu ma bly they found 

man y of the things this new spa per 

found. A weighing of the record should 

lead the co mm ittee to the s am e conclusions tha t this new spa per reache d:

Mr. Hooper is not qualified to serve 

on the board of the TVA, and his 

nomination should be reject ed.
137

T-e TEN N ESSEA N

’ May 30, 1975

Still Playing Without A Helmet
138

T ie T E N N E SSE A N

S epte m ber 10, 19 75
139

ESTABLISHED 1869

Stye

ffiItattauoD9ct

eitttfs

ADOLPH S. O CHS, Publisher. 1878-1935

Published Every D ay In the Year by The Times Pr intin g C ompany

RUTH S. HOLMBERC

Publisher

A. WILLIAM HOLMBERC

President and General Manager

HARVE Y D. MEDEARIS

Treasurer

•

NORMAN BRADLEY

Editor

•

JOHN N. POPHAM

Managing Editor

RAY HOWE

Editorial Production

PAC-E B 6 SUN DAY, MA RCH 16,1975.

The TVA Dire ctorship

With the nine-year-term of Don 

McBride as a TV/V direc tor ending in 

May, interest is mounting on President 

Ford’s possible selection for the post. Mr.

McBride, a midwestern reclamation 

engineer prior to his appointment in 1966, 

has said that at 71 years of age he is not a 

candidate for another term .

Already various groups are recommending names of possible nominees. Misx

 sissippians have suggested Jam es F. 

Hooper, a Republican businessman from 

the northeast are a of the state served by 

TVA. Alabamans are not united behind 

any one person. Among those whose h ats 

have been thrown into the ring are 

Maynard Layman, a Decatur, Ala., 

newspaperman; Charles R. Mitchell, who 

has been Sen. Jam es Allen’s executive 

secretary ; and Thomas L. Longshore of 

Birmingham, an official of the Alab ama 

Power Co.

Members of the Tennessee legislative 

delegation have not come up with a re ­

commendation, although we feel sur e they 

will.

There are no hard and fas t requirements for membership on the board as to 

residence or experience, nor should the re 

be. Citizens of the region have an understandable belief tha t someone fam ilia r 

w'ith its problems and its people may 

serve more capably than a nominee with 

the same qualifications from some other 

section.*?

The TVA act does say specifically, 

however, tha t ‘‘all members of the board 

shall be persons who profess a belief in 

the feasibility and wisdom” of the statute . 

This was obviously written in to preven t 

the choice of someone bent on dism antling 

the TVA or warping its concept of unified 

development for the Valley.

We add the hope tha t in this era of 

energy crisis someone with wide experience in the field of power production be 

considered. The name of Carroll V. 

Kroeger, until recently head of Tenne ssee ’s 

energy office, suggests itself in this r egard. 

He has had worldwide experience in power 

development, particularly in the use of 

nat ural gas, and he has m ore than a nodding acquaintance with nuc lear energy.

The appointment is for Mr. Ford to 

make. He has innumerable individuals to 

consider on whose qualifications we hav e 

no way to pass judgment. Since the appointment is of such great imp ortanc e to 

the Valley, however, we do tru st th at the 

bes t available talent is draw n on to help 

direct the Authority’s affa irs.
k ESTABLISHED 1669

(Gljattaimoga

Stntra

ADOLPH S. O CHS, Publisher. 1878IV35

I'u blu hrtl Lirr> lin y in ih r ]ru r b\ 7 lir 7i/n**.« I'n n liiiy Cuntpuny

RUTH S. HOL MBE RG

Publisher

A. WIL LIAM HOL MBE RG ''

President and General Manuger

HARVEY D. MED EAR IS

Treasurer

•

NORMAN BRA DLE Y

Editur

•

JOHN N. POPHAM

Managing Editor

RAY HOWE

Editorial Production

PAGE 12 TUESDAY, NOVEMBER 25, 1975.

Th e TVA A p p o in tm en t

Senate hearings on the con firm atio n of 

James F. Hooper HI as a director of the 

Tennessee Valley Authority have been put 

off until sometime next year. The prolonged delay may signal the desire to give 

Mr. Hooper a graceful way to bow out. 

However, he has said he has no intention 

of asking that his name be withdraw n by 

the White House.

Donald McBride's term as a director 

expired last May. President Ford appointed Mr. Hooper, a Mississippi Republican, 

to the post, subject to Senate approval. 

Within a short time, sharp opposition developed to the nomination. Questions were 

raised as to some of Ins business dealings, 

his knowledge and understanding of the 

TVA's programs, and his attitud e on environmental protection.

Months went by before the Senate 

would even set a date for the hearings, 

fin ally scheduled for early December. The 

request for further delay came from Mississippi's two Democratic senators who 

had supported the nomination. It is

enough to encourage a belief that th eir in ­

terest in his con firm atio n is dwindling.

Mr. Hooper would do well under the 

circumstances to withdraw , and the Ad ­

min istratio n — already under fire for 

other appointments — would do we ll to encourage him. The autho rity directorate 

has been at less than full strength too long 

already.

Should the opportunity for appointment 

be recreated, we hope that geographical 

considerations will be buried under more 

imp ortant elements. We understand that a 

resident of the TVA service area might 

have a better knowledge of Valley problems early on in his tenure, but his experience and knowledgeability in the 

types of programs TVA engages in would 

be far more importa nt in the long run , 

whether he is from Mississippi or Maine, 

Tennessee or Texas.

We hope Mr. Ford will have another 

opportunity to nominate a TVA director; 

we also hope he puts real qualifications at 

the top of the lis t of requiremen ts fo r his 

choice.
141

. . . . . . . »’ •

Making TVA more accountable

IT APPEARS that at long last the Tennessee 

Va lley Autho rity, which has come under increasing criticism fro m consumer and en vironmental groups fo r its energy policies, w ill 

be put under the congressional microscope.

The Senate Public Works Committee has 

scheduled five days of hearings, beginning 

A pril 30, w ith the focus of testimony expected 

to bear on the federal power agency's SI billion bid to buy Peabody Coal Company. But 

the three-memb er TV A board and its staff 

surely w ill face close scrutiny on a number 

of oth er vital public issues, such as the 

agency’s proposal to strip mine parts of the 

Daniel Boone National Forest in Eastern Kentucky and its rock-rib bed opposition to proven 

air po llutio n con trol techniques.

Equally important, however, w ill be President Ford's choice to fil l the vacancy tha t w ill 

be created May 18 when the term of board 

member Don McBride expires. So far, reports 

tha t an Alabama newspaperman and a Mississipp i businessman have the inside tra ck fo r 

the nine-year, S38,000 post aren't encouraging 

news tha t consumer and environmental inte rests w ill be adequately represented.

L o u is v ille C o u rie r J o u rn a l

A p r il 7, 19 75

The United Mine Wo rkers offer the in trig uing suggestion of appointin g White sburg. K y„ 

newspaperman Tom Gish, ed ito r of The Mountain Eagle. For an agency that only this year 

abandoned secret meetings, the prospect of 

adding to the board a harsh TV A critic and 

defend er of openness in the conduct of the 

public's business must surely cause the Nashville bureaucracy to tremble.

Bu t one has to wonder if ed ito r Gish 

wo uldn 't better serve the public intere st, partic ular ly that of the citizens of Appalachia 

who must live with the results of TVA-n ourished strip mining, if he rem aine d on the outside looking in, rather than becoming part 

of the bureaucracy tha t he so effectively 

watches over. Fortunately , some of the oth er 

nom inations include people with simila r environ me ntal credentials plus professional expertise— among them Dr. Charles W hittle, a 

Centre College physicist cu rren tly on leave 

to the Ins titute of Energy Analysis at Oak 

Ridge, Tenn.

Preside nt Ford also migh t look seriously 

at the proposal by Tennessee’s governor to 

expand the size of the TV A board to seven 

as a step toward providing more divergence 

of opinion on TV A policies. This would be 

especially useful if the fo ur addition al members were, as Governor Ray Blanton suggests, 

named by the governors of his state, Kentucky, Alabama and Mississippi— the four 

main service regions fo r TV A. This expansion, 

plus the appointm ent to Mr. McB ride's 

seat of someone with environme nta l credentials, could go a long way tow ard making 

the federa l power agency more responsive 

to the public i t serves.

67 -5 20 0 - 76 - 10
Ford should drop nominee

PRESIDENT FORD should spare himself 

fu rther po litic al embarrassment and withdraw 

his nom ination of Mississippian James Hooper 

fo r a seat on the board of dire ctors of the 

Tennessee Valley A utho rity.

The Senate Public Works Comm ittee has 

inde fin ite ly postponed hearings on Mr. Hooper’s nom ination, pending an investigation 

into the financial background of this Republican loyalist and pro moter of bankrupt businesses.

The investigation doubtless was prompted 

by The Nashville Tennessean, which traced 

Mr. Hooper’s background through court bankL o u is v ille C o u rie r Jo u rn a l

ruptcy records. What emerged is the po rtrait 

of a wheeler-dealer who diverted funds from 

an ailing Alabama insurance company, of 

which he was a director, to a finan cia lly tro ubled Atlan ta da iry, in which Mr. Hooper also 

had an interest. According to The Tennessean,

funds were channeled from the insurance company to the da iry throug h Mr. Hooper's Mississippi farm operatio n by means of an in tr icate check-swapping scheme.

Mr. Hooper has denied any ille ga lity . But 

even if it tur ns out tha t he has been only an 

innocent partic ipa nt in a string of financial 

failur es (he also operated a pe tfo od company 

that went bro ke), is this the kind of man who 

should be spending the taxpayers’ money as a 

$38,000-a-year director of the TVA?

Surely not. Given TV A's influ en tia l role in 

national energy plan ning , this nine-year vacancy on the three-member governing body demands someone with a broad background in 

energy affairs, ind ustria l management and 

conservation. As Kentucky Senator Huddleston has said, “ we need excellence, not medioc rit y,” in this job. Nothing in Mr. Hooper's 

bac kground suggests tha t he comes close to 

meeting the Senator's firs t qualification.
143

L o u is v ille C o u ri e r J o u rn a l Ju ne JO , 197 5

Senate should reject nominee

\ AS SENATOR JACKSON argued on the 

. floor of the Senate earlier this month, a presi- 

'•dent of the United States-should have the 

■widest possible latitude in selecting whomever 

he wants for his closest advisers and members 

of his Cabinet. But the rules change when it 

comes to filling long-term (even lifetime) vacancies in the courts and the multitude of 

federal agencies and commissions.

The case Senator Jackson was discussing 

was the nomination of former Wyoming Governor Stanley Hathaway to be Secretary of the 

Interior. While environmentalists properly 

raised questions about his views on energy 

, and conservation, no one seemed to doubt the 

nominee’s inte grity or his ability to administer 

4

 a major federal agency. On the theory that a 

»-president is-entitled to surround himself with 

associates of his choice unless they are prova- 

. bly awful* Mr. Hathaway was confirmed.and 

how holds office. Who knows, he might even 

turn out to be another Walter llickel.

But latitude is not license. This is what 

makes the nomination of Mississippi Republican loyalist James F. Hooper 111 to the Tennessee Valley Authority board of directors, 

like that of brewer Adolph Coors to the Corporation for Public Broadcasting, a different situation. Most of Mr. Ford's appointments have 

been at least good, and some of them exemplary. But the Hooper and Coors appointments arc transparent attempts, lacking any 

other rational justification, to shore up the 

President’s stock with the ultraconservative

wing of the GOP.

Why else would Mr. Ford appoint the 

promoter of a failed dairy, a failed pet food 

factory and a defunct insurance company to a 

nine-year term on such an important energypolicy post as the TVA board of directors? As 

the Nashville Tennessean has observed. Mr. 

Hooper’s career, though also marked by hard 

work for a number of civic causes and the 

Republican Party, makes him a questionable 

candidate for this important post.

Above all there is nothing in Mr. Hooper’s 

record to suggest that he possesses qualifications in energy matters, industrial’management 

or environmental protection. Yet he would be 

one of only three directors voting on such 

questions as TVA’s commitment to nuclear 

power, its plans to strip parts of the Daniel 

Boone National Forest for coal, and its refusal 

to-cooperate with the Environmental Protection Agency in installing stack-gas scrubbers 

on its steam-generating plants.

Given the current deadlock on most of these 

questions between the other two members of 

the TVA board, this appointment becomes 

even more crucial. The environmental groups 

that oppose Mr. Hooper's confirmation would 

prefer a nominee who'd help make this 

bureaucracy more responsive to consumers 

and conservation. But one needn't share that 

view to insist that a presidential appointee 

at least be qualified to vote inte lligently on 

the policies of one of the nation's largest 

energy producers and users.
144

, BARRY BINGHAM JR. ROBERT T. BARNARD

Editor and Publisher Opinion Page Editor

Associate Editors

• • - • ADELE VINCENT JOHN HART

BLRTEMKE JAMES LDDLEMAN

H L'G 11IIA Y NIE, Ca rtoonis t

v THURSDAY. JAN UAR Y 15. 1976. FOUNDE D 1826.

O p in io n

• vk- *»t* '» • "• ’-

TVA deserves a better deal .

INCREDIBLE as it may seem, the nomination of James Hooper, the spectacularly unsuccessful businessman chosen by President 

Ford for the board of the Tennessee Valley 

Autho rity, is still alive if not well in the 

United States Senate.

Mr. Hooper’s unfitness for the S39.000 post 

'as one of the three full-time directors who 

actively oversee TVA was demonstrated so 

fu lly last year that it is stretching a point to 

call it controversial. The nominee presented 

no qualifications in either the fields of energy 

or conservation, plus a tangled business record 

as a promoter of a failed dairy, a failed pet 

food company and a defunct insurance company. His sole qualification appeared to be as 

a Republican loyalist who might improve the 

President’s standing with the conservative 

wing of the party.

Mr. Hooper apparently failed even at that. 

The appointment was one that even Senator 

William Brock, the conservative Tennessee Republican, couldn’t swallow. In the normal 

course of events, the nomination would have 

died at year’s end, since the Senate failed to 

act on it.

The nomination stayed alive, however, when 

a resolution carrying it into the new year was 

passed by unanimous consent. Senator Brock 

reportedly passed up the opportunity to block 

the resolution for fear that the President 

.Would place Mr. Hooper on the board on an 

"ac ting basis, as he is entitled to do. This could 

have put the appointment for the nine-year 

term in the hands of a new president, possibly 

a Democrat, if Mr. Ford is not continued in 

office.

As this sort of politicking has continued, the 

post has lain vacant since mid-May, when Don

McBride retired. Left on the board are Chairman Aubrey Wagner and William Jenkins, 

who sometimes disagree on vital issues, such 

as TVA policy on expanding nuclear generating capacity. The original intent of Congress 

was that such major decisions would be made 

by a full, three-member board.

Indeed, there is considerable question today 

in Congress and in TV A’s seven-state service 

area whether even the three-man board is 

sufficiently responsive and responsible to the 

public interest. Senator Brock and Senator 

Wendell Ford have offered separate proposals 

for broadening public representation in TVA 

matters, and both plans deserve careful consideration.

Meanwhile, President Ford will be acting 

less than responsibly if he docs not quickly 

withdraw the Hooper nomination and send the 

Senate the name of a man with proper credentials to help guide TVA, If political considerations must be the guide, there surely are 

Republicans with better qualifications.
145

Slje SUiumlsjr

Ju ly 21 , 197 5

Hooper May

EXT EN SIVE and intim ate re ­

search has revealed tha t President Ford's choice for director of 

the Tennessee Valley Authority is 

a mat\, who somehow managed to 

adhere to the letter of the law if not 

its sp irit.

Tuesday the Senate will be able 

to ask James F. Hooper first-hand 

about h is p e c u li a r tw is ti n g s 

through the financia l wo rld and 

the wreckage of ba nk rupt businesses and business pa rtn er suicides behind him (two of his three 

partners killed themselves in the 

past decade). .

Among the more blatant of the 

Coium bus. Miss ., busin essm an's 

moves was a sudden tra ns fer of 

$154,000 from a failing Greenville, 

Ala., insurance company to a set of 

dairy farms> out* of the state between 1969 and 1972. All three businesses flo pp ed m is era bly , and 

Hooper was sued — unsuccessfully 

— by the stockholders.

Eq ua lly im po rta nt is the fact 

that Hooper h3S never displayed 

an interest in any utility or energyactivitie s at all, much less TV A. 

He pointedly refused to discuss 

what he might do as director of 

TVA and at one point fla tly stated 

he could not discuss any oi the majo r issues facing TVA because he 

was “ unf am iliar with the questions involved.”

Hooper s nomination comes at 

one oi the most crucial times in '.he 

history of TVA. Within the next C 

years — the period of Hooper s 

te rm if he su rvive s the Senate 

hearing — the gigan tic conce rn 

will have to re-evaluate many of 

its policies — including its ambition to be the nuclear showcase ol 

the nation.

Also with in the next 3 years, 

TVA w ill have to maintain service 

to 5.000 P'Hi consumers in seven 

states, including Alabama where 

21 per rent o! TVA s electricity is 

generated.

Not only does Hooper have qu-. 

tum ahle ma nager ial ab ili tie s ai d 

experience for such a massive jeb.

Des tro y TVA

but he comes fro m a state — Mississippi — that produces not one 

kilo wa tt of power tor TVA.

Indeed, as we have stated before. Hooper's only qua lification 

seems to be his political ties. His 

wife is the current Republican national commilteewcman for Mississippi, and he has the backing of 

the entire Mississippi congressional delegation.

Ford, now of fic ially and actively 

campaigning for the 1976 term as 

President, must see Mississippi as 

a possible GOP state in Wallace 

country.

But politics is a poor ju st ifica ­

tion for an appointment to something as serious as TVA. Already 

TVA has botched its fuel purchasing policy severely enough to consid er buying out a coal company 

and becoming an illega l vertic al 

monopoly.

In addition, with energy generation at the crisis level TVA, i: it 

remains so lve nt, an oc curre nc e 

that now appears doubtful, could 

be the testing ground for radically 

new energy ideas. Something private utilities are hesitant to do.

Hooper should not be placed in 

such a situation with such dubious 

qualifications.

Whoever is inst alle d w ill become the cr itica l swing-voter betw e en th e b u re a u c ra tic e x ­

pansionist. Aubrey J. Wagner, and 

th e m o re c o n s e rv a ti v e and 

cautious W illiam Jenkins Placed 

between those two extreme positions. the next director wilt to a 

-.crv real extent be able to personally control the direction ol TVA 

into the HMfts. a lim e that Ford 

him se lf ad mits may de te rm ine 

whether this nation's energy system stands or falls

N ationally and re gio nally , to ­

morrow's hearing w ill have im ­

po rta nt consequences. There are 

mo re qua lified men, by nn les. 

than Hooper.

It would be a grievous mistake 

lo r the St-r.i'.e in go a’< ng with 

PicMdi-nt I'oid on Hus ap pointment
Ju ne 2, 1975

Wauled al the TV, 1

riM IE COUNTRY'S large a power company. tlm Ti-nnessvc Valley Authority, is tip S'ainst all nt the troubles 

that now beset utilities. But since the TVA is also a

federal agency. its public respon .hili'in s are broader

Ilian other utilities'. Particularly in balancing the tra ­

dition of cheap electricity against the new imperatives 

of c:iviruiii.:c i":il ptv cvlioil, tuu TVA is confronted by 

decisions ol r.aliou.’.iiie imp'Utar.eo. Two weeks ago. one 

seat fe ll Vacar.l of the authority's three-man beard of 

directors. The charae tcrof the next appoinment w ill be 

crucial to future TVA policy It i. a presidential appointment, but unfortunately neither Mr. Ford nor his staff 

shows any appreciation of the iniluence that it will 

carry. They seem to be treating it as a mere matter of 

routine patronage.

The TVA unwillingly illustrates the growing division 

in this country between the old-line consumers’ movement. which defines the public interest as the cheapest 

possible price lor power, and a new concern fo r conservation. The TVA is the nation's largest consumer of 

coal, and half of that coal is strip-mined. To keep tins 

price low, the authority has apparently cut corners in 

the reclamation standards that it enforces in its strip 

mining contracts. Which is more important, low rates 

or reclamation? In a country that is prosperous but increasingly crowded, protecting the land is worth the 

price. But the TVA i* still fling ing to the rule tha t it 

brough oul ol lac Depression: cheap power at any cost.

A similar question arises lroir. the gue rrilla warfare 

that the TVA has been conducting'against the clean air 

standards being imp o-ct by anntlie: arm of Ihc federal 

government, the Environmental Protection Agency. The 

UFA thinks that public health standards require expensive sciubbing equipment to cleanse generating plants’ 

exhaust gases. Again, the cost of this protection would 

show up in the consumer’s electric bills. The TVz\ is 

figh ting the scrubber requirement.

Another issue, for the country as well as for the 

TVA. is reliance on nuclear power. The TVA has vast 

plans for nucb.ar development, and llu.se plants are 

under vehement challenge in the communities where the 

plants are to In- built. It would be reasonable to expect 

the Ford administration to u.o tbc TVA ... . model lor 

the country's power industry. But the TVA has been 

steadfastly inclined to a narrow and local view of its 

job, and it seems to be almost c n tin lv insulated from 

the larger purposes of the government as they are 

evolving hero in Washington.

Tiie authority is currently run mainlv bv the highly 

experienced chairman of its board. Aubrey J. Wagner. 

Un til mid-May he had the support of a second director, 

Don McBride, but Mr. McBride's term has expired. The 

third member, a young Tennessee rep ublican named 

William L. Jenkins, has challenged Mr. Wagner on many 

of the TVA s traditional positions and the question now 

is the nomination of the director who w ill cast the 

swing vote. Since it is a nine-year term, this nomination will cast a long shadow. Two requirements seem 

obvious. The incoming director needs to understand 

the technology of large electric utiliiics. for all of tho 

value judgments here have to begin with a sure grasp 

of the engineering requirements. Second, lie needs a 

clear sense of the national implications of the choiret 

that t?e TVA now is called upon to make

Tne V bite House has not vet nominated a candidate, 

but the signs suggest tlia» it is moving in precisely the 

wrong direction. The While House reportedly has under 

consideration a man whose sole qualifiration is the 

warm support of tho Mississippi Republican Tarty and 

whoso previous experienco in tho power industry is 

zero. Before Mr. Ford lels this nomination go further, he 

might want to ask hinisrif whether there isn't a hit 

more at stake than providing public employment for 

one Mississippi Republican.
147

'F R ID A Y , SE PT EM BE R 5, 197 5

The President and the TVA

P

RESIDENT FORD jus tly takes pride in the quality 

of most of his appointments over the past year. But 

he has made a serious mistake in bis choice to fi ll the 

crucial third seat on the divided board of the Tennessee 

Valley Authority. Rather than barrelling stubbornly 

ahead, he would be wiser to withdraw the nomination 

before Senate hearings become necessary.

His nominee, James F. Hooper ni. is a businessman 

with no previous experience in the power industry. He 

has no background in the technology of electric generation, or the economics of energy, or any of the urgent 

issues of environmental policy that the TVA must soon 

begin to answer. Mr. Hooper’s chief asset in seeking this 

highly influe ntial position is evidently his wife, the Republican National Committeewoman from Mississippi.

The .TVA is coming into a very difficu lt time, in which 

weak leadership would prove intolerably expensive to 

the region it serves. As the authority has grown in size 

and self-confidence over the years, it has become—like 

many another federal agency—increasingly set in its 

ways. It clings tenaciously to the principle of maximum 

production cf power at the minimum price to the buyer. 

But slowly, throughout the middle South, there has come 

a realization tha t this single-minded concentration on 

low rates Is exacting an intolerable cost in pollution of 

many kinds. The authority’s encouragement of stripmining is the most spectacular example, but hardly the 

only one. The dimensions of this cost were explored at 

some length last spring by the Senate Public Works 

Committee, in a series of oversight hearings on the TVA's 

practices and their effects on the surrounding countrysde. Those hearings developed the standards by which 

that committee will inevitably judge the qualifications of 

the next TVA director.

The TVA is currently run mainly by the strong-willed 

and highly experienced chairman of its board. Aubrey 

.'J. Wagner. The present policies of the authority are 

• largely Mr. Wagner's. Recently the second member of 

the board, William L. Jenkins, has begun to challenge 

' him on a broad range of questions. This division means

that the third director will hold the swing vote. The 

TVA's example will have an impact on energy choices 

nationwide, as the whole country struggles to reconcile 

the new imperatives of conservation with the old demand 

for cheap power. The rising congressional opposition to 

Xlr. Hooper is not merely partisan or regional. Sen. W illiam E. Brock, a conservative Republican from Tennesee, has announced the he w ill oppose confirmation 

on grounds that Mr. Hooper is plainly unqualified.

Unfortunately, there is more to the matter than a 

simple lack of administrative experience on the hominee’s 

part. Reports published earlier this summer—chiefly 

in the Nashville Tennessean — raised broad questions 

about Mr. Hooper's judgment and sense of propriety in a 

series of private business ventures. As a result of these 

reports, the Public Works Committee postponed the confirm atio n hearings, originally scheduled for July, and 

began an investigation that will run fo r several more 

weeks.

Mr. Hooper is apparently insisting on going through 

with the hearings, on grounds that he is entitled to an 

opp ortunity to clear his name. But if that is his purpose, his friends owe him a warning that he has chosen 

the wrong forum. The prudence and the legality of his 

business operations will not be the main issue before 

the committee. It w ill be interested in his past record 

only as an indication of those qualities of character and 

mind that would enable the nominee to represent the 

American people on the board of the nation's largest 

power company. It is possible for a man to be completely 

honest and yet emerge from a hearing of this nature 

with out enhancing his reputation for competent management. '

If Mr. Hooper is well advised, he w ill now ask the 

President to withdraw, his name. If he does not. the 

President would serve everyone's interest best by revoking it himself. The TVA has had a great history, 

and there are a good many people in the Senate who 

are determined not to let it degenerate into mediocrity 

and political back-scratching.
148

New Y ork Ti mes A p r il 9 , 19 75

T.V.A., a N ational Asset

President Ford is soon to choose a nominee to fill a 

vacancy on the three-member board which governs the 

Tennessee Valley Authority. It is one of the more important appointments that a President makes because of 

the length of the term— nine years—and because of the 

continuing importance of the T.V.A.

Since its creation in 1933, the T.V.A. has grown to 

become one of the largest utilitie s complexes and the 

largest purchaser of coal in the nation. The Authority is 

soon to decide whether it should buy the Peabody Coal 

Company, the world's biggest coal producer. The policies 

set by T.V.A. concerning the development of nuclear 

power and the purchase of strip-mined coal have wide 

influence throughout the utility industry.

Under these circumstances, it might seem logical f hat 

the President would try to find a figure of outstanding 

experience and reputation who could consider the many 

difficu lt issues of energy production and environmental 

protection with sensitivity and wisdom, a figure comparable to David Lilientha l and Gordon Clapp, who served 

the T.V.A. in an earlier period.

Unfortunately, however, the backstage maneuvering 

over this appointment has turned into a parochial squabble involving the Senators from Alabama, Tennessee and 

Mississippi. The qualifications of most of the candidates 

being discussed are as undistinguished as the reasons 

for proposing them are narrow. One leading candidate,- 

for example, is the husband of the G.O.P. National Committeewoman from Mississippi, where local Republicans 

are said to be clamoring for White House ‘'recognition.’’

This appointment is too important and for too long a 

term for President Ford to treat it as a purely regional 

matter, much less a political payoff. This misplaced 

regionalism has already triumphed in the President's 

nomination of former Gov. Stanley K. Hathaway of 

Wyoming to be Secretary of the Interior. A recurring 

theme in comment on the Hathaway nomination was that 

it restored the Interior post to the Far West after the 

retirement of outgoing Secretary Rogers C. B. Morton of 

Maryland.

It is worth recalling that the greatest Secretary of the 

Interior in recent decades was not a Westerner but a 

Chicago lawyer named Harold I.. Ickes. Similarly, the 

Tennessee Valley Autho rity was the inspired creation not 

of a Southerner but of George Norris of Nebraska and 

Franklin D. Roosevelt of New York. Neither the Interior 

Department nor the T.V.A. belongs to any region. Both 

belong to the nation anti deserve to be led byJJie most 

talented persons that the President can recruit.
149

Senator Randolph. Mr. Williams?

STATEMENT OF JOHN PH ILIP WILLIAMS, EAST TENNESSEE 

RESEARCH CORP.

Mr. Williams. Thank you, Mr. Chairman, I appreciate the opportunity to be here today. My full name is John Philip Williams. I am a 

lifelong resident of Tennessee. I presently live in Jacksboro, Tenn., 

about 35 miles north of Knoxville.

Senator Randolph. Would east Tennessee include, let’s say, 

Kingsport?

Mr. Williams. Kingsport would be further east.

Senator Randolph. Further east?

Mr. Williams. Right.

Senator Baker. Jacksboro, Mr. Chairman, is best located as being 

22 miles east of Huntsville. It is the center of the known universe and 

also my hometown.

Senator Randolph. I remember, I spoke in the mountains of east 

Tennessee. You have mountains there, do you not?

Mr. Williams. Very much so.

Senator Randolph. This was such a long time ago tha t I should 

not remember it or even recall it. 1 went in bv a narrow trail road. 

That is what was operative at that time. I t was operative but not on a 

long time schedule because 1 arrived an hour and 40 minutes late. I 

was to address a meeting and I remember a person who met me and 

grabbed me. We rushed up the hillside into the auditorium.

I attempted to take my seat, but I barely touched it because he 

moved the podium and lie said, “Ladies and gentlemen, the train 

pulled in with a jerk.” It was an unusual introduction but it was one 

tha t got me off on the right foot.

So I do remember your area very well. I have traveled throughout it. 

What you discuss here today as Tennessee and as the area embraced 

by the Tennessee Valley Authority, I know just as I know the valleys 

and mountains of West Virginia.

Mr. Williams. I think in many respects our area is similar to 

West Virginia, Senator.

Senator Randolph. Yes, that is true. When you are here talking 

about the Tennessee Valley Authority, I commend you for coming 

before the committee as I would commend anyone coming before the 

committee and testifying on this im portant subject matter, regardless 

of the person who had been nominated by the President for the 

position. Because I feel tha t the impact of the Tennessee Valley 

Authority, its yesteryears, its present, yes—but you are thinking in 

terms of the future of this unique, significant and substantial development. Proceed.

Mr. Williams. I am a staff attorney with the East Tennessee 

Research Corp., which is a nonprofit organization that does research 

on social, economic, and environmental issues of importance to community organizations in the Tennessee Valley and provides counsel 

and technical assistance to these organizations upon their request. 

Some of our research and technical assistance to these organizations is 

on issues involving the Tennessee Valley Authority (TVA).
150

In ear ly 1975, several mo nth s before the exp iration of Don ald 

McB rid e’s term on the TVA Board of D irec tors , our organizatio n preB

ared some short research pap ers describing the TVA Boa rd of 

firectors, the w ay th at its mem bers are selected, and some brief backgro und sketc hes on several men who were being me ntio ned in the press 

as the leading can did ates for Mr. Mc Bride’s seat on the Board.

Subse que ntly , when it was widely rep orted in the press th at the 

Preside nt was planning to nominate Jam es F. Hooper for the p osition, 

our research focused more closely on Mr. Hooper. At the same time 

th at ou r organizatio n w as resea rching Mr. Ho oper’s backg round, o the r 

Tennessee env ironmental organiz atio ns and several lead ing T ennessee 

Valley newspap ers began a similar research effort.

Th e facts th at we are presenting to this com mittee ab ou t Mr.

Ho op er’s bac kground and qualifications are based alm ost entirely on 

the ind ependent research done by our organization and some of the 

other groups which hav e endorsed the testim ony of Mr. Gibson and 

myself.

We compiled these facts because we wa nte d the public to know 

wh at kind of m en are run nin g the TVA, and we are offering it to this 

com mittee because it is high ly relevant to the pri ma ry issue before 

this com mittee —wh eth er or no t the com mittee should recommend 

confirm ation of Mr. Hoope r to the TVA Boa rd.

We are frankly very perplexed at th e Presiden t’s nom ina tion of M r. 

Ho oper to the TVA Board. We have found abs olutely nothing in his 

bac kgroun d or bu siness experience which qualifies him for this complex 

and dem and ing job.

TVA is the Nation’s largest e lectric utility, bu t Mr. Hoo per has held 

no job which is even tan gentially related to the energy or utility fields. 

TVA has over 25,000 employe es and a cash flow oi over $1 billion a 

yea r, making i t the e quiva len t of the Nation’s lar gest priva te cor porations; ye t Mr. Ho oper’s only business experience has been in several 

small businesses with a han dful of employees and a cash flow of no 

more than several hundred thousa nd dollars a yea r.

Bein g a member of the TVA Board, as has been said previously in 

these hearings, is like being one of the top three officers of a large 

priva te uti lity com pany such as Duk e Power Co., Ame rican Ele ctric 

Pow er Co., or oth er similar uility companies.

We can not imag ine th at a pri vate power com pan y would elevate a 

man with Mr. Ho oper’s lack of experience to such a high position in 

the com pany ove rnight. It is ju st no t sound business practic e to 

elevate a persons with no experience in a business to a high decisionmakin g position which requires specialized exp ertise and ma nageme nt 

skills in th at business.

Similarly, it would no t be sound business pra ctice to nam e to the 

TVA Board a man with Mr. Ho oper’s lack of experience in utilities 

and large business organiz ations.

Ev en more distressing to us tha n his lack of experience, howe ver, is 

his ap pa rent failure in even the small busin esses with which he has 

been assoc iated. His business career is a tangled skein of unp aid 

com pan y deb ts, mortga ges, laws uits, and busines s failures.

Let me describe for this com mittee some of the facts ab ou t Mr. 

Ho oper’s business ventu res , to illu strate why we believe th at he will 

be unable to handle the responsibilities of a TVA directorship. I am
151

not presenting these facts to injure or embarrass Mr. Hooper in any 

way, but solely because these facts are relevant to whether he is 

qualified for the TVA Board position:

One: It has been widely reported in the press that Mr. Hooper was 

a dogfood manufacturer. Several Dun & Bradstreet reports—copies of 

which are attached to my testimony—describe Mr. Hooper’s dogfood 

company, which was known as Columbus Canning Co.

According to a Dun & Bradstreet summary dated October 14, 1958, 

Mr. Hooper provided substantially all the initial capital to s tart this 

< corporation in 1946, and served as company president. According to

the Dun & Bradstreet report, the company was discontinued in 1949 

“due to unprofitable operations.”

In the early 1950’s, Mr. Hooper started up the dogfood company 

* again as a partnership, with Mr. Hooper serving as managing partner.

According to the same Dun & Bradstreet summary dated October 14, 

1958, the company “operated at a struggle” during the 1950’s.

According to the summary, the company’s capital became tied up 

in fixed assets, the gross return on sales was never adequate, and the 

payments to suppliers were slow, “extremely so in many instances.”

In 1957 the company was incorporated, and Mr. Hooper became 

president. In 1958 Air. Hooper persuaded some Atlanta investors to 

contribute additional capital to the corporation. According to the Dun 

& Bradstreet report dated October 14, 1958, Mr. Hooper still owned 

51 percent of the stock on October 1, 1958.

Subsequently, as he testified yesterday, the Atlanta investors apparently bought controlling interest in the company, though, as he did 

not testify yesterday, they retained Mr. Hooper as the president of 

the company.

In the first 6 months of 1959, the company attempted to expand its 

business, but instead it went broke. In January 1959, Mr. Hooper 

mortgaged all the physical plant and property of the company.

In August 1959, this mortgage was foreclosed on. According to a 

supplemental Dun & Bradstreet report dated August 18, 1959:

Current efforts to interview President James F. Hooper have been unsuccessful. 

Efforts to develop information relative to th e rem aining assets and liabilities of the 

company have not been fruitful. However, it is known th at the mortgage which 

was foreclosed covered land, buildings, machinery, equipment, office furniture, 

• fixtures, trucks and traile rs of th e company, and all were sold August 15.

It is unlikely th at there are any assets left to speak of in the corporation. Liabilities have been estim ated in some quarters to range between $200,000 and 

$500,000. Apparently, there have been no provisions made for these liabilities.

« It is a matter of public record in the Circuit Clerk’s office in Lowndes

County, Miss. (vol. 4, p. 26) that many of Columbus Canning Co.’s 

creditors reduced their claims to judgments against the company, 

which according to these court records have not been satisfied.

The Lowndes County Chancery Clerk’s records reveal several 

Federal tax liens against Columbus Canning Co. which were never 

discharged.

Two: As Mr. Hooper testified yesterday, his primary business 

since the 1950’s has been his dairy farm near Columbus, Miss., 

which is located on an approximately 1,400-acre tract of land tha t he 

inherited from his wife’s father. Most of this land was recently sold 

by Mr. Hooper to the Weyerhaeuser Co.
152

It app ears th at M r. Ho oper’s da iry farm has ne ver been a profita ble 

business. To obt ain funds for his d airy business, Mr. H oop er mortgaged 

the 1,400-acre trac t to the Prudentia l Ins ura nce Co. of America in 

October 1964 for $155,000.

Th e land remained mortgag ed until he sold it in 1975 to the W eyerhae user Co., which agreed to assume the mortgage to Prudential 

and to pay off the p rincipal and intere st on th at d ebt .

In 1965, Mr. Hooper formed a partners hip with Ev erette Hope 

Brooks, Jr. , of Mem phis, to ope rate the dairy business. In 1966, 

Mr. Hoo per conveyed to Mr. Brooks an undivided one-half int ere st 

in the 1,400-acre farm real estate.

Mr. Brooks also invested several hun dred tho usa nd dollars in their 

dairy farm partn ers hip acc ount over the next 4 years, bu t he got no 

return on his inv estme nt. Beca use of this and oth er business reverses, 

Mr. Broo ks filed for ba nk ruptcy in October 1969 (in the m at te r of 

Eve rette H. Brooks, No. BK -69 -24 53, W. D. Tenn.).

In Dec ember 1968, Mr. Hooper and Mr. Brooks conveyed their 

und ivided one-half inter ests in the 1,400-acre farm real est ate to 

Stan dard Unio n Life Ins ura nce Co.

r

 a com pan y th at Mr. Brooks 

owned.

When the Insura nce Commissioners of Tennessee and Georgia 

ruled in 1969 th at St an da rd Union had acquired too much real 

est ate as admitted assets, the three-person boa rd of directors of 

Stan dard Union (which consisted of Mr. Hooper, Mr. Brooks, and 

Mrs. Brooks) vote d to convey the whole inter est in the land back to 

Mr. Hooper for no conside ratio n in Augus t 1969, ju st 2 mo nth s 

before Mr. Broo ks filed for bankrup tcy .

The Trustee in Ba nk ruptc y in Mr. Bro oks ’ case, Roy W. Hen drix , 

Jr ., did no t atte m pt to claim any of this propert y as par t of Mr. 

Brooks’ assets because he found the pro perty to be so ove rbu rde ned 

by the P rudential mortga ge and oth er i nde btedne ss th at it con sti tuted 

burden som e pro perty , alth oug h he did tell the Referee in Ba nk ­

ru ptcy th at lie thou gh t the transfer from Standard Union to Mr. 

Hoope r was in his opinion a voidable preference made to avoid 

hav ing the land included among Mr. Brooks’ asse ts at the time 

Mr. Brooks filed for bank ruptcy .

In 1970, Mr. Hoo per had the pro perty pu t in his wife’s nam e, 

for some reason which is no t clear to us.

Accordin g to a sworn petitio n and accoun ting filed by Mr. Hooper 

in 1971 in the Brooks bank ruptcy proceedings (a copy of which is 

att ached to my testim ony), the n et deficit of the ir dai ry farm pa rtne rship in 1969 was $536,144.34, including debts to the two pa rtn ers.

All the assets and pro perty of the dairy farm were encumbered by 

a security agreem ent and finan cing sta tem ent with the Fi rst Co lum ­

bus Nation al Bank, of Columbus, Miss.; the debt owed to the bank 

was $152,664, which exceeded the value of the dairy far m’s entire 

assets by more than $30,000 at th at time, according to Mr. Ho op er’s 

own sworn sta tem ent.

When Mr. Hoo per’s deposition was taken in 1971 dur ing th e Brooks 

bank ruptcy proceedings, Mr. Hooper was asked if the da iry farm 

partners hip had ever made a profit; his reply was, “N o, sir” (page 63 

of his deposition in that case).
153

During this same depo sition, Mr. Hoo per was asked wh at his ne t 

wor th was; his reply was, “I would have to say zero.” (page 80 of his 

deposition in th at case).

Th ree : Mr. Hoo per was involved with Mr. Broo ks in other business 

ventu res as well. In 1968, Mr. Brooks bought all the stock of S tand ard 

Union Life Ins ura nce Co. Mr. Brooks served as pre sid ent of this 

com pany for about 9 months, and his wife was sec retary -treasurer . 

They nam ed Mr. Hooper vice president. The thre e of them con stitut ed the comp any’s boa rd of directors. This com pan y was an Alabam a corporation , auth orized to write insuranc e in Ala bam a, Ar kansas, Georgia, Mississippi, and Tennessee.

In Decem ber 1968, Mr. Hoope r and Mr. Brooks conveyed the ir 

und ivid ed one-half intere sts in the Mississippi dairy farm pro perty 

to Standard Union. Mr. Brooks also conveyed oth er real est ate he 

owned to thi s life insu rance com pany.

In early 1969, however, the Insur ance Commissioners of Tennessee 

and Georgia ruled th at the com pan y had far too much real estate 

as admitted assets, and required the com pan y to divest itself of much 

of this real est ate .

In compliance with this req uir em ent, the three-person board of 

Standard Union voted to convey the 1,400-acre dai ry farm land back 

to Mr. Hoo per for no conside ration, even though the land had belonged to Mr. Hoo per and Mr. Brooks joint ly before the y conveyed 

it to the insu rance company.

It is n ot clear why Mr. Hoo per and Mrl Brooks thou gh t the y could 

convey so m uch real estate to a life insurance comp any, when the laws 

of Tennessee, Georgia, and other State s clearly lim it str ictly the percentage of a comp any’s admitted asse ts which may be real est ate .

After the conveyance of several tra cts of real estat e to Stan dard 

Unio n by Mr. Brooks and Mr. Hooper, real est ate constitute d over 

70 percen t of the admi tte d assets of the com pany.

Tenn essee law allows only 10 perce nt of the admi tte d assets of a 

com pany to be real estate, unless the Com missioner of Ins urance in 

his dis cre tio n waives this req uirem ent .

Stan da rd Unio n also mad e some very unwise busin ess decisions in 

han dling its corporate fund s. Accordin g to exh ibit 13 in the Brooks

ba nk ruptcy case, Stan dard Unio n loaned over $50,000 of its corp ora te 

fun ds to Litt le River Far ms, Inc., a Georgia dairy processing com pan y 

which was owned by Mr. Brooks, Mr. Hooper, and one other man, and 

which wa s more th an $300,000 in d eb t a t t he time th e lo ans were m ade. 

These loa ns were nev er repa id to Stan da rd Union.

Some of the checks for these loan s were made ou t to He nry McM ahan, pr esiden t of Little River Farms, rath er than to the co rpo ration , in 

an ap par en t at te m pt to fru str ate the creditors of Little Riv er Farms.

Mr. Br oo ks also transferred $100,000 of the insurance comp any’s 

corporate fu nd s to the Hoo per-Brooks d airy farm pa rtn ers hip acc ount 

in the su mmer of 1969, again according to Mr. Ho oper’s sworn pe tition and ac coun tin g in the Brooks ba nk ruptcy case.

Since the insura nce com pan y was no t pay ing the dairy far m for 

any pr od uc t or servic e, this tra nsfer of $100,000 would logically hav e 

been e ith er a gift, a loan, or an investm en t; it is n ot clear which it was.

In his deposition in the Brooks ba nk ruptcy case, Mr. Hooper tes ti-
154

fied th at the dairy farm partners hip acc oun t was sometim es used as a 

“c onduit” thr ough which f und s were transferred on to o the r co mpanies 

or oth er persons by M r. Hoo per and Mr. Brooks.

Perhaps this l at te r cha rac terization best explains why the in suranc e 

com pan y fun ds were transferred to the dairy f arm acco unt. If this expla natio n is true, it does no t com port with good accoun ting principle s 

or with good business practice.

Mr. Hooper’s ten ure on the board of dire ctors of Sta ndard Uni on 

Life Ins ura nce Co. ended in the latte r half of 1969, when Mr. Brooks *

pledged the stock of the com pan y as colla tera l for a loan from a Little 

Rock, Ark. ban k. When Mr. Brooks failed to pay bac k the loan 

the bank foreclosed on the loan, took control of S tan dard Unio n, and 

app ointed a new b oard of directors. *

Fou r. Mr. Hoo per and Mr. Brooks were also involved in anoth er 

business ven ture, which was probab ly the worst failure of all the ir 

joint business endeavors.

In early 1969, Mr. Brooks p ut up $5,000 to buy all 250,000 sh ares of 

stock in Little River Fa rm s Inc., a dai ry processing com pan y with a 

pl an t ne ar A tla nta, Ga. He b ought the stock from H enry L. Mc Ma han, 

who had bought all 250,000 shares the mo nth before for $100. The 

stock sold cheaply because the com pany was over $300,000 in de bt a t 

th at time.

Mr. Ho oper’s role with Little Riv er Farm s seems to hav e been to 

manage Mr. Bro oks ’ inv est me nt in this com pan y. I thi nk he testified 

to th at effect yesterda y.

Mr. Hoo per serv ed on the board of directors of the com pan y and 

was issued one -third of the com pan y’s sto ck. In his deposit ion in the 

Brooks ba nk ruptcy case, he testified th at he made ma ny trips to 

Georgia dur ing 1969 to help direct the comp any’s business (page 19 

of his deposition).

He nry McM ahan, who served as presi dent of Little River Fa rm s 

during Mr. Ho oper’s association with the com pany, testified in his 

deposition in the Brooks bank ruptcy case th at , whenever he nee ded 

more mon ey inv ested in the business, he would call Mr. Hooper, who 

in t ur n would call M r. Brooks.

M r. Hoo per and Mr. Broo ks decided which acc ount to tra nsfer 

the money from. Th ey loan ed to or inv ested in Little Riv er Fa rm s *

over $20,000 from the d air y farm partn ers hip acc ount in 1969, acc ord ­

ing to Mr. Ho oper’s sworn petition and acc ounting in the b an krup tcy 

case. a

And as mentioned previously, they also loan ed or invested ove r 

$50,000 of Stan da rd Union Life Ins ura nce Co .’s corporate fun ds 

in Little River Fa rm s in 1969. Mr. Broo ks also invested a grea t deal 

of his own mon ey in the company, and the y borrowed mon ey from a 

Georgia bank to inv est in the com pany. In all, the y investe d alm ost 

$250,000 in L ittle Riv er F arm s in 1969.

Mr. Hoope r and Mr. Brooks became convinced, ap pa rentl y, 

aft er 6 mo nth s th at the y had mad e a bad investm ent and th at the y 

could no t pull the c ompan y ou t from its s tate of insolvency. So in the 

sum me r of 1969, Mr. Hoo per turned the ir stock certificates over to a 

ma n nam ed William Bric key, who was at th at time convicted of 

mail fraud, for which he spent 2 yea rs in the Fed eral pe nitentiary.

Mr. Bric key prom ised th at he would sell the Little Riv er Fa rm s
155

sto ck to some investo rs, but he was nev er able to find any buy ers. 

So he eve ntu ally ret urned the stock certificates to the com pany.

Du rin g mo st of 1969 and the first qu arter of 1970, the com pan y 

failed to pay its employee withholding and social sec urity taxes. The 

Inter na l Rev enue Service (IR S) made dem and on the com pan y for 

the paym ent of over $70,000 in taxes, and because the com pan y did 

no t pay these taxes, the IR S padlocked the comp any’s doors on

* April 5, 1970. On May 10, 1970, the IR S sold the co mpa ny ’s assets 

for a l ittle over $20,000.

One measure of the ex tent of Mr. Hooper’s inv olv em ent in this 

business is the fac t th at he personally guara nte ed a de bt of Little 

River Fa rm s to Sea lrig ht Co., a milk conta ine r sup plier bas ed in 

Kansa s City.

When Li ttle River Fa rm s we nt brok e, Sea lrig ht tur ned to Mr. 

Hoope r for paym ent of the comp any’s de bt of ab ou t $19,000. Mr. 

Ho oper’s attorneys, argu ing th at Mr. Hoo per was in grave finan cial 

str ait s, persuaded Sealrig ht to acc ept a settlem en t of aro und $8,000 

for th is debt.

An oth er measure of the e xten t of Mr. Hooper’s involv em ent in this 

busin ess is t he fact t hat the com pan y bought a m oto r home fo r him to 

live in during his trip s to Georgia. Un fortu nately, the com pan y was 

unable to meet the payme nts on the mo tor home.

The inexp licable thing ab ou t Mr. Hooper’s inv olv em ent with 

Little Riv er Farm s is why it ever hap pen ed. In his dep osition in the 

Brooks b ankrup tcy case, Mr. Hoo per testified th at he and Mr. Brooks 

were looking for anoth er ou tle t to sell the ir milk to. Bu t they never 

sold any milk to Little River Fa rm s for processing. Th eir pla ns 

appa rentl y did no t work ou t as they had hoped, bu t it seem s th at a 

litt le more fore sigh t would hav e cau tioned them again st such a poo r 

inv estme nt.

Many of these facts ab ou t Mr. Ho oper’s businesses have been 

widely rep ort ed in the press, and mo st are a m at te r of pub lic record. 

In our opinion, they lead to only one possible conclus ion: Mr. Ho oper 

is no t qualified to be a mem ber of the TV A Board of Directo rs.

• Th roug ho ut his busin ess career, he has demo nstra ted poor business 

judg men t in the managem ent of his busin ess affairs a nd in his selection 

of business associates. How can this com mittee possibly app rov e the 

ap po int me nt of a man who ca nn ot manag e his own business affairs

i to a position where he will have to manag e the affairs of the N at io n’s

largest elec tric utility?

Ap paren tly many people hav e drawn the same conc lusion ab ou t 

Mr. Hooper. A wide va rie ty of int ere sts are rep res ent ed amo ng the 

opponen ts of this nomination here tod ay. The nomination has also 

received bipartisan political opp osition. As rep ort ed in the press, the 

following M embers of Cong ress hav e pu blicly opposed thi s n om ina tio n: 

Senator William Brock, Se nator Walter Hu ddles ton , Senator Wen dell 

Ford, Re prese nta tiv e Jame s Quillen, Re presentat ive Jo hn Du ncan, 

Re presentat ive Joe Evins, Re presen tat ive M arilyn Lloyd , Re presen tative Ed Jon es, and Re presen tat ive Clifford Allen. Go ver nor Ra y 

Blanton of Tennessee has also pub licly opposed the nomination .

Also, seve ral lead ing new spa pers hav e edi torially oppo sed this 

nomination, including the New York Times, the Wash ing ton Post,
156

the Louisville Courier-Journal, the Nashville Tennessean, the C hattanooga Times, the Oak Ridger, the Montgomery Advertiser, and others.

These editorials are attached to Mr. Gibson’s testimony.

We have been told by some people that a Presidential nominee must 

have been involved in criminal activity before a Senate committee 

will recommend against his confirmation. We believe th at involvement 

in criminal activity is the wrong standard against which to measure 

a Presidential nominee.

In addition to having avoided criminal activity, a Presidential 

nominee ought surely to have some basic, rudimentary qualifications *

for the position to which he is being appointed. A Senate committee 

should not recommend Senate confirmation of a Presidential nominee 

who is totally unqualified for a job, just because he has managed to 

avoid criminal activity all his life. *

We are encouraged to note tha t Senate committees have in recent 

years been giving very careful scrutiny to Presidential nominees and 

have recommended against confirmation of several of them. In 1973 

the Senate voted against the confirmation of Robert Morris to the 

Federal Power Commission.

In 1974, the Senate Commerce Committee refused to act on the 

nominations of David Kingsley to the Federal Power Commission 

and Luther Holcomb to the Federal Communications Commission; 

both these names were finally withdrawn by the White House.

In recent months the Senate Commerce Committee has rejected 

the nominations of Joseph Coors to the Public Broadcasting Corporation and Isabel Burgess to the National Transportation Safety 

Board, and the Senate Banking Committee rejected the nomination 

of Ben Blackburn to be Chairman of the Federal Home Loan Bank 

Board.

These Senate committees have apparently set a higher standard 

against which to measure Presidential nominees than was applied by 

the Senate in past years. We view this development as a very healthy 

one, and we believe tha t it will result in the appointment of better 

qualified persons to important government positions.

We are asking this committee to follow the example of these other 

Senate committees and reject the nomination of James Hooper to the 

TVA Board on the ground that he is totally unqualified for the position. «

In doing so, this committee would be telling the President tha t the 

TVA is an important national agency deserving of highly qualified 

board members. If the committee does not take this step, we are 

afraid tha t TVA will be viewed as a mediocre, second-rate organize- *

tion rather than as a national leader in the energv and environmental 

fields.

It is our understanding tha t the committee staff has made a very 

thorough investigation of Mr. Hooper’s background and has prepared 

a lengthy staff analysis for the use of committee members, and, as 

was announced yesterday, will soon be made public.

If any members of this committee are not convinced by our presentation today, we urge you to study the staff analysis and draw 

your own conclusions about Mr. Hooper’s qualifications for the TVA 

Board.

If this committee is inclined to recommend confirmation of Mr.

Hooper, we ask tha t the staff analysis be made public, so that other
157

Members of the Senate and members of the general public will have 

a chance to examine the analysis before the final vote on confirmation.

In summary, we have presented the reasons tha t we think Mr. 

Hooper is not qualified for this important TVA post, and we urge this 

committee to reject his nomination.

[Attachments to Mr. Williams’ statem ent follows:]

C o lu m bus C a n n in g C o., I n c., M a n u fa c t u r e r o f D og F oo d, C o lu m bu s, M is s

James F. Hooper, Presiden t 

< Erwin E. Rockwell, Vice President

Heida Humphries, Secretary and Treasurer

Started : 1950 (See history).

Payments: Slow to 100 days (See pay ments).

SUMMARY

The company has operated a t a struggle in recent years. Deb t has accumulated, 

net working capital has been inadequate and paym ents slow.

In mid-1958 a partial change in financial control took place. The principals 

repo rt th at additional capital is to be placed into the business (some of which is 

already in) to be used to liquidate or substan tially reduce trade debt. Then, 

a sizable expansion program is planned which is expected to at least double the 

annual volume.

HISTORY

This corporation was organized under Mississippi laws Nov. 25, 1957 with 

1,000,000 shares of $1 par value common stock. The corporation succeeded a 

business started by James F. Hooper and W. Pr att Thomas in 1950. Hooper 

subscribed to 50,000 shares, Thomas to 50,000 shares and W. O. Garrard 50,000 

shares.

In mid-1958 it is reported th at there was a partial change in financial control 

of the business. On Oct. 1, 1958 President James F. Hooper said th at he now 

controls 51 percent of the outstand ing capital stock and Vice President E. E. 

Rockw’ell 49 percent of the outstan ding capital stock of this business. Hooper 

added th at Rockwell represented certain investors, and the re-arrangem ent of 

outstan ding capital stock took place abo ut as follows: Th at Thom as and Garrard 

disposed of their 100,000 share of stock in this business to the “new investors” , 

and then the stock was re-distributed as indicated.

During this interview with Hooper, and in earlier interviews with E. E. Rockwell, it was said th at additional capital was coming into the business in the form 

of capital stock heretofore unsubscribed to. Hooper and Rockwell repo rted 

tha t, to begin with, at least $150,000 additional stock would be sold to the present 

investors, with the money being utilized to liquidate or sub stan tially reduce 

♦ trade debt.

Hooper, married, born Selma, Alabama about 1917, graduated from the Alabama Polytechnic Ins titute , Auburn, Alabama with an engineering degree in 

1937. While atte ndi ng college he was a member of a musical ban d known as the 

Auburn Knights. He became the owner of th at band after receiving his degree, 

A and was thus engaged until 1941, in addition to acting as a booking agent for the

Music Corporation of America. Hooper served in the U.S. Army from 1941 until 

1945. In Jan uar y, 1946 he was instrumental in organizing, and furnished substan tial ly all of the capital for Columbus Canning Co., Inc., to man ufacture dog 

food. T ha t business was organized Jan . 15, 1946 with $7,500 authorized and paid in 

capital. Hooper was its president until it was discontinued in 1949 due to unprofitable operations. Meanwhile, after his marriage to the daughter of a local 

physician, lloo per became interested in cattle raising locally. He devoted his tim e 

to t ha t activity until he and Thom as star ted the predecessor of this corporation. 

He has activ e charge of management.

Rockwell, married, born in Alabam a in 1926, attended Southern Watchmaking 

Ins titu te, Birming ham, Alabama from 1947 to 1951. During this period he was 

employed by Kay Jewelers, Birmingham, in 1950 and 1951. He was employed at 

Gadsen, Alabam a by Lee’s Jewelers from 1951 to 1952, and was a jew’eler for Center Watch & Diamond Company, New York City from 1952 to 1954. Since 1954

67 -520 0 - 76 - 11
158

he has been employed by Rodes Optical Company in Atla nta, Georgia, having 

served as General Manager for th at business for the pa st year.

Mrs. Humphries performs secretarial duties; she is not a stockholder nor 

director.

Vice Pres iden t Rockwell is said to represent the interests of at lea st two Atlanta, 

Georgia business men as investors in Columbus Canning Co., Inc. A brief summary 

of the antece dents and connections of these individuals are as follows:

Charles Gilsten, married, born New York C ity in 1903, is a long tim e resident of 

Atlanta , Georgia where his principal business inte rests are situated. He is president 

of Monarch Wine Company of Georgia (Inc ); Georgia Grain & Elevator Company, 

Inc .; and Molasses Industries, Inc., all Atlanta, Georgia. He also controls Seaboard Brokerage Company, Atlanta , a dorman t corporation which formerly 

handled New York and California Wines and Cham pagnes; is vice president of 

Boland, Inc., a concern now dor mant bu t formerly active in the building construction lines; and is president and principal of Gillstar Corporation, Atlanta, a concern active as a holding com pany for business property in Atlanta . Monarch Wine 

Company of Georgia dates from 1936; Molasses Indu stries, Inc., from 1957; 

and Georgia Grain & Elevato r Company from 1955. Financial information has 

been declined on each company.

Victor C. Rasmussen, married, born 1911 in Nebraska, was employed from 1937 

to 1939 by Consolidated Air Lines, Chicago, Illinois. In 1939 he organized AeroBank Plan, now inactive. Th at business, owned individually by Rasmussen, 

offered finance services for airc raft purchases, and road insurance relative to 

aircraft. In December, 1943 he organized Aviation Associates, chartered 1951 

with Rasmussen as President and Treasurer. That business originally offered research consultation services as well as sales and public relations for aircraft manufac turers. He sold his interest in the Fall of 1952. Meanwhile, he was treasurer of 

American Farm Industries, Inc., farm equipment distributors, bu t also sold his 

intere st there. He is reported to be a director of Pan Coastal Life Insurance 

Company, Mobile, Alabama; a par tner in Gunn & Rasmussen, a rental housing 

project at Moultrie, Georgia; president and treasurer of Hercules Building Corporation. Details have been declined on all of these businesses. Currently , Rasmussen 

is prominently associated with Charles Gilsten as a principal in Molasses Industries, Inc., and Georgia Grain & Elevator Company, Inc.

OPERATION-LOCATION

Manufactures dog food (SIC #2042) which is m arketed under the brand names 

of “J et ” and “Bonus” ; also does packaging for private labels. Sales are through 

brokers th roughout Southeastern and Southwestern states to grocery chains. Approximately 25 employees. The plant is a one-story frame and concrete block 

building measuring 75 by 120 feet; there is a 50 by 60 foot frame cattle barn; and 

a 20 by 30 foot frame office building located on leased land in a rural area approximately 3% miles west of Columbus on Gilmore Road.

FINANC IAL INFORMATION

President James F. Hooper was interviewed October 1, 1958; Vice President 

E. E. Rockwell was interviewed August 6, and August 26, 1958. In the August 6, 

1958 interview Rockwell said th at a firm of certified public acco untants would 

prepare a complete financial report on Columbus Canning Co., Inc. and that t ha t 

report would be made available when completed. Subsequently, both Rockwell 

and Hooper said that they could not furnish figures, nor could they make any 

definite promise about subm ittin g figures on this company at any early date.

Almost from the beginning this company has operated at a struggle, especially 

so in recent years. Invested capital of $150,000 soon became tied up in fixed 

assets. Sales developed fairly well, but the gross return on sales was never ad equate. 

As the result, debt accumulated, net working capital became insufficient for needs 

and payments to suppliers slow, extremely so in many instances.

On August 6, 1958 Vice President Rockwell said th at Charles Gilsten and/or 

some associates had purchased the controlling interest of Columbus Canning Co., 

Inc., explaining that W. Pr at t Thomas and W. O. Garrard had sold their twothirds (combined) interest in the company. Subsequently, Hooper reported that 

in this capital stock re-arrange ment he came into control of 51 percent and Rockwell 49 percent, explaining th at Rockwell represented the interests of the new 

investors.
159

It was stated during these interviews with Hooper and Rockwell th at the 

company plans an expanded sales program, with cooperative television, radio 

and newspaper advertising to be co nducted with the cost shared between Columbus Canning Co., and its chain store custom ers. This program will offer customers 

one free can for each three cans of dog food purchased in some instances, and in 

others (where new territories are being opened up) one for one. Such intensive 

advertising is expected to double or triple the current $1,200,000 annual volume 

in a very sho rt time. In this respect, it was repo rted that the plant now has a 

capacity for producing four cases of dog food per minute, and with the demands 

of this expanded sales program the company will operate on a three-shift daily 

basis within three months. The company, according to Rockwell, was already 

selling in mark ets in New Oreleans, Mobile, Atlan ta, Memphis, Houston and the 

Carolinas; th at the State of Flordia is being opened up, with the produce now 

being offered in stores in Miami, Orlando, Tam pa and Jacksonville. Additional 

emphasis will be placed on expansion of the Houston, Texas market. In addition, 

both Rockwell and Hooper reported th at the company expects to package dog 

food for other manufacturers under their lables, which will further expand the 

volume transacted. In the subsequent October 1, 1958 interview President Hooper 

said that sales were already running 40 percent above normal, and on the present 

basis that the first twelve months’ operations under the new program should 

return a gross volume of some $2,000,000.

In addition to acquiring the capital stock owned in the company by Thomas 

and Garrard, Rockwell reported that the new investors plan to add new capital 

to the business of some $150,000. He said th at this would be done by purchasing 

authorized bu t previously unissued capital stock (the company has $1,000,000 in 

authorized capital stock and only $150,000 was outstan ding a t mid-1958). He said 

he could not amplify this information any further at this time.

Meanwhile, in outside quarters it was learned that at Mid-1958 this company 

had a tangible net worth composed of $150,000 in outstand ing capital stock, 

$150,000 in outstan ding preferred stock and an earned surplus account of $18,000. 

Principal of company assets was some $140,000 invested in copyrights, labels and 

such; and a $150,000 note receivable due from the sale of preferred stock, collectible $5,000 monthly for twelve months with a balloon note covering the balance. 

Thus, some $290,000 of the $318,000 tangible net worth is of an intangible na ture , 

composed of the copyrights and labels a nd the receivables on the sale of preferred 

stock. At the same time current deb t reportedly approxim ated $175,000, and 

there were additional deferred liabilities of near $30,000.

On February 15, 1958 Columbus Canning Co., gave a chattel mortgage to the 

Merchants & Farmers Bank, Columbus, Mississippi, for $5,000 due in 24 insta llments of $208 each beginning March 15, 1958, secured by two Internatio nal 

trucks and four trailmobiles. This note bears 8 percent interest.

On July 7, 1958, this company filed a Notice of Intentio n to assign one or more 

accounts receivable to the Commercial Cred it Corporation.

On July 18, 1958 Columbus Canning Co., Inc., gave a “Deed of Tr ust’’ (a 

mortgage) to Leonard M. Bernes, T rustee for the use of Tintin, Inc., a corporation 

in Atlanta, Ga., for $30,000 evidenced by one promissory note due on demand at 

8 percent. This mortgage carried a provision for possible futu re advan ces from 

Tintin, Inc., to Columbus Canning Company, Inc. not to exceed $500,000. This 

mortgage carried as security land on which Columbus Canning Co., Inc. pla nt is 

located, some 68.5 acres; all machinery and equipment situated on this property; 

nine units of cargo trucks and trailers; a Plym outh sedan and five truc ks; all 

personal prop erty acquired within 12 months of the date of this instrument; and 

all labels, trade marks, trad e names, registrations and rights to same, including 

“J et”, “Bonus” and “Columbus Canning Company”.

On August 6, 1958, E. E. Rockwell said th at he could not furnish any details 

relative to this la tte r instrument, except to say t ha t it was his impression th at th e 

mortgage rep resented some sort of short-term financing arranged before he and his 

associates entered the picture. Investigation in A tlanta, Georgia finds th at T intin, 

Inc. was incorporated in Fulton County, Georgia July 14, 1958, four days prior 

to the execution of this mortgage. The company has 100 shares of common stock, 

without par, and 1,000 shares of preferred at $100 par authorized; minimum 

beginning capital is $200. Its incorporators were B. John Franklin, A. W. Smith 

and A. L. Martin, not further identified.

On September 16, 1958, Columbus Canning Co., gave a cha ttel mortgage to 

Waters Truck & Tra ctor Company for $14,335, secured by truck and allied 

equipment.
160

On September 12, 1958 Columbus Canning Company gave a cha ttel mortgage 

to Hys ter Sales & Service, Inc., $1,853 due in 18 installments of $102 each beginning October 5, 1958.

On August 12, 1958 there was a notice of assignm ent or inten tion to assign 

one or more accounts receivable filed on Lowndes County records, Columbus 

Canning Company, Inc., to Russell O’Neal, care of Continen tal Grain Company, 

New York City.

An account of moderate proportions is maintained at one bank where secured 

loans to a medium five figure have been granted and handled satisfactorily. One 

out-of-town bank has handled drafts of Columbus Canning Co., Inc., for about 

60 days to an aggregate of a medium five-figure, no loans.

PA YM EN TS

In August, 1958 Vice President Rockwell said t ha t new funds, as the y came into 

the business, would be utilized to liquidate or substan tially reduce debt towards 

open account creditors. October 1, 1958, President Hooper said that substantial 

reductions had been made in the trad e debt of Columbus Canning Co., Inc. In 

order to reflect such a reduction a trad e clearance has been started, the results of 

which are not yet available. Meanwhile, the last ledger experiences available 

resulted from a clearance completed August 21, 1958, and are as follows:

HC OWE P due Terms

3,5 00____ ________ .............. 0 .. __________30 da ys .............. _____ P p tt o s lo w 9 0 ___

6 ,2 0 0 .................. ______ 1,3 00 1,3 00 ............................ ........... S lo w 60 9 0 . . . . . . . Sold o ver 3 yrs.

3 ,0 0 0 ....________ .............. 2,00 0 2,0 00 . ............... ............Slow 90 _________

1 ,1 0 0 .. ...................... 1,1 00 1,100 15 da ys ______ _____ Slo w 1 0 0 ................ . . . Sold o ver 3 yrs.

22, 000___________ .............. 21 ,675 18,46 6 30 da ys............. _____ S lo w .____________ . . . Sold over 3 yrs .

C U R R EN T IN V ESTIG A TIO N

President James F. Hooper was interviewed March 10, 1959. Hooper said th at 

the negotiations for the proposed transaction involving Columbus Canning Co. 

Inc., Woodward Foods of Florida, Inc., Zellwood (near) Orlando, Fla. and Battle 

Creek Dog Food Co., Battle Creek, Mich., are still under way; th at the situation 

remains substantially unchanged from the sta tus as reported December 19, 

1958. Again, Hooper suggested th at negotiations might be completed at an y time, 

eith er in the near future, or may be dragged out still further.

Meanwhile, Hooper said th at the company continues to transa ct an active 

volume and th at representative earnings are being produced. He deferred discussing the financial condition of the company at this time.

MOR TG AG ES

A transcrip t of Lowndes County, Miss., records for the period Jan. 1, 1959 to 

Jan. 31, 1959 carried a mortgage executed by this company to Weiss & Geller, 

Inc., New York City; Leonard I. Dosser, Baltimore, Maryland; and Phil Groh, 

Baltimore, Maryland, for $40,000 at 8 percent interest, and secured by the pla nt 

and prop erty of Columbus Canning Co. Inc. The mortgage is repayable at the 

rate of $3,650 monthly beginning Feb. 27, 1959.

During the current interview President Hooper said th at this mortgage was 

executed for additional financing, with the proceeds used primarily for working 

capital purposes; t ha t the previously recorded mortgage to Tintin, Inc., had been 

made secondary to this more recent mortgage.

The same tran script of Lowndes County records showed th at Columbus 

Canning Co. Inc. gave a $2,822 chattel mortgage to Freuhauf Trailer Company, 

Detroit, Michigan due in 12 monthly insta llments of $235.20, and secured by 

one trailer. This mortgage was dated December 17,1958, an d filed Janu ary 13, 1959.

This mortgage resulted when the company purchased a trailer to be used in 

hauling its prod uct to its distributors.

PA YM EN TS

The late st detailed ledger experiences on this company are contained in the 

previous report, which see for further information.
HC

12,000 ........................................

Req...........................

4,0 00 ..........................................

100..............................................

15................................................

2,0 00 ..........................................

15................................................

3,0 00........................................

200.............................................

161

Owe P d ue Te rms

0

10,00 0 

3, 198 

0 

0 

0 

0

1,0 00

100

Payments 

Feb. 13, 1959

____ 1-1 0-3 0........................ Disc ...............................

0 1-1 0-3 0........................ P pt................................

0 15 days.......................... P pt................................

____ 10 p ro x........................... Ppt................................

. . . . 1 da ys ........................... Ppt................................

___ 15 da ys ............................Siow 7............................

. . . . 10 p ro x............................Slow 30..........................

0 15 da ys ............................Slo w 35 ..........................

100 Rec. of s h ip m e n t... . Slo w 180.......................

Sold yr.

Sold ov er 3 yr. 

Sold ov er 3 yr. 

Sold over 3 yr. 

Sold yr.

So ld over 3 yr. 

Sold 1st sale. 

Sold ov er 3 yr. 

Sold 2 yr.

(1 0) 11/7/58 cash sale $861.

(1 1) Active accou nt, satis.

(1 2) Not a good accou nt.

M ORT GA GE FO RECLO SE D ----PH Y SIC A L P R O P E R T IE S SOLD

It was learned on August 18, 1959 th at a mortgage on all physical properties 

(except inventories) of Columbus Canning Co. Inc., was foreclosed due to nonpayment, and at a public auction held at 4 P.M., Satu rday , August 15, 1959, those 

physical properties were sold. The mortgagor foreclosing was Weiss & Giller, Inc., 

New York City. This mortgage was originally executed in January, 1959 by 

Columbus Canning Company, Inc. to Weiss & Giller, Inc., New York City; 

Leonard I. Dosser, Baltimore, Md.; and Phil Groh, Baltimore, Md. for $40,000 

at 8 percent interest and secured by the physical properties (except inventories) 

of Columbus Canning Co. Inc. The mortgage was scheduled to be repaid at the 

rate of $3,750 monthly beginning February 27, 1959.

It was also learned during this investigation, concluded August 18, 1959 th at 

the properties brought $41,600 at th e public auction, and the buyer was reported 

to be C. E. Forker and one or more associates, Columbus, Miss. The new interest 

had no connection whatsoever with the principals of Columbus Canning Company, 

Inc.

It had previously been reported th at the plant of this company wits closed, and 

the telephone disconnected. The closing of this plant earlier had nothing to do 

with the mortgage foreclosure. Apparently, the company had run out of funds, 

and could not sustain its operation. It is reported, also, that the office was open 

on one or more occasions for short periods of time during the period July 20, 1959, 

to the mortgage foreclosure sale August 15, 1959. However, as far as can be 

determined the plant was not in continuous operation during this period.

Current efforts to interview President James F. Hooper have been unsuccessful. 

Efforts to develop information relative to the remaining assets and liabilities of 

the company have not been fruitful. However, it is known th at the mortgage 

which was foreclosed covered land, buildings, machinery, equipment, office 

furniture, fixtures, truc ks and trailers of the company, and all were sold August 

15th. It is unlikely th at there are any assets left to speak of in the corporation. 

Liabilities have been estimated in some quarters to range between $200,000 and 

$500,000. Apparently, there have been no provisions made for these liabilities-
162

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF TENNESSEE 

*

WESTERN DIVISION

IN BANKRUPTCY NO. BK -69 -24 53

IN THE MATTER OF EVERETTE H. BP.OOKS,

INDIVIDUALLY, AND d /b /a CONSOLIDATED

BUSINESS SERVICE ................................................................. DEBTOR

PETITION AND ACCOUNTING OF JAMES F. HOOPER J

FOR PARTNERSHIP OPERATION OF HOOPER DAIRY FARM

Comes now James F. Ho op er and e x h ib its an d f i l e s t h is 

h is a cc o u n ti n g to th e C ourt in c o n n ecti o n w it h th e p a r t n e r ­

sh ip fo rm erl y o p e rate d by James F. Ho oper and E v c re tt e H. 

Bro ok s d /b /a Ho oper D air y Farm in Lowndes C ounty , M is s is s ip p i, 

and wo uld r e s p e c tf u lly show u n to th e C ou rt th e fo ll o w in g 

f a c ts and f ig u r e s , to - w it:

I .

The fo ll o w in g c o n s t it u t e a l l pa ym en ts to and 

w it h d ra w als fro m th e Ho op er Farm Acc ou nt by b o th James F.< 

Ho op er and E v e re tt e Hope B ro oks, a cco rd in g to your 

p e t i t i o n e r 's ba nk r e c o r d s , th e s e d e p o s its o r pa ym en ts 

c o n s t it u t in g th e only pa ym en ts ev er made by Br oo ks f o r 

h is e q u it y in c e r ta in c a t t l e an d d a ir y m ac hin er y and 

eq u ip m ent. The se w it h d ra w als c o n s titu te th e only pa ym en ts 

whi ch Ho oper re c e iv e d f o r h is c a t t l e , m ac hin er y and 

eq uip m en t whi ch th e p a r tn e r s h ip agre ed to p u rc h ase fro m 

him fo r $175 .OCO.OO.
163

♦

Hate

n e p o s it s

(B ro o k s )

Farm A c c t.

Wi ti iu ra w a is 

(B ro o k s )

F a m A c c t.

Depus a ti> 

(H ooper) 

Farm A c c t.

1 0 /1 8 /6 5 15 , 0 0 0 .0 0

1 1 /1 0 /6 5

1 1 /1 0 /6 5

5 0 ,0 0 0 .0 0

1 / 3/6 6 5 ,0 0 0 .0 U

1 / 7/6 6 

1 /1 1 /6 6 1 5 ,0 0 0 .0 0

2 ,5 0 0 .0 0

1 /2 4 /6 6 2 5 ,0 0 0 .0 0

3 /1 0 /6 6 1 0 ,0 0 0 .0 0

4 /2 2 /6 6 2 5 ,0 0 0 .0 0

5 /2 7 /6 6 2 7 ,0 0 0 .0 0

6 /1 0 /6 6

6 /1 0 /6 6

1 0 0 ,0 0 0 .0 0

9 0 ,6 7 6 .6 7

J .F .H . T o ta l f o r 196 6 

(la n d in com e) 1966" 1 0 ,0 2 4 .9 4

1 1 / 1/6 7 

1 1 /2 1 /6 7 3 ,0 0 0 .0 0

6 ,2 5 0 .0 0

1 1 /2 3 /6 7 2 ,5 0 0 .0 0

1 2 /1 5 /6 7 4 ,5 0 0 .0 0

1 2 /2 2 /6 7 1 ,5 0 0 .0 0

J .F .H . T o ta l f o r 1967 

(la n d in com e) 1967 " 1 0 ,3 0 6 .4 2

1 / 7 /6 8

3 / /6 8

1 0 ,0 0 0 .0 0

2 ,3 2 6 .0 0

6 /2 1 /6 8

8 /2 6 /6 8

5 ,0 0 0 .0 0

2 ,0 0 0 .0 0

J . F . ll. T o ta l f o r 196 8

(la n d in co iris ) 19 68 * 9 ,3 2 3 .4 2

8 /3 1 /6 9 2 ,0 0 0 .0 0

(Crump) 6 /2 0 /6 9 2 0 ,0 0 0 .0 0

(l.HF ) 6 /2 0 /6 9 1 5 ,0 0 0 .0 0

(Crump) 6 /2 3 /6 9 2 0 ,0 0 0 .0 0

(Crump) 6 /2 3 /6 9 4 0 ,0 0 0 .0 0

( J .C .B r a d fo r d ) 6 /2 4 /6 9 3 3 ,3 5 0 .0 0

( M a r ie tta ) 6 /2 4 /6 9 2 5 ,0 0 0 .0 0

(B ro oks Co. )6 /2 5 /6 9 1 0 ,0 0 0 .0 0

(Crump) 6 /2 6 /6 9 4 0 ,0 0 0 .0 0

( M a r ie tta ) 

(B an k o f

6 /3 C /6 9 2 5 ,0 0 0 .0 0

Ya zo o C ity ) 6 /3 0 /6 9 9 3 ,1 2 5 .5 6

(S ta n d a rd

U nio n ) 7 / 2 /6 9 9 5 ,0 0 0 .0 0

(Crump) 7 / 7 /6 9 5 0 ,0 0 0 .0 0

( M a r ie tta )

(S ta n d a rd

7 /1 4 /6 9 5 0 ,0 0 0 .0 0

U n io n ) 7 /3 1 /6 9 5 ,0 0 0 .0 0

(I.R F) 8 /2 3 /6 9 4 ,7 5 0 .0 0

(B ro oks 

C o tt o n C o .) 8 /2 8 /6 9 232.5 0

(LRF ) 9 /1 0 /6 9 1 ,0 5 0 .0 0

(E .H .B ) 1 0 /1 5 /6 9 2 ,0 0 0 .0 0

J . F . ll. T o ta l f o r 1969

TOTALS 5 7 3 ,5 0 0 .0 0 '3 5 2 ,7 6 0 .7 3 3 7 ,1 5 4 .7 8

n x i i i u J dtf ca

(H oo per) 

Farm A cct

2 5 ,0 0 0 .0 0

2 2 ,0 1 1 .0 3

34 , 0 1 0 .7 5

2 3 ,1 1 6 .0 0

2 1 ,0 7 0 .9 2

1 2 5 ,2 0 8 .7 0

2 2 0, 7 3 9 .2 7 88,0 .' .

*T lic la n d inco me c o n tr ib u te d by H ooper was d e riv e d fr o m ic 

o f b u ild in g lo t s an d g ra v e l on la n d n o t us ed by d a ir y 

p a r tn e r s b ip .
164

11.

P e t it i o n e r wo uld f u r th e r show th a t i t was th e 

ag re em en t of th e p a r tn e r s th a t he be p a id a s a la r y as 

th e m an ag in g p a r tn e r and he rd sm an in th e amount of 

$ 1 2,0 00.0 0 p er y e a r, and th a t he be re im burs ed fo r 

a ll o f h is ex pen se s p a id on b e h a lf of th e p a r tn e r s h ip .

The accru ed s a la ry fo r f iv e y e a rs is th e sum of $ 6 0 ,0 0 0 .0 0 . 

P e t i t i o n e r 's w it h d ra w als fro m th e p a r tn e r s h ip to co ver 

s a la r y and ex pen se s am ou nted to $ 8 8 ,0 5 3 .9 2 , o r $ 2 8,0 53.9 2 

more th an th e accru ed s a l a r y , t h i s b ein g th e only pa ym en t 

re c e iv e d by p e ti t io n e r f o r th e in c u rre d ex pense s and th e 

only pa ym en t made upon th e agre ed s a le s p r ic e of p e t i t i o n e r 's 

c a t t l e and equip m ent. P e t it i o n e r wo uld show th a t h is 

c o n tr ib u tio n s to th e p a r tn e r s h ip in clu d e th e e q u it y in 

c a t t l e , m achin ery , and eq uip m en t o f $ 1 7 5 ,0 0 0 .0 0 ; sto c k 

in R e a li c io u s D a ir ie s , In c . o f $ 2 ,4 0 0 .0 0 ; a ca sh lo an 

made in th e y e a r 1970 by h is w if e to th e p a r tn e r s h ip in 

th e sum o f $ 1 5 ,0 0 0 .0 0 ; and 1970 la n d re n t which he was 

re q u ir e d to pa y fo r th e p a r tn e r s h ip o f $ 1 3 ,5 0 0 .0 0 . The se 

c o n tr ib u tio n s t o t a l th e sum o f $ 2 0 5 ,9 0 0 .0 0 . D educt in g n e t 

pa ym en ts above s a la r y all ow ance as shown ab ove, th e 

r e s u l ti n g n e t c o n tr ib u tio n s o f your p e t i t i o n e r to th e 

p a r tn e r s h ip is th e sum o f $ 1 7 7 ,8 4 6 .0 8 . As w ill be h e r e in ­

a f t e r s e t f o r t h , your p e t i t i o n e r ha s assumed and is 

r e s p o n s ib le f o r a d d itio n a l p a r tn e r s h ip l i a b i l i t i e s in 

th e am ount of $ 7 1 ,2 2 8 .0 0 , whi ch when p aid by him w ill 

make h is t o t a l n e t c o n tr ib u tio n s o r t o t a l n et lo s s in 

t h i s p a r tn e r s h ip th e sum o f $24 9 ,0 7 4 .0 8 .

I I I .

In a d d it io n to th e it em s o f a cc o u n ti n g g le an ed from 

th e p a r tn e r s h ip ba nk r c c o id s , y our p e t i t i o n e r h as kn ow ledg e 

o f c e r t a i n o th e r c o n tr ib u tio n s and w it h d ra w als made to th e 

j r tn e r s h ip by h v e r e tte U. Bro ok s wh ich were n o t r e f i t te d 

<• 'h e c o r p o r a tio n 's bank a c c o u n t, and th e s e it em s i n e '. ’de 

1 fo ll o w in g :
165

CO.NTRI BUT 1QNS

C a t t l e p u r c h a s e d i n 1967 

* ( T h is a m o u n t f u r n i s h e d t o 

p e t i t i o n e r by T o u c h e R o ss 

5 C o. a n d i s a c c e p t e d b u t 

u n v e r i f i e d )

1 9 6 8 p a y m e n t t o P r u d e n t i a l 

I n s u r a n c e C om pa ny on la n d 

m o r tg a g e w h ic h s h o u l d h a v e 

b e e n p a i d by t h e p a r t n e r s h i p 

a s r e n t

T o t a l

$ 5 6 ,1 0 0 .0 0

1 5 ,1 4 5 .0 0 

$ 7 1 ,2 4 5 .0 0

WITHDRAWALS

1968 p a y m e n ts m ad e by 

p a r t n e r s h i p f o r B ro o k s 

i n d i v i d u a l d e b t s

N e t a d d i t i o n a l c o n t r i b u t i o n s

4 ,9 1 3 .9 5

$ 6 6 ,3 3 1 .0 5

IV .

P e t i t i o n e r w o u ld sh ow t h a t t h e p r e s e n t b a l a n c e s h e e t 

o f t h e p a r t n e r s h i p i s a s f o l l o w s :

BALANCE SHEET

A s s e t s

C a t t l e a n d p r e s e n t a p p r a i s e d v a l u e $ 7 6 ,7 2 5 .0 0

M a c h in e ry a n d e q u ip m e n t a s p e r a p p r a i s a l 3 4 ,0 0 0 .0 0

A c c o u n ts r e c e i v a b l e 3 ,5 0 0 .0 0

C ash 2 ,2 1 1 .0 7

T o t a l A s s e t s $ 1 1 5 ,4 3 6 .0 7

L i a b i l i t i e s

A c c o u n ts P a y a b le t o t h i r d p a r t i e s ' $ 3 4 ,0 0 0 .0 0

N o te s P a y a b le t o F i r s t C o lu m b u s

N a t i o n a l Ban k 1 4 0 ,0 0 0 .0 0

A c c r u e d i n t e r e s t t o b a n k 1 2 ,6 6 4 .0 0

Ow ed t o H o o p e r f o r e x c e s s 

c o n t r i b u t i o n s o r c a p i t a l a c c o u n t 1 7 7 ,8 4 6 .0 8

Owed t o B ro o k s f o r e x c e s s 

c o n t r i b u t i o n s o r c a p i t a l a c c o u n t 2 8 7 ,0 7 0 .3 5

T o t a l L i a b i l i t i e s $ 6 5 1 ,5 8 0 .4 1

- 4 -
166

Net d e f i c i t o f c o rp o ra tio n w it hout d e b ts to p a r tn e r s $ 71,2 27.V 5 

Ne t d e f i c i t o f c o rp o ra tio n in c lu d in g d e b ts to p a r tn e r s $ 5 3 6 ,1 44.3 4 

V.

P e t it i o n e r wo uld f u r th e r show th a t in a d d it io n to 

th e d e f i c i t ,.e e itic :i e f th e p a r tn e r s h ip and th e o u ts ta n d in g 

o b lig a tio n s to b o th p a r tn e r s , th a t your p e t i t i o n e r i s l e f t

w it h p e rso n a l l i a b i l i t y f o r a l l o f th e in d e b te d n e ss owed by **

th e p a r tn e r s h ip , in c lu d in g $152,6 64.0 0 p r i n c i p a l and accru ed

i n t e r e s t owed to th e F i r s t Columbus N a ti o n a l Bank and j

acco u n ts p ay ab le to t h i r d p a r ti e s o f ap p ro x im ate ly $ 3 4 ,0 0 0 .0 0 ;

and th a t a lt h o u g h th e a s s e ts o f th e p a r tn e r s h ip am ount in

v alu e to $ 71,7 78,0 0 le s s th an th e s e d e b ts , y o u r p e t i t i o n e r

w ill ha ve to ass um e and pa y th e s e d eb ts in o rd e r to p r o te c t

h im s e lf fro m p e rso n a l b an k ru p tc y b ecause o f h is p e rso n a l

l i a b i l i t y ; th a t be w i l l , th e r e f o r e , s u s ta in a n e t a d d itio n a l

lo s s by th e pa ym en t o f th e s e d e b ts o f $ 7 1 ,2 2 8 .0 0 , which w ill

add to th e lo s s a lr e a d y s u s ta in e d as s e t f o r th above.

WHEREFORE, PREMISES CONSIDERED, your p e t i t i o n e r wo uld 

show th a t th e re is no e q u it y in t h i s p a r tn e r s h ip f o r e i t h e r 

p a r tn e r , and th a t y our p e t i t i o n e r is o b li g e d and in te r e s te d 

in c a rry in g on th e b u s in e s s fo rm erl y en gag ed in by th e 

p a r tn e r s h ip s o le ly f o r th e re aso n th a t he i s p e rs o n a lly 

o b lig a te d to pa y a l l o f th e d eb ts o f th e p a r tn e r s h ip and 

he mu st a tt e m p t to m in im iz e h is lo s s e s by c o n ti n u in g th e

o p e ra ti o n of th e b u s in e s s u n t i l i t ca n be liq u id a te d in an ,

o rd e rly m an ne r; th a t th e r e is no e q u it y f o r th e c r e d ito r s

o f E v e re tt e Hope B ro oks, a b a n k ru p t, and th a t in e q u it y and

j u s t ic e to your p e t i t i o n e r , as w ell as to e x p e d it e th e

b u sin e ss o f th e h a n d li n g o f th e b a n k ru p t' s e s t a t e , th e

C ou rt sh cu ld o rd e r th e T ru ste e in B an kru ptc y to ab an do n any
167

P e t it i o n e r p ra y s f o r su ch o th e r r e l i e f as t h i s C ourt 

may deem a n n ro p ria tc to g ra n t him.

R e s p e c tfu ll y su b m it te d ,

STATE OF MISSISS IPPI )

(

LOWNDES COUNTY ) LOWNDES COUNTY

P e rs o n a lly a p p eare d b e fo re me, th e u n d e rs ig n ed a u th o r ity 

of law in and fo r s a id co unty and s t a t e , JAMES F. HOOPER, 

who b ein g by me f i r s t duly and le g a lly sw orn , s ta te d and 

dep os ed on h is o ath t h a t th e m a tt e rs and th in g s a ll e g e d in 

th e fo re g o in g a cc o u n ti n g and p e t i t i o n a re tru e and c o r re c t 

as th e r e in s ta te d and a v e rre d .

SWORN TO AND SUBSCRIBED B efo re me, on t h i s th e ____ day

•o f Ja n u a ry , A .D ., 19 71 .

(SEAL)

My co mmission e x p ir e s :

N ota ry P u b li c

> •
168

Sena tor Baker (presiding). Mr. Williams, than k you v ery m uch for 

your sta tem en t, which I find to be very thorough. I am intrigued with 

the am ou nt of work th at must have gone int o th at research and 

development.

Mr. Williams. I was helped by some othe r peop le, Senator. I 

didn ’t do it all myself.

Senator B aker. As a m at te r of cu riosity, where did you develop the 

detail you hav e inclu ded in the s tatem ent?

Mr. W illiams. Se nator, I pers onally w ent to Memphis and examined 

the records in the ba nk ruptcy proceedings of Mr. Brooks. As I testi ­

fied, mu ch of this inform ation was developed from pub lic doc uments 

in th at case. I went thr ough the file fairly tho roughly and Mr. Gibson 

we nt to Atla nta and talk ed to several indiv iduals dow n the re who have 

been associated w ith Li ttle Riv er F arm s and looked at some doc uments 

in the IR S proceedings in the Little River Fa rm s proceed ings and 

developed muc h of the inform ation about Little River Fa rm s in th at 

way.

As I testified about Columbus Can ning Co., much of th at info rmation came from a Dun & B rads tre et series of rep orts on th at com pan y.

Se nator Baker. I than k you very much . The subje ct will be very 

help ful. We than k you, sir.

Is the next witn ess Mrs. Morgan or Mr. Br an dt?

Mr. Gibson. Ms. Wh iteh ead .

Senator B aker. We will be glad to hear you r testim ony.

STATEMENT OF CORRINE WHITEHEAD, ON BEHALF OF THE 

BETWEEN THE RIVERS COMMITTEE 

Ms. Whit ehe ad. T ha nk you.

I am Corrine W hite head, Ben ton, Ky. T ha nk yo u for allowing me to 

present this sta temen t on beh alf of the Betwee n the Riv ers Co mm ittee, 

elected to rep res ent citizens, concerning TVA policies in western 

Ke ntucky .

We respec tfully urge the Senat e Public Works Comm ittee no t to 

app rov e the nomination of Mr. Jam es Hoo per to the TVA Board. I 

subm it a resolu tion v ote d by the executive com mittee of our organization, opposing the nominat ion of Mr. H ooper (exh ibit I). T he info rma - ♦

tion presented by Mr. Williams was mad e availab le to our org anization J un e 1975, and was the basis for the resolution. Would you like me 

to read the resolutio n?

Se nator Baker. Whicheve r you prefer, Miss Wh iteh ead . We will 

acc ept the resolution for the record or you can read it; whichev er you 

prefer.

Ms. Whit ehe ad. Th an k you.

EX HI BI T I

Resolution: On behalf of the some few thousand people we represent in Kentucky we call upon our Congressman Carroll Hubbard, Senators Wendell Ford 

and Huddleston and other interested Congressmen from our State to advise 

President Ford th at the nomination of James Hooper to the TVA Board of Directors is tota lly unacceptable. We respectfully request th at the above delegation 

to the Congress make every effort to secure the appointment of a board member 

who is technically and manageriallv qualified. Such people have been passed over 

in favor of Mr. Hooper, in our opinion.
169

In this era of energy related crisis and the lack of conservation orienta tion by 

TV A in the fields of lands, forests, wildlife, and water we pray for a TVA Board 

member who is fiscally qualified, technically qualified and accountable to the 

people of the Valley w ith a humane and conscientious interest in their well-being 

and future. Now therefore be it resolved th at the Between the Rivers Committee for and 

on behalf of our membership approve the above resolution:

The above resolution was voted on and approved June 21, 1975. Committee 

members and counties are: Arth ur Wallace, Trigg County; George Bleidt, Trigg 

County; Wilma McAllister, Trigg County; Ernest Littlejohn, Trigg County; 

Virginia Ferguson, Christian County; Jack Colson, Livingston Cou nty; Judge 

* Floyd Hooks, Livingston County; Mrs. Herman Jones, Calloway County; Virginia Chandler, Calloway County; Oscar Forsythe, Marshall Cou nty; Perry 

Calhoun, Lyon County; James Bannister, Lyon County; Homer Ray , Lyon 

County; Corinne Whitehead, Marshall County.

Ms. Whitehead. The people of the Tennessee Valley are seething 

with resentment at the predicament we find ourselves in, due to the 

mismanagement and shortsighted policies of the TVA Board over the 

past 15 to 20 years. Mr. Hooper has said his desire is to continue and 

augment the Wagner TVA Board policies. The last thing on Earth 

we need is more of the same.

It is ironic tha t TVA—the agency hailed as an international star 

in the demonstration in the overall best development and conservation of the resources of the seven-State Tennessee Valley region—has 

been responsible for the most destructive elements in the Tennessee 

Valley. I go back to the second paragraph and ask to include copies of 

editorials from leading newspapers in Kentucky as exhibit II. These 

editorials disapprove of the Hooper nomination.

Senator Randolph. Without objection the material will be included. (See p. 172.)

Ms. Whitehead. Thank you, sir.

Our Kentucky mountains and lands are ravished and gutted by 

strip mining, due to TVA’s price wars with the coal industry. The 

trees are sold from park and TVA recreation areas in the LBL. (See 

exhibit III, p. 175.) Sulfur dioxide from the TVA Shawnee steam plant pollutes the air 

so severely at times tha t vegetation and animals die, while humans 

suffer respiratory agony. (See exhibit IV, p. 177.)

♦ Yet under present TVA Board policy, clean air laws—both State

and Federal—are circumvented, defied, and ignored. Insult is added 

to injury when TVA dominated electric cooperative associations and 

recreational associations mount advertising campaigns on television 

and radio against the clean air laws.

The people in the Tennessee Valley find the continued rise in TVA 

electric rates difficult to accept. They are aware tha t TVA consorts 

with monopolistic multinational coal and oil conglomerates, contracting for coal at higher prices and generally refusing to do business with 

smaller coal operators who sell for less money. (See exhibit V, p. 178.)

As an addition to this statement, may I point out that in testimony 

given in the Congress last fall, Chairman Wagner confirmed the fact 

tha t in 1960 TVA used coal from only one multinational, and at the 

present time the consumption of coal is from seven multinationals, and 

onlv one independent. (See exhibit V-A, p. 180.)

Senator Randolph. May I interrupt at tha t point?

Ms. Whitehead. Yes.
170

Senator R and olph. I s the coal purchased by bid?

Ms. Whit ehead. I un derst and th at i t is no t in mo st instances.

Senator R and olph. It is ju st a neg otiate d co ntract with a 

com pany?

Ms. Whit ehead. T hat is my understandin g.

Senator R and olph. We wa nt to clarify th at point. If you will 

proceed, please.

Ms. Whit ehead. Th an k you.

Our people sus pec t th at pa st TVA Boa rd appointees w ith a h istory 

of affiliation with larg e coal, oil, and ura niu m inter ests hav e been <

responsible for this policy, to the de trime nt of the consumers.

One deeply resented TVA policy is th at of selling electricity to huge 

industr ies a t less tha n cos t and m aking up the d eficit at the expense of 

reside ntial users, lig ht indu str y and businesses. (See exhibit VI, p. 180.) *

Th e estimated 165 perc ent increase in the cost of TVA power compared to the approx imate 30 per cent increase by private utilities in the 

area, does no t make sense.

Labor union rep res entat ives and employe es at stea m gen era ting 

plan ts tell me of the mismana geme nt by TVA of the lab or force and 

crafts which has resu lted in escalated costs. C ircum stances surrounding 

the fire at the Browns Fe rry nuclear pl an t are inexc usab le.

TVA estimated at one po int th at rep air cost at about $100,000.

Now it is reve aled th at $6 million has alread y been spent on repairs .

Ju st who would trus t the con stru ctio n and opera tion of the nuc lear 

pl an t at Hartsville, Tenn., to a Board with such a tra ck reco rd?

The awesome po ten tia l inh ere nt in the nucle ar programs TVA is 

actively involved in calls for nothing less th an the mo st circ umspect 

manag ement .

Mr. Chairm an, when yo ur esteemed comm itte e approves a m an for 

the TVA B oard, a mere mo rtal is im mediately elevated to a positio n of 

pow er great er than th at of m ost d ict ato rs and kings. For too long this 

position of power has been misused in the Tennessee Valley.

Th e TVA Act of 1933 ha s been stretc hed from the original in tent 

to the pre sen t Boa rd policy, which is th at TVA can engage in any 

activ ity deemed for the general welfare of the people in the 5-S tate 

are a [exhibit 7]. Unlike an Am bassador nominat ed to the court of 

St. Jame s who can be realled, if y our com mittee selects a TVA Board 

me mb er who is un fit, we cannot pack him up and send him back t o you.

Th e issue at hand is w hethe r the Tennessee V alley A utho rity can be 

ma de to work in the best inter est of the region and the Na tio n. The 

TVA is in a crisis situation. I can assure you the p eople of the Tennes- _

see V alley are alarmed and deep ly concerned ab ou t this appoint me nt.

The practic e of rep aying a political de bt or rew arding a political 

crony b y ap po int me nt to the TVA Boa rd is no l onger acceptable . Th e 

people are dem and ing impeccable sta nd ards for fut ure TVA Board 

mem bers . In our opinion, Mr. Hoo per does no t meet this criteria .

Rem edia l legislatio n is needed to augm ent the TVA Boa rd. We are 

deeply app rec iative for the proposed legislation Sen ators For d and 

Brock hav e introd uced in S. 2289 and S. 2740 which speak to the 

need for reform in the T VA area. We hope this com mittee will, at the 

appro priat e time, act favora bly on this legislation.

Mr. Chairma n and com mittee mem bers , I know th at you are each 

ded icated to th at which you dete rmine to be in the best interest of
171

this Na tion. We ask th at yo u assure a new da y of hope in the T ennessee Valley by app roving futur e TVA Board members only aft er 

det erm ining their total comm itm ent to the hig hes t ideals of personal 

integrity, scientific knowledge, resp onsible fiscal and manag erial 

bac kgroun d, and a ded icated concern and res pect for hu man ity . The 

TVA Board position calls for nothi ng less. Th an k you, sir.

May I say a few more words on suggestions about wh at TVA 

could do?

* Senat or R andolph. Yes; y ou may. You proceed.

Ms. Whitehe ad. Personally , I would think it would be an ap propriat e agen cy to do an indepth stud y on solar power. I think i t would 

be the ideal agency to inv estiga te th at asp ect of energy development.

* I have jo tte d down some things since I hav e listened to the other 

testim ony . Th ere is one thing I think th at TVA could do, which migh t 

be of gr eat service to the valley. Ke ntuc ky D am and B ark ley D am are 

sittin g in the New Madrid ea rth qu ak e fau lt. Th e last big quake is 

estimate d to have been more than 12 points on the Rich ter scale in 

intensity. Th e fau lt area is considered to be one of the mo st dangerous in the w orld.

It is com parable to the St. Andreas. Since we are in an are a where 

the re are treme ndous chemical plan ts and the Paducah ato mic pl an t 

and ma ny other ind ustrial pla nts , it w ould seem th at TVA could look 

int o this. It would be a challenge to dra w up a plan of wa rning and 

rem edia l action in the case of a natio nal disast er in th at area. There 

has b een rec ent publicity th at thi s is m ost likely.

I would recommen d those two areas.

Above all, I would recommend TVA to h ave more of a g ive -an d-take 

with the people of the valle y, no t be total ly isolated.

Senator R andolph. Th an k you very much, Ms. Wh iteh ead . As to 

your closing com ment, “n ot be totally iso lat ed.” I do n’t think the 

original in te nt of the act of 1933, alth ough Senator Ba ker has very 

pro per ly given to us tod ay exa ctly how it was set in mo tion and the , 

le t’s say, alm ost inv uln era bility of the Board, to manag e it.

Bu t I nev er felt th at TVA or any org anization can divorce itse lf 

from con tinued con tac t with people.

I am asking you now, has the Tennessee Valley Au thority , thr ough 

its ma nageme nt team, appea red in open meetings and discussed 

problem s with the people of Tennessee? Or hav e the y declined the 

invit ati ons, or have the y abs ent ed them selves? Or is the re a f ailu re to 

>

com mu nicate, a ra pp or t th at is abs ent ? Discuss th at a mo me nt,

please.

Ms. Whitehe ad. I thi nk the general feeling on the par t of the 

people is th at the agency is totall y unapp roa cha ble .

Senator R andolph. Unapp roa cha ble ?

Ms. Whiteh ead. Unapp roachable. Our Ke ntu cky St ate agencies 

find TVA unwilling to cooperate. I know of great fru str ations of the 

members of the general assembly.

It has been now for abou t 15 or more years. Th e Governors feel c ut 

off wi tho ut cou rteous and eve n-hand ed tre atmen t. In o ther words, the 

general wishes and expressions are no t given wh at the y conside r or 

wh at we con side r due consid eration.

Senator R andolph. Do you, or oth ers th at you kno w of, have 

correspondence with the ma nageme nt in one form or anoth er?
172

Ms. Whitehead. At times.

Senator Randolph. Do you feel then tha t i t is more routine when 

you present a problem tha t the answer isn’t given consideration?

Ms. Whitehead. I think generally the question is anticipated and 

the answer has already been prepared and you are presented a canned 

answer. That is my judgment. If you people will pardon that, tha t is 

my feeling.

Senator Randolph. Thank you, Ms. Whitehead.

Are there any questions?

Senator Baker. I think the statement was very good and very 

useful, Mr. Chairman. I have no further questions.

Senator Randolph. Thank you, Ms. Whitehead.

|Ms. Whitehead’s exhibits follow:]

EX HI BI T II

[From the Sun-Democrat, Paducah, Ky., June 17, 1975]

F or d N om in a tes P ar ty H ac k to T va

By his nomination of a Republican par ty hack to succeed the retiring Don 

McBride on the board of directors of th e Tennessee Valley Authority, President 

Gerald Ford has again shown th at he puts party loyalty above talent, brains, 

experience and other more generally valued qualities in picking people for the most 

important jobs he has to distribute.

Ford’s choice is a native of Alabama who has long been engaged in business 

and Republican politics in Columbus, Miss. He is James F. Hooper III, age 59, 

whom the White House describes as self-employed, in manufacturing, real esta te 

and farming. What he has ever done to qualify himself for the demanding and 

natio nally important post of TVA director, nobody seems to know; a t least, nobody 

in the Ford administration has said. Except th at Hooper is loyal to the GOP, 

and th at the senators from Mississippi and Alabama like the choice.

This is a terrible way to tre at an agency which was created as the grea t hope 

of an entire, economically backw ard region of the U.S., and which has fulfilled its 

promise in so very many ways th at i t is today, after more tha n 40 years, still the 

U.S. government agency th at visiting foreigners are most curious about, most 

anxious to see, and regard as most inspiring.

Gone from TVA, except for Aubrey (Red) Wagner, are the great men who organized the Tennessee Valley Authority, and comprehended the vast dreams of 

Nebrask a’s George Norris and New York’s Franklin Roosevelt; and their successors who also understood the th rillin g concept, and made it reality. We are thinking of Dr. Arth ur E. Morgan and II. A. Morgan, and Dave Lilienthal and Gordon 

Clapp, and much more recently, Mississippi’s ex-Congressman Frank Smith.

Presiden t Eisenhower was inclined to stress p arty loyalty in making many of his 

key appointments, bu t in the instance of TVA he felt the agency needed disciplining and “ bringing into lin e” w ith his personal creed, so he nam ed an Army general, 

Herbert Vogel, as his TVA chairman. The general, afte r he got acquainted with 

his organization and people and saw what it and they had accomplished, became 

a sten torian defender of TVA in Congress against Ike ’s misguided att em pt to 

sell it to the private power trust, in the ill-conceived Dixon-Yates deal.

Gerald Ford should find himself a nother Gen. Vogel for this board vacancy, or 

some thoughtful, respected college professor, or a retired statesm an of distinction 

like Arkansas’ Bill Fulbright, or—some TVA people think—some practicing 

philosopher. There is a grand philosophy upon which TVA is founded, and excellent 

as he is in his demanding post as TVA chairman, Red Wagner—th e pragmatic 

engineer and power expert, could well use now the counsel and help of such a comember of his board.

President Ford has been successfully vetoing numerous important bills passed 

on to him by Congress in recent months. The Senate, if its Democratic majority 

wishes, can square accounts with him to some e xtent now by rejecting his nomination of this nonentity to the TVA board. At the same time it will do the entire 

nation a great service by insisting that the appointment go to someone with 

truly impressive qualifications.
173

[From the Louisville Courier Journal, Aug. 1, 1975]

F or d S hould D ro p N o m in e e

President Ford should spare himself further political emb arrassment and 

withdraw his nomination of Mississippian James Hooper for a seat on the board 

of directors of the Tennessee Valley A uthority.

The Senate Public Works Committee has indefinitely postponed hearings on 

Mr. Hooper’s nomination, pending an investigation into the financial background 

of th is Republican loyalist and promoter of b ankru pt businesses.

The investigation doubtless was prompted by The Nashville Tennessean, which 

trace d Mr. Hooper’s background through court ban kruptcy records. What 

emerged is the portrait of a wheeler-dealer who diverted funds from an ailing 

Alabama insurance company of which he was a director, to a financially troub led 

Atlanta dairy in which Mr. Hooper also had an interest. According to The Tennessean, funds were channeled from the insurance company to the dairy through 

Mr. Hooper’s Mississippi farm operation by means of an intricate check-swapping 

scheme.

Mr. Hooper has denied any illegality. But even if it turn s out t ha t he has been 

only an innocent participant in a string of financial failures (he also operated a 

pet-food company tha t went broke), is th is the kind of man who should be spending the taxpay ers’ money as a $38,000-a-year direc tor of the TV A?

Surely not. Given TVA’s influential role in national energy planning this nineyear vacancy on the three-member governing body demands someone with a 

broad background in energy affairs, indu strial managem ent and conservation. As 

Kentucky Senator Huddleston has said, “we need excellence, n ot mediocrity ” in 

this job. Nothing in Mr. Hooper’s background suggests th at he comes close to 

meeting the Sen ator’s first qualification.

[From the Louisville Courier Journal, June 30, 1975]

S en a te S hou ld R e je c t N o m in ee

As Senator Jackson argued on the floor of the Senate earlier this m onth, a president of the United States should have the widest possible latitude in selecting 

whomever he wants for his closest advisers and members of his Cabinet. But the 

rules change when it comes to filling long-term (even lifetime) vacancies in the 

courts and the multitu de of federal agencies and commissions.

The case Senator Jackson was discussing was the nomination of former Wyoming 

Governor Stanley Hathaw ay to be Secretary of the Interior. While environmentalis ts properly raised questions abo ut his views on energy and conservation no 

one seemed to dou bt the nominee’s integrity or his ability to administer a major 

federal agency. On the theory th at a president is entitled to surround himself 

with associates of his choice unless they are provably awful, Mr. Hathaw ay was 

* confirmed and now holds office. Who know’s, he might even turn out to be another

Walter Hickel.

But latitude is not license. This is what makes the nomination of Mississippi 

Republican loyalist James F. Hooper II I to the Tennessee Valley Authority board 

of directors, like th at of brewer Adolph Coors to the Corporation for Public Broad- 

• casting, a different situation. Most of Mr. For d’s appointments have been at leas t

good, and some of them exemplary. But the Hooper and Coors appointments are 

transp are nt atte mpts, lacking any other rational justification, to shore up the 

Presiden t’s stock with the ultra conservative wing of the GOP.

Why else would Mr. Ford appoint the promoter of a failed dairy, a failed pet food 

factory and a defunct insurance company to a nine-year term on such an imp ortant 

energy-policy post as the TV A board of directors? As the Nashville Tennessean

has observed, Mr. Hooper’s career, though also marked by hard work for a number 

of civic causes and the Republican Party, makes him a questionable candidate 

for this imp ortant post.

Above all there is nothing in Mr. Hooper’s record to suggest th at he possesses 

qualifications in energy matters, industrial managem ent or environm ental protection. Yet he w’ould be one of only three directors voting on such questions as 

TVA’s commitment to nuclear power, its plans to strip parts of the Daniel Boone 

Natio nal Forest for coal, and its refusal to cooperate with the Environmental 

Protection Agency in installing stack-gas scrubbers on its steam -generating plants.

67-520 0 - 76 - 12
174

Given the current deadlock on most of these questions between the other two 

members of the TV A board, this appo intm ent becomes even more crucial. The 

environmental groups th at oppose Mr. Hooper’s confirmation would prefer a 

nominee who’d help make this bureaucracy more responsive to consumers and 

conservation. But one needn’t share that view to insist that a presidential appointee 

at least be qualified to vote intelligently on the policies of one of the nation ’s 

argest energy producers and users.

[From the Louisville Courier Journal, Apr. 7, 1975]

M akin g TV A M o r e Accounta ble

It appears that at long last the Tennessee Valley Authority, which has come 

under increasing criticism from consumer an d environmental groups for its energy 

policies, will be put under the congressional microscope.

The Senate Public Works Committee has scheduled five days of hearings, beginning April 30, with the focus of testimony expected to bear on the federal power 

agency’s $1 billion bid to buy Peabody Coal Company. But the three-member 

TV A board and its staff surely will face close scrutiny on a number of other vital 

public issues, such as the agency’s proposal to strip mine pa rts of the Daniel Boone 

Natio nal Forest in Eastern Kentucky and its rock-ribbed opposition to proven 

air pollution control techniques.

Equally important, however, will be President Ford’s choice to fill the vacancy 

th at will be created May 18 when the term of board member Don McBride 

expires. So far, reports tha t an Alabama newspaperman and a Mississippi businessman have the inside trac k for the nine-year, $38,000 post a ren ’t encouraging news 

th at consumer and environmental interests will be adequately represented.

The United Mine Workers offer the intriguing suggestion of appointing Whitesburg, Ky., newspaperman Tom Gish, ed itor of The Mountain Eagle. For an agency th at only this year abandoned secret meetings, the prospect of adding to the board 

a harsh TV A critic and defender of openness in the conduct of the public’s business 

must surely cause the Nashville bureaucracy to tremble.

But one has to wonder if editor Gish wouldn’t better serve the public interest, 

particularly that of the citizens of Appalachia who must live with the results of 

TVA-nourished strip mining, if he remained on the outside looking in, rather than 

becoming p art of the bureaucracy that he so effectively watches over. Fortunately, 

some of the other nominations include people with similar environmental credentials plus professional expertise—among them Dr. Charles Whittle a Centre College physicist currently on leave to the Ins titu te of Energy Analysis a t Oak Ridge, 

Tenn.

President Ford also might look seriously at the proposal by Tennessee’s governor 

to expand the size of the TVA board to seven as a step toward providing more divergence of opinion on TVA policies. This would be especially useful if the four 

additional members were, as Governor R ay Blanton suggests, named by the governors of his state . Kentucky, Alabama and Mississippi—the four main service regions for TVA. This expansion, plus the appointment to Mr. McBride’s seat of 

someone with environmental credentials, could go a long way toward making the 

federal power agency more responsive to the public i t serves.

[From the Louisville Courier Journnl, Jan. 15, 1976]

TVA Deserves a Better Deal

IN CR ED IB LE as it may seem, the nomination of James Hooper, the spectacularly unsuccessful businessman chosen by President Ford for the board of the 

Tennessee Valley Authority, is still alive if not well in th e United States Senate.

Mr. H ooper’s unfitness for th e $39,000 post as one of the three full-time directors 

who actively oversee TVA was demonstrated so fully la st year th at it is stretching 

a point to call it controversial. The nominee presented no qualifications in either 

the fields of energy or conservation, plus a tangled business record as a promoter of 

a failed dairy, a failed pet food company and a defunct insurance company. His 

sole qualification appeared to be as a Republican loyalist who might improve the 

Presiden t’s standin g with the conservative wing of the p arty.
175

Mr. Hooper app aren tly failed even at th at. The appo intm ent was one t ha t even 

Senator William Brock, the conservative Tennessee Republican, couldn’t swallow. 

In the normal course of events, the nomination would have died at year’s end, 

since the Senate failed to act on it.

The nomination stayed alive, however, when a resolution carrying it into the 

new year was passed by unanimous consent. Senator Brock reportedly passed up 

the opp ortu nity to block the resolution for fear th at the President would place Mr. 

Hooper on the board on an acting basis, as he is entitled to do. This could have put 

the appointment for the nine-year term in the hands of a new president, possibly a 

Democrat, if Mr. Ford is not continued in office.

As this sort of politicking has continued, the post has lain vac ant since mid-May, 

when Don McBride retired. Left on the board are Chairman Aubrey Wagner and 

William Jenkins, who sometimes disagree on vital issues, such as TV A policy on 

expanding nuclear generating capacity. The original intent of Congress was that 

such m ajor decisions would be made by a full, three-member board.

Indeed, there is considerable question today in Congress and in TVA’s seven- 

* sta te service area whether even the three -man b oard’ is sufficiently responsive and

responsible to the public interest. Senator Brock and Senator Wendell Ford have 

offered separate proposals for broadening public repre sentation in TVA m atters, 

and both plans deserve careful consideration.

Meanwhile, President Ford will be acting less tha n responsibly if he does not 

quickly withdraw the Hooper nomination and send the Senate th e name of a man 

with proper credentials to help guide TVA. If political considerations m ust be the 

guide, there surely are Republicans with better qualifications.

EX HIB IT II I

[From the Mountain Eagle, Whitesburg, Ky., June 26, 1975]

TVA Timber T o Be Weighed

(By James Branscome)

The senior timb er cutter for a private company operating on the Tennessee 

Valley Authority’s Land Between the Lakes recreation project in western Kentucky has accused TVA of under-estimating the volume of timber the agency 

allows to be cut from the area.

R. C. Reynolds, who is employed, by Averitt Lumber Co., Inc., the TVA 

contractor, told the Mountain Eagle in a telephone interview last week th at he 

believed one 50-acre tra ct of timb er was under-estimated by 40,000 to 50,000 

board feet. He estim ated in other cases th at TVA’s figures were low by five 

per cent.

Averitt, the single TVA contrac tor, cuts two million board feet from the Land 

Between the Lakes (LBL) each year.

Last week the Eagle quoted records and sources which cast doubt on the 

accuracy of the TVA timber estimating practices. Based on th at information, the 

paper said TVA figures on about 700 acres of the timbering area were low by 

several thousand board feet.

Reynolds said he was approached by Kenneth Averitt, the manager of the 

company, and told th at “beginning immediately” all timber hauled from the area 

would be weighed for accuracy by weighing each truckload. The actu al volume 

of the timber can be estimated so tha t TVA and the timber cutters, who are paid 

on the basis of TVA’s estimate of the board feet, could be compensated more 

accurately for the timber.

In the interview Reynolds also agreed with Eagle sources th at the average 

trucklo ad of timb er hauled from the area contains about 3,000 board feet. “Some 

loads could be a lot more,” he said .The load count from several tra cts —based on 

this average figure—varied considerably from TVA estimates, the Eagle said 

last week.

Reynolds disagreed, however, with his timb er-c utting partner, Lester Pogue, 

who had explained that a $700 p aym ent questioned by the Eagle was for work 

the pair had done in the lumberyard. The paymen t was back-payment, according 

to Reynolds, for a raise he demanded on the amount received on each cord of 

wood cu t in conjunction with the timber.

TVA said last week th at Kenneth Averitt’s explanation for the amount was a 

paym ent to “keep money in his tim ber-cutter s’ pockets.” Eagle sources said earlier
th at this paymen t was for additional timb er the cutters believed the y had cut 

above TVA’s estimates.

Reynolds confirmed Eagle sources who said he had complained to TVA’s chief 

forester at LBL, Bob Drexler, th at he believed TV A was under-estimating its 

timber sold to the Averitt Lumber Co. “I told Drexler th at I actually believed 

your boys are actually making a mistake ,” he said.

Reynolds named three tracts—Woodson’s Chapel, Long’s Creek, and Gray’s 

Cemetery—where he said he though t TV A estimates were p articula rly low. TV A 

foresters measure the timb er while it is still standing and demand no further 

accounting. The company’s con trac t calls for paym ent to TV A based on these 

estim ates and not on a final count.

In the interview Reynolds also:

—Confirmed reports that the company is not complying with safety and work 

requirements th at are in the TVA contract. He said th at the company furnished 

neither water coolers nor toilets to the timber cutters as provided in the TVA 

con tract and did n ot have procedures established for emergency medical tre atm ent.

In one case he said he guided an injured timber cutter, with blood stream ing 

from a head wound above his eyes, “ab out a half mile and pu t him in my statio n 

wagon. They haven’t got an ambulance. They do a lot of talking on these things, 

bu t talking and doing are two different things.” The timberman was sliced in the 

head by a chain saw and has not returned to work since the accident one year 

ago, Reynolds said.

—Supported contentions by Eagle sources th at Averitt Lumber Co. pays low 

wages to its workers. “They don’t pay those workers very well. When they 

sta rted they were going to pay a commission on weight. I thin k these boys are 

getting a b eating.” lie said approximately 20 employees work in LBL for Averitt 

Lumber.

—Said tha t Kenneth A veritt, “ whom I had not seen in over a m onth and a half,” 

came to the woods las t week to say th at “a reporter had called” and th at weighing 

of trucks would begin immediately at the Cadiz, Ky., lumberyard owned by the 

company.

Reynolds said that weighing each truck would meet his objections to the 

timbering practices TVA resources project director at LBL, Dr. Ray Nall, did 

not retu rn phone calls made by the Eagle last week to ask further ab out the charges 

related to the timber cutting. The TVA public information office in Knoxville 

was asked last week to reply to the charges of Eagle sources, bu t as of Tuesday 

of this week had given no response.

TVA seized the 170,000-acre LBL area in the 1960’s for a recreation project. 

The timb er cutting in the area is only the latest in a series of controversies sur ­

rounding the project. Former land owners and some coun ty officials in the area 

have petitioned Congress to turn the TVA management of the LBL over to 

another federal agency.

TVA says that some of the timb er cut from the area is going to the Peabody 

Coal Company for mine timbers.

[From the Marshall County Courier, Benton, K.v., Oct. 22, 1975]

Notice—TVA Timber for Sale

The Tennessee Valley Authority offers for sale a tra ct of standing, selectively 

marked hardwood timb er containing an estim ated 132,638 board feet of sawtimber and 170 cords of pulpwood. The timber is located in Land Between the 

Lakes in Stew art County, Tennessee, approximately ten miles north of the 

intersection of U.S. Highway 79 and The Trace (Tennessee Highway 49).

Sealed bids will be received by the Forest Management Section, Land Between 

the Lakes, Tennessee Valley Authority, Golden Pond, Kentucky, until 10 a.m., 

Central Standa rd Time, October 29, 1975.

Parties interested in inspecting the aforementioned timber should contact the 

above office. Office hours are 7:00 a.m. to 3:45 p.m., Monday through Friday. 

Bid forms and detailed information may be obtained from the forester in charge, 

Land Between the Lakes, Golden Pond, Kentucky, telephone number (502) 

924-5602.
177

EX HIB IT IV

[From the Louisville Courier Journal, Dec. 7, 1975]

TVA Reimburses Farmers $231,000 for Burned Crops

(By Bill Powell)

P aducah, Kv.—The Tennessee Valley Authority (TVA) has paid farmers 

$231,000 for sulfur dioxide damage to crops around Shawnee Steam Pla nt in 

McCracken County, Leonard Smith, a member of the TVA legal staff in Knoxville, 

said yesterday.

Smith said paym ents covered dam age mainly to tobacco, soybeans and gardens 

caused by sulfur dioxide burns in 1971, 1974 and 1975.

He said 215 claims were made and settled “w ithout a single case going to court.”

Smith said th at yesterd ay’s report is considered final but th at subseque nt 

* claims of sulfur dioxide damage will be considered.

The worst burn was reported July 21, 1975, as smoke from the large steam 

generating electric plant affected a swath of farmland a bou t six miles wide and 14 

miles long.

Numerous farm ers complained, and the settlement arrangem ent resulting in the 

$231,000 paymen t was worked out in a series of meetings of TVA officials and 

farmers—with Gov. Julian Carroll and U.S. Sen. Wendell H. Ford, D-Ky., 

atte nding one meeting.

Until then, TVA had made only one pay ment in the area, for crop loss from a 

1974 burn.

After th e July burn, TVA star ted an emergency system of sulfur dioxide control 

th at was m aintained until the crop growing season ended in the fall.

Dr. Larry Montgomery, chief of TVA’s air quality branch in Muscle Shoals, 

Ala., said yesterda y th at the emergency system resulted in numerous power 

cutbacks and extensive burning of low-sulfur coal at Shawnee, a 1.7 million 

kilowatt p lan t on the Ohio River 16 miles west of Paducah.

TVA also is establishing a system to limit sulfur dioxide emissions at Shawnee 

th at Montgomery said he hopes will be operating fully by the end of th is month. 

Computer and other problems delayed a November operations sta rt.

The new system, he said, “undoubtedly will have bugs in it at first bu t we are 

confident it will be adjusted for full use before the next crop season.”

He said the system will eliminate the guesswork and “loose motion” of the 

emergency system. Monitors, 14 of which already have been installed a t Shawnee, 

and computerized equipment will be used to control sulfur dioxide emissions, 

Montgomery said.

The basic controls still will be generation cutbacks and use of low-sulfur coal, 

but Montgomery said the “sophisticated, efficient system will elim inate cutbacks 

and unnecessary fuel expense occurring because of the crude emergency system.”

The new system will cost $1.2 million to install and abo ut $3 million a year to 

operate and maintain . About $2.6 million of the cost will be for electric power 

TVA will have to buy from other generation sources to replace power lost through 

reductions resulting from cutbacks.

[From the Wall Street Journal, July 31, 1975]

TVA Inaction Helped Cause Fire at Plant in Alabama, Nuclear Agency

Staff F inds

Washington.—Inaction by the Tennessee Valley Authority and some of its 

workers contributed to the cause and severity of a fire at the utility’s nuclear 

plant in Alabama, the staff of the federal Nuclear Regu latory Commission said.

In a repo rt on the March 22 fire and in a letter to the utility, the NR C’s Office 

of Inspection and Enforcement also charged th at the TVA violated some of the 

nuclear agency’s rules. The alleged violations basically involved c ertain paperwork 

requirements on safety procedures at TVA’s Browns Ferry nuclear plant near 

Decatur, Ala.

The utility was asked to reply to the allegations within 20 days, after which 

the NRC will decide whether to file an enforcement action. The agency can fine 

companies or suspend or revoke their licenses to operate.
The staff report found th at in addition to the alleged rule violations, various 

actions and inactions by the company and some of its employes contributed to 

the blaze. For example, the report said th at TV A training of its personnel in fire 

fighting was “inadequate.” It also said that workers failed to report many small 

fires that occurred before the March 22 incident.

The fire burned cables leading from the main control room to the plant’s two 

operating reactors, each rated a t 1.1 million kilowatts, and to a third reactor under 

construction. The report confirmed earlier reports th at the fire originated from a 

candle used by workmen to check for air leakage in an electrical-cable penetration 

between a cable room and the reactor building. Some foam used for sealing the 

leakage caught fire, according to the report.

The fire burned for several hours, damaging a bout 2,000 cables and causing the 

closedown of both generating units. Also due to the fire, all closedown cooling 

systems for the units were inoperable for several hours, though they didn’t 

cause any major problems, the repo rt stated.

The units curre ntly remain closed down, the NR C said. In March, the TVA 

estim ated the plant would be closed for only abo ut three months.

The report said the TVA d idn ’t recognize the significance of the flammability 

of the materials involved in the fire and didn’t prepare proper procedures for the 

sealing operation. The report also cited a delay in applying water to fight the fire 

and difficulties in using the self-contained brea thing app ara tus caused by inadeq uate training and maintenance. The report also said closedown of the reactors 

was delayed because control-room personnel lacked knowledge on the location 

and severity of the fire.

The alleged NRC rule violations included performing leak testing and sealing 

with out developing detailed w ritten procedures to control the work; failure to make 

a written safety evalu ation of the reactors’ operations while cable penetrations 

were unsealed; failure of persons discovering the fire to sound the fire alarm, and 

failure to take corrective action after two minor fires th at occurred before 

March 22.

EXHIB IT V

[Prom the Mountain Eagle, Whitesburg, Ky., Oct. 17, 1974]

TVA and Peabody Deal Behind Doors

(By James Branscome)

The nation ’s largest power company locked itself behind closed doors last 

Thursda y and loaned the nation’s largest coal company $23 million. In a financial 

move th at set Peabody Coal Company executives to jabbering like hungry 

monkeys suddenly unleashed on a banama boat, the Tennessee Valley Authority 

Board of Directors approved a Peabody plan for the federal agency to use its 

funds to open a new deep mine for the company in Western Kentucky.

It was not the first deal struck between the child of the New Deal and the child 

of the giant Kennecott Copper Corporation, bu t it clearly was one of the coziest 

bottle-sharing exchanges the two have ever formulated. In New York City, the 

executives of the copper company were gloating th at “this is the nicest con trac t 

Peabody ever nego tiated,” while in Knoxville the TVA highliners were raising th eir 

eyebrows in befuddlement, wondering why anyone could possibly think the agency 

got skinned by the conglomerate.

The TVA, which won the hea rts of the na tion’s liberal community over the years 

with its claims of economic aid to Tennessee mountaineers, agreed to a con trac t 

with Peabody th at obligates the company to open the new mine on TVA’s coal 

lands on a former military reservation—Camp Breckinridge—in Union County, 

Kentucky. TVA agreed to pay all capital costs a nd operating costs of the mine and, 

in addition, granted the company a “management fee” of 80 cents a ton and a 

guara nteed “reasonable profit” on all coal th at comes from the 35 million ton 

reserve.

In tod ay’s profit-bloated coal market th at may no t sound like a bonanza 

immediately, bu t consider:

§ Peabody will not have to borrow money on th e open market at the going rate 

of 11 percent to finance the mine. One result of this will be that Peab ody's major 

stockholder, the Morgan Guaranty Tru st Bank of New York City, will not have
179

to lend any of its money to the fumbling giant, thus contin uing to roll in cash at 

exorbitant interest rates while gaining a new mine.

§ The TV A will pay $12 a ton for the coal—coal it already owns—when the 

mine begins production in three years. Even the most benign estim ates at present 

place the real cost of underground coal production at abo ut $7 a ton. Any coal 

executive knows th at tod ay’s coal market will not last forever. So Peabody is 

guaranteeing itself a stead y, healthy profit over at least the next 20 years from 

the mine, which will produce around one and one-half million to ns of coal a year.

In case anyone wishes he had known abo ut the bidding on the project so th at 

he could have shared in the scramble for the contract, pocket the though t. No 

bidding was allowed. Peabody was the only company notified of th e offer. But any

* poor person could probably have bea t Peabody’s claim th at it could not afford 

the capital for a new mine. Kennecott’s profits (Peabody does not list its profits 

since i t is wholly owned by the parent) were up 52 percent last year. Kennecott 

itself has assets of over $1.4 billion and the Morgan Guaran ty Trust Bank has 

assets of more than $13.6 billion.

* The new deal came to light last week as a Mountain Eagle reporter was chasing 

the TV A brass in and out of restrooms, up and down halls and elevators, and other 

various and sund ry places trying to ask the agency why it was b uying coal from 

Peabody in the first place. The company has a fatality and inju ry rate for its 

miners th at exceeds anything in the industry. And even while TV A was pouring 

money into the giant, the government was enforcing an order t ha t Kennecott 

sell Peabody for violation of the Clayton A nti-Trust Act. (The U.S. Supreme Court 

has ruled th at the Federal Trade Commission was righ t in demanding th at 

Kennecott sell the company by April 1, 1975, In order to comply with the law.)

Why would the TV A—an agency with a supposed conscience—be buying coal, 

a majority of all the coal it buys, from a company like that?

When the Eagle finally backed Don McBride—one of the thre e men who rule 

the agency—up against a wall and asked that question, he said, “I t’s n ot TVA’s 

responsibility to enforce mine safety standard s.” McBride, who won his board 

appointment because of his friendship with Senator Kerr of Oklahoma (the same 

as Kerr-M cGee oil company) also said he had been in a Peabody deep mine 

th at the company already operates on TV A prop erty at Camp Breckinridge. 

“I ’ve been down into the Breckinridge mine, and I didn’t like i t at all,” he said.

The second board member, Bill Jenkins, a Nixon appointee, did not even know 

he had jus t voted two hours earlier to lend Peabody the money for the new 

mine when he was asked about the contract. And Jenkins still had a re port on his 

desk th at the Eagle had sent him two weeks ago—at his request—detailing th at 

Peabody had an injury rate four times the natio nal average at its mines th at 

supply coal to TV A. The report also showed that Peabody led the nation in deep 

mine death s in 1971 even though it is primarily a strip mine company.

To his credit Jenkins did tell the board meeting (a combination of some 20 

top staff and the thre e board members) th at he had a report on Peabody that 

did not make the company look good safety-wise, bu t he said th at he got no 

response from the meeting.

« The third TV A board member, Chairman Aubrey Wagner, did not visit the

restroom during the four hours the Eagle was on the executive floor, so he could 

not be reached for comment on the Peabody matter. Wagner called for repeal 

of sections of the 1969 Mine Health and Safety Act in a June 17, 1974, speech 

to the Natio nal Coal Association, so it is doubtful he would have expressed any

* concern abo ut TV A buying coal from a company th at ranks mayhem higher tha n 

safe mining.

C. E. Wilkerson, the TV A executive who buys the agency’s 40 million tons—12 

million tons supplied by Peabody—of coal each year, was not reticen t abo ut 

talking abo ut Peabody’s mine safety record, however. Asked if he was concerned 

about the safety record of its chief coal supplier, Wilkerson said flatly, “No!” 

He continued, “I t’s not part of my responsibility. If the mines are unsafe, it ’s 

another agency’s responsibility.” Asked why TVA would enforce its own reclam ation standa rds for strip mining, even thou gh all states from which it buys coal 

have a more vigorous program, and not be concerned about mine safety, Wilkerson 

said, "I have no comm ent.” This was one of nine “no comments” th at he made 

during a telephone interview.

TVA’s chief press spokesman, Paul Evans, was more lucid about why th e agency 

did not concern itself with mine safety at its supplying mines. “Buying coal is 

jus t like our buying turbo-generators for our steam plants,” he said. “We don’t 

write into our contracts compliance with any laws th at are not required.” The 

agency was aked if it could supply any records indicating th at TVA had ever
180

expressed concern in any fashion about Peabody’s mine safety record. Lee Sheppeard, another TV A spokesman, said it could not.

Peabody owes its very lifeblood to TV A. It was TV A which gave the giant its 

major long-term contracts in the 1960’s guaranteeing it a profit far into the 

future. TV A has used its power of eminent domain to condemn land for Peabody’s 

mines. It even built the Paradise Steam Plant on a Peabody strip mine in Muhlenberg County, Kentucky, after it destroyed the town now immortalized in the 

song “P aradise” by John Prine. The two are inseparable. And, as Prine’s song 

laments, both claim their union is “for the progress of man.”

EX HI BI T V-A

[From the Wall Street Journal, Feb. 9, 1976]

* * * • ♦ • •

Some Congressmen and other critics of Big Oil worry abo ut the oil companies, 

ownership of 17% of proven U.S. coal reserves. The critics fear th at oil companies 

are investing in coal and other alte rnative fuels simply to preven t their development as competitors of oil. The oil companies say they are investing in alte rnative fuels to help replace diminishing domestic oil reserves. They say th at with 

their technological capab ility and capital, they are in th e best position to increase 

alternativ e-fuel production.

Consolidation Coal Co.’s 1976 capital budget, for example, is $336 million, 

primarily for increasing production and complying with new environmental laws. 

Before its acquisition by Continental Oil Co. in 1966, Consolidation, the nation’s 

second-biggest coal company, never had an annu al capital budget larger than 

$40 million, says Howard Blauvelt, Continental’s chairman.

Some critics suggest th at the oil companies are responsible for the sharp increase 

in the price of coal in recent years. Aubrey J. Wagner, chairman of the Tennessee 

Valley Authority, one of the nation ’s biggest coal consumers, told a congressional 

subcommittee last November th at during the 1960s, the average price of coal 

delivered to TV A steam plants was a little more tha n $4 a ton. By 1974, it was 

$8.50 a ton. When he testified, it was around $17.

Health and Safety

Howard C. Hardesty Jr., a vice chairm an of Con tinental Oil, told the same sub" 

comm ittee that the coal price increase resulted from sharply higher outla ys for 

hea lth and safety programs and for meeting new environm ental requirements.

But Mr. Wagner testified: “We recognize the coal industry has experienced 

increases in costs, as have other industries; however, we believe the increase in 

prices subs tantially exceeds the increase in costs. We cann ot say whether, or to 

what extent, these increased prices resulted from the decline of the independent 

coal producers. But we do believe the acquisition of coal companies by large 

conglomerates has been a factor in reducing the competition in the overall fuels 

ma rke t.”

Mr. Wagner noted th at in 1960, only one of TVA’s major coal suppliers was 

not an independent coal company. Now, he said, only one of its major coal suppliers is an independent. Seven of TVA’s current major coal suppliers are controlled 

by large oil companies or by conglomerates also engaged in developing or marke ting oil and gas.

Some oilmen see a breakup of Big Oil as only the first step in an attem pt by 

Congress to nationalize the oil industry. Some Congressmen, says C. John Muller, 

past president of an association representing independ ent oil producers, want to 

“shatte r the industry so the federal government will ha ve to take over and pick 

up the pieces.”

EXH IBIT VI

[From the Paducah Sun Democrat, November 1975]

TVA’s R ate Stru ctu re Called U nco nstitution al

NASHVILLE, Tenn. (AP).— A U.S. District Cou rt was asked today to rule 

that Tennessee Valley Authority’s r ate structure, particularly as applied to extra 

large indu strial customers, is unconstitutional and in violation of the TV A act.
Clifford Allen, Metro Nashville’s tax assessor and a critic of TVA, asked the 

Middle Tennessee court to accept his challenge to the federal agency’s rates as 

an amendment to a lawsuit against TVA’s local distributor, Nashville Electric 

Service. “We are going to test the righ t of any public agency to charge an industry less than cost and make up the deficit a t the expense of other taxpa yers or consumers,” 

said Allen before filing the papers. The cou rt papers also claim TVA’s rate schedule “is calcu lated to encourage, not less, bu t grea ter use and consum ption of electrical power, by reducing the price and the rates th at are charged, the more electricity a cu stomer uses.” Allen said these rates are maintained despite a national policy “to encourage 

every citizen and concern to economize sources of energy.” Allen, the Democratic candidate in Tuesday’s special election for the vacan t 5th Congressional District seat, contended TVA is selling or compels its distrib­ utors to sell power to large industries “a t rates which discriminate against other 

consumers and customers.” TVA, as of la st year, sold power directly to 50 industries and 10 federal installa­ tions and to 160 municipal and cooperativ e distribu tors in Tennessee, Georgia, Alabama, Mississippi, Kentucky, Virginia and North Carolina. The suit could 

affect contracts between TVA and all of its distributors. Allen claimed Nashville Electric Service was charged by TVA an average of $9 for each thou sand kilowatt hours of electricity distribu ted to NES customers, which meant a net cost to NES of $10.80 per thousand KWH when operating 

and billing expenses were added. In contrast, Allen claimed, Du Pont’s local pla nt has been paying only $8.78 per thou sand KWH and the local Ford Motor Co. glass pla nt paid only $8.85 

per thou sand KWH. “As recently as May, 1975, homeowners on an average paid Nashville Electric Service $20.10 for the first 1,000 KW H of electricity used and some light industry during the same time period paid $31.55 pe r 1,000 KWH used. “ During th at time the average cost of electricity furnished Nashville Electric Service by Tennessee Valley Authority was $13.40 per 1,000 KWH. But DuPon t was charged only $12.95 per 1,000 KWH or 45 cents less tha n the average cost 

charged Nashville Electric Service . . .” the su it claimed.

EX HIB IT VII

Law Offices of J. Granville Clark,

Russellville, Ky., February 14, 1976.

Mrs. Corinne Whitehead,

Route 9,

Benton, Ky.

Dear Corinne: In trying to go over the m att er we discussed ye sterd ay, I really 

think what you have planned to say to the committee would be more appropriate than the thoughts th at I had; however, I tho ught the following might be helpful 

to you. From the very ou tstart of TVA they have atte mpted to broaden their area of operation. In the beginning TVA so ught authority through the courts to extend transmission lines outside of the Tennessee Valley area on the idea of distrib uting surplus power. Then TVA sought authority to build a steam pla nt in order to supplement power generated at the dams. Now probably 10% of the electricity generated by TVA comes from the dams and TVA now claims the righ t to trans­ mit electricity anywhere within the eastern half of the United States. In the Welch case due to wartime need for production of electricity TVA condemned land necessary for the Fontana Dam. In so doing they flooded the roadw’ay to an area containing 44,000 acres and the state would not rebuild the roadway. Due to the emergency situation created by TVA, the Supreme Cou rt allowed TVA to condemn this 44,000 acres. In the LBL case TVA claimed the right to buy this prop erty in order to dem onstrate a recreation project which the court allowed. In the Elk River project they claimed the righ t to have a four prong project: generation of electricity, flood control, recreation, and resale of lake fron t prop erty to a state development commission. Now in the Little T project TVA admits that the generation of electricity, flood control and recreation
182

are relatively insignificant and are condemning land for the purpose of creating 

industrial work sites and recreation facilities. In fact TV A now claims th at the 

agency has a righ t to take any land th at in the opinion of the administrative 

board would promote the general welfare of the peoples of the Tennessee Valley 

area. This agency has probably become more powerful than the Federal governme nt in many respects.

I am atta chin g hereto a chart showing the predictions th at TV A made for 

the Melton Hill project and showing th at in the 8 year period their predictions 

were .19% of their estimates. The manager of TV A, shortly after the Brown’s 

Ferry Nuclear Energy Plant fire, said that i t would take approximately $100,000 

to repair this plant. The other evening he made a statem ent on television th at 

they had already expended more than $6 million in repa ir and redesign work.

The history of TV A is replete with predictions and promises made by TV A 

officials th at have failed to materialize. However, this is easily understandable 

by reason of the fact th at when any individual or agency assumes a position of 

divine guidance they will fall short in their planning.

Sincerely,

J. Granville Clark.

Enclosure.

August 2, 1971. TVA’s Melton Hill Project

The Melton Hill Project was justified by TV A on the basis of navigation and 

power generation benefits.

TV A claimed navigation benefits would amoun t to $729,000 per year at a 

savings rate of $0.54 per ton shipped.

The table below presents TVA’s estimated annual navigation benefits versus 

the actual navigation benefits for years 1963 through 1970.

*

A

Year

1963 ............

1964 ............

1965 ............

1966 ............

1967 ............

1968 ............

1969 ............

1970 ............

Total.

Estimated 

annual —

navigation

benefits

Tons

shipped

Actual

Benefits 

or s avings

Percent of 

estimate

5729, 000 2,000 $1,800 0.1 5

729, 000 5,000 2,700 .37

729, 000 5,00 0 2,700 .37

729, 000 1,000 540 .07

729, 000 1,000 540 .07

729,000 2,00 0 1,080 .15

729, 000 639 345 .05

729,000 4, 247 2,290 .31

5,83 2,000 .......................... 11,275 .19

Source: Mr. Douglas Williams, president, Loudon County Taxpa yers Association, Inc., Lenoir City, Tenn.

EX HI BIT VIII

[From the Louisville Courier Jou rna l]

Western Kentucky, California Share E arthquake R ating

(By Bill Powell)

There’s no noticeable indication that residents of Western Kentucky and 

Southwestern Indiana fret much over the possibility of being jolted by an earth ­

quake.

Little earthquake insurance is sold; rarely does anyone inquire abo ut earth ­

quake safeguards at Kentucky and Barkley dams, and earthqua kes are not major 

discussion subjects in schools.

Yet. . . .

Western Kentucky and the southwestern tip of Ind iana are p art of an area tha t 

has the same top earthquake risk rating as the San Francisco Bay area of California, where a lot of folks live in fear of quakes.

What’s more, one of the nation’s leading experts on earthquakes, Dr. Otto 

Nuttli of St. Louis University, said in a recent interview th at tremors from the 

Western Kentucky-Southern Indiana area are recorded almost daily at the university.

«
183

Dr. Nuttli said, “The Paducah area certa inly is an active seismic zone . . . with 

the possibility of having an earthquake as big, or about as big, as the largest ever 

occurring anywhere in the world.’’ He also said, “There is nothing to be panicky abo ut . . . there is nothing to 

joke about either.” Dr. Nuttli, a doctor of geophysics at St. Louis U niversity an d a m an who prob­ ably keeps a closer tab on earthquake possibilities for Western Kentuck y and 

parts of nearb y states than anyone else, said of quakes: “We know they are going to happen because the smaller ones are happening all 

the time.” He said th at hard ly a day passes withou t a tremor being recorded from an area comprising parts of Western Kentucky, the southwest tip of Indiana, West Tennessee, Southeast Missouri, Northern Arkansas, Southern Illinois and Northeast Mississippi. “This tells you th at the area is an active earthquake region,” he said. He 

added th at the tremors mean there is a significant relationship to the San Fran­ cisco Bay area, which like the Western Kentucky-Southern Ind iana area has a 

top earthquake-risk rating of “3.” The designation means that major e arthqu ake damage is antic ipated someday.

Th at “3’° rating is listed for only five oth er areas on the late st seismic risk map of the United States, published last November by the Coast and Geodetic Survey, U.S. D epa rtment of Commerce. The other areas include parts of Mon tana, Idaho, Utah; upper Washington; 

upper New York; South Carolina; Maine and Vermont. Western Kentucky and parts of neighboring states lie in what is commonly 

called the New Madrid Fault. The fau lt is so named because a series of three 

quakes as severe as any ever recorded occurred near the Missouri town of New 

Madrid in 1811-12. The first grea t shock was felt Dec. 16, 1811. Log cabins rocked or collapsed, dishes shattered , furn iture tumbled, trees crashed to the ground and large fissures 

opened in th e earth. The second quake came Jan. 23, 1812, and the third on Feb. 7, 1812. All, according to geologists, reached the maximum measurement of 12 on what they now call 

the Modified Mercalli scale, which measures how ha rd a quake hits. The other quake measurement used is th e R ichter Scale, which measures imp act as far as it reaches. The 1811-12 shocks are believed to have reached a stunning 8 on th at scale. A reading of 5 on the Richter Scale means big trouble, bu t there 

is a vast difference between 5 and 8. Motion of the ear th increases 10 times with 

each added point, according to Dr. Nuttli. The New Madrid quakes were of th e severity of the San Francisco Ear thq uak e of 1906, where prop erty damage and loss of life were vast. The seve rity of the 

1811-12 quake is calculated to occur once every 500 to 1,000 years. The last major-damage earthquake in the New Madrid Fault was in October 

1895. Buildings were knocked down, mud and water gushed from closing fissures. 

There is no record of loss of life. The 1895 quake was of the severity geologists figure occurs every 75 to 100 years in the New Madrid Fault. It registered 6.25 on the Richter Scale. The last 

severe shock in Western Kentucky was in 1968—it measured 5.5 on the Richter 

Scale. Damage was widespread bu t light. Dr. Nuttli said, “I t is natural n ot to worry abo ut earthqua kes in your (Western 

Kentucky) area, because who remembers 1895?” But, he said, because of the con stan t tremors and the recurrence schedule 

(plus no assurance th at the worst earthquakes can’t happen in quick succession), “ We are carrying out a program of research as part of the U.S. Geological Survey 

research effort to try to predict earthquakes. “Here, we must depend on seismograph traces, recordings of instruments,” 

he said. St. Louis University has 16 seismic monitoring stations in neighboring five 

state s, including five stations in western Kentucky. Dr. Nu ttli has been a professor in the Dep artm ent of Earth and Atmospheric Sciences of the university since 1952. He is nationally respected as an earthqu ake 

authority. He is serving a four-year term on the U.S. National Committee on 

Geology, which reports to the secretary of the interior and U.S. Academy of 

Science. He also is a member of the U.S. Committee on Seismic Risks, and is 

helping prepare a new risk map.
184

*

Sena tor Randolph. Mis . Morgan , will you be our nex t witness, 

please?

STAT EMENT OF SH IRLEY MORGAN, JACKSBORO, TENN.

Mrs. Morgan. Th an k you.

May I say one word before I go any further a bo ut Ms. Whitehead ’s 

sta temen t? At the last TV A board meeting, I was there. I was politely 

asked to come in and be seated with the board mem bers and Mr. 

Wa gne r answered one little Question and then presum ably was going 

to pat me on the head and let me be along on my w ay.
185

I didn ’t go the re to do th at . So th at is one reason why I am here 

tod ay, so I will go on with my sta temen t.

Senator Randolph. T hat is very im po rta nt.

Senator Bak er. I can person ally testify , she certa inl y was the re 

I was home for the Linc oln Day recess at the time and watch ed 

television. I can say wi tho ut any hesitation Mrs. Mo rga n ma de an 

impression on the boa rd.

Mrs. M organ. Well, I am going to make one here.

Mr. Ch airma n, mem bers of the com mittee, my name is Shirley 

Morgan . I am from Jac ksb oro, Tenn. Fi rst of all, I have been here 

since Sunday and the only thing th at has really impressed me about 

this place is Senator R an dolp h.! think he is good.

Senator R andolph. Will you repe at that?

Mrs. Morgan. I really enjo yed wh at you said yeste rday. It 

sounded fruitfu l. You sounded like you were int ere ste d in me and 

everybody . And I tha nk you because it is very gre at.

Senator B aker. Y ou are off to a good star t.

Mrs . Morgan. I didn ’t even realize th at .

Senator R andolph. Th an k you, Shirley.

Mrs. Morgan. You are welcome. Oh, I wish we had you on the 

TVA Boa rd. I am here for one simple reason. I do n’t kno w Mr. 

Jam es Hooper personally, bu t I do n’t thi nk he can help the TVA 

run its business.

Th e people in Tennessee, as well as the whole country , are upset 

over some of the thin gs th at the TVA is try ing to pull. We need 

strong leadei ship on the TVA Board of Directors. After wha t we 

hea rd yeste rday, I dare any one up there before us to look me str aigh t 

in the eye and hon estly tell me th at Mr. Hoope r can do this job.

I hav e been to the las t TVA Boa rd mee ting and I don’t like the 

way it is run . I don’t think it is run for us or for the benefit of us. 

I thi nk th at TVA has got to get bac k for us. We will su pp ort them if 

the y help us. So I thi nk we need someone up the re for us, us little 

people. Tha t is who counts. I cou nt. I pay my taxes. I think th at we 

should hav e a say in some of the things th at go on.

I do n’t know how to r un it, bu t we p ay people to do our business for 

us, such as Sen ators Howard Baker, Bill Brock, and the rest of you 

people. It is yo ur job to know wh at is best for us. And th at is wh at I 

am asking for.

I am going to be at every TVA meetin g from now on. T h at is pa rt 

of being a good citizen. The next pa rt is havin g hones t men in our 

Go vernme nt. When we vo ted y ou in, you were to work for the good of 

the co un try a nd the people who you are serving. The little people who 

are doing their thing, go to work and pay their taxes.

Now, it is yo ur turn to do your job, app rove only the best one 

who can get the job done for us, someone with the bac kgrou nd and 

know ledge of run nin g a big business, such as the TVA.

I know of several people who are n’t eat ing well at this minute. 

Fro m Decem ber to the mo nth of Ja nu ary, the electric bills didn ’t go 

double bu t they went over double. I know of one lad y who I hav e 

know n all my life. You tell me how she can pay an electric bill of 

$105 on a $185 Social Sec urity check.

Som ething has got to be done for these people. I can pa y my 

elec tric bill. My hus ban d works and I work. I am pro ud to say I am 

fortu na te to be able to pa y it. Buy my ne ighb ors ca n’t pay it.
186

That is why I am here. I paid my own way to come here . Nob ody 

is beh ind me exce pt a little group of people in La Folle tte , Jacksboro, 

and Knoxville. Th ey wa nt som ething done. I can pa y mine, bu t my 

neighb ors ca n’t. So you tell me how someone is going to ea t on $30 

or $40 or $50 a m onth. If you can show me th at, th at is wha t I asked 

Wa gne r. I have n’t g otten an answer, bu t F rid ay I will have an answer.

I wan t someone on the TVA Boa rd of Directors who, whe n I go to 

him, they are no t above me. Th ey are just like I am. I hav e got to eat 

ju st as well as th at fellow. I do n’t mind how much money you pay 

them. Le t them mak e their money bu t let them rem em ber us, the 

little people. That is wh at we hav e got to have recog nized .

I worked and g ot over 4,000 signatures, in the la st 2 or 3 days before 

I started up here, of people who are interested in this . Th is pet itio n 

is signed and is supp osed to go to Sen ator Howard Bak er, of course. 

I would like to read it for you:

I have a petition with 4,000 signatures on it from people who 

are again st the nominat ion of Jam es Hooper to the TVA Board. I 

got these signat ure s in less than 5 days. With more time I could get 

five times th at much rig ht around home. Le t me read you wh at the 

petition say s: Hon. Howard H. Bak er, Jr., U.S. Sen ate, Washington,

Dear S enator Baker: We, the undersigned citizens of Tennessee, urge you to do 

all you can to oppose the nomination of James F. Hooper to th e Board of Directors 

of the Tennessee Valley Authority. This winter we and our neighbors have paid 

the highest electric bills we have seen in our lives, more tha n double what we paid 

last year.

At a time when electric bills have become such a crushing burden on the people 

of the Tennessee Valley, any new member to the TVA Board should be chosen with 

one thing in mind: the experience and professional background to help TVA find 

ways to reduce the burden of rising electric rates. We do not thin k that James 

Hooper’s background shows tha t he is qualified for the job.

This is what the people who have to pay TVA’s bills thin k about Mr. Hooper. 

We hope you will take their advice.

Mrs . M organ. I tha nk you.

Senator R andolph. Th an k you. You r statem en t will be pri nte d in 

the record. (Seep. 188.)

Th an k you, Mrs. M orga n.

I ask you to return to your com me nt about the am ou nt of the bill, 

of a lad y who is a neighbor of yours. Was the am ou nt of th at electric 

bill for one mo nth?

Mrs. M organ. One mo nth .

Senator R andolph. W ha t was the amo unt?

Mrs. M organ. The m ost I colle cted—Fr iday night and early Sa tu rday morning , I collected over 1,000 electric bills. Ove r 900 of those 

electric bills from Decemb er until Ja nu ary doubled. If you had a $40 

electric bill for December, your electric bill I can gu aran tee you was 

no t un der $80.

If i t was $80, i t was over $200. I looked at these bills. I know wh at 

I am talkin g abo ut. They are at the Tennessee Valley rig ht now. My 

husband delivered those bills yeste rday so the y could be looking after 

the m but they didn ’t believe me eith er. That is wh at is hap pening. 

I know. I saw it. I collected thes e th ings and it wasn ’t easy.

Senator R andolph. I am certain of th at, the colle ction and the 

inform ation you are bringing to our att entio n. I wa nt to be specific 

now ab ou t the one bill th at you men tioned.
187

Mrs. M organ. Her bill was $105.

Senator R and olph. $105?

Mrs. M organ. Yes.

Senator R andolph. All rig ht. Th e electricity for which th at bill 

was rende red, was t hat to a person livin g in a large house?

Mrs. M organ. No.

Senator Rand olph. Tell me the picture.

Mrs. M organ. It is ra th er a new little house. It is so rt of like a 

small home. I t is about a 5-room house; ju st a small house. I t is a

* widow wom an who lives by herself. There is no one else at home 

except ju st her. He r husba nd is dea d and she has no small children 

in her home.

She only has her social sec uri ty check to live on. I t is no t a big

* home. I do n’t suppose it is one of the best homes, but it is new ana 

it is ra th er nice.

Senator R and olph. The name of the lady, please?

Mrs. M organ. M rs. Flossie Blank of Care yville.

Senator R andolph. Howard, I tu rn to you. How can such a bill 

be rendered in 1 mo nth the re on a v alid assessment? C an you imagine 

it? I am ju st tem pte d to reconcile thi s figure.

Mrs . M organ. I hav e a list where I hav e go tte n ove r 200 where 

it we nt from $60 to $200; $70 to $190. In man y instan ces they more 

than doubled. Th ey went over $20 and $30, bu t the re were 5 days, 

mind you, 5 day s now, th at were add ed on. Of course, it was colder, 

bu t the po int I am try ing to get across is som ething has to be 

inv estigated.

Se nator Baker. Mr. Chairma n, I would like to say this. I ha d the 

op po rtu nity to talk with Mrs. Mo rgan briefly before the hea ring s 

began this morning. She says she comes from Jac ksb oro , which is in 

Cam pbe ll Co unty, and very close to my hom etow n. We had a brief 

ch at this morning.

I fully agreed with her the n, as I do now, th at the escalating fuel 

costs are ju st an impossible bu rden for our low income citizens and 

for ma ny of o ur elderly citiz ens in the area.

As I ind icated to Mrs. Mo rgan the n, I hav e an ide a th at before 

we are done w ith this and find an y so rt of so lution, th at we probably 

will have to tak e up and consider a whole range of possibilities and 

maybe even pu t several different ideas into effect before we get 

anyth ing like an equ itab le rem edy for this situ ation.

I think there is one point, Mr. Chairma n, th at we ought to tak e

* acc ount of. I thi nk Mrs. Mo rgan has done a good service, no t only 

for her neighbors and for the people of th at area, but for this committee, in inte nsif ying our attention on this m atter and publicizing 

it. T hat is an Ame rican tra dit ion , to call pub lic attentio n to matters 

of gr ea t concern.

I think we ought to do one other thin g. I think we ou gh t to ask 

the staff of the com mittee to confer with Mrs. Mo rgan aft er this 

hea ring and go over and tak e add itio nal inform ation from her on the 

prod uct of her collection of thes e bills so th at we can answer your 

que stio n ab ou t how th at s ort of bill could occur.

I do n’t know, to answ er yo ur questio n, wh eth er it is entire ly a fuel 

cost e scalation or whether it is a diff eren t billing period or wh at.
188

Mrs. Morgan. Th ey hav e no answer.

Senator Baker. I be t the y will have an answer.

Mrs. Morgan. Th ey will Frida y because we are going to tak e a 

tou r of L a Follette.

Senator Baker. I think this is a good case stu dy . Why don’t we,

Mr. Chairma n, if you are agreeable, ask our staff to coopera te with 

Mrs . Mo rgan to try and correlate and analyze this? She has done such 

a good job of collecting.

Senator R andolph. Senat or Baker, th at will be done.

Se nator Baker. This, Mrs . Morgan, I hope would furth er your «

cause.

Mrs. Morgan. I do n’t have any cause, Senator Baker , oth er than 

ju st trying to ge t help to the people who need it. We do need att en tio n 

back there for people who do n’t have enough food to ea t as it is. I *

mean you have to sta y warm and you hav e to have food. It is ju st 

no t there.

Senator Baker. That is undenie d. We inten d to do wh ate ver we 

can to try to be helpful, Mrs. Morg an. You hav e been very helpful 

to us.

Mrs . Morgan. Th an k you.

Senator R andloph. Th ank you, Mrs. Morgan .

[Mrs. Mo rga n’s st atem en t with att achm en ts follows:]

Sta te m e n t of M r s. S h ir ley M organ, J a c ksbo ro, T e n n .

Mr. Chairman, members of the committee. My name is Shirley Morgan. I am 

from Jacksboro, Tennessee. Tha nk you for this chance to talk to you about somethin g th at is very important to me and my neighbors in Tennessee. I am here for 

myself, as someone who pays TVA’s bills, and as a representativ e of a group of 

people in Campbell County who have gotten together to try and do something 

abo ut the electric bills we have to pay now.

I am giving you a copy of some news articles which describe a trip we made to 

the TV A Board meeting last week to tell them abo ut our problems. We have ju st 

gotten started and there are a lot more people who want to help us t ry to make 

TV A lower its electric rate s.

As I have said, we have met with the TVA Board members. We don’t have a nything against them personally, bu t we know how important it is to have people 

we can tru st on the Board.

I am interested in the TVA. I have always been for it and I defended it. Th at is 

why I am here to tell you t hat we need strong leadership on the Board of Directors.

Over the past few years the TVA has gotten out of hand. The people don’t 

#

thin k th at they have any say in what the TVA does.

Over the past m onth m any of our electric bills doubled. TVA now charges over 

twice as much per kilowatt hour now than it did a year ago. Many of our bills 

have gone from $40 to over $200. One lady, who lives in a five-room house and 

whose only income is a $185 Social Security check, has an electric bill of $106. 

There are lots of people like her. 4

There is no way th at people in Campbell County and the surrounding area 

can pa y this kind of bill. A lot of people in these areas live on Social Security checks 

of abo ut $150 or $200 a mon th, or they have low-paying jobs of $2.10 or $2.50.

We feel th at it is time for TVA to try and find some way to help people who ca n’t 

afford to pay this much for electricity. We need somebody on the Board who will 

make TVA tr y and help us.

Other people can tell you the details a bout the man the Presiden t has selected.

I don ’t know a lo t a bout him, bu t it does not seem to me t hat he was chosen b ecause he is the best man for this job. He doesn’t seem t o be the kind of man who 

will really help TVA solve some of the problems it has.

We are the government and TVA belongs to us. The big men have forgotten 

th at bu t the little people remem ber. We want intelligent and honest men to run 

TVA for us. TVA is too important to pu t in the hands of incompetent people.

We need someone who has proved th at they can get our confidence and who can 

do a good job for us.
189

You should only approve someone who is both a good leade r and a good 

businessman.

I am not jus t speaking for myself. People all over the Tennessee Valley have 

the same problem. We don’t intend to sit around and do nothing abo ut this. 

It is hard right now to pay our electric bills and have enough to eat on for the 

rest of the month. How do you think people are going to feel when they have to 

make sacrifices to pay these bills, thinking th at a damn fool is making TVA’s 

decisions?

I have a petition with four thousand signatures on it from people who are 

against the nomination of James Hooper to the TVA Board. I got these signatures 

in less than five days. With more time I could get five times th at much right 

around home. Let me read you what the petition says:

The Honorable Howard H. Baker, J r.,

U.S. Senate,

Washington, D.C.

Dear Senator Baker: We, the undersigned citizens of Tennessee, urge you 

to do all you can to oppose the nomination of James F. Hooper to the Board of 

Directors of the Tennsesee Valley Authority. This winter we and our neighbors 

have paid the highest electric bills we have seen in our lives, more tha n double 

what we paid last year.

At a time when electric bills have become such a crushing burden on the people 

of the Tennessee Valley, any new member to the TVA Board should be chosen 

with one thing in mind; the experience and professional background to help TVA 

find ways to reduce the burden of rising electric rates. We do not think th at 

James Hooper’s background shows t ha t he is qualified for the job

This is w hat the people who have to pay TVA’s bills thin k about Mr. Hooper. 

We hope you will take their advice.

[From the Tennessean, Feb. 13, 1976]

E ast R esidents Hopping Mad Over TVA Hikes

(By Keel Hunt)

Knoxville—Brimming with frustration over sky-high electricity bills, an 

irate waitress looked the chairman of the TVA in the eye yesterday and called 

him a “boogey man.”

Mrs. Shirely Morgan, the waitress from Jacksboro, and abo ut 40 other angry 

bill-payers from Upper Eas t Tennessee took their complaints direc tly to the 

Tennessee Valley Authority’s board of directors.

“I ’m mad. Everybody I brou ght today is mad,” she told TVA chairman 

Aubrey Wagner, who moments earlier had explained that power rates have been 

pushed higher this winter by increased rates and cold weather.

“We’re n ot here to be turned away ,” Mrs. Morgan said.

The busload of troubled Campbell Countains filled the normally sedate TVA 

board room here to near capacity, many of them waving their own electricity 

bills at TVA officials and others carrying home-made placards calling for “reasonable rates.”

One member of the group, Mrs. Flossie Blank of Caryville, szid her Socia. 

Security check totaled $185 a month and her electric bill for January was $106[

“I guess the only thing we can do is leave,” she said. “I’ll tell you what I’m 

going to do. I’m going to get a coal stove to hea t with.”

Mrs. Morgan, one of the principal speakers for the group, which has been picketing a LaFollette utility all this week, said wages in Campbell Cou nty average 

$2.10 to $2.30 and hour and many are forced to live on Social Security amo unting 

to $150 a month.

“The old people can’t pay their bills,” she said. “I know one old woman who 

paid her electric bill and had $4 left for the mo nth .”

Mrs. Morgan recalled Sen. Barry Goldwater’s proposal to sell TVA to a p riva te 

firm during his 1964 presidential campaign.

“I hated Goldwater when he wanted to sell TVA” she said. “Oh, God, I wish 

we had him now!”

The protesters remained seated as Mrs. Morgan, a spokesman for the goup, 

was invited to the front of the board room at the conclusion of its formal meeting. 

Then she took a seat between Wagner and TVA general mana ger Lynn Seeber.

67-520 0 - 76 - 13
She gave Wagner a petition, signed by 3,760 rate-payers, which read:

“We understand th at TV A cann ot avoid some of these (rate) increases. But we 

urge you to do all you can to take the burden of these increases away from the 

average consumers who use j us t enough power to cook their food and light and 

heat their homes.’’

Mrs. Morgan told the board some Campbell Countians have received winter 

power bills th at almost equal their monthly house payments. She said TV A should 

adopt a “lifeline” rate structure.

A “lifeline” rate system—advocated by some consumer groups bu t generally 

opposed by TV A—would set low rates for small customers such as low-income and 

elderly persons.

Wagner told the group yesterday “lifeline” rates would not help many lowincome people and would benefit many wealthy consumers who hea t primarily 

with gas or keep vacation homes that are not used year-round.

Also, he said the bills paid by many TV A area home-owners are high because 

the ir homes may be poorly insulated —causing them to waste heat—and not only 

because rates are high.

But Mrs. Morgan, who was frequently cheered on by her neighbors, persisted.

“We believe th at TV A does not know how serious the problem is for some 

people,” she said. “ We also believe that many people do not realize that TVA 

could change the way it charges for electricity to give a break to the average 

consumer.”

Seeber told the group TVA officials would meet with them again soon, along 

with officials of their local power distributor, to discuss individual problems.

Earlier, in the formal board meeting, Wagner and TVA director William Jenkins 

approved:

An increase in coal prices paid to South Hopkins Coal Co. near Madisonville, 

Ky. TVA officials, saying the company was facing ban kruptcy as a result of the 

1974 price of $9.57 per ton, will now pay the company $11.52 per ton for delivery 

of 20,000 tons.

A project to replace switchboard equipment in electricity control centers in 

South Nashville and four other sites in the region. The replacements will cost an 

estim ated $530,200.

[From the Knoxville New-Sentlnel, Feb. 13, 1976]

U n a n im it y M is sin g in M organ-W a g n er C la sh

(By Jim Dykes)

It was not what yo u’d call a meeting of the minds when TVA Board Chairman 

Aubrey Wagner and Jacksboro waitress Shirely Morgan met yesterday.

It was more like a head-on collison.

Mrs. Morgan led a delegation of angry Campbell Countians to the TVA board 

meeting. They are furious over doubled electrical bills.

Mr. Wagner, as gently and smoothly as possible, welcomed Mrs. Morran and 

the delegation of more than 60 people. He said he was gratified th at they had taken 

the interest to turn out, and how much he an d the rest of th e TVA board and staff 

gathered there appreciated the visit.

Mrs. Morgan regarded him calmly for a moment, then said, “ Who are YOU?”

The answer was alm ost lost in the roar of laughter—much of it from Mr. Wagne r’s subordinates sitting behind him.

Mrs. Morgan said she—and the rest—came for answers and would not leave 

without them. She outlined the plight of many Campbell Countians . . . th at 

many work at jobs paying $2.10 to $2.30 an hour, others are on black lung benefits, 

Social Security, and the like.

“Tell me, how’ can you get an electric bill of $104 and pay it o ut of Social Security of $156 and still eat? I wan t an answer—and you are the boogerman!”

Mr. Wagner said his bill went up, too. But not double.

“I have a hea t pum p,” he said.

“I have a heat pump, too,” Mrs. Morgan said, “and my husband (a carpenter) 

built our house. It is ti ght and well insulated. Why did n’t your bill double? It was 

just as cold here as it was in Campbell Cou nty.”
191

Mrs. Morgan implied th at Mr. Wagner receives some sort of break on his bill. 

He said he paid the same rate as anyone else.

He explained th at since 1969 the price of electricity has doubled but that the 

price of the coal used to generate it has quadrupled.

“In 1969 the price per 1000 kilowatt hours was $11.50,” he said.

“In Jan uar y 1976 it was $23.43,” he said, “while the average price of coal in 

1969 was $4.50 a ton; it doubled to $9 a ton in 1974 and redoubled to $18 by 1975.”

He said TVA’s coal bill has increased from about $150 million in 1969 to nearly 

$600 million in 1975 and th at it would probably reach $860 million by the end of 

this year.

He said materials, labor and the inflationary tren d of the times has also contrib uted to the high cost of electricity.

He reiterated TVA’s longstanding promise th at when Brown’s Ferry Nuclear 

Plant gets on line it will help somew hat in keeping electrical prices lower. He said 

heat generated by the nuclear plant would be that equivalent to a steam plant 

paying $3 a ton for coal.

He said he has been saying for years th at coal prices must be brou ght under 

control—th at something should be done to tie coal costs to the costs of producing 

coal. He said TVA still charges consumers only 62 per cent of the price paid by 

the average U.S. consumer.

The “lifeline rate” was brou ght up. It is a means whereby small consumers 

would get electricity at a very low price.

TVA holds th at th is is a welfare problem and the agency cann ot determine who 

should get it and who shouldn’t. Board member Bill Jenkins noted th at someone 

with a summer cottage on the lake—unused most of th e time—would get lifeline 

rate s while a poor person, in a drafty house heated by electricity, might not.

“We ca n’t pay. We d on’t have it. You’re g etting cheaper electricity here than 

in Campbell County. It’s no t fair,” Mrs. Morgan charged, to shouts of approval 

from the crowd.

“TVA is supposed to belong to the taxpayers. Well, we’re taxpayers. Why d on’t 

we have a say? I hated Goldwater when he came here and said he wanted to sell 

TVA. I just wish to God we had him now. I wish I’d voted for him, now,” she said.

Mr. Wagner, who makes over $40,000 annually, had been asked about his salary. 

He had answered by saying he wasn’t having trouble paying his bill.

Mrs. Morgan followed her Goldwater speech with, “I know what you make . . . 

you deserve it . . . to take talk like I ’m talking. But we want answers and we 

have to have them.”

Mr. Wagner said to give specific answers he would need to look at specific 

electric bills.

That broke the dam. Campbell Countians stood waving receipts. One Mr. 

Wagner looked at was from Sister Yvonne Nelson’s Community Action Committee 

headqua rters in Newcom Community. It has, she said, a heater and a couple of 

lights.

The December bill w’as $81.66. The Jan uar y bill was $151.98.

Mr. Wagner pointed out t ha t December’s $81.66 bill was for 2994 kilowatthours 

and that the J anuar y bill for $151.98 was for 5892 kilowatthours.

He said there was a slight rate increase bu t that mainly Jan uar y was much 

colder—therefore more electricity was used—than in December.

General Manager Lynn Seeber, knowing the meeting could go no furth er toward any agreem ent, proposed consulting with the La Follette power company; 

then having a meeting between TVA and the embittered Campbell Countians 

where electric bills could be studied in detail. Mrs. Morgan agreed to have the 

electric bills in hand by next Friday.

Then she said, “I don’t know how you all adjourn these meetings b ut I’m fixing 

to leave.” She left. Meeting adjourned.

The group from Campbell County was not at all in favor of the appointme nt of 

James Hooper, Mississippi businessman, to fill the long-vacan t third chair on the 

TVA Board of Directors. Mrs. Morgan is to testify Wednesday in Washington at 

the Hooper hearings. She will testify “ag ainst.”

The board, in routine action, approved a contract ame ndment with South 

Hopkins Coal Co. which increases coal prices from $9.57 a ton to $11.52 a ton.

Deliveries are 20,000 tons a week from a deep mine ne ar Madisonville, Ky. The 

con tract is through January 1984.

Senator Randolph. Mr. Brandt?
192

STATEMENT OF ROBERT S. BRANDT, TENNESSEE CHAPTER,

SIERRA CLUB

Mr. Brandt. Th an k you, Mr. Cha irman.

I am Ro be rt S. Br an dt, an att orney from Nas hville and am here 

today, testify ing on behalf of the Sierra Club.

I wan t to than k the com mittee for inv iting me to testify tod ay on 

behalf of the Sierra Club. I would like to express my than ks n ot only 

to Senat ors B aker and Randolp h, bu t to the com mittee staff and also *,

ask the sta ff m embers from oth er Sen ators’ staffs to convey ou r thanks 

to tho se Sen ators who could no t be here.

I have prepared some wr itten testimony which I choose no t to read.

Se nator Baker. Would you like to inclu de it in the record? *

Mr. Brandt. Yes.

Senator Baker. W ith ou t objection, the statem en t will be received 

for the record. (See p. 194.)

Mr. Brandt. S ena tor B aker, it is very difficult to imp rove on wh at 

has alread y been said. That is one reason I do n’t w an t to be repetitive.

I think it is impossible to imp rove on wh at Senator Brock said this 

morning .

I was most impressed with the obvio us de pth of his consideratio n 

of the m atter of TVA. I find it ve ry enco uraging; very , very enco urag ­

ing th at Sen ator Bro ck has underta ken to learn as much as he has 

ab ou t TVA. I hope th at s omething will res ult from it.

As I sta ted , I am here on behalf of the Sierra Clu b. I am pa st 

chairma n of the Tennessee chap ter of the Sierra Club. I also serve as 

chairma n of the Tennessee Con servati on Commission, hav ing been 

app oin ted to the Conse rvation Commission by Gover nor Blanton 

in 1975.

I am no t here on beh alf of the State of T ennessee, alth oug h I think 

the Gover nor’s position in oppositio n to Mr. Ho oper’s nomination 

is well known.

Sen ator, I would like to, if you will indulge me for a moment, tell 

you a little bi t abou t my personal background.

I am from about 40 miles from Huntsville, from a town called 

Nor ris, Ten n. I am a na tiv e of Norris, born and raised there. Norris ,

Tenn., as the Senat or knows, is a cre atu re of TVA. It was conceived 

by TVA and bu ilt by TVA and nam ed aft er Senator George Nor ris,

TV A’s creator.

As I have said in my w ritten r ema rks, mo st of us who grew up t here 

sort of feel th at we were conceived by TVA too. When you look at a 

lot of how our pa rents hap pen ed to get the re and ge t together, it 

ma y no t be too far from the tru th.

My fat her migrated to Tenn essee from Chicago in the early 1930’s 

to go to work in Tenn essee for TVA and ma rrie d a Ch att anoo ga girl.

I am a pro duct of th at marriage. So w hen I say a lot of us were con ­

ceived by TVA, I thi nk th at may be som ewhat true.

I was raise d in a TVA town. I have a TVA outlook, or thou gh t I 

did, on life. Ye t I supp ose I am as vocal a critic of TVA as now 

exists in the State of Tennessee.

I think th at is significant, th at this could happen. I thi nk th at , 

havin g people like Mrs . Mo rgan here tod ay, is qu ite significant. We
193

are the people who are supposed to be benefiting from TVA. Here is 

someone who has been born and raised from a TVA town, from a 

TVA family.

I guess I talk about TVA so much I just bore my friends. Tha t is 

how upset I get about it.

I have attempted in the written testimony, Senator Baker, to 

identify why I think TVA has such a bad name right now. I have 

identified several things. I would like to touch upon one of them. 

That is, TVA’s institutional personality. Mrs. Morgan and Miss Whitehead both talked about that. TVA has an arrogant corporate personality tha t is very difficult to conceive unless one has dealt with it. I 

have heard this from two Governors. I have heard it from more than 

one Member of Congress. I have heard it from a justice on the State 

supreme court. I have heard it from lawyers and from anybody who 

has anything to do with TVA, tha t it is an arrogant institution.

I think it is this institutional personality tha t we are talking about 

when we talk about Mr. Hooper. You cannot pass laws and tell 

people to change the way they are and the way they think.

TVA’s institutional personality has been developed over a period of 

years by the Board of Directors. The Board of Directors, like any 

corporation, with TVA sets the tone for the institutional personality. 

I think tha t this is the most important thing I can say, that when you 

consider Mr. Hooper’s nomination you are considering the institutional personality TVA will assume.

I listened with interest to Senator Baker’s question to Mr. Gibson 

about where Mr. Gibson thinks TVA should go in the future. I think 

one of the most interesting comments I have heard was when I turned 

on the Today Show the other day to watch Senator Baker and my 

good friend the publisher of the “Tennessean,” John Siegenthaler.

John said something that really struck home about TVA. The 

NBC man, I can’t recall his name, said, “What do you see as the 

future for the State of Tennessee?”

Senator Baker. His name was Jim Hartz. The real perspective to 

tha t story was when somebody, during that filming, looked out and 

said, “Who is tha t man next to John Siegenthaler?” Right away you 

knew you were in Nashville.

Mr. Brandt. Well, tha t is good. I enjoyed your part of the program. 

I thought it was very perceptive and a good analysis of my native 

State.

John Siegenthaler said, “We are concerned in Tennessee tha t the 

blessings of the past do not become the curses of the future.” He 

said, “TVA and nuclear power.” I think that is the question. I think 

that is the question you asked essentially of Mr. Gibson, Senator 

Baker, are the blessings of the past—and I consider TVA a blessing 

of the past—going to be the curses in the future?

My conclusion is that unless something happens to change TVA, 

it is going to be a curse in the future.

There is simply nothing in the record, as Senator Brock said, tha t 

can remotely suggest that Mr. Hooper has any of the qualifications 

which equip himself to be a force in shaping this institutional 

personality.

I don’t know of any agency of the U.S. Government, with the 

possible exception of the CIA—to talk about a current topic—where
194

the directors or the leaders of tha t agency have such an absolute 

opportunity to shape the institutional personality.

Any other agency of Government has many more restraints on 

it than does the TVA. It doesn’t need to be repeated, the TVA is 

autonomous, as it has been said today. I think tha t is a unique opportunity that this committee has to be a force in shaping the institutional 

personality.

I am not in favor of any structural changes in TVA right now, with 

one or two exceptions. I do think they ought to have to get authorization for public works projects. I think their utility rates ought to “

be subject to regulation.

But I like the flexible nature of TVA. I think it served us well in 

the past. I don’t think it is serving us well now. I keep coming back 

e

to the same thing, it has to do with the people who are running it.

They are the ones who set the tone.

As for Mr. Hooper, I don’t know the gentleman. I have only seen 

him once in my life and that was here today. But from everything I 

read about him he just is not the person to be a force in shaping that 

institutional personality.

Thank you.

Senator Baker. Mr. Brandt, you have been an outstanding witness.

I thank you for your insights. I will read your statement with great 

interest.

[Mr. B randt’s prepared statement follows:]

Statement of Robert S. Brandt on Behalf of the Sierra Club

I am Rob ert S. Brandt, an atto rney from Nashville and am here today, testifying on behalf of the Sierra Club. The Sierra Club is a natio nal conservation 

organization dedicated to the conservation and preservation of America’s natural 

resources. The Sierra Club has chapters in each sta te within the TVA service 

area. I am past Chairman of the Tennessee Chapter.

In addition, I am currently serving as Chairman of the Tennessee Conservation 

Commission, an advisory agency of the Sta te of Tennessee. The views expressed 

today are those of th e Sierra Club and not the State of Tennessee. However, the 

position of the State Administration on the question of Mr. Hooper’s nomination 

has been forcefully expressed by our Governor. The Governor and the Sierra 

Club are in agreement th at the nominee has none of the qualifications which 

equip him to become a TVA director.

To assess Mr. Hooper’s potential contribution to the nation as a TVA director, 

it seems appropriate to examine TVA as it exists in 1976, and more particularly 

to examine the public’s attitude toward TVA.

It is apparent th at at this time, TVA does not enjoy widespread public affection.

To the contrary, it would be difficult to imagine an agency which has so changed 

its image to the citizenry of the democracy it serves than has TVA. This is re- 4

fleeted in the multitude of articles which have appeared in the press over the la st 

several years reporting on the public unrest over TVA. National publications 

such as Newsweek, Forbes, The New York Times, The Washington Post, and 

others have written more than once recently abo ut the changing attitud e of the

S

ublic towards TVA. The South magazine, The Louisville Courier Journal, The 

fashville Tennessean, and the Montgomery Advertiser have each joined the 

chorus of asking serious questions of TVA. Even the Knoxville News-Sentinel, 

the last hold-out of the “TVA can do no wrong” advocates within the ranks of 

the press, has recently published an objective, critical analysis of TVA’s Browns 

Ferry Nuclear Ferry Plant fire and the costs of repair.

I mention this not because the press is necessarily the source of all knowledge 

and wisdom abo ut TVA or any other issue, bu t because these many articles and 

editorials about TVA are reflections of a changing public attitud e abo ut the 

Tennessee Valley A utho rity.

I m ust add my name t o the list of those critical of TVA, indeed to the list of the 

most vocal TVA critics. If the committee will indulge me, I would like to relate
195

some personal background. I am a native of Norris, Tennessee, a town conceived 

by and built by TVA, named after its grea t creator, Senator George Norris. 

The TVA influence was so great upon my early life in this TVA town th at I came 

to believe t ha t my fellow Norris natives and I, like the town itself, were likewise 

conceived by TVA. I also recall vividly my activ ities in the 1964 presidential 

campaign when our slogan was “Peace, Prosperity and TVA.” I mention this 

biographical matt er only because it seems significant th at one from this background should become such a vocal critic of TVA. It seems significant th at one with 

a TVA nurtured outlook on life would be here today in the United States Senate 

discussing what to me seem to be gross abuses committed by TVA.

As stated above, it is appropriate to look at TVA toda y to determine if James 

Hooper, referred to by President Ford recently as “ Mr. Hooker”, is qualified to 

become one of the thre e directors of this autonomous agency.

Assuming TVA’s current unpopularity, we must ask why TVA is unpopular 

and how did it happen.

As to the first, it is clear th at TVA’s practices and programs came into dire ct 

confrontation with the conservation and environmental revolution which swept 

the nation in the late 1960’s and early 70’s. TVA’s dam building momentum is 

so strong th at it has embarked upon a course of building small dams and small 

rivers, so small th at they cann ot even sup port hydro-electric facilities, the y 

provide negligible flood control, and hardly any navigation.

As the largest purchaser of strip-m ined coal, and a not too subtle prom oter of 

strip-mining, it was inevitable that TVA would clash with a variety of interests 

ranging from theoretical environmentalists to the mountain folk who are the 

victims of TVA’s practices. When I look at the denuded and barren mountains 

of my nativ e Anderson County, Tennessee, ripped apart with TVA money, 

my money, I am bewildered by my early recollections of TVA’s outstan ding 

efforts in the 30’s and 40’s at soil conservation, reforestation, and increased agricultural productiv ity. Thus, what we have seen is the evolution of a new generation of critics of TVA formed around various conservation, sportsm en, agricultural, 

and other interests.

A second facto r which has resulted in quite vocal criticism of TVA is its comm itment to nuclear power as a means of providing one hundred per cent of its base 

power load. Many people question the safety of TVA’s nuclear program, while 

many, many more question the economics of it. Responsible and knowledgable 

citizens are asking how TVA can intelligently place such reliance upon a tech ­

nology which has such a dismal record of production. TVA’s nuclear power activities, thus far, have been a tragic disaster. The mam mouth TVA nuclear commitment, the largest in the nation, has brought to the surface an entirely new 

constituency of TVA critics.

But it takes more, in my opinion, tha n TVA’s shift from an agency born in 

the s pirit of conservation to one of America’s prime dispoilers to create the cu rren t 

outcry of criticism and even downright hostility. A third factor is a factor which 

figures most prom inently into the question of James Hooper’s qualifications . . . 

tha t facto r is TVA’s institutional personality. Like any corporation or entity, 

TV A has a co rporate personality, and, in recent years, t ha t institu tional personality 

has been characterized by an arrogannee which is difficult to conceive unless one 

has dealt with TVA. I have heard repeatedly from a variety of people th at have 

dealt with TVA that it is almost impossible to amicably work with the agency.

I have heard this from a Governor, more than one Congressman, and a State 

Supreme Court Justice. I have heard it from lawyers who have had cases with 

TVA, from employees of other agencies of government, both State and federal, 

and most importantly, from many private citizens who have been forced to deal 

with TVA.

Naturally, there are many capable and public minded TVA employees, bu t like 

any other corporation, the directors set the tone for the entire organization. One 

new appointm ent to the TVA Board can dram atically change TVA’s in stitutiona l 

personality.

Finally, I must mention the one factor which has given rise to more public 

hostility towards TVA than any other—dramatically increased rates for residential 

electricity. The question of electric utility rates is indeed complex and I profess 

no expertise in this area. But one does not need to be an expert to see t ha t when 

a utility builds the largest nuclear plant in the world, and it not only fails to 

produce electricity for nearly a year, bu t the catastrophe which caused the 

failure costs millions to repair, electric bills are going nowhere bu t up. And, 

when the average citizen struggling to pay uti lity bills learns th at a giant energy 

intensive industry is paying a subs tantially lower rate tha n the home-owner,
196

he gets downright angry. Moreover, when th at rate payer complains to his local 

utility, he finds th at the utility cannot significantly change the rate due to its 

contract with the unregulated TV A.

Our rates are lower tha n almost anywhere in the nation, bu t it remains to be 

seen how long th at situation will exist. Many innovative suggestions are being 

made around the country on reforming utility rates, suggestions which may or 

may not have merit. Thi.-> unique agency which was c reated to be an experiment 

to begin with, has led the field, nationwide, in its obstinate refusal to consider 

rate reforms.

Having given our answers to the question of why TV A is so unpop ular nowadays, the more difficult question should be answered . . . how did it happen? 

The answer to this question is indeed complex and intricate and I make no pretense of having the complete answer.

TV A is completely autonomous. It has to secure no congressional authoriza tion 

for its major projects. Its power rates are unregulated.

TVA was once well-known nationally. Now, however, even members of congress 

who come from outside the TVA region know very little about TVA. Either unwilling or unable to control TVA, Congress has given TVA a free hand to do whatever it pleases. As I u nderstand it, the 1975 oversight hearings were the first since 

the late 30’s.

TVA’s basic mission is vague and ambiguous, thus enabling the agency to seek 

its current purpose after its existence has already been firmly established. With so 

massive a bu reaucracy in place, TVA is going to do something, even if it is not in 

the public interest.

TVA’s early success has engendered an affection among the populace, which 

has made many people r eluctant to speak out aga inst its obvious current abuses.

There have been many proposals in the pas t year or so to make stat uto ry changes 

in TVA’s structure, some of which have alrea dy been introduced in Congress. 

These proposals m ay or may not have merit. No legislative body can legislate a 

change in atti tud es or personality.

When considering TVA’s personality, we come back to James Hooper and his 

desire to become a force in shaping that personality and the administration’s 

apparen t desire to have him become such a force. By serving as one of the three 

directors of this autonomous unregulated burea ucracy, it is incredible how powerful the new TVA director will become.

This job is n ot some petty political job to be given away for solely political 

considerations as Postmaster’s jobs once were. This is a job for someone with a 

proven record of adm inistrativ e ability, someone knowledgeable in the grave 

economic energy and health problems facing TVA. Nothing I have read or heard 

about Mr. Hooper even remotely suggests he has any qualifications to serve.

I and my fellow Sierra Club members believe that TVA is on a self-destructing 

course. However vocal or critic we may be of TVA, we do not want to see TVA’s 

destruction. Only the appointment of a qualified third member of the Board of 

Directors can save TVA from itself. Ja mes Hooper is not th at person.

The Sierra Club respectfully urges the Senate to refuse to confirm Mr. Hooper.

Senator Baker. You have been an excellent panel, and we thank 

you for your participation today. If any of you have any further and 

concluding remarks, we would be happy to have them at this time.

Thank you.

Ms. Whitehead. Senator Baker, may I say something, please?

Senator B aker. You may, indeed.

Ms. Whitehead. With respect to the statement tha t Mrs. Morgan 

made, there are petitions out all over western Kentucky with respect 

to the TVA. Some of these are directed to the Congress; some to the 

State of Kentucky.

With respect to what she said about the increase in the electric 

rates, one of the State legislators was in my home last Sunday. He 

was extremely perturbed because he said his bill had doubled and 

tha t it was $174 and tha t he hadn’t even been at home. The heat 

had been turned off pa rt of the time.

Senator Baker. I have an office full of mail. I can recite case after 

case tha t has been brought to ray attention personally, of extraor-
197

dinary increases in electric rates, particularly in the DecemberJanu ary billing period.

I entirely agree, it is a matter that requires careful attention. I 

assure you we are going to do that.

Ms. Whitehead. Thank you.

Mr. Gibson. Thank you very much for your time this morning, 

Senator, and for your interest in TVA.

Senator Baker. Thank you.

The next witness is a representative of the United Mine Workers.

Senator Randolph. I want to thank Mr. Brandt for his testimony.

' Mr. Savitsky, am I correct?

Mr. Savitsky. Yes, sir.

Senator Randolph. We had earlier communication from Arnold 

, Miller. He is president of the United Mine Workers and was to have

been a witness, but because of certain circumstances and commitments you are here testifying for the United Mine Workers. Who 

are you joined by today?

STATEMENT OF BILL SAVITSKY, EXECUTIVE BOARD MEMBER,

UNITED MINE WORKERS, REPRESENTING ARNOLD MILLER, PRESIDENT OF THE UNITED MINE WORKERS OF AMERICA, ACCOMPANIED BY DALE LAWSON, LEGISLATIVE REPRESEN TATIVE OF

UMW

Mr. Savitsky. I have also here with me today Mr. Dale Lawson 

who is the legislative representative of the United Mine Workers,

Senator Randolph. If you will proceed as you desire, by reading 

a statement or filing a statement or commenting on the statement, 

members of the committee will be glad to hear your testimony.

Mr. Savitsky. Mr. Chairman and members of the committee, I 

am the international executive board member of the UMW and, as 

you mentioned earlier in your statement, 1 am representing President 

Miller, who was not able to attend today because of other urgent 

commitment.

I am pleased to appear before you today to present the views of 

the UMWA on the nomination of James Hooper as a member of the 

„ Board of Directors of the Tennessee Valley Authority. As you know,

the UMWA is extremely interested in the operation of the TVA and 

we appreciate this opportunity to make our views furth er known.

In addition to that, Mr. Chairman, at the conclusion of my presenta- 

► tion I will be glad to answer any questions and any questions I will

not be able to answer, will be answered for the record at a later time.

The UMWA represents 143,000 working miners and 77,000 retired 

miners—with their dependents, a total population of 692,000. Threefourths of our members and their families live within or adjacent to 

the TVA service area.

TVA is the largest single consumer of the coal that we produce. 

On many levels, we have intense interest in TVA and the policies 

which the directors of TVA develop and implement. We have looked 

closely at Mr. Hooper’s record—at least at tha t pa rt of his record 

which has been made public—and it is an understatement to say tha> 

we are disappointed.
198

We give Presi dent For d due credit for the excellence of some of 

his appoint me nts in other areas. We had hoped th at he would recognize the imp ortanc e of this appoint me nt and would app roach it in 

a sp iri t of finding the best available man or wom an for the job.

In April, we asked th at conside ration be given to the ap po int men t 

of Thom as E. Gish, a Ke ntu cky new spaper edito r and publis her 

whose whole career has been dedicated to the be st tra ditio ns of 

grassroots dem ocracy and whose dogged coverage of TV A in rec ent 

years has done more than any oth er single force to shed light on the 

age ncy ’s policies. *

La ter, we ind icated our willingness to su pp ort the nomination of 

Dr. John Gibbons, a respected nuc lear physicist whose nam e has 

been proposed by others.

In making these rec om menda tion s to Presi dent Ford, we felt th at *

we were acting as good citize ns, while fully recog nizing th at the fina l 

decision on the nominat ion would res t with the recom me ndation of 

the White House and its confirma tion in the Sen ate.

Nevertheless , we wa nte d to make it clear th at the vac ancy on the 

TVA Board was a m at te r of much more than rou tin e concern, and 

should be given the most serious and tho ughtf ul conside ration by the 

ad mi nis tra tio n.

TVA dire ctly affects the lives of more than 6 million people livin g 

within its service are a and millions more who are eith er the victims 

or beneficiaries of its policies. TVA is no t ju st anoth er utility th at 

hap pen s to be owned by the Fed eral Government.

In a very real sense, TVA con stitute s a regio nal gov ern me nt, with 

as muc h direct influence as ma ny Sta tes. Th e ap po int me nt of a TVA 

dire ctor, in our view, is as serious a m atter as the election of a Gov ernor, 

a Sen ator, or a Me mber of the House of Repre sen tative s.

In testim ony before this com mittee on Ma y 6, 1975, we spelled ou t 

our concern th at T VA has long since ceased to be the bold new vision 

of Roosevelt’s time and has become, instea d, a corpo ration which is 

no t accoun table to the pub lic and which makes policy wi thou t co nsidera tion for the public good.

In our testim ony we a tte mpted to d em onstr ate t hat TVA , in purs uit 

of low-cost electri city , esta blis hed and followed coal proc urem en t 

policies which dis rupte d the in lustry and laid waste the land with a 

total disregard for the welfare of those who produc e the coal and th os e 

who live among the dev astation.

We offer th at tes tim ony as an app endix to this sta temen t and ask 

th at it be inclu ded in the record. (See p. 2)5.) It reflects our concern s 4

and sup ports o ur deep con viction th at the next dir ector of TVA mus t 

be a m an or woman of ability, unchallengeable principle, and d edica ted 

to esta blishing full public accountab ility for this supposedly publi c 

agency.

Tho se are, we believe, minimum sta nd ards for an acceptable ap ­

point me nt. Measured aga inst those sta nd ards, the care er of James F.

Ho oper II I, falls far short.

He might go unn otic ed as an app ointee to one of the inn um era ble 

advisory com mittees in Washington th at are alre ady packed with 

frien ds and relatives of political figures. But the Tenn essee Valley 

Au tho rity is not ju st anoth er com mittee and this appo int me nt must 

no t go unnotic ed. In our opinion, it deserves forceful and determ ine d 

opposition sufficient to force reconsider atio n by the White House.
199

The inform atio n available on Mr. Hoo per is admi tte dly incomplete . 

Clearly, however, he has left behind him a trail of dub ious business 

dealings which of them selves were enough to prom pt this com mittee 

to postpone previou sly scheduled hearing s and conduct a thorou gh 

review of his financial backgroun d. I un derst and th at the inv estig ation has been completed and will soon become available to the pub lic.

Mr. Hooper is reliably rep ort ed to have sou ght the nomination 

thro ugh influential friends active in the Repub lica n Pa rty in Mississippi. His wife is the Repub lica n Na tional Comm ittee-w oman from 

th at State . When Mr. Ho oper’s nam e floated in over the transo m at 

the White House, it was no t hard to imag ine the tho ug hts th at must 

have passed through the min ds of Mr. Fo rd’s political advisers.

Looking no t very far ahead to the cam paign ba ttles of 1976, the y 

had a clear opp rotunity to tra de a favor. Mr. Hoope r’s wo rth could be 

measured in political sup port.

Bu t wha t abou t the people of the TVA area? And wh at about the 

yea rs to come, when they will be saddled with a TVA director who 

was once worth som ething, if only very briefly, to a Pr esiden t’s 

reelection efforts?

Mr. H ooper politically is a peri shable com modity , val uab le only 

throug h 1976, bu t his term run s for 9 years. The people of the TVA 

area will be living with him, if his nominat ion is confirme d, until 

1984.

Nat Caldwell, a veteran staff writer for the Nashville Tennessean 

who has covered TVA affairs for more than 20 years, att em pted to 

explore Mr. Ho oper’s past and rep orted his findings in a revealing 

article pub lish ed on June 22, 1975.

We subm it th at article in its en tir ety with our tes tim ony and ask 

th at it be included in the record of these hearings. It is, in o ur opinion, 

devasta ting. (See p. 223.)

Ite m: Mr. Hoope r publicizes himself as the inv estor of the Air 

Air Force ’s crash helm et, an accomplis hment of dub ious rele vance to 

TVA and one which he inclu ded in an autob iog rap hy provided to 

“ Who’s Who in Ame rican Politics. ” Tr y as he mig ht, Mr. Caldwell 

could find no evidence to supp ort the claim.

If Mr. Hooper has misrepresented himself in this m at ter, he is 

gui lty of no crime great er than excessive bravad o. But he should be 

questioned ab ou t it by the com mittee, and if he is unable to substa nt iate the claims which he has mad e for himself, it should be a 

m at te r of grea t concern for this com mittee.

Item : Mr. Hoo per has been asso ciated with business failures and 

resulting court actions which, while never resulting in anv dir ect 

con victions , have left a hea vy shadow of do ub t on his busin ess talents 

and , as the earlier testim ony ind icates, ethics.

As Mr. Caldwell re po rted :

Hooper was the promoter of a failed dairy inten ded to be Mississippi’s largest, 

and a failed pet food factory th at for a sho rt time enjoyed the largest sales volume 

of any in the South. He was a co-promoter of an insurance company which had 

its Tennessee license revoked in February 1970.

Mr. Ho pper has explained away all of these d isas ters , but they leav e 

the pe rsi ste nt impression th at he is dogged by incredible bad luck or 

sim ply ha s poor business sense. In eith er ev en t ther e is no im me dia tely 

ap pa rent o r discernible reason to sele ct him ou t of the mas9 of Am erican s for the high hon or of directing the Ten nessee Valley Autho rit y.
200

Compare thes e creden tials with those of the firs t three Direc tors of 

TVA. David Lilien thal, a brillian t lawyer who sp en t his whole life in 

pub lic service, had spen t 7 yea rs representing the city of Chicago in 

ut ility litiga tion and had been a mem ber of the Wisconsin Pub lic 

Seivice Commission. Du rin g th at time he had com pletely revamped 

the Sta te ’s utility code.

Ar thur E. Mo rgan had been a civil engineer for m ore than 30 ye ars 

and was a nationally recognized exp ert on con servation and rec lam ation. He had been presi dent of A ntioch College for several yea rs prior 

to his appointme nt. Harco urt Morgan h ad spent 14 y ear s as presi dent 

of the Unive rsity of Tennessee and was a professional agrono mist w ho 

had been director of Ten nessee’s Agricultura l Ex perim ent Stati on .

TVA has had only 15 Directo rs, and most of them hav e had substa ntial and recognized careers in work directly related to the ac tiv ­

itie s which the y have supervised as TVA overseers. In rec ent years 

the re has been an increasing tend enc y to rega rd thes e jobs as s uitable 

for filling w ith political app oin tment s, and a simu ltan eou sly increasing 

ten den cy for TVA to veer away from the pa th of public service on 

which it was first la unc hed . Now Presi dent F ord proposes to go fu rth er, 

with an appo intm en t bl atan tly no t based on merit.

We hope th at you will give this nomination inte nsive scrut iny and 

will withhold your su pp ort if you believe, as we do, th at this is a 

political and total ly unwa rra nte d appointme nt.

Mr. Hoo per cou nters the charg es mad e again st him by pointing to 

membership in variou s associations establis hed to lobby for developmen t of w ate rways and other projects. No do ub t these efforts deserve 

reward. But why should th at reward be pro vided by the p eople of the 

Tennessee Valley, and by our mem bers, who min e the coal for their 

gen erators and whose livelihoods are so dir ectly affected by TVA 

policies.

A final rem ark on this nomination relate s to the Caldwell article 

th at appeare d in the Nashville Tenne ssean Ju ne 22, 1975. In th at 

article Mr. Hoope r is quote d as saying:

I respect and admire both the purposes and achievements of the TVA, an d I 

know of no other Republican, with a chance of White House appointment, who, 

conscientiously, as I can, could stick in there and uphold Red Wagner’s hand.

This is no t the time to debate the perf orm anc e of Mr. Wagne r bu t 

I believe this sta temen t by Mr. Hoope r is cause for concern. Mr. 

Hoo per has made it clear he will no t be brin ging any new ideas to 

the TVA at a time in its history when the y are mo st needed. His 

confirm ation by t his body will merely allow a continuation of business 

as usual and Aubrey Wagn er’s d omination of th at agency.

We subm it th at Presi dent Ford did no t make much of an effort 

to find th at bes t qualified man o r woman to serv e the 6 million people 

of the Tennessee Valley.

We subm it with this testimony , for inclusion in the record, background inform atio n conc erning Tom Gish and John Gibbons, two 

ind ivid uals prev iously recommended for this nom ination . We do 

so, n ot with any hope th at the White House will volu nta rily reconsider 

this nom ination , but because of the s tark con tra st betw een the qualifications which we sought and found, and those which the W hite House 

sou ght and found.
201

We subm it th at Mr. Ho oper’s nomination is tran sp aren tly political 

and totall y witho ut mer it. Th e Wh ite House should hav e withd raw n 

it, bu t failing th at , we urge its prom pt defeat by thi s com mittee.

Gen tlem en, the issues facing the TVA Board are complex and the 

resulting policies will have a widespread and lasting effect. Before 

this com mittee acts on this nom ina tion, 1 ask th at the members tak e 

the following into c onsideration : one: Th e TVA is amon g the Nation’s 

largest corporatio ns. Its asse ts total over $4 billion and it employs 

over 26,000. Is the com mittee convinced th at Mr. Ho oper’s back4

ground ind icates he is capable of co mp ete ntly adm inistering a busin ess

of this size and complexity?

Two: At pre sen t the TVA is engaged in a con trover sy invo lving 

its proposed switch from coal-fired to nuclear-pow ered elec tric 

* gen erators, a most serious and far-reaching decision. Of all the Natio n’s utilities, TVA has the strongest comm itm ent to nuclear power.

La st week’s newspapers were filled with articles concern ing the 

resignatio ns of exp erts in the field of nuc lear energy. These highly 

qualified men resigned because of their fears concerning the spread 

of nuclear pow erplants. Is this com mittee convinced Mr. Hoope r is 

knowledgeable enough in the field to make soun d decisions concern ing 

nuc lear power?

Th ree : Similarly, in the pu rsu it of low cost electricity TVA is 

moving to W estern ma rkets for low cost str ip mined coal, aba ndoning 

once again the TVA region’s bo untifu l coal supplies. Does M r. Hoope r 

realize the TV A’s obligations to people and economy of the TVA 

region?

Is Mr. Hoo per co gniz ant of the m any social, economic, and envir onmental factors which mu st be eva lua ted as the TVA mak es policy 

decisions concerning the use of cheap, strip-m ined coal versus coal 

readily available in the TVA region?

Fo ur: Consu mer groups a cross the Na tio n are mo unting cam paigns 

to in sti tute ma jor changes in the rate str uc tur es and pric ing policies 

of electric utilities . Large ind ustrial users have been able to receive 

extremely cheap power because small consumers pay a disproportionate ly high price per kil ow att for the ir electricity.

This is due to the descending block rates which are used by alm ost 

, all utilities includin g the TVA. Fro m Califor nia to New Y ork consumer

groups are fighting before pub lic utilities commissions and in the 

State legislatures and cou rts for the insti tut ion of lifeline rat es, fair 

share rat es, and inverted block rate s.

These new rate str uc tur es rep res ent an end to cheap elec trical 

powe r for indu str y which is subsidized by the small consumer.

As the Nat io n’s largest utility, with $560 million in reside ntial 

sales and $670 million in commercial sales, the TV A’s p ricing policies 

affect 2.2 million residen tial and 263,000 commercial and indu str ial 

users.

With the tre nd tow ard more equ itable rate str uctur es, the TVA 

will cer tainly be confronted with the se issues time and again. I t will 

be necessa ry for this gian t utility to mak e ma ny ma jor decisions 

concerning its o verall pricing policy.

Is Mr. Hoo per familiar enough with economics, and more spe cifically with the peculiar economics of the electric utili ty indu str y, to
202

make intellige nt decisions in this rega rd? Does he have adequ ate 

concern for the consum ers’ interests? With no prev ious experience 

in the utility ind ustry , does he know enough ab ou t electrical power 

ra te str uc tur ing and rela ted issues to justi fy his appoint me nt to a 

position on the board of directors of the Nation’s largest utility?

Senat or R andolph. Th an k you very muc h for you r testim ony, 

Mr. Sav itsky. Is there furth er testim ony th at you thi nk you shou ld 

give to the com mittee? Are you accompanying Mr. Sav itsk y?

Mr. Lawson. Yes.

Senat or R andolph. I didn ’t know wh eth er Mr. Lawson wante d 

to testify. I wante d to give him the op po rtu nity to do so, if he wished.

Th an k you very much.

Mr. Savitsky. Mr. Chairma n, may I offer as a final com ment, 

in view of much of the testim ony th at was placed here before this 

distinguish ed group, I believe I have to share, along with the res t of 

th e Un ited Mine Wo rker s and their constitu ents, the urgency in this 

matter. We cannot perm it at this time, as—the magnitude of the 

prob lem is great in the Tennessee Valley— the nomination of this 

person to go thro ugh .

After listening to testim ony and reading all ab ou t the backg rou nd 

and the qua lific ations of this person and when obviously the tra ck 

reco rd is so bad, I think this com mittee shou ld care fully consider the 

nomination . This corpo rat ion ’s responsib ility is so great and so man y 

peop le will be affected by it. Th ank you.

Senat or R andolph. Th an k you very muc h. I wish, as cha irm an, 

to mak e this fu rth er com men t. You and oth ers have spoken of the 

necessity, as you un de rst an d it, for a person to fill this position who 

has cer tain qualifica tions.

It is inc um bent upon those associate d with this subje ct m atter, 

from the Wh ite House and including, of course, the Congress, to act 

on the m atter of the vacancy.

Th e vac ancy for which the nomination has been made occu rred on 

May 18, 1975. There have been a series of situatio ns which hav e delayed action on these problems.

We hav e had in the pa st hearing s on other nom inees who hav e 

come before us and who are mem bers of the boa rd. Mr. Jenkins , for 

exam ple, Mr. McBride, for example, and Mr. Wa gner, for exam ple. 

Mr. Wagner, of cours e, was associated with TV A before he became 

a member of the Board.

As these hav e moved along, I think th at we have trie d to be th or ­

ough in our hea ring process in all these instan ces . Bu t now I would 

wan t to share with Senator Baker and oth er mem bers of the committee, because I thi nk we are of one mind on thi s m atter, th at we 

must n ot ourselves c ontribute to the dela y in the filling of this position.

If the com mittee acts in one way or the oth er, th at is a m at te r for 

the ind ividual conscience and understandin g of each member. We 

mus t no t dela y our actio n.

So, within a very reasonable time—and I hope th at is a m at te r of 

day s—we will be able to give the ju dg me nt of the c ommittee m em bership on the nomination of Mr. Hooper.

I think th at the TV A area, in fact, the country , has b een ill-served 

by this long period of uncerta int y, from May 18, 1975 when the 

vac anc y occu rred, and now some 10 mo nth s later, with no resolution 

on this situ ation.
203

Of course, we have th at in other boa rds, as Senat or Ba ke r knows.

I am no t referring politically to the presen t adminis tration. Let ’s 

tak e the position th at it is necessary to be a continuing one of the 

person who is responsible for the health and safety of coal miners, 

where the acti on is delay, delay, delay.

I think it is no t a carping criticism th at I mak e, th at we now hav e 

many, ma ny positions to be filled in the Fed eral Go vernme nt by 

appo int me nt and confirmation by the Senate.

This is certainly one th at holds a prior ity and one which this 

com mittee is directly concerned with.

Senator B ake r, do you hav e com ments?

Senator Baker. No, I don’t, Mr. Chairma n. I think th at was a 

very excellent sta temen t and we will profit by hav ing had it.

I might point ou t th at the ter m expired on May 18, 1975 and we 

got off t o a p retty good s tart. A nom ination was sen t up about 3 weeks 

lat er and we had our first hea ring scheduled for July, ju st about a 

mo nth late r.

Bu t the n it was postpon ed so th at the staff could do certain field 

inv estigations which took some time. The n, in December, it was 

rescheduled and postponed again, as you recall. So for a va rie ty of 

reasons, no t all of them at the req uest of the com mittee, the nomination hea ling s hav e been prolonged.

I agree with you, Mr. Ch airma n, we oug ht to dispose of the matter 

pro mp tly. I hope we can finish this witness list tod ay and move on 

then, even this week, for consid eration of the mark up in the committee .

Senator R andolph. Th ank you , Senator Baker.

Th an k you, gentlemen .

Mr. Savitsky. Th an k you for the privilege of being here.

Senator R andolph. You did mentio n, Mr. Savitsky, I understand 

th at the investiga tion has been completed bu t is no t ava ilab le for 

public scr utiny.

In yo ur testim ony as it was writte n, I believe I hea rd you say th at 

it was read ied for public scrutiny.

Mr. Savitsky. 1 had ju st learned prio r to my app ear anc e here th at 

th at was made available. Tha t is the reason why I entered it in my 

testim ony. So there has to be a change made.

[Discussion off t he record.]

Senator R andolph. Mr. Savitsky , with the app rov al of and consultation of ma ny persons, we had the desire to make thi s available, 

even though it was no t in pri nt. We had been working from galley 

proofs. But we will have the staff analysis made available very soon.

Senator Baker. It has a lready been done.

Senator R andolph. What I am saying is we will correct it. I think 

about 15 copies have already been prepared. I hope th at has been 

enough. We would wa nt to mak e it available as quickly as we can. I 

presume th at has been done. It has been s ent to the printer for furth er 

prin ts.

I than k you for calling attentio n to th at matter .

Mr. Savitsky. Th an k you, Mr. Chairma n.

Senator Randolph. Th ank you , Mr. Sav itsk y.

Did you wish the let ter from Arno ld Miller as presi dent of the 

United Mine Worker s of America included in the record?

Mr. Savitsky. Yes, sir.
Senator Randolph. He addressed the committee. I thought you 

might look at the letter. Perhaps your testimony has taken care of 

that matter and from the explanation of why he wasn’t here, we can 

determine that. It was a letter of opposition?

Mr. Savitsky. Yes, sir.

[Mr. Miller’s letter and attachments to Mr. Savitsky’s statement 

follows:]

United Mine Workers of America,

Washington, D.C., June 26, 1976.

Hon. J ennings R andolph,

Chairman, Public Works Committee,

U.S. Senate, Washington, D.C.

Dear Senator R andolph: The United Mine Workers of America is opposed 

to President Ford’s nomination of James F. Hooper to the Tennessee Valley 

Authority Board of Directors.

This nomination is a ma tter of considerable nation al importance in my opinion 

I have had the opp ortu nity to witness the direction in which th e TV A has moved 

in recent years, and I see a distressing failure to respond to the needs of the 

people of Appalachia.

The Ford Administration had an opportu nity to move decisively and constructively to demonstrate a comm itment both to the agency’s future and to the 

people of Appalachia when a vacancy occurred on TVA’s Board of Directors. 

Sadly, Mr. Hooper’s nomination was a purely political decision. Mr. Hooper’s 

main qualification for the position is tha t he is the husband of a member of the 

Republican National Committee from Mississippi.

The position requires expe rt administrative experience. Mr. Hooper has been 

involved in three business deals where the companies went bank rupt. Mr. Hooper’s 

failing business ventures included a dog food canning company, real esta te development, and an insurance company. None of these businesses, nor Mr. Hooper’s 

handling of them, qualify him for the post he has been nominated to by the 

Administration.

The TV A as a government agency has important responsibilities to the people 

it serves. The UMWA is opposed to the ill-advised nomination of Mr. Hooper 

because we don’t believe he will fulfill these responsibilities.

We feel th at Mr. Hooper is unqualified for the hingly important job of being 

one of the three TV A Directors whose decisions have a tremendous effect on th 

lives of 6 million people who are served by the Tennessee Valley Authority. Mr. 

Hooper’s record is not one which would inspire public tru st in him, either as an 

administrator or as the kind of open responsible public official who is desperately 

needed at the TV A.

The UMWA feels th at if the TV A is to regain the confidence of th e people of 

the Tennessee Valley region, the nominee for the vac ant position on the TV A 

Board of Directors must be a man who is qualified beyond a doubt and not merely 

a political appointee. Mr. Hooper does n ot meet these imp ortant criteria. 

Sincerely —

Arnold Miller.
205

STATEMENT

OF

ARNOLD MILLE R

PR ES ID EN T

UNI TED MINE WORKERS OF AM ERICA

BEFORE THE

UNI TED STA TES SENA TE PU BL IC WORKS COMMITTEE 

WASHINGTON, D . C .

MAY 6 , 1975

67-520 0 - 76 - 14
Mr. Chairman and members o f the Committee, my name is 

Arnold Miller, President of the United Mine Workers of America.

I appreciate your invitation to participate in these important 

hearings on the Tennessee Valley Authority.

This Committee has decided to explore some very serious 

problems, and in doing so, you are hearing expert testimony from many 

witnesses. At the United Mine Workers of America, we have been 

taking a hard look at TVA for some months. Following these hearings, 

we plan to release a report setting forth our views in detail.

Today, however, I will try to be brief. I simply want to bring to 

your attention some of the concerns we have about the Tennessee 

Valley Authority and offer some suggestions for your consideration.

We have a point of view which is obviously different from 

some of your other witnesses. We are a union of coal miners.

We produce raw energy — and the energy we produce is vital to the 

future of the United States.

Our first priority is to produce coal safely.

Our second priority is to produce it without destroying the land we 

live on. Our third priority is to produce it efficiently and 

economically in whatever quantities the nation needs.

These priorities are a matter of common sense to us.

It disturbs us deeply that they sometimes put us on a collision course 

with the Tennessee Valley Authority.

For many years, TVA has been the largest single consumer of 

coal in the United States. As such, TVA has had an enormous impact on 

coal technology, and that impact has been felt in every c o m e r of the
207

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coal mining communities of Appalachia — far beyond the Tennessee 

Valley itself. We live in those communities, in those hills. We work 

in those mines. We feel the impact of TVA directly, every day.

< We believe that TVA has a clear responsibility not only to the people

it supplies with electric power, but also to the people who provide 

the raw energy to make that power possible. I am sorry to say that 

TVA has not been a friend to us.

I don't want to be misunderstood. We are not here today to 

attack the basic philosophy behind the Tennessee Valley Authority.

TVA was needed desperately back in 1933, and the basic idea is still 

sound today. In Roosevelt's words, TVA was designed to be 

"a corporation clothed with the power of government, but possessed with 

the flexibility and initiative of a private enterprise."

TVA's accomplishments over the past 42 years are truly awesome, 

and they prove bevond any doubt that the basic idea made sense and 

worked well. «

The problem is that this is not 1933, and TVA is not what it 

set out to be. The bold new vision o f Roosevelt's time has been 

replaced by something ugly and dangerous. We still have a corporation 

clothed with the power of government, but that corporation is not 

accountable to the public and makes policy without consideration for

* the public good. TVA no longer combines the best of government with

the best of private enterprise. Instead, it combines the worst.

This docs not mean that TVA should be abolished. Instead, we

must try to figure out what went wrong, and why. Then we must look
208

the

to be used as

and as a way of 

companies.

(3)

for ways to make TVA a responsivo public servant again. We would not be 

here today if we did not believe that this can be done. 

t Long before TVA was actually brought into being,

supporters of public power were arguing for a "yardstick" 

a way of determining the actual costs of power production 

controlling the excessively high rates charged by private

The yardstick concept was built into the legislation creating TVA in 

1933 and remains as a central reason-for-being four decades later. In 

pur view, this valuable concept has been irresponsibly used by TVA's 

board of directors, with terrible consequences in the past and the 

prospect of more to come.

Section 15 of the TVA Act, which deals with electric power 

generation, charges TVA with establishing rates "as low as are feasible." 

In the Depression years, when most of TVA's power production came from 

hydroelectric generating plants, this language — and its interpretation 

by the TVA board - caused few if any serious problems. At that time, 

TVA's principal opposition came from conservative state and local 

governments and their powerful allies in private industry. The private 

utilities had reason to worry about the new yardstick and they fought to 

destroy it. At that time, and under those circumstances, it made sense 

to insulate TVA from public control.

But then, after World War II, the power demands of the TVA 

. service area clearly and quickly outstripped the system's hydroelectric 

capacity. Within the space of a few short years, T VA became the nation's 

number-one coal buyer and the nation's number-one builder of

conventional coal-burning generating stations. And this was where the 

trouble started with Section 15 of the Act and with the yardstick idea.
209

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Like oth er u tilitie s , TVA campaigned hard to get it s customers 

to use more ele c tr ic it y , and succeeded so well th at the people of the 

TVA servic e area today use about twice as much ele c tr ic it y per ca pi ta 

as the average American. Then, to de liv er th at e le c tr ic it y at the 

comparatively low ra te s for which the agency was famous, TVA's board 

of director s led the agency into a se ries of irre sp on sibl e de cis ions.

The worst of these was the decis ion to se t the pr ice of coal so 

low th at it could not be met by companies involved in underground 

mining. You must remember what the coal market looked like in the 

1950's and 1960's. The demand for coal had peaked immediately aft er 

the war and then had gone into a long de cline, which was accelerated 

by the avail abil it y of re la tivel y cheap o il and gas and the conversion 

of the coal-burning railr oa ds to de is el locom otives. The coal 

industry had turn ed out 630 mi llion tons in 1948 and had found 

customers for a ll of th at production . By 1955, production had dropped 

by nea rly 40 percen t and millio ns of tons of th t production could not 

find buyers. Day in and day out, companies wc’.c bankrupt and miners 

went on re li e f. Anybody who can remember Appalachia 15 yea rs ago knows 

what I am talking about. It was a nightmare, and Appalachia has never 

to ta ll y recovered from the shock.

TVA was st ra te gic al ly located within easy reach of the 

na tio n’ s rich es t and most fu lly developed coal fi eld s. By 1959, TVA 

was buying' about three-fo ur ths of the coal produced in Tennessee and 

more than a fourt h of the coal mined in Kentucky. Because the market 

was so so ft na tion al ly , and because TVA bought coal in larg er volume 

than any oth er customer, TVA could and did se t the pr ices i t would pay.
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Those prices ranged anywhere from $1.00 to $3.00 per ton below the 

actua l cost of produ ction at the average deep mine in Appalachia.

A coal company could successfu lly pro fi t from a TVA co ntract only by 

reducing wages and elim inating fri ng e be ne fits, laying off men, 

cu tting corners on safety and maintenance, gouging its othe r custo mers, 

or by going into st ri p mining.

All of these things happened. The blame fo r the 

consequences must be laid squa rely at TVA's door.

The United Mine Workers, which had gone through a long and 

bloody figh t to organize the southern Appalachian co al fiel ds in the 

1930's, lo st it s grip in the 1950’s and early 1960's as one company 

af te r another broke away from union wage scale s and union sa fety 

standards in order to compete in the a rti fic ia ll y depressed marke t. 

Mechanization and the loss of markets combined to lay off one out of 

every thr ee miners in Appalachia — men who had no oth er sk il ls , and 

who were too crippl ed with black lung to trav el acro ss the coun try in 

search of work. The frequency of fa ta l acc idents climbed during 

those grim years, but the men dying in the mines made no impressio n on 

the di re ct or s of TVA. Coal customers got tire d of rec eiv ing 

substandard coal at in flat ed prices from companies str ug gling to 

operate under TVA co nt racts, and the sh if t away to o il and gas 

ac celer ate d. And acro ss the mountains of Appalachia, the f irs t raw 

scars of str ip mining began to appear.

Remember th at Roosevelt had said th is of TVA, back in the 

early years: "The agency's real purpose is the reclamatio n of land , 

of human being s."

That great purpose should have governed the direc to rs of TVA
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and sh o u ld h av e c a r r i e d more w e ig h t w it h th em th a n th e la n g u a g e o f S e c tio n 

IS . I t s h o u ld hav e in f l u e n c e d th em wh en th e y w ere b u y in g c o a l . I t s h o u ld 

have made th em th in k tw ic e a b o u t t h e i r y a r d s t i c k . .

O ver th e y e a r s , TV A's p u r c h a s in g p o l i c i e s had th e e f f e c t o f co mp l e t e l y d i s r u p t i n g th e A p p a la c h ia n c o a l m in in g i n d u s t r y . We a r e g o in g to 

be l i v i n g w it h th e c o n se q u e n c e s f o r a lo n g ti m e t o co m e. S to p and t h i n k , 

f o r a m om en t, t h a t i f th e deep m in es o f A p p a la c h ia had b een e n c o u r a g e d to 

d e v e lo p s lo w ly an d s t e a d i l y o v e r th e y e a r s , we w oul d have n o th in g to w o rr y 

a b o u t now when we lo o k to w a rd th e g o a l o f d o m e s tic e n e rg y s e l f - s u f f i c i e n c y . 

But th o s e m in es a r e n o t t h e r e . The s k i l l e d m in e rs a re n o t t h e r e . Th e 

c o m m u n it ie s to s u p p o r t th em a r e n o t t h e r e . I t w i l l ta k e m a s s iv e com m it m ents 

o f money and ti m e to b u ild th e in d u s t r y t h a t we n eed in A p p a la c h ia in 

th e y e a r s a h e a d .

The d i r e c t o r s o f TVA d e fe n d t h e i r p o l i c i e s as b e in g c o n s i s t e n t w ith 

th e n eed to s u p p ly ch ea p p o w er. S in c e I know th e y a r e n o t s t u p i d men , I 

g u e ss th e y m ust be b l i n d . I am n o t an e c o n o m is t, b u t i t ta k e s me no ti m e 

a t a l l to s e e th e fl a w in t h e i r r e a s o n in g . T h e ir r a t e s a r e c o m p a r a tiv e ly 

low o n ly b e c a u s e so m eb od y e l s e i s p ic k in g up th e t a b .

The r e c o r d w i l l a ls o show t h a t TVA i s c o n tin u in g to mak e i r r e ­

s p o n s ib le d e c i s i o n s an d to e s t a b l i s h i r r e s p o n s i b l e p o l i c i e s in th e nam e 

o f ch eap p o w er, an d in th e nam e o f a y a r d s t i c k t h a t lo n g s in c e c e a s e d to 

have an y m e a n in g . In th e l i m i t e d ti m e a v a i l a b l e to d a y , I w ould l i k e to 

m e n ti o n t h r e e s p e c i f i c a r e a s w her e TVA p o l i c i e s w i l l le a d th e n a t i o n i n t o 

t r o u b l e u n le s s TVA i s f o r c e d to c h an g e c o u r s e .

F i r s t : TVA i s h e lp in g to s u b s i d i z e th e d e v e lo p m e n t o f w e s te r n c o a l 

a t th e e x p e n s e o f th e c o a l r e s e r v e s w a itin g to be d e v e lo p e d in th e e a s t .

In a l e t t e r to S e n a to r R andolp h l a s t N ovem ber , A ubre y W ag ner , C hai rm an 

o f TV A's b o a r d , j u s t i f i e d t h i s mov e once a g a in a s s t r i c t l y a m a tte r o f 

c o s t , a r g u in g t h a t w e s te rn c o a l was mor e r e a d i l y a v a i l a b l e a t th e p r i c e s

t h a t TVA wa s w i l l i n g to p a y .
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L e t’ s ke ep c e r ta in is s u e s in p e rsp e c ti v e h e re . TVA has to ld 

th is Committee of it s problems caused by the sharp inc reases in the pr ice 

of coal sinc e 1973. Coal companies have in flat ed the pr ice of th ei r 

product beyond a ll reasonab le le ve ls, and th eir greedin ess is being paid 

fo r by everybody who uses ele ctr ic it y . We have no qu arrel with TVA's

claim th at it is being gouged. But that is not the iss ue here — and it 

probably should be mentioned in passing th at when the shoe was on the 

oth er fo ot , TVA was ju st as hard-h earted as the coal opera tors are today. 

I am inc lin ed to say that they deserve each othe r. The only problem with 

th at is that when they get each ot he r, the re st of us fe el i t when the

b il ls come due.

The UMWA is not opposed to the development of western co al, 

as long as th at development is planned and balanced against the 

av ai la bil it y of coal closer to TVA’s servic e area '.n the East. But keep 

th is in mind: If we had no coal west of the Miss iss ipp i -- if we had 

no reserv es the re to develop -- w e would s ti ll have enough in the East 

to-supply the en tir e country and much of the re st of the world fc r the 

next century. By even the most con servati ve e. tim at es , we have more 

than 23 billion tons of deep-mineable coal av ailable to us in the 

immediate ser vic e area of TVA (Alabama, Kentucky, Tennessee, and 

Virgini a). At TVA's cu rre nt ra te of consumption, th is repr esen ts a 

supply of nea rly 600 years . Obviously, much of th at coal would go 

elsewhere, but the poi nt is s t i l l true that it is th er e, waiting to be 

developed; and any sensible plan fo r the use of our resource s would 

look to th at coal f ir s t.

But TVA does not plan th at way. Having deliv ered a nearly 

fa ta l blow to the Appalachian coal ind ust ry 20 years ago, TVA is 

pe rfec tly willin g to do i t aga in. If you remember the Appalachia of 

20 or even 10 years ago — if you know the pa rts of Appalachia th at
213

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have never reco vered, even today*

Second: TVA is now turning to nucle ar power in a big way.

I he si ta te to comment on th is , for an obvious reason . The United Mine 

Workers of America is a union of coal miners. We do not rep res ent 

nuclear engineers or tec hnicians and it is easy to dism iss our view on 

atomic energy as being preju dic ed. But the fa ct is th at we are not 

bli nd. We recognize the need fo r th is natio n to develop all of its 

sources of energy in good time. We are not opposed to so la r energy 

even though we do not rep res ent the sun in co llec tive bar gai ning.

We are not opposed to geothermal energy. We are not opposed to 

windm ills. But we know something about coal. We know how much of it 

the re is under our fe et . We know th at i t repr es en ts more than 

80 percent of the reso urces avail ab le to the United Sta te s, and that 

it accounts for only 20 percen t of the energy supplie d to us today.

So i t is only reason able fo r us to belie ve th at TVA, sit ti n g almost 

di re ct ly on top o the fi ne st supply of coal in the United Sta te s, 

should give th at coal pri ori ty over the atom. You are hea ring from 

other witnesses about the sa fety problems th at TVA is experie ncing.

We share th eir concerns. We know th at coal can be mined sa fe ly , even 

though few if any companies have ever given sa fety top p ri o ri ty . We 

are not so sure about nuc lear energy. Too many problems remain 

unsolved. TVA's dec ision — made, as always, without publi c hearings 

to sh if t about 90 percen t of it s fu ture gen erating capacit y to nuclear 

is another way of abandoning the reso urces and the work force of 

Appalachia.

Third: TVA proposes to acq uire the la rg es t coal company in

the world and to mine it s own coal on a massive sc ale. TVA's of fer
214

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to buy Peabody Coal Company fo r a re po rted $1.2 b il li o n poses some very 

se riou s problems which must be explored fu ll y , not only by th is 

Committee and the Congress as a whole but also by the Federal Trade 

Commission.

The coal in du stry is in cr ea si ng ly co nc en trated , and with in th at 

in du st ry , Peabody Coal is an extremely pow erful fo rc e. I t has always 

been a very tough o u tf it to de al with. Peabody makes i t s own ru le s and 

has very l i t t l e re sp ec t fo r anybody who opposes them. Thousands of our 

members w ill vouch fo r th a t. Fed era l and st ate mine in sp ec to rs w ill 

ag ree. S ta te le g is la to rs w ill ag re e. The UMWA is not at a ll happy with 

th e pros pe ct of merging Peabody in to TVA. Bas ic al ly , i t is a m at te r of 

combining th e power of two or ga ni za tion s which are al re ad y too pow erful 

and which use th e ir power, without rega rd fo r the public.

Peabody is the company which is famous fo r having done away 

with the town of Pa ra di se , Kentucky, so th at coal could be mined fo r a 

TVA pla nt. Ke should not fo rg et th at TVA has the power of eminent domain 

I see no rea son to be liev e th at TVA would use th t power wise ly i f i t 

wanted th e coal th at somebody's house or town happened to s i t on. In 

the name of cheap power, the town or th e house would go.

Pea body's mines are union mines now. We have no rea son to 

be lie ve th at TVA would w illi ngly reco gn ize the UMWA's ri g h t to 

repr es en t those miners. I t w’as no t so long ago th at TVA p o li cie s

helped to dr iv e the union ou t of sc or es of mines in Ap palachia . We 

sec the p o ssib il it y of a very long and b itte r stru ggl e with TVA i f the 

agency ac qu ire s Peabody. We do not re li sh the ide a o f de al in g with 

TVA as an employer a ft e r see ing fi rs t- h an d it s public-bc-dam ncd

a tt it u d e s at work over the pas t 20 ye ar s.
215

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Wo ore not automatically opposed to the idea th at some coal 

should be mined under pub lic co ntro l. But TVA, as it is pr esen tly 

str uctur ed and opera ted , is a public agency in name only. TVA's 

ordinary way of doing business is behind closed doors, and i t took 

The Mountain Eagle, a Kentucky weekly paper, more than a year to 

pry those doors open even a l it tle . We have no reason to believe th at 

thin gs wi ll change.

The three-man board of di re ct or s should include public 

represen tat ion. Accordingly, the UMWA has proposed the nomination of 

Tom Gish, ed ito r-pu blishe r of The Mountain Eagle, a man who has been 

fig hti ng for the people of Eastern Kentucky for nearly as long as TVA 

has been victim izing them. We note th at Congress will more likel y 

accept a conventional poli ti cal nomination by the Ford Admin istratio n. 

If th at should be the case, we would have even more reason to oppose 

TVA's ac qu isi tio n of Peabody and even more reason to figh t for a basic 

overhauling of TVA's ch arter .

The nomination to TVA's board is one a ja where the public 

should be involved. There are othe rs. TVA should es ta blish po lici es 

only aft er open pub lic hea rings, and TVA business in general should be 

opened to public scrutin y. We have no in te re st in turning TVA into 

another Appalachian Regional Commission, blown every which way by 

whatever poli ti cal winds happen to be going around on a given day.

We recognize the need for TVA to be abl e to pla n, and to carry out its 

plans without unreasonable poli ti cal in te rfer en ce . But, at the same 

time, it is vit all y important to permit ci tize n pa rtic ip at io n in ra te ­

making and in dec isions about the u ti li za ti o n of resource s. As a 

na tter of simple connon sense, the people affected by TVA must have 

the opp ortunity to influe nce it s po lici es . They lack th at opportu nity
216

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today. For more than 20 years, TVA has not re al ly been accountable to 

anybody. We have paid a high pr ice for th at, and the time has come to 

give TVA a new direction and a new purpose. This Committee and th is 

Congress have the re sp on si bi lity to do th at, and we of fe r our supp ort.
217

BACKGROUND INFORMATION 

ON

THOMAS E. GISH

M arch , 197 5

THOMAS E. GISH, e d ito r -p u b lis h e r o f The Mou ntain E agle , was born 

in th e E a ste rn Ke ntuc ky c o a l camp o f Se co on Ja nuary 28 , 19 26 . He 

a tt e n d e d th e U n iv e rsit y o f Ke ntuc ky a t L ex in g to n , wh ere he m aj ore d in 

jo u rn a li sm and e d ite d th e c o ll e g e ne w sp ap er , g ra d u a ti n g in 19 47 .

From 1947 u n t i l 19 56 , he wo rked a s a r e p o rte r fo r U nit ed P re s s 

I n te rn a tio n a l (t hen U nited P re s s ). As c h ie f o f th e w ir e s e r v i c e 's 

F ra n k fo rt b u re au , he co ver ed more the m t h i r t y s e s s io n s o f th e Ke ntuc ky 

s t a te l e g i s l a t u r e , e arn in g a r e p u ta tio n fo r do gg ed an d th oro ugh 

in v e s tig a tio n an d re p o rtin g o f is s u e s b e fo re th e le g i s l a t u r e an d o f th e 

lo bbyin g a c t i v i t i e s and o th e r e x te r n a l p re s s u re s which in flu e n c e d th e 

l e g i s l a t i v e p ro c e s s .

W ith h is w if e , P a t, a ls o a r e p o r te r , G is h re tu rn e d to h is home 

a re a of L etc h er Co un ty in E a ste rn Ke ntuc ky in 1957 an d purc h ase d 

The Mou ntain E agle , a wee kly p ap er w it h a t r a d i ti o n o f e d i t o r i a l 

in dep en den ce in i t s e a r l i e r y e a rs . S in ce th e n , over th e sp an o f e ig h te e n 

y e a rs and n e a rly a ‘‘ho us an d is s u e s o f th e p a p e r, he h as c o n s is te n tly 

b u i l t on t h a t tr a d iti o n .* To da y, The M ou ntain Eagl e h as earn ed n a tio n a l 

re c o g n it io n fo r i t s d e te rm in a ti o n to fa c e c o n tr o v e rs ia l is s u e s h ead -o n , 

re g a rd le s s o f th e co nse quen ce s.

I n i t i a l l y , th e c o n tr o v e rs ie s we re lo c a l in sco p e. E a rl y o n , fo r 

ex am pl e, G is h fo un d th a t co unty go ve rn m en t — in c lu d in g th e sch o o l 

sy st em — fu n c ti o n e d w it h i t s doo rs c lo se d t i c h t l y to th e p u b lic and th e 

p re s s . Ca mp aign ing to open th o se d o o rs, he t Ls co ve red th e p r ic e o f 

sp eak in g o u t: lo c a l bu si ne ss m en b o y c o tt e d h i t a d v e rtis in g co lu m ns , an d 

lo c a l p o l i t i c i a n s an d co a l o p e ra to rs su b s id iz e d a r i v a l ne w sp ap er to 

d riv e him in to bankru ptc y and o u t o f th e co u n ty .

T h e ir a tta c k f a i l e d , n o t becau se G is h ha d f in a n c ia l re s o u rc e s o f h is 

own (he d i d n 't ) b u t bec au se The M ou ntain E ag le ha d earn ed an d won th e 

str o n g su p p o rt and c o n ti n u in g lo y a lty o f i t s r e a d e r s . S c a tte re d a c ro s s 

th e h i l l s and holl ow s o f L etc h er Co un ty (and now a c ro ss a l l o f c e n tr a l 

A p p a la c h ia ), th ey ha d be en ab us ed an d ig n o re d fo r dec ad es an d th e y ha d 

ha d no v o ic e in th e p re s s u n t i l G is h and The Mou ntain Eag le p ro v id ed one.

• Now th ey w rite i t s lo c a l news co lu m ns , i t s f e a tu r e s , i t s l e t t e r s - t o - t h e -

e d ito r ; th ey h e lp sh ap e i t s o u tl o o k an d th e y re g a rd i t as t h e i r own; 

t h e i r s u b s c rip tio n s s u s ta in i t , an d in r e tu rn th ey g iv e f ie r c e su p p o rt to 

G is h 's in depen den ce , w he th er th ey a g re e w it h h is vie w p o in t o r n o t. As a 

r e s u l t , The Mou ntain Eag le comes a s c lo s e to tru e g r a s s - r o o ts jo u rn a li s m 

a s any o th e r pap er p u b li sh ed in th e U nited S ta te s to d ay .

Many o f th e p a p e r 's ca m pa igns ha ve bee n aim ed a t th e la r g e , 

im p ers o n al, d i s t a n t fo rc e s wh ich te n d to t r e a t A ppal ac hia a s an ec on om ic 

an d p o l i t i c a l co lo n y , wide open to e x p lo ita tio n and e x p e rim e n ta ti o n .

Fo r n e a rly f i f t e e n y e a rs , Gish has ta k e n a dim vi ew o f c o a l in d u s try
218

BACKGROUND INFORMATION 

ON THOMAS E. GISH 

Page 2

practices in the area, particularly strip-mining. Long before mountain 

stripping was widely opposed, Gish pointed out that it was an "economical" 

form of mining only because most of the costs could be passed on to the 

public; long after the coal operators had gone, local people would be 

left with the mudslides, the acid water in the creeks, the roads destroyed 

by overweight trucks. And, in the process, the deep-mining industry was 

being destroyed competitively. The Mountain Eagle exposed the fact that 

Tennessee Valley Authority coal purchasing policies were subsidizing the 

stripping industry (by setting purchase prices too low for deep mines to 

meet, in order to help maintain TVA's reputation as purveyor of cheap 

power) and pointed out the irony of a federal agency contributing to the 

destruction of a whole region in order to maintain its image as the 

benevolent giant of the neighboring Tennessee Valley.

The Mountain Eagle fought the Corps of Engineers when the Corps 

came up with a plan to build dams in Eastern Kentucky, thereby submerging 

most of the tillable land and forcing thousands of families to migrate 

(the Corps plan was successfully blocked); fought the Appalachian 

Regional Commission for its preoccupation with blueprints and bureaucratic 

jargon at the expense of any meaningful grass-roots development; fought 

the United Mine Workers for its failure to provide strong local leadership, 

and now fights the current administration of the UMWA for the same failings; 

and fought, generally, on behalf of the right of ordinary people to make 

their own decisions about their own lives.’ Not long ago, Gish summed up 

his feelings (and the feelings of his readers) this way:

"•••We need to be skeptical, to be suspicious, to ask a million

questions, and ti demand answers of all who would come to save us, no matter

what cloak they vear. Had we asked the right questions and insisted upon

the right answers at the right time, we might have been saved from a TVA

that devastates an entire area for its strip coal; from a Corps of

Engineers that builds dams simply to build dams; from a Forest Service that

serves only the lumber industry; from an Appalachian Regional Commission

that seeks not to assist but to eliminate an entire culture rich in its

own heritage. We might even have been saved from our own folly in turning

over the greatest wealth in the nation to a few moneymen from the outside

who wanted our minerals...

"We don't need any new ideology forced upon us. We just need help

in seeing and understanding all the alternatives. Give us all the facts —

and I mean all of them — and we will make the right decisions."

This kind of tough-mindedness continues to carry a high price tag. 

Having failed to drive Gish out of the mountains with economic sanctions,

The Mountain Eagle's enemies went a step further last August; in the dark 

of night they set fire to the newspaper's office. Despite extensive 

damage from fire, smoke, and water which destroyed all of the paper's 

photographic and composing equipment, Gish set out to complete the publishing 

of the issue in preparation at the time, only to be evicted as he was doing 

so. In defiance, he put the paper out from his living room until he could 

find another office.
219

BACKGROUND INFORMATION 

ON THOMAS E. GISH 

Page Three

The fire brough t a new ra ll y in g of support from the pa pe r’ s re ad er s, 

and widespread coverage national ly by re port er s who had come to know the 

pap er and to re sp ec t i t . Early in 1975, The Mountain Eagle received the 

John Pe ter Zenger Award, a cov eted mark of jo u rn a li sti c ex ce lle nc e awarded 

on the ba sis of nom inations by pre viou s re cip ie n ts , scr een ed by seve ral 

hundred edit ors (l ast ye ar , the award went to The Washington Post fo r its 

coverage of Watergate; the year pr ev io us ly, to The New York Times fo r its 

re por ting of The Pentagon Pap er s) . In accepting the award, Gish had th is

* to say :

" ... Freedom o f the press is no t something to be pla ced in a book and

file d away on a libra ry sh e lf . I f i t has any meaning at a ll, i t is in the

na ture o f what happens as we, as ed itors and publish er s, go ro utinel y

about our da ily bu sine ss.

"Press freedom is not something th at belong s on ly to the ed itor and

pu blishe r. I t re all y is a kin d o f common pr op er ty, in vo lv in g the re ad er 's

ri ght to inf orma tio n fu lly as much as i t does the publi sh er’s rig h ts .

The press w il l remain fr ee on ly so long as i t li v e s up to thos e deep

ob liga tion s to the read ers. The fou nders o f our co un try, in dra ftin g our

C onst itut io n, embraced the idea th at democracy was an ever growing th in g,

and th at each generatio n.h ad to giv e a new b ir th to freedom. The same is

true o f freedom o f the pr es s. I t w ill e x is t on ly so lon g as i t is a

li v in g , day-to-d ay pa rt o f us."

This att it u d e has been bas ic to The Mountain Eag le's re ce nt 

repo rtin g on the Tennessee Valley Autho rity, in numerous a rti c le s by 

re port er Jim Branscome. Gish de scrib ed the proc ess in h is Zenger award 

speech:

". ..T he TVA has deep te nta cl es in the mo untain s. I t is the la rg es t

purcha ser o f co al. In fa c t, i t is the mother o f s tr ip min ing in the

mountains, and more than than any othe r happening or in s ti tu tio n , i t is

re sp on sible fo r the des truc tion o f hundreds o f m ile s o f mountain side and

the upr ooting o f hundreds o f mountain fa m ilie s as the reg ion has had to

gi ve up i t s way o f l i f e and sur ren der to the bulldoze rs .

"TVA.. .was so much a pa rt o f the problem in the mou ntains th at we

* dec ide d to sta rt sta ff in g i t s monthly board meetings in K no xv ille , to see

ju s t what was goin g on. To our su rp ri se , we found we were the f i r s t

newspaper in the 40-y ear his to ry o f the Tennessee Va lley Autho rity to

attem pt to s ta ff a TVA board me eting. Our re po rter got thrown ou t. He

A

ke pt going bac k, and we dug in a ll the hard er to fi n d ou t ev er ything we

could about the agency. We asked lo ts o f sp e c if ic ques tions, see kin g

sp ecif ic informa tio n about TVA's coal buying p ra cti ces, the deals i t was

making with coal companies, i t s pla ns to sta rt s tr ip mining in plac es li k e

Montana and Wyoming, and we wanted to know about rumors th at TVA wanted

to buy Peabody Coal Company, the nat io n’s la rg es t coa l pro ducer . We knew

th at ev erything we wanted to know was in the TVA fi le s . We knew al so that

the pu bl ic inf orma tio n law passed by Congress would compel TVA to produce
BACKGROUND INFORMATION 

ON THOMAS E. GISH 

Page Fo ur

th e in fo rm a ti o n when we ask ed th e r ig h t q u e s tio n s . TVA th en in fo rm ed us

i t wou ld g iv e us no more in fo rm a ti o n , an sw er no mo re q u e s tio n s , u n le ss we

wo uld agre e to pa y i t s c o s ts . We s a id , s u r e , w e'd p ay. We d i d n 't know

what mon ey was in v o lv e d , b u t we th ought we we re p ro bably ta lk in g abou t a

fe w d o ll a r s to cover Xerox c o s ts . How wro ng we w er e. TVA in fo rm ed us we

wo uld ha ve to pa y th e h o u rl y wage o f a f i l e c le r k fo r ti m e sp e n t c o lle c tin g

in fo rm a ti o n , p lu s th e h o u rly wag es o f a s u p e r v is o r . To t e s t th is o u t, we 

ask ed a fe w q u e s tio n s , a l l r e a lly r e la tin g to o n ly on e q u e s tio n . We g o t

ba ck some an sw er s and a b i l l fo r $1 07 . We p a id th e b i l l . . .

"So much fo r Freedom o f In fo rm a ti o n , in th e vie w o f TVA. Freedom

o f th e p r e s s , free do m o f in fo r m a ti o n , o b v io u sly i s o n ly fo r th o se who can

a ffo r d to pa y.

"We ha ve n o t st o p p ed our e f f o r t s , ev en th ou gh we ha ve be en a d vis ed

we now owe TVA a 'v e ry s u b s ta n tia l' b i l l . We ha ve fo und and re p o rte d th a t

TVA i s co n sid erin g s tr ip m in in g th e Cumberland N ati onal F o r e s t, an d we are

pr ou d th a t be ca us e o f t h i s r e p o r tin g , Co ng re ss w ro te in to i t s s t r i p m in e

c o n tr o l le g is la tio n a co u p le o f mo nths ago a p ro v is io n s p e c i f ic a ll y

desi g n ed to keep TVA from s tr ip p in g th e fo r e s ts ... W e fo und TVA p la n s to

purc hase Pea body Coa l Company fo r mo re th an a b i l l i o n d o lla r s , a m aj or

s te p towa rd n a tio n a liz in g th e coal in d u s tr y . A ll in a l l , we ha ve fo und

ov er whe lm in g evid en ce th a t TVA, fa r fro m bei ng th e se r v a n t o f th e p eo p le o f

th e Ten nes se e V a ll e y , i s - t h e h ig h lo r d and m a ste r, a k in g p r e s id in g o ver

a c o lo n y , a kin g in no way a cco u n ta b le to th e p e o p le ."

P u b li c a c c o u n ta b ility , in G is h 's vie w , i s b a s ic to de m oc ra cy . His 

e n tir e c a re e r as e d ito r -p u b lis h e r o f The Mou ntain E agle has be en devote d to 

sh in in g b r ig h t li g h t s in to dar k c o rn e rs . He grew up in th e coal- m u sc le d 

m ount ai ns o f Ke ntucky and has sp e n t al m ost a l l o f h is l i f e th e r e ; he i s 

c lo s e ly fa m ili a r w it h th e comp lex pr ob le m s o f i sing re so u rc e s w it h o u t 

m is usi ng p eo p le , and in is s u e a f t e r is s u e o f h i 5 ne wsp ap er he has come o u t 

s tr o n g ly and a r t i c u l a t e l y on b e h a lf of th e p eople he r e p re s e n ts .

T his a t titu d e was on ce th e c o rn e rsto n e o f th e p h il o so p h y th a t 

bro ught th e Ten ne ss ee V all ey A u th o ri ty in to bei ng more th an f o r ty y ears 

ag o. Now, TVA i s a sp ra w li n g , p o w erf u l, remote g ia n t; i t s p o lic ie s 

a f f e c t th e liv e s o f m illio n s o f peo p le li v in g w it h in i t s s e rv ic e a re a and 

o th e r m illio n s be yo nd , b u t none o f them ha s had a sa y in th o s e p o lic ie s 

and a l l to o many ha ve be en v ic ti m iz e d by them .

As e d ito r o f a sm all wee kly d eeply ro o te d in th e comm unity i t 

se rv e s , Tom G ish knows mo re ab out a c c o u n ta b ility th an m os t go ve rn m en t 

o f f i c i a l s w ill ev er le a r n . In every is s u e , in i t s new s co lumns and i t s 

e d i t o r i a l s , The Mou ntain Eag le i s acco u n ta b le to i t s r e a d e r s . W itho ut 

t h e i r t r u s t , i t co uld n o t s u rv iv e . The re co rd o f th e p a s t e ig h te e n y e a rs 

i s e x c e p ti o n a ll y c le a r p ro o f o f Tom G is h 's q u a lif ic a tio n s f o r mem bersh ip 

on th e boar d of d ir e c to r s o f th e T en ne ss ee V all ey A u th o rit y — a boar d 

which m us t face th e im m ed iate c h a ll e n g e of g iv in g TVA a new se n se of 

d ir e c tio n and purp ose bas ed on op en poli cy -m ak in g , w it h th o se p o lic ie s 

c a r r ie d o u t in u n ity w it h th e peo p le whom TVA m us t le a rn t o se rv e over 

th e y e a rs ah ea d.
JO HN H. GIBBONS

EDUCATION:

B.S . (1949), Mathematics and Chem istry, Randolph-Macon College , 

Ashland, Virg in ia

Ph .D. (1954), Nucle ar Physics, Duke University

POSITIONS:

1954-19 65. Oak Ridge National Laboratory. Experimental research on 

nuclear reactions pertinent to nuclear reactor design and to understanding 

mechanisms o f heavy element synthesis in stars.

1965-1969. Oak Ridge National Laboratory. Group leader, nuclear 

geophysics. Research on ste llar nucleosynthesis and solar system 

elem ental abundances; nuclear techniques to explore composition of 

solid materials near their surface.

1969- 1970. Oak Ridge Na tional Laboratory. Director, Environmental 

Q uality Study Pro ject. Research on environmental problems associated 

with conversion of energy resources to ele ctr ic ity.

1970- 1973. Oak Ridge Na tional Laboratory. Director, ORNL - Nationa l 

Science Foundation Environmental Program. Research applied to problems

of energy conservation; environm ental impacts of coal mining and conversion; 

origins, flow , and fate of heavy toxic elements; solid waste management; 

regional land use and environm ental systems analysis.

Jan.-August 1973. University of Tennessee.Director, Environment 

Ce nter. Research and service in environm ental issues, with emphasis on 

private and public costs of coal mining.

Sept, 1973-Sept. 1974. Department of Interio r, Federal Energy O ffic e, 

Federal Energy Adm inistration: Dire ctor, Office of Energy Conservation. 

Responsibility for d ire cting overall Federal programs in research, develop ­

ment, and demonstration on energy con servation. Directed Federal Energy 

Management Program which reduced energy consumption by federal agencies 

in FY 1974 by 24% . Directed action programs with state and local government. Directed national education and public awareness campaign to 

conserve ene rgy. Developed issue papers and decision papers for administration and leg islative action programs in short-term energy curta ilm en t 

and longer term increase of U.S. ene rg y-effic ienc y. Developed program 

for interna tional cooperation (NATO-CC MS ) in energy conservation 

research and demonstration programs.

O ct. 1974- University of Tennessee: Director, Environment Ce nter. 

Programs o f research and service in a v ar iety o f environmental issues; 

with emphasis on energy supply and demand tra de -offs, inclu din g 

environmental imp lica tions; coal mining and conversion systems analysis, 

emphasizing environmental implications; land use patterns; and o ther 

so cio -te chnical issues associated with energy and environment.
222

Page 2

PROFESSIONAL ORG AN IZAT IONS AN D HONORS:

Fe llow, American Association for the Advancement of Science.

Fellow, American Physical Society.

Mem ber, Phi Beta Kappa, Sigma X i, Omicron Delta Kap pa, Sigma 

Pi Sigma, Pi Mu Epsilon, Pi Gamma.

Member, Eco logical Society o f Americ a.

Mem ber, US AEC Advisory Committee on Nucle ar Cross Sections 

(1969-70).

Member, Governor's Task Force on Energy (1973).

Governm ent Co-Chairm an, Na tional Petroleum Co un cil Committee 

on Energy Conservation (1973-74).

Mem ber, U.S . Delegation to Plenary Meetin g of the NA TO Committee 

on the Challenges to Modern Society (1974).

Consultant to Federal Energy Ad ministration, Oak Ridge Nationa l 

Laboratory, Oak Ridge Associated Universities.

American Men of Science, Who's Who in Atoms, Who's Who in Am erica. 

First Distinguished Service Award, Federal Energy A dm inistration.

Board o f Editors, "Energy Systems and Polic y" .

Consultant: FEA, ERDA, OTA

PERSONAL:

Born 1929, Harrisonburg, Virginia 

Married: Mary Ann Hobart, 1955

Ch ildren: Virgin ia (now at Smith C olle ge); Diana (now at Yale University) 

Mary Marshall (High School)

Member, Church of the Ascension (Episcopal)

Residence at Sassafrass H ill Farm, Conco rd, Tn. and Riverbend Farm, 

Lancing, Tn.

Member of Board of Directors, Oak Ridge Chamber of Commerce (1958). 

Chairman, Mayor's Com mittee on Industrial Development (196C-61). 

Founding Member, Board of Directors and President (1971-7 3), Oak 

Ridge Development C orporation.

Vice President and Member, Board o f Directors, Oak Ridge C iv ic Music 

Association (1962-63).

Member, Board of Trustees, Webb School of Kno xv ille (19 68-73). 

Member, Board of Directors, Scientists and Engineers for Ap pa lachia. 

Member, Board o f Direc tors, Environmental Systems Corporation.

Member, Board of Directors, McDowell Enterprises, Inc.

Founding Member, Board of Directors, 2nd Federal Savings and Loan,

Oa k Ridge, Tn.

Mem ber, Tennessee Citizens for Wilderness Planning, Sierra Club, The 

Wilderness Society.

Cosmos Club (Washington).
223

[From the Tennesseean, June 22, 1975]

Contradictions Dot Ford’s TV A Choice

(By Nat Caldwell)

Columbus, Miss.—There seem to be twro James F. Hooper’s living inside one 

skin—two different personalities—and his hometown wonders which “Jim ” President Ford has named to the Tennessee Valley Auth ority board.

One Jim Hooper, lavishly endowed with sales and promotion skills, bu t constantly haunted by bad business judgment or luck, appears as the sporadic 

contriver of a series of elaborate commercial ventures that flopped.

Usually drama and lawsuits followed business failure. This is Jim Hooper, the 

huckster and hustler.

The other Jim Hooper is the civic leader, the visionary pioneer of waterways 

projects, the volunteer pilot for regional charity drives or public improvement 

projects, the tireless worker for the Republican party in his home state. This is 

Jim Hooper, the solid, stable citizen.

These conflicting images of the man emerge from a careful research of cou rt 

suits brou ght against him and his associates, from interviews with local businessmen and lawyers who know him, and from a study of news clips recoun ting some 

of his activities.

Research into the past of this controversial bu t colorful man whom the President wants to be a TV A director, shows him to be a remarkable bu t question able 

candidate for the high federal office he soon may hold.

There is Hooper the ex-band leader who escorted more new bands into the 

historic ball rooms of Memphis’ Peabody hotel in four years tha n any other 

musician or promoter.

There is Hooper the self-proclaimed invento r of the U.S. Air Force crash 

helmet (a dozen Mississippi newspapers front-paged this Hooper claim to fame 

when it appeared he was high on President For d’s list for the TV A post).

There is Hooper, the private pilot, who talks of his days in the cockpit of his 

personal, private plane as the times he has enjoyed the most.

There is Hooper the business entrepre neur whose business associates seem 

plagued by ghastly fates: two of them, a decade apa rt, suicide victims; a third, 

in deep financial trouble, was involved in a tragic head-on collision as he returned 

from a disappointing business trip in Memphis.

Two persons in the other car were killed. The business partner was arrested. 

Later, he went on to suffer bankruptcy , his assets $5 million short—and other 

tragedies still stalk this former associate of Hooper.

There is Hooper who has known business failings and civil court actions th at 

have grown out of the flops of these enterprises. He has won these lawsuits, bu t 

he has been accused by opposing counsel of being a conman, a four-flusher and 

a hapless splurger.

All of this makes this greying, strikingly handsome man less tha n attrac tive 

as a potentia l TV A board member.

No man with such a unique, diverse past has ever been seriously considered 

for the TV A board.

Hooper, in person, responded to this reporte r’s questions in an out-going 

manner, seemingly unconcerned th at already his nomination is stirring early 

opposition.

“I am basically a conservative businessman,” he says, “I have often been a 

successful one.”

The presidents of three Columbus banks agree. So do Mississippi GOP leaders 

(Hooper’s wife is Republican national committeew’oman) whose sup por t for the 

TV A post he first solicited.

It is assumed, since Ford has sent Hooper’s name to the Senate for confirmation to the TV A board, th at the FBI found nothing in his past th at bars his 

appointment.

When he was asked by a reporter about his record of business failure Hooper 

urged the journalis t to talk to other people in Mississippi who know him and who 

would vouch for him.

He listed bankers, civic leaders and old friends to see. He mentioned his lawyers, 

members of the most successful and most potent law firm in North Mississippi. 

This crosssection of people who knew him would con obo rate his sta tus as a 

solid citizen.

Hooper is well-known in Columbus business circles. Those who know him are 

willing to discuss him.
224

Some praised him for attribu tion, but assured at their request they would 

not be quoted by names, warned that he has propensities they consider undesirable which m ight follow him to TV A.

A few civic leaders, not named by Hooper, or his lawyers, volunteered their 

tributes, extending his list of achievements.

His calm in the face of a reporte r’s tough questions was evidence th at he has 

poise. He is a groomed man, trim and looking cool, even on the hottest days. 

When he goes out in his khaki ju mpsuit to supervise the small dairy tha t remains 

of all the business ventures, or at least the only surviving venture that he will 

discuss, he looks neat.

Hooper was the prom oter of a failed dairy intended to be Mississippi’s largest, 

and a failed pet food factory that, for a short time, enjoyed the largest sales 

volume of any in the South. He was a co-promoter of an insurance company 

which had its Tennessee license revoked in February, 1970.

Hooper told a repo rter: “I was out of the Standa rd Union Life Insurance 

Company long before it was suspended in Tennessee or any other sta te.” But he 

was sued by men who replaced him as majority stockholders anyway. He pointed 

out th at the Tennessee suspension involved no questionable practice, simply 

a re-insurance plan th at se nt Tennessee policy holders to ano ther company.

Like most of the business failures that Hooper acknowledged, incredibly bad 

luck could have been a cause as well as management failure.

But there was no equivocation from the Air Force on Hooper’s claim to have 

invented the protective headgear. Calls to Air Force Systems Commands, archives, protective clothing and headgear research, produced neither record nor 

memory that he played even a minor role in the development of the famed safety 

headgear.

But Donald E. Huxley, of Dayton, Ohio, a retired civil service supervisor of 

the research sector said: “H ooper’s name rings a bell. I think he was one of our 

very minor helpers. He could be assigned abo ut one-one hundred and sixtyseve nth of the credit for one activity at one time. But there are other names, 

principal contributors, I would write about.”

Hooper, when interviewed earlier, described himself as the “key man” in 

developing the crash helmet.

He says he is surprised th at the news media has not found more people who 

oppose him.

“I am flabbergasted because all of the press has found so few detra ctors . . . I 

am not a foolish man. If I were, every top office holder and political leader of 

both parties in Mississippi would not have endorsed me for one of the most 

responsible assignments in the natio nal government service.”

Questions about his business record seemed to irritate him, however. Once in 

an interview in his home, he suddenly pulled two pieces of paper out of a rear 

pocket. He extended these to be read.

One was on the memorandum pad of Columbus National Bank of Commerce, 

the other was on the memorandum pad of the First Columbus National Bank. 

Signed by th e presidents of these two banks, these memos said they were evidence 

Hooper owned certificates of deposit of $200,000 and $100,000.

Top officials of both banks said later their regulations prevented them from 

sub stantiating Hooper’s claim or the size of any other depositor’s account.

He retrieved the memos, flourishing them and grinning. He declared th at 

“if anybody questions my success, here’s $300,000 cash to sta rt with. And I’ll 

be ready with a sworn net worth statement in excess of $600,000. I t’s a shame to 

goad a man until he is forced to boast of his success . . . This, almost, gets to 

me.”

One who volunteered commendation in behalf of Hooper’s civic efforts and 

“imaginative effort in behalf of the Tennessee Tombigbee waterway” insisted he 

would not presume to discuss Hooper’s financial affairs.

Glover Williams, executive director of the Tennessee Tombigbee Waterway 

Authority, called from Washington. “I want a chance to boost Hooper,” Williams 

said.

“To any of the old guard of river development, flood control, soil conservation, 

scientifically improved farming, and wild life protection, bad mouthing Jim Hooper, 

as some environm entalist groups seem to be doing, is unjust, unfair and tota lly 

lacking in trut h, ” said Williams.

“Jim Hooper was one of the original plank holders of the Tennessee Tom 

waterway,” Williams continued. “How many trips over the South can I remember 

in his Bonanza, buying the gas was on him too, barnstorming for money to pay 

for lobbying just to get the Corps of Engineers sta rted?”
225

Reading the court records must make Hooper wince. Fifteen years ago at 

Aberdeen, Miss., a Columbus lawyer was trying to garner some money for a client, 

after Hooper’s large southwide pet food facto ry went down. He offered the federal 

court jury an acid critique to the man, who soon may be casting th e deciding vote 

on whether and how much the Tennessee Valley Authority will increase light 

bills for 3 million valley citizens.

The lawyer said, “T ha t Jim Hooper continued in his usual manner to operate 

the business, to fly a round in his plane, to take the biggest suites in the hotels, 

saying ‘Now things are going . . . Business was booming.’ . . . and, while he 

was behind on his bills, he w’as going to have some people pu t new money in the 

business . . .”

Hooper responds, “I reject the idea th at a series of incidents show I was no 

manager. This was at a time when the whole U.S. was rolling the dice, trying to 

get rich quick . . . But I won all those law suits you read, overturned in court, 

all of the fraud charges . . . I have made money and still make money in my 

business deals. I am a basic conservative.”

Hooper added more strokes to this p ortrait. “I respe ct and greatly admire both 

the purposes a nd the achievements of the TV A, and I know of no o ther Republican, with a chance for White House appointment, who, conscientiously, as I can, 

could stick in there and uphold Red Wagner’s hand .”

“On top of th at ,” he continued, flicking the string tie of a woven white sport 

shirt as he spoke. “I know that the TVA board needs a man who will b attle for 

new indu stry and new jobs. Also, it needs a man who understands the full potential 

contribution of the Tennessee Tom waterway to the Tennessee Valley a nd to the 

central South. I dearly love that waterway and I helped to organize most of the 

groups th at promoted it in the early days.”

Failed pet food factory, failed 500 cow dairy which was planned to be the largest 

in Mississippi with four milkings per day and a Hooper devised high protein feed 

formula to keep the dairy cows producing at this level—how do these fit in?

It may square with Hooper whose friends insist th at he “never missed” on a 

civic promotion. From Tenn Tom to the kidney machine badly needed by a 

Jackson hospital a few years ago and obtained, according to Hooper, from federal 

H.E.W ., he listed these successes.

And the very lawyer who offered the jury the biting synopsis of Hooper’s 

business methods has been won over. He is State Sen. Bill Burgin and, as head of the 

local firm that now represents Hooper, he’s slated to coach his client thro ugh the 

Senate confirmation comm ittee hearings th at alone bar his p ath to a $38,000 law 

annual wage and a full third of the responsibility for running TVA.

Burgin said: “On th at law suit, we were tryin g to get the jury’s attention , at a 

time when Hooper’s lawyer had all the facts and all the proof on his side.”

Burgin’s associate, Hu nter Gholson, added: “H ooper’s an innocent victim of 

bad luck on lots of those cases.”

What about the law suit to recover from Hooper his dairy farm, previously 

pledged as reserve against policy premiums of the Standa rd Union Life Insurance 

Company?

“He won tha t case in the Mississippi state courts. He was absolved of all fraud 

charges.”

What about the su it of the federal receiver in ban kruptcy, also directed against 

Hooper’s farm?

“The record will show tha t Hooper won th at too.”

Neith er Burgin, who obtained for Hooper unanimous endorsements from the 

Mississippi legislature and strongly worded stat ements from all majo r Democrat 

officeholders, nor any of his Republican sponsors believe he’ll be even lightly 

skinned in the confirmation procedures.

And Burgin seemed tota lly unimpressed by the protests of anti-strip mines and 

environmentalist groups against Hooper’s environmental positions. These pro ­

tests had s tarted to come in when Hooper and Burgin were interviewed two weeks 

ago.

Twelve n ational and TVA regional environmental groups filed formal protests 

against the Hooper nomination before the Senate Public Works Committee 

Tuesday. They pledged a batt le against confirmation.

Another Hooper admirer in Columbus, Louis Wise, manager of Fou r Counties 

Electric Cooperative, said that “with Mississippi’s two very senior senators, 

Eastland and Stennis, carrying the ball for him, the environm entalists will have to 

come on stronger with the votes than they have ever done before to even show 

him down.”
226

“Jim Hooper hasn’t told the press how he stood on any of the environmental 

issues,” Wise declared. “So these 12 groups must have gotten mad because he 

said he’d like to back up th e TV A board chairman, who has been having some hard 

going recently. T ha t’s a poor ground to fault him on.”

Senat or R andolph. Mr. Hall and Mr. Blackwelder. Would you 

tell us how you desire your sta tem ents to be given to the com mittee?

STATEMENTS OF RICHARD M. HAIL, FRIENDS OF THE EARTH AND 

BRENT BLACKWELDER, ENVIRONMENTAL POLICY CENTER

4

Mr. Hall. Mr. Chairma n and Sen ator Bak er, I am pleased to su bmit my sta temen t for the record. I will no t read any portion of it 

bu t I would like to mak e one com men t in add ition to the sta temen t 

in response to some of the points th at were made yesterda y. 4

Sen ator R andolph; Yes, you do that, Mr. Hall. You r stat em en t 

will be included in the record. (See p. 229.)

Mr. Hall. Th ank you.

The one com men t is th at Senator Stennis said he felt stro ngly th at 

the Board needed balance. On th at sta temen t we agree. I believe the 

panels here today, and ma ny of the people who testified, in effect 

said tha t.

In add ition, there was a strong emphasis th at Mr. Hoo per could 

brin g the back ground of an agriculturalist to the Board. We are no t 

sure th at in a crisis stag e as to the ma jor issues, so referred to in my 

testim ony , th at th at can be given overrid ing importance in lieu of 

anyth ing else. Bu t we agree th at an agr icu ltural backgroun d would 

be a plus for any man.

I would like to point ou t the bac kground of Mr. Ha rco urt -M organ 

as an agricultura list who was one of the first three mem bers of the 

TV A Board.

I would like to read ju st a brief passa ge from a book entitled, 

“M organ versus Lilienthal, a Feu d within the TVA ,” by Com is 

Mc Gra w, pub lished as a M aster’s th esis:

John Harcourt Alex Morgan has spent his adult life promoting agricultural 

improvement in the South. He had been recommended to Arthur Morgan— 

was the perso n who selec ted the oth er mem bers of the Board —

for recommendation to President Roosevelt by officials in the Department of * 

Agriculture and formally endorsed by the executive of the Russell Sage Foundation and several land g ran t colleges.

Born in Canada, he was educated there. Upon grad uating from college, he later 

earned several Doctoral degrees. Upon graduating from college in 1 889, he was 

hired immediately by the Louisiana State University to teach entomology an d 

work in the new agricultural experiment station.

As Chairman of the Department of Zoology and Entomology at Louisi an a 

State, a position he assumed in 1893, Harcourt-Morgan applied his specialized 

knowledge to agricultural problems.

He battled the boll weevil, the Army worm and the grasshopper, traveling 

thro ugh out rural Louisiana and neighboring States. Interm itte ntly, during the 

1,890’s he pursued grad uate work at Cornell and studied at the Marine Biological 

Station at Woods Hole, Massachusetts.

In 1903, as Executive Director of the new Sta te Crop Pest Commission, he 

intensified his personal campaign against the tick and boll weevil. In 1905, he was 

hired by the University of Tennessee to direct its agricultural experim ent station.

He was also made Professor of Entomology and Zoology, but his main inte rest 

continued to be in agricultural development.

The Tennessee Department of Agriculture at that time conducted farm ers’ 

institutes to demonstrate progressive methods in rural areas throu ghout the State.

This form of education suited Harcourt-M organ perfectly. He had guided a similar 

program in Louisiana.
227

He ultimately became the driving force behind the project. He frequently 

lectured at the meetings himself and traveled to the back country on horseback to 

recruit stud ents to the university’s new agricultural school.

In 1913 he became Dean of the College of Agriculture, and during World War I 

served as Food Administrator for Tennessee.

In 1919 he was made President of the University of Tennessee and in 1927 was 

elected President of the Association of Land Grant Colleges and Universities.

More than once, Harcourt-Morgan was asked to run for Governor of Tennessee. 

He was shrewd in the ways of politics, but had no desire to become a professional. 

Throughout these years he continued his interest in entomology, serving on national advisory committees—and I might add their legion—for the control of 

insects, pests and working closely with th e Extension Service.

Thus, when he was selected to be placed on the Board of Directors of TV A, 

besides extensive background throughout the South, both in Agriculture and in 

the sciences necessary to supp ort Agriculture, he sp ent 14 years as the President 

of the University of Tennessee and six years as the President of the Association 

of Land Grant Colleges and Universities.

Mr. Hall. T hat is an agr icultural kind of bac kgroun d th at would 

be of real valu e to the Tennessee Valley Au thority . But we do no t 

believe M r. Hoope r m atches those s tand ards even as an agric ult ura list.

Th an k you.

Senat or Baker. Dr. Morgan was indeed a dist inguish ed citiz en of 

this country and a distinguish ed citiz en and reside nt of Tennessee. 

Th an k you for that.

Th e chairma n found it nece ssary to leave because of an oth er prior 

comm itm ent th at was scheduled for 12:30. He asked me to conclude 

this last panel of this hearing.

Mr. Balckwelder, do you have a statem en t th at you would like to 

make?

STATEMENT OF BRENT BLACKWELDER, ENVIRONMENTAL POLICY 

CENTER

Mr. Blackwelder. Yes, sir. If th at can be included in th e record 

I will be very brief.

Senator Bake r [presiding]. We will receive the stat em en t for the 

record. (See p. 238.)

Mr. Blackwelder. The focus of my testim ony concerns TVA’s 

wa ter resources dev elopm ent policy. Essen tially, our feeling is th at 

Mr. Hoo per is no t sensitiv e to the serio us environme nt problems in 

this a rea. It is our feeling th at the S tate of Tennessee h as amp le wa ter 

dev elopments to las t for the rest of this centu ry and into the indefinite 

fut ure and th at in fac t he would no t brin g ab ou t some needed reforms 

in TVA’s wa ter dev elopment policy.

As you know, the General Acc oun ting Office’s a ud it and repo rt on 

the Duck River D am revealed th at the TVA was cer tainly overz ealo us 

in its economic justification of the pro ject. The tria l on the Du ck 

Riv er Dam reve aled th at high TVA officials had falsified inform ation 

provide d by the staff in an effort to make the pro jec t appear more 

favorable.

It is our view th at we need a person on TV A’s Boa rd of Direc tors 

who will be able to tak e an hon est look at w ate r dev elo pm ent p rojec ts 

and no t at te m pt to pu t forward pro jec ts which do no t me et the 

sta nd ards th at we feel need to be adopted across the country .

One final p oint con cern s M r. Ho oper’s spo nsorship of the Ten nesseeTom bigbee Wa terw ay. This pro ject, if yo u read the pro motion lite r-
228

atu re, is in pa rt designed to provide water tra ns po rta tio n for stripmined coal going to Japan.

We feel th at is no t a very responsible energy policy.

Furth erm ore, his supp ort for the Tennessee-T ombigbe e Wa terwa y 

opens up anoth er area of concern—racial discrim ination . This proje ct 

goes through area s with hea vy black pop ulat ions. Ind eed , some of the 

countie s thro ugh which the Tennessee-T ombigbe e Wate rw ay crosses 

are over 60 percen t black. Ye t ther e are no blacks on the Ten nesseeTom bigb ee Devel opment Au tho rity, despite the fac t th at the proje ct 

will be heavily impacting on black population s. We feel his spo nso rship of this proje ct reveals an insensitivity in this im po rta nt are a of 

pub lic concern.

Senator Baker. Th an k you, Mr. Blackw elde r and Mr. Hall. We 

than k you very much. We app reciate your patience and forb earanc e 

in bein g the final witnesses in this schedule.

Your s tat em en ts will be considered ve ry carefully and we than k you.

[Mr. Ha ll’s and Mr. Blackw elde r’s prep are d sta temen ts follow:]
229

TESTIMONY OF FRIENDS OF THE EARTH BEFORE 

THE SENATE PUBLIC WORKS COMMITTEE ON THE 

NOMINATION OF JAMES HOOPER AS DIRECTOR OF 

THE TENNESSEE VALLEY AUTHORITY

February 18, 1976

I am Richard M. Hall and speak for Friends of the 

Earth, a national environmental organization with 23,000 members 

devoted to the preservation, restoration and rational use of the 

ecosphere. Many Friends of the Earth members live in or benefit 

from the area served by the Tennessee Valley Authority. A substantial part of my work over the past five years has been devoted 

to environmental, energy and some fiscal issues of the TVA, both 

as a staff attorney for Natural Resources Defense Council and as 

consultant to Friends of the Earth. Friends of the Earth as an 

organization and I personally thank you for the Invitation to 

testify today.

The position of Tennessee Valley Authority Director for 

which James Hooper has been nominated is demanding and important.

A TVA director is not a figurehead or part-time advisor. The TVA 

Board of Directors by statute, by historical precedent and by the 

the expectation of the people served by TVA combines in itself 

the powers and duties ordinarily exercised by both the board of 

directors and officers of a business corporation.
230

Thu s, i f co n fi rm ed , Jame s Ho op er w ill be on e o f th e 

th r e e men ru n n in g on a f u ll- tim e b a s is th e n a ti o n 's la r g e s t 

u t i l i t y an d one o f i t s la r g e s t c o rp o ra tio n s . M ore over , w it h 

p o li c y d if f e r e n c e s be tw ee n th e B o ard 's p r e s e n t two me mbe rs, th e 

d i r e c to r under c o n s id e ra ti o n to day may fre q u e n tly be th e sw ing 

o r d e c id in g d i r e c to r .

The po wer s and d u tie s o f t h i s p o s itio n a re awesome.

TVA p r e s e n tly owns and o p e ra te s 109 h y d r o - e le c tr ic u n i ts , 63 

c o a l- f ir e d st ea m u n i t s , two n u c le a r u n its and M gas tu rb in e 

u n its w hic h, w it h some m in or a d d itio n s , g iv e TVA a g e n e ra ti n g 

c a p a c it y o f 26. 7 th ousa nd m eg aw at ts . W ith t h i s c a p a c it y TVA se rv e s 

2 .5 m il lio n u lti m a te cust om ers by g e n e ra ti n g and s e l l i n g 103 

m il lio n k illo w a tt h ours o f e l e c t r i c i t y f o r r e c e ip t s o f 1 .4 b i l l i o n 

d o l la r s . D ur in g f i s c a l 1975 TVA em plo yed over 25.0 00 w ork er s and 

m ad e" net p u rc h ases o f equip m ent, m a te ria l and n o n p ers o n al se rv ic e s " * 

o f 3 .8 b i l l i o n d o l la r s . J u s t ru n n in g su ch an e n te r p r is e i s a 

de ma nd ing and c h a ll e n g in g ta s k .

The c h a ll e n g e o f th e next d ecad e, ro u g h ly th e te rm 

o f th e d ir e c to r s h ip a t s ta k e , dw ar fs ev en t h a t ta s k . Not only 

must th e d ir e c to r s o p e ra te th e TVA o f to d a y , b u t th ey must a t 

th e same ti m e b u il d new g e n e ra ti n g c a p a c it y o f 21 th ousa nd 

m eg aw at ts , Jiw t s l i g h tl y le s 3 th an th a t p r e s e n tly on l i n e , a t 

a trem en do us in c re a s e in c o s t. TVA p r o je c ts t h a t by 1985 i t mu st 

r a is e c lo s e to 10 b i l l i o n d o lla r s in th e p r iv a te money m ar ket to 

b u il d new po we r p la n ts . The v alu e o f th e n e t co m ple te d p la n t 

(c om ple te d p la n t le s s d e p r e c ia tio n ) which t o t a l l e d 3 .7 b i l l i o n

•T he p h ra se i s us ed in th e TVA 1975 Ann ual R e p o rt , pa ge 66 ,

w it h o u t e x p la n a ti o n o f th e com puta tion use d to d e riv e "n e t p u rc h ase s"
231

dollars on June 30, 1975, Is projected to be 12.7 billion 

dollars by 1985-

Does Mr. Hooper's business background suggest he has 

the managerial and financial skills required to fill this position 

The testimony here today and the accounts in the Nashville 

Tennessean leave no doubts that Mr. Hooper's business background 

suggests the exact opposite. Although Mr. Hooper has maintained 

a living for his family, apparently by consuming his inheritance, 

he has demonstrated an inability to manage even the relatively 

small businesses in which he has been involved, much less a 

business the size and complexity of TVA.

This Committee has undertaken an investigation and 

prepared a detailed report of Mr. Hooper's business background. 

This effort was staffed by public employees, paid for by public 

funds and undertaken to provide information on the topic of these 

hearings; yet the Committee has inexplicably refused to release 

the report. We call upon the Committee to release the report 

immediately and to allow time for interested persons to comment 

on the report for the record prior to any Committee action 

favorable to the nomination. Mr. Hooper has had the report for 

study and comment since November, 1975- Surely the public is 

entitled to at least several weeks of the same consideration.

In addition to the talents and skills required to run

TVA as an enormous business, because of TVA's status as a govern- 

* ment owned electric energy company with.a broad charge of human

, and natural resource conservation, the talents required of a
232

TVA d i r e c to r a re more th an m an ag eri al and f i n a n c ia l . The p o s itio n 

o f TVA d i r e c to r c a l l s fo r a p ers o n a b le to le a d TVA in comp lex 

a re a s o f p u b li c p o lic y c u r re n tly th e fo cus o f b ro ad n a ti o n a l 

d eb ate - d eb ate f a m ilia r to th e Senate an d , in d eed to t h i s Com mitt ee .

TVA is - a t th e c e n te r o f th e d eb ate over th e us e of

sc ru b b e rs to rem ove s u l f e r d io x id e pro duce d by po we r p la n ts .

TVA i s an im p o rt an t i n s t i t u t i o n in th e d e b ate o v er th e re g u la tio n 

o f c o al s u rfa c e m in in g. TVA by i t s c h o ic es s i g n i f ic a n tl y e f f e c ts

th e n a ti o n a l ch o ic e o f f o s s i l or n u c le a r f u e ls f o r f u tu r e e l e c t r i c

g e n e ra ti o n . TVA th ro u g h i t s c o n s tru c tio n and o p e ra tio n o f th e 

p i l o t p la n t i s c r i t i c a l to th e d eb ate about th e liq u id in eta l 

f a s t b re e d e r r e a c to r and th e s o -c a lle d "p lu to n iu m ec on om y". TVA 

i s s t i l l a y a rd sti c k n o ’t only fo r o v e r a ll e l e c t r i c i t y c o s ts but 

p o te n tia lly f o r r a te s tr u c tu r e re fo rm an d th e in ti m a te ly r e la te d 

is s u e o f en er gy c o n se rv a ti o n and lo ad man ag em en t.

I n e e d n 't b e la b o r e it h e r th e im port ance o f th e s e is s u e s 

to th e r e s id e n ts o f th e TVA re g io n and to th e e n ti r e n a ti o n or 

t h e i r co m p le x it y .

Does Mr. H oo p er' s ba ck gr ou nd d em o n str ate th e a b i l i t y to 

d e a l w is ely and f o r c e f u lly w it h th e s e is s u e ? H ere , fro m Mr.

H ooper's ba ck gr ou nd we ca n only sa y t h a t by th e ag e o f 60 he ha s 

n ever dem o n str ate d any o f th e t a l e n ts and s k i l l s t h a t a re nee ded .

By e d u c a ti o n , p r o fe s s io n o r p u b lic a ti o n he has n o t dem o n str ate d 

th a t he i s a su d en t of th e s e comp lex a r e a s . By wo rk e x p eri en c e 

he ha s not d e a l t w it h them . Nor has he h e ld p u b li c o f f ic e or 

le ad s i g n i f ic a n t c iv ic e f f o r t s wh ich may dem onst ra te a g ra sp

o f th e s e is s u e s .
233

The one exception is Mr. Hoo per ’s involvement with 

several water projects, principally the Tennessee- Tombigbee 

project. Even there Mr. Hooper's involvement was, by available 

accounts, limited to promotion, not analysis, planning, financing 

or construction of the projects.

It is because of the lack of background and involvement 

In these public policy areas that on July 13. 1975» representative! 

of six environmental groups from the TVA region met with Mr.

• Hooper. As the attached letter from Sherrill and Glemm Cler.mer,

spokespersons for a Mississippi environmental group and participants in the meeting, indicates, Mr. Hooper did not demonstrate 

any talents or knowledge beyond what his lack of background and 

involvement would suggest.

Can the members of the Committee, both in thler role 

as the functional stockholders of TVA and as leaders in the 

decision-making process in the many areas of public policy which 

TVA effects, allow James Hooper td assume control, with his two 

co-directors, of the Tennessee Valley Authority? I believe not.

Mr. Hooper's rejection is required not because an 

individual member of the Committee agrees or disagrees in whole 

or in part with the views of James Hooper on ai y partlcualr issue 

which the TVA Board of Directors will face, but because Mr. Hooper 

is plainly not equal to the task for which he has been appointed - 

a task the importance of which this Committee knows.

An amazing number and array of political, business, 

labor and civic leaders and newspapers within and without the *
234

TVA re g io n op po se Mr. Hoo pe r. In th e end t h i s o p p o s it io n i s

ty p if ie d by th e sta te m e n t o f Mike S a r t in , d i r e c to r o f Mr. H oo pe r’ s

hometown u t i l i t y in Co lumb us, M is s is s ip p i.q u o te d in an a r t i c l e

in th e N a sh v il le T en ness ea n o f Ju ly 23, 1975:

"W ha te ve r h is buddie s may sa y , th e lo c a l 

d a ir y down h ere was a f lo p , j u s t l ik e ev ery ­

th in g e ls e t h a t I know o f t h a t Jim Ho oper 

t r i e d h is hand a t was a f l o p . . . . I h a te to 

th in k o f som ebody lik e him d e c id in g how 

much to charg e fo r l ig h t b i l l s in th e 

T en nes se e V a ll e y ."

F ri e n d s o f th e E art h a g re e s w it h t h a t ass ess m en t and 

u rg es yo u to d is a p p ro v e James H o oper' s n o m in ati o n .

Tha nk yo u.
235

Ju ly 14, 1975

Hon. Jennings Randolph 

Dirkson Senate Office Bldg.

Washington, DC 20510 

Dear Senator Randolph:

In response to your le tte r (9 Ju ly 1975) requesting inform ation 

bearing on the qualif ic ations of James F. Hooper to the Board of Directors 

of the Tennessee Va lley Auth ority , we would li k e to re la te an info rmal 

meeting held in our home with Mr. Hooper, Sunday, July 13 (see attached 

sheet fo r those in attendence). While the meeting provided a rare occasion 

fo r a free exchange of views, l i t t l e occurred to negate our strong reservatio ns concerning Mr. Hooper's qualifications fo r the job.

Indeed, Mr. Hooper's primary claim to q u a lifica tio n rests in his 

involvement with thre e water development groups. Cer tainly th is is a meager 

background fo r one to hold such an important posi tion. We have in cr edib ly 

l i t t l e in sig ht into what his possible capabilitie s as a Dire ctor of TVA 

might be, and his lim ited experience offers l i t t l e basis upon which to 

fo rc ast his futu re polic y decision s.

As to what Mr. Hooper wants to accomplish at TVA, he envisions a 

so lu tio n to two problems to which he would engage his s k il ls . The f ir s t 

of these is the so lutio n to the natio n's "lowe ring water table problem" 

which he thinks TVA should concentrate upon both in research ?. development 

and advocating expanded pu blic works programs. He gave endorsement to the 

idea of a cross-Texas.water dive rsion from the Missis sip pi as an example. 

Second is the refurb ishing of t he TVA fe r til iz e r program in the direction 

of "chemical composting". Neither of these two primary in te re st s even 

ob liq uely focuses upon TVA's c rit ic a l problem areas to which not only 

inno va tive impulse but seasoned ex pe rtise must concentrate.

Senator Randolph, TVA fo r better or worse is predominantly concerned 

with e le c tr ic power generatio n. I t has become the na tio n's larg est e le c tr ic 

u t ilit y and larg es t coal purchaser and wants to become the natio n's leading 

nuclear power developer. TVA, li k e a ll other u t ilitie s in the na tio n, faces 

enormous problems at th is time in our his to ry , as we see the ushering out of 

low-price d energy in a ll forms. I t is in th is area th at hard decisions are 

to be made i f we are to evolve to meet these new co nd ition s.

TVA, however, is un lik e a ll other e le c tr ic u tilitie s in th at i t was 

rnng re ss iona lly mandated to be the natio n's "y ard st ick" fo r e le c tr ic power 

g e - r r . ' , W e cannot see th at Mr. Hooper adds any meaningful understanding 

of or competency in any of the energy issues TVA must deal with . Mr. Hooper 

has l i t t l e knowledge of the coal indu stry or TVA's
coal procurement policies. Mr. Hooper related to us no comprehension of 

TVA's rate making dilemmas associated with energy conservation. The 

most hopeful thing we can say about Janes Hooper is he did mainta in a 

•'layman's” skepticism about the dangers of nuclear development. For TVA 

to reassume its policy priorities in the nation's best interests, it will 

take someone far more knowledgeable to have any impact.

Mr. Hooper stated that he believed his salient qu alific tion in the 

energy field was an open mind, unbiased by a career in the energy field; 

however, we believe this rather candidly admits the lack of any working 

knowledge upon which to make far reaching policy decisions. Therefore, 

Senator Randolph, our opposition to Mr. Hooper is based on the absolute 

necessity to have a TVA Director who has energy expertise and who has a 

demonstrable record of accomplishment in the public interest. How else 

will the public be able to evaluate a person who is to exercise such a 

powerful role upon the Tennessee Valley region and the nation itself? 

Sincerely yours,

Sherrill M. Clemmer 

Glenn H. Clemmer

Box 5351

Ms. State, Ms. 39762
237

Mary Burks 

Robert Burks 

Tim Murphy 

Chan Kendrick 

John Bur ris 

B il l Dow 

E ls ie Cro ft 

Pa dg ett Ke lly 

S h e rri l Clemmer

The Alabama Conservancy

Ap palac hian COALition

S ie rra Club and SOCM (Save Our Cumberland Mo unt ain s) 

SOCM

CLEAN (Comm ittee fo r Leaving th e Env ironment o f 

America N at ur al )

*

87-520 0 - 76 - 16
Environmental Policy C enter

324 C Street, S.E., Washington. P.C. 20003 

(202) 547-6500

TESTIMONY OF BRENT BLACKSELDER, WASHINGTON HEPRESENTATIVE OF THE 

environmental polic y ce nt er, before the SENATE PUBLIC WORKS 

COMMITTEE, CONCERNING THE NOMINATION OF JAMES HOOPER TO THE 

BOARD OF DIRECTORS OF THE TENNESSEE VALLEY AUTHORITY, F eb ru ary 18 ,19? 6

Th e E nvir onm enta l P o li c y C e n te r Is a n a tio n a l c o n se rv a ti o n o rg an ­

i z a tio n wh ich fo c u ses a tt e n ti o n on c r i t i c a l e n v ir o n m en ta l Issu e s 

su oh as la nd u se , w ate r r e s o u rc e s , and energ y pro ble m s. We 

a p p re c ia te th e o p p o rtu n it y to t e s t i f y on th e n o m in ati on of James 

Ho op er to th e Bo ard of D ir e c to rs of th e T en ness ee V all ey A u th o rit y .

The E nvir onm enta l P o li c y C e n te r Is op po sed to th e no m in ati o n of 

Mr. Hooper f o r a num ber of re a s o n s . Ba sed on our ex am in ati o n of 

th e ba ck gr ou nd of Mr. H ooper , we b e li e v e t h a t th e on ly re a so n 

f o r h is nom in ation Is t h a t h is w ife Is a mos t I n f l u e n t i a l fig u r e 

In th e R epubli can P a rty In M is s is s ip p i. The P u b li c Wo-'ks Com mittee 

w i l l be h e a rin g te sti m o n y co n cern in g Mr. H ooper ’s I n a b il i ty to 

manage h is b u sin e ss a f f a i r s c o m p ete n tl y . The E nvir onm enta l P o li c y 

C e n te r wis he s to fo cu s on a d i f f e r e n t gr ou nd of o p p o s it io n : Mr. 

H ooper’ s t o t a l la c k of s e n s i t i v i t y to en v ir o n m en ta l pro ble m s.

S in ce TVA Is h e a v il y In volv ed In ener gy p ro d u c ti o n and w ate r 

re so u rc e devel opm en t, we b e li e v e t h a t I t Is e s s e n t ia l t h a t a 

member of TVA’s Boa rd o f D ir e c to rs p o ss ess some m in im al u n d e rsta n d in g of th e many en v ir o n m en ta l pr ob lem s a s s o c ia te d w it h th ese 

a c t i v i t i e s . The S ta te of T en nes se e Is l i t e r a l l y cover ed w it h 

r e s e r v o i r s . I t ha s had enou gh dam b u ild in g f o r one c e n tu ry . Yet 

we f e e l t h a t Mr. Ho op er would advocate and ba ck s t i l l more r e s e r ­

v o ir c o n s tru c tio n f o r T en n ess ee. TVA Is p re s e n tly v io la tin g th e 

End an ge red S p ecie s Ac t in c o n s tr u c tin g th e T e lllc o Dam, and I t s 

Duck R iv er dams would a ls o e li m in a te en dan ger ed s p e c ie s . TVA 

need s some new le a d e rs h ip which w ill n o t en ga ge In p r o je c ts wh ich 

fo re v e r e li m in a te n a tu r a l re so u rc e s and dro wn a re a s of p r ic e le s s 

h i s t o r i c a l v a lu e . Mr. H oo pe r, we b e li e v e Is n o t about to ad v o cate 

an y re fo rm s In TVA’s w ate r de ve lo pm en t p o lic y .

T es tim on y a t th e t r i a l on th e Duck H lv er cams re v e a le d t h a t h ig h 

TVA o f f i c i a l s had d e lib e r a te ly f a l s i f i e d r e p o r ts from th e 

s t a f f and c o n s u lta n ts co n cern in g t h is p r o j e c t. B asi c ch an ges a re 

nee de d In TVA’s r u th le s s e f f o r t s to g e t p r o je c ts b u i l t no m a tt e r 

wha t th e co n se q u en ces. The G en era l A cc ounti ng O f f ic e ’s a u d it 

and r e p o r t on th e Duck R iv er P ro je c t was Is su ed In Septe m ber, 19 74 , 

an d c o n ta in ed a s c a th in g co ndem nat io n of th e p ro ced u re s use d by 

TVA In an e f f o r t to make th e p r o je c t appear J u s t i f i a b l e . Re form 

Is c le a r ly need ed, b u t Ho oper Is n o t th e pers o n f o r th e Jo b.
239

2.

The E nvir onm enta l P o li c y C e n te r has lo ng be en conce rn ed ab o u t 

s t r i p m in in g and has worke d f o r a to ugh b i l l to r e g u la te s t r i p 

m in in g . TVA 's pro m otion o f s t r i p m in in g and f a i l u r e to e n fo rc e 

th oro ugh re c la m a ti o n Is a s e r io u s en v ir o n m en ta l I s s u e . Her e 

a g ain Hr. H o o p er' s s e n s i t i v i t y to t h i s pr ob lem Is lo w . Mr.

Hoo pe r Is a b ig su p p o rte r of th e T en ne ss ee -T om bl gb ee W aterway , 

whi ch w ill l i t e r a l l y d e str o y th e Tomb lgb ee R iv er w it h I t s r ic h 

d iv e r s ity of f i s h e s . Re vie w o f th e p ro m o ti o n al l i t e r a t u r e f o r 

th e Wa terway r e v e a ls t h a t one of I t s pr im e purp ose s Is th e p ro ­

v is io n of w ate r tr a n s p o r ta tio n to f a c i l i t a t e th e sh ip p in g of 

str ip -m in e d c o a l to Ja p a n .

Mr. H ooper’ s su p p o rt of th e Ten ne ss ee -T om bl gb ee Wa terway op en s 

up a n o th e r a re a of p u b li c c o n c e rn —r a c i a l d is c r im in a tio n —w hich 

we ho pe th e Com mittee w i l l I n v e s tig a te . D esp it e th e f a c t t h a t 

th e Waterw ay go es th ro ugh an a re a w it h a he av y B la ck p o p u la ti o n 

(som e c o u n ti e s bein g c ro sse d by th e c a n a l a re more th an 60 ^ B la c k ), 

th e r e a re no B la ck s on th e Waterway Dev elop men t A u th o rit y , th e 

ag en cy pro m ot in g th e p r o j e c t. B la ck s ha ve be en ex clu ded fro m 

th e dev el opm en t and p la n n in g of th e Wa terway an d oc cu py no a re a s 

of r e a l r e s p o n s i b i li t y h e r e , ev en th ough th e c a n a l w i l l be h e a v il y 

Im pac ti ng on B la ck p o p u la tio n s .

Iri sum mary, our ex am in ati o n of Mr. H ooper’ s re c o rd and our co n ­

v e r s a tio n w it h c o n s e r v a tio n is ts In h is a re a le ad us to con clu d e 

t h a t h i s appoin tm en t to TVA’ s Boa rd would be a m aj or m is ta k e .

Mr. Hoo pe r do es n o t co mpreh en d th e n a tu re of en v ir o n m en ta l pr ob lem s 

an d has l i t t l e sympa thy to w ar d c o n se rv a ti o n g o a ls . He la c k s th e 

le a d e rs h ip arid c h a ra c te r n e c e ssa ry to I n s t i t u t e re fo rm s In TVA’s 

en erg y and w ate r re so u rc e dev el opm en t p o l ic i e s . We th e r e f o r e 

u rg e th e Com mittee to r e j e c t h is n o m in ati o n .
240

Senator Baker. The chairman asked me to announce th at it will be 

the intention of the committee to have this transcript typed and made 

available to the committee members as soon as possible. We will 

proceed with an early consideration of the nomination in executive 

session. My personal estimate is that probably will be sometime next 

week.

If there are no further statements at this time, the hearing is adjourned.

[Whereupon, at 12:53 p.m., the committee recessed, to reconvene 

subject to the call of the Chair.]
STATEMENTS IN OPPOSITION TO MR. HOOPER’S NOMINATION

Washington, D.C., February 17, 1976.

Hon. J ennings R andolph,

Chairman, Senate Public Works Committee,

4202 Dirksen Building,

Washington, D.C.

Dear Mr. Chairman: I want to tha nk you for this opp ortu nity to comment 

on the nomination of James F. Hooper to the TVA board of directors. Unfortunately, my schedule prohibits me from appearin g personally before you r committee.

As you know, I have previously stated my opposition to this nomination on 

grounds that I believe we need a person of truly outstanding qualifications and 

reputation for the job.

My attit ud e on this nomination is molded by my belief th at TVA is entering 

perhaps the most difficult period of its existence. I have always been, and continue 

to be, a strong supp orter and advocate of TVA. It has provided unto ld benefits 

to our region.

But many, many questions are now being raised abo ut its public acco untability, 

about its rate structure, about its role in environmental matters, and abou t public 

input in its decision making.

Th at being the case, I thin k this nom ination—which is for a seven-year term— 

is more significant than usual. It is a great opportunity to put on the board 

someone who can provide th e leadership and the insight to address and effectively 

deal with these issues so th at TVA can remain strong and maintain the kind of 

grass roots support it has always had in the past.

Since announcing m y opposition to Mr. Hooper, I have at th e request of others 

reviewed my decision to see if perhaps I have overlooked factors in his favor. 

However, my review was undertaken with the same sentimen ts about the nomination ’s importance at this particular time.

I must say th at I have come to the same conclusion, if somewhat relu ctantly. 

I am sure Mr. Hooper is an honorable man with the best of inten tions, bu t I 

simply do n ot believe he is the righ t man for the job at this time.

Therefore, I urge th at the comm ittee not report this nomination to the full 

Senate.

Sincerely,

Walter D. Huddleston.

Kentucky General Assembly,

House of Representatives, 

Frankfort, Ky., February IS, 1976.

Hon. J ennings R andolph,

Chairman, Senate Public Works Committee,

Senate Office Building, Washington, D.C.

Dear Senator Randolph: After much consultation with the constitu ents 

I represent, I feel it necessary th at I address myself to the proposed appointment 

of Mr. James Hooper to the T.V.A. Board.

I feel th at there are may questionable situations within T.V.A. already, such 

as: inefficient utilization of th e skills of employees and scheduling methods which 

are conducive to inefficiency.

I feel th at Mr. Hooper’s appointment to this board would not improve the 

questionable practices already in existence w’ithin T.V.A.

I do oppose Mr. Hooper’s appointment to this board and I am confident th at 

everyone involved will give this ma tte r careful consideration before making 

their decision.

Sincerely,

J. R. Gray.

(241)
E ast T e n n e s s e e E n erg y G ro up

Knoxville, Tenn., February 18, 1976. Senator J e n n in g s R a n d o lph,

Commiftee on Public Works, U.S. Senate,

4202 Dza OB, Washington, D.C.

D ea r S en ato r R a n d o lph : Please include the enclosed testim ony in the public 

record of the hearings on James F. Hooper as Director of the Tennessee Valley 

Authority. Thank you.

Sincerely yours,

J o hn Z. C. T hom as.

T es ti m ony P r e se n t e d by t h e E ast T e n n e s s e e E n er gy G ro up

As numerous witnesses, I am sure, have already noted, the Tennessee Valley 

Authority is at a critical juncture. The TV A has always been a t a critical juncture, 

only this time the agency is faced with problems, the solution of which will profoundly shape the future of the Valley. Never before in TVA’s long and turb ulent 

history has it been faced with so many decisions of such long-range effect nor 

has it had to deal with massive, broad-based criticism and opposition both 

within and outside the Valley. As the United States largest utility, the course 

TV A charts will have an influence on the rest of the nation.

The problems and critics that TV A faces are numerous and varied. They are 

found in the lengthy hearings, mostly the result of interventions by local citizens, 

on the Hartsville nuclear reactors which found the State of Tennessee and TVA 

in sharp disagreement over TVA’s adherence to the state’s water qu ality standards. 

They are found in the recent massive dissatisfaction with TVA’s electrical rates 

which resulted in the organization of demonstrations or consumer groups across 

the Valley. They are found in the national and local opposition to TVA’s involvement in the construction and operation of the Clinch River Breeder Reactor 

Demonstration Plant. They are found in the endless opposition to TVA’s final 

dam, the Tellico project. They are found in the State of Alabam a’s lawsuit against 

TVA over the agency’s failure to adhere to the Sta te’s air pollution standards.

Never before has TVA needed such qualified leadership as it needs today. The 

agency is a great experiment, born of the New Deal. Even those curre ntly in 

opposition to it do not want it to fail. Thus at this critical moment great hope 

was had that a new director would be appointed who would bring fresh and 

knowledgeable viewpoints to the Board. It was anticipa ted that such a person 

would be familiar with energy problems and experienced in administration and 

thereby help our great in stitution weather the current storm.

Unfortunately this was n ot to be. Instead the citizens of the Valley were given 

James F. Hooper, a Mississippi businessman, whose principal qualifications 

appear to be that he is a good fellow, well met and is supported by key persons 

in Mississippi politics. Such an appointment is an insult to TVA and to the citizens of the Valley. The Eas t Tennessee Energy Group urges the Senate Public 

Works Committee to advise against his confirmation forthwith. TVA does not 

need a promoter nor will the agency’s problems be solved by the appo intm ent 

of a director with no experience in energy or adm inistration. Mr. Hooper’s principal qualification that might be of some use to TVA are his public relations abilities. 

TVA’s problems are far too great and far too important to be dealt with in such 

a manner. A superficial, uniformed approach will no t help.

Fur ther damaging to Mr. Hooper is his professed desire to continue without 

question the curre nt policies of TVA. He is quoted as saying “I know of no other 

Republican, with a chance for W'hite House appointment, who, conscientiously, 

as I can, could stick in there and uphold Red Wagner’s hand.” (Nashville Ten ­

nessean, June 6, 1975.) The new director for the agency should have an open 

mind, not a closed one such as Mr. Hooper professes.

The East Tennessee Energy Group feels that TVA’s new director should have 

a basic knowledge of energy and its problems, th at the person should have had 

some administrative experience, that the new appointee should be aware of 

environmental problems and the solution to those problems to the best benefit 

to man and nature, and that the person should be aware of the broad implications of TV A’s policy on the nation al scene. Mr. Hooper has none of these 

qualifications and does n ot deserve to be recommended to the full Senate.
243

R2 Box 385,

Blacksburg, Va., October 8, 1975.

H o n . J en n in g s R and o lph,

U.S. Senator,

Washington, D.C.

Dear Senator Randolph: As a former Elkinsite I am writing to you to relate 

an experience I am sure you will be interested in knowing about. Yesterday I 

attended The White House Conference in Knoxville and was one of th e questioners 

of the president. I asked him what qualifications he used in determining James F. 

Hooper’s qualifications to be a member of the Board of Directors of TVA. He 

responded by saying that since his (Hooper’s) name had been forwarded to the 

appropriate committee he should no t comment.

The above is background.

Tonight I am in Memphis. Before I left Knoxville the morning TV coverage to 

the Conference was limited to his response to the question of Hooper’s qualifications. On the way west on 1-40 I heard radio news and it answered the question 

Tonight in the local Memphis TV news, the only item covered in respect to the 

President’s entire visit to Tennessee was his response to the question of Hooper’s 

qualifications. There was no editorializing in these reports, but it is obvious th at 

this is a very imp orta nt issue in Tennessee. Those of us who have followed the 

TVA’s activities from the beginning are also gravely concerned as I said and also 

said that it is a m atter of national concern.

I trust th at Mr. Hooper’s record will be fully revealed, so that the committee’s 

vote will be based on his complete record.

If you wish you may make this letter a part of the record in th e hearings.

Best wishes for your continued good health and work.

Sincerely,

C arl J . H olc om b.

A P P E N D I X

AN ANALYSIS OF TH E BACKGROUND OF JAM ES F. 

HOOPE R I II , TO GETHE R W ITH MR. H OO PER’S RESPON SE

INTRODUCTION

On June 12, 1975. the nomination of James Fuller ton H ooper I II to 

the Board of Directors of the Tennessee Valley Aut hority was submitted by the President for confirmation by the United States Senate.

* The nomination has been referre d to the Committee on Public Works.

A number of individuals and organizations have asked to be heard 

with regard to the confirmation of Mr. Hooper, and have indicated 

tha t they intend to raise questions regarding the business background 

of the nominee. In addition to the issues raised by these potential 

witnesses, several articles appeared in newspapers in the valley region 

raising specific allegations which would bear on the nominee’s business and managerial competence. Selected news articles are contained 

in Appendix II I, p. 61.

Because of the nature of the allegations which have been made, the 

Committee postponed hearings on the nomination scheduled for 

Ju ly 22 and 23 and requested tlie Committee staff to conduct an analysis of Mr. Hooper’s business background.

This analysis is limited to the business affairs of Mr. Hooper. His 

positions on issues rela ted to the mission and programs of the Tennessee Valley Aut hority or to energy and the environment are beyond the 

scope of this analysis.1

General B ackground

Tn 1939, Jam es F . Hooper, hav ing completed 4 years stu dying industria l engineering at Auburn University, left to pursue briefly a career 

in music.

Tn October of 1941. Mr. Hooper entered the U.S. Army Ai r Corps. 

He earned his pilot wings ami served until discharged on September 25.1945.

While in the service he married Virginia Reid Fite of Columbus, 

Miss., and aft er his discharge settled in Columbus to take up dairy 

• farmin g on land formerly owned by his wife’s father. Mr. and Mrs.

Hooper have three childre n: Mrs. Ralph Rood. Columbus. Miss., a 

landscape arc hite ct: Dr. James F. Hooper IV, Lexington. Ky.. a resident physician at the Univ ersity of Kentucky Medical Cen ter: and

♦ P. F. Hooper, a farmer.

Mr. Hooper has served as President and Board Member on the 

Mississippi Rivers and Harbors Association and was a cha rter member 

of the Tombigbee W ater Management District.2 He has served on the 

Board of the Tombigbee Valley Authority and was named a member 

of the Wa ter Resource Advisory Boards for Republican presidential 

cand idates in I960.1964. and 1968.

’ A Ta bl e of Doc um en ts conta in in g th e m a te ri als rolle d on or re fe re nc ed In th is re port 

Is att ach ed an d ma y he fo un d a t p. 67. R ef er en ce s to do cu m en ts are In di ca te d In th e te xt 

In bra ck et s c it in g t he nu m be r of t he d oc um en t in th e Tab le o f Doc um en ts.

’ Mr. H oo pe r ha s sta le d th a t hi s in te re st In w ate r re la te d pr ob lems der iv es from hl* 

fa rm in g e xp erie nc e. Il ls fa rm is lo ca ted adja cent to th e T om bigb ee River.

1

(247)
In addition to dair y farm ing, which has remained his primary 

occupation for almost 30 years, Mr. Hooper has become involved in 

several business ventures.

In the late 1940's throug h 1959 Mr. Hooper participated in the 

ownership and management of the Columbus Can ning Company, 

which produced, canned, and sold Je t and Bonus dogfood. This business was operated initially as a prop rieto rship, then as a partnership, 

and finally, from 1957 until it ceased operations in 1959 as a corporation.

In 1965, Mr. Hooper met Eve rett Hope Brooks, a Memphis businessman, and in 1966 the two formed a partne rship in the dairy farm operation which lasted until the b ankruptcy of Mr. Brooks in late 1969. Mr. 

Hooper and Mr. Brooks also were associated in two other business 

ventures: Sta nda rd Union Life Insurance Company and Little Biver 

Farms, Inc., an Atlanta retail milk chain.

Because Mr. Brooks was closely involved in these businesses with 

Mr. Hooper, an und erstanding of the nominee’s business background 

is aided by understanding the financial background and bankruptcy 

of Mr. Brooks. A b rief account of Mr. Brooks’ business affairs is a ttached to this report as A ppendix IT, p. 59.

In addition to the foregoing enterprises Mr. Hooper has from 

time to time realized income from the development and sale of real 

estate inherited from his father-in-law, I)r. Bed L. Fite. In the early 

197O's Mr. Hooper and his wife sold several small houses in Memphis. 

In December, 1974, Mr. Hooper negotiated the sale of the farm 

property upon which the dairy was located for approx imately $560,000 

to the Weyerhauser Company for rail access to the ir new pulp and 

linerboard mill at Columbus, Mississippi. [68,69.] 3

Mr. Hooper retains a lease on the dairy farm and continues tha t 

opera tion as his prim ary occupation.

’ The se tt le m ent sta te m ent fo r th e W ey er hau se r sa le sh ow s th a t W ey er hau se r di sb urs ed 

th e pr oc ee ds of th e sa le to pay se ver al outs ta ndin g de bt s of Mr. Hoo pe r, in cl ud in g th e 

bal an ce du e on a m or tg ag e to P ru denti al In su ra nce Com pa ny ,n th e am ount of $114,50 0.

< ,u *’ o n s e v e r ®l no te s to th e F ir st Co lumb us N at io nal B an k In th e am ount of >1 21.02 6.0 2, an d a not e to th e F arm ers Ho me A dm in is tr at io n in th e am ount of $7 0,3 77.90 . 

The net proc eeds of th e sa le of th e fa rm t o Mr. an d Mrs. Hoo pe r wer e $2 28 ,495 .48 [7 0. ]
249

THE HOOPER DAIRY FARM PARTNERSHIP

T he P artnership Agreement

In the fall of 1965 Mr. Evere tt Hope Brooks and Mr. Hooper 

agreed to form a partne rship to continue the operation of Hooper 

Dairy Farm, which had theretofo re been operated as a proprietorship 

by Mr. Hooper. The partne rship agreement was never reduced to 

writing. A lette r from Mr. H ooper's a ttorney, H unter Gholson, to Mr. 

Brooks’ atto rney, James S. Gilliland , d ated November 4, 1969, state s:

It is my hope that you and I can devise some documents which will accurately 

reflect and document the informal and verbal agreements which took place 

between Brooks and Hooper. [103.]

A m emorandum was subsequently filed as an exhibit to the deposition of Mr. Hooper in the Bankruptcy of Mr. Br ooks 4

 taken in Feb ­

ruary of 1971 tha t undertakes to set forth both the agreem ent and 

experience of the partnership. The memorandum is untitled and 

undated, but Mr. Hooper state d tha t he believed it was executed in 

the fall of 1969. It was app arently made in pre paration for the 

bankruptcy proceedings and tha t at the time of its execution Mr. 

Brooks had eith er filed or was pre paring to file his petition for a 

Cha pter XII arran gement under the Ban krup tcy Act.

The memorandum reads as follows:

In 1966, Hooper and Brooks had man ; discussions and arrived at certain 

conclusions about the economic opportunities in the commercial production of 

milk. It was evident tha t the price of raw milk had fallen so far behind the 

general economy tha t small dairym en could not survive an d th at th eir withd raw al 

over a period of time would inevitably result in a reduced supply, which in tur n 

would mean a rise in price. The only dairy operation s that could survive this 

shortage would have to be those well-financed, large-scale organiz ations able 

to provide good working conditions, efficient utilization of feed by top-quality 

cattle, and able to withstand te mpo rarily adverse economics.

Based on these discussions. Hooper and Brooks felt tha t they could each benefit 

from the oth er’s background and experience and that the combined effort could 

develop an operation tha t would meet the above criteria with larg e financial 

rewards.

A partn ers hip was formed with the understand ing that because of Hooper’s 

background in nutr ition, manufa cturing, engineering and dairy operation, he 

should devote full time to management of the existing operation, develop additional physical facilities as required, locate and select top qua lity cattle, and 

set up feeding systems that would be economically sound. Brooks’ background 

in finance in the construction, cotton and farming businesses would be devoted 

to making available adeq uate long-term capital. The main thr ust of the whole 

concept was to develop a large-scale, facto ry-ty pe dairy operation.

The partne rsh ip was formalized in 1966. The basic financial agreement was 

tha t Brooks would buy an undivided one-half in terest in certain farm lands owned 

by Hooper for $100,000, plus assumption of one-lialf of the existing mortgage. 

In addition. Hooper was to be paid $175,000 for his cattle, machinery, and equip ­

ment, by the partnership, out of financing tha t was to be made available an d/or 

profits.

* See Appendix II for brief account of Mr. Brooks' bankruptcy.

3
During 1966, 1967, and 1968, Brooks made available to the par tnership a 

series of loans as temporary measures, [tending proper long-term financing. During 

the la tter p art of 1968 a rea ppraisal of the relationship of the two partn ers was 

made in which the following situ atio n became evident.

While Hooper had conveyed titl e to one-half inte rest in the land, and had 

made available the cattle and machinery as originally agreed upon, the hand-tomouth financing had made it impossible for any substantia l sums to be paid to 

Hooper. Specifically, out of $79,137.78 paid to Hooper, $36,000.00 would be equal 

to the salary requirements of a competent herdsman, and approxim ately $15,- 

000.00 was for reimbursement of expenses out of Hooper's personal funds, leaving 

a net of $28,137.78 tota l that could he considered as paym ent toward the indebtedness of $275,000.00. This would leave a balance still due at that time of 

$246,862.22.

At thi s point, even though a diligent search had been made for the necessary 

long-term financing, there was no immediate prospect of securing these funds, 

nor was the profit structur e such that there were any foreseeable funds to make 

any sub stantia l reduction in the indebtedness to Hooper. Since this was not the 

situation originally intended, it was agreed that Brooks would re-couvey titl e to 

the one-half inte rest in the land, plus a small acreage valued at $13,000.00 which 

he owned (known as the canning pla nt) to Hooper. This would reduce the obligation to Hooper to a more reasonable figure by cred iting $113,000.00 toward 

the $246,862.22, leaving a tota l balance due of $133,862.22.

Before the above agreem ent was implemented, an atte mp t was made to use 

this and other farm prop erties as admitted reserves in an insurance company 

owned by Brooks, with Hooper to be paid by stock in the company. This [dan 

was submitted to the insurance commissioners hut was rejected. Since no stock 

had been issued, nor paym ents made, the land was formally conveyed to Hooper 

in August of 1969, in line with the agreement reached in 1968.

During 1969, payment to Hooper of $18,070.92 was approxim ately equal to 

salary and expenses due him without any reduction in the debt owed him. In 

July, 1969, some monies were made available to the par tnership by Brooks, but 

due to othe r financial pressures, were immediately withdra wn by him.

Throughout the four-year period, a line of cred it was maintained at the First 

Columbus National Bank as a joint personal liability of Hooper and Brooks 

with cat tle and machinery as collateral. This account presently shows $140,000.00 

due the Bank. Due to high interest rates, tigh t money, and the generally depressed farm situation, the cattle and machinery owned by the partnership 

have a value approxima tely equal to this indebtedness.

During the existence of the partners hip the accounting firm of 

Touche, Ross & Company in Memphis. Tennessee, was retained by Mr. 

Hooper and Mr. Brooks to prepare the Federal income tax returns for 

the partners hip. Mr. Hooper would regularly submit to the firm all 

of the James F. Hooper—Farm Account bank statements and canceled checks for the tax year.5

 Any accounting questions raised by 

Touche, Ross & Company in connection with the partne rship accounting would be. resolved throu gh correspondence and telephone 

conversations with the partne rs. 0

The inte rpre tation o f the partnership dealings derived from these 

contacts by the accountants at Touche. Ross & Company is at 

variance w ith the inte rpretation presented by Mr. Hooper both in the

B A ft er Mr. Br ooks de cl ar ed bankru ptc y on Octob er 27, 19fi9. th e firm of To uc he . Ro ss 

A Com pa ny was re ta in ed by th e T ru st ee In B an kru ptc y be ca us e th ey po ssessed know ledg e 

an d In fo rm at io n re gar din g m an y of th e com ple x bus in es s re la tionsh ip s of th e bankru pt, 

in cl udin g th e Hoo pe r D ai ry Far m part ners hip . To uc he . Ro ss As Com pa ny ha d been re ta in ed 

by Mr. Brook s ns hi s pe rs on al accounta nts fo r se ve ral yea rs pri or to lils ba nk ru ptc y. Th e 

pa rt n e rs h ip di sc on tinu ed se nd in g To uc he , Ross & Co mpa ny fina nc ia l In fo rm at io n re ga rd in g 

th e part n ers h ip ope ra tion In Aug us t of J9C>9 an d did not re ta in th e acc ounta nts In th e 

pre para ti on of th e ir 19R9 p art n e rs h ip ta x re tu rn .

•T h e part n ers h ip ba nk ac co unt w ith th e F ir st Colum bu s N at io nal Ban k of Co lum bus. 

M ississ ip pi bore th e des ig nat io n "J am es F. Hoo pe r Farm Acc ou nt .” Th e ac co un t ha d 

bee n set up some tim e earl ie r In co nn ec tion w ith Mr. H ooper 's In di vid ual op er at io n of 

th e fa rm . Alth ou gh Mr. H oo pe r m ai nta in ed a se para te per so nal ch ec ki ng ac co un t, th e 

fa rm ac co un t was use d fo r some pe rs on al an d no n fa rm busi ne ss tr an sac ti o n s bo th be for e, 

duri ng, an d a fte r th e p a rt n e rs h ip 's ex ist en ce . This nec es si ta te d a ca re fu l review by 

To uc he Ro ss & Co. of tr an sacti o n s af fe ct in g th a t nc co un t In th e p re para ti on of p a rtn e rsh ip ta x re tu rn s.
251

foregoing memorandum and in his deposition in the ban kruptcy 

case.7

 The difference in these interpreta tion s is significant and an 

analysis of the partne rship transactions is included in Appendix I to 

this repo rt to assist in understanding the dispa rities.

The partnership tax work was supervised at Touche, Ross & Company by Mr. Don Stark , now a p art ner in the firm. Mr. S tark met with 

Mr. Brooks and Mr. Hooper on May *2, 1967, to discuss the p rep aration 

of the partne rship tax return for 1966. Since this was the first return 

of the p artnership, the general partnership arra ngement was discussed 

at some length. Mr. S tark’s impression of that discussion was reduced 

to an interoffice communication to file and is as follows:

For over IS years. Mr. Hooper h ad operated a Holstein dairy farm nea r Columbus, Mississippi. As of October 15, 1965, Mr. Brooks became an equal partn er with 

Mr. Hooper in the operation of the farm . Actual operations did not begin until 

Jan uary 1, 1966. The basis of their partn ers hip arra ngemen t was that Mr. Brooks 

was to contribu te $150,000 in cash, while Mr. Hooper was to contribute some 1500 

acres of land, 45 lots, eipiipment. equity in the venture was agreed to be $300,000. 

See balance sheet of October IK, 1965, in the workingpapers.

Mr. Brooks . . . personally paid in cash to the partnership and . . . guara nteed loans at National Bank of Commerce to provide immediate working capital 

for the venture. Total cash deposits by E. H. Brooks totaled $240,000 of which 

$90,000 was then repaid to the NBC hank loan. Mr. Hooper is to he charged for 

the $676.67 interest on the repaym ent of this loan. Thus, the tota l cash contribution of E. H. Brooks is $150,000, in addition he has advanced ano the r $27,000.

Based on the $300,000 determined equity, it would appear tha t the $150,000 should 

have gone to Mr. Hooper personally. Actually the money went to th e jo int account 

and Mr. Hooper has withdraw n only $35,000 of the funds.

Mr. Hooper indicated tha t he has sub stantial capital and net operatin g loss 

carry forw ards available to him. Accordingly, the venture should he set up in 

such a way as to give the greatest tax advantage to Mr. Brooks. Mr. Hooper has 

also included a copy of his prio r y ear’s tax return which should provide information for depreciation purposes.

Mr. Hooper emphasized tha t we should not rely upon his summ ary sheets 

entirely because they may he inaccurate. He has furnished us with hank statements and cancelled checks. Worksheet number 5 shows estim ated operations for 

the first three months of 1967. Based on expectations, the venture could earn 

$100,000 in 1967 before depreciation. (91.]

During the Brooks bankruptcy proceedings the Trustee sought to 

ascertain the natu re and value of the interest of Mr. Brooks in the 

farm partne rship to determine if it m ight be of any benefit to the cre ditors of Mr. Brooks. The Court appointed Mr. Joh n Paul Jones of 

Memphis, Tennessee, attorney for the Trustee to gather information 

regarding the Hooper Dairy Farm partnership and the other business 

interests of Mr. Brooks in which Mr. H ooper was involved. [24.]

On Feb ruary 18, 1971. Mr. Jones took the discovery deposition of 

Mr. H ooper in connection with these affairs. In the course of tha t dep ­

osition Mr. Hooper testified at length regarding the partners hip operation. His testim ony furnishes an insight into his un derstanding or the 

partnership dealin gs:

Q. [by Mr. Jones.] In other words, Mr. Brooks became the record title holder 

of tha t land ?

A. [by Mr. Hoojier.] Undivided half interest.

Q. All right. Became the record title holder of an undivided half inte rest in 

this land on Feb ruary 15, 1966.

A. Correct.

’ See pages 5 through 9.

5
252

Q. At tha t time did he owe any money on it?

A. Yes, sir. This was subject—the sale was subject to Pru den tial mortgage of 

$140,000.

Q. Yes, sir. But did he owe the former owners any money?

A. Owed me, yes.

Q. All right. What did he owe you?

A. Well, the total package was 100,000 for this. 175,000 for lan d and machinery. 

Q. All right. But then on Feb ruary 15. 1966. you caused to he conveyed to him 

this land?

A. Yes, sir.

Q. On which he owed you $100,000, right?

A. Yes, sir.

Q. Did you take a second mortgage hack ?

A. Not to my knowledge, no. sir.

Q. But he still owed you the $100,000?

A. Total of two seventy-five, yes.

Q. All right. But it would he $100,000 for this par ticula r land tha t was tra nsferred plus $175,000 for c attle, machinery and equipment?

A. Correct.

Q. All right. Now, was Mr. Brooks to pay this $100,000 for the land personally, 

or was the partne rship to pay it?

A. I can 't honestly distingu ish in my mind between the two. I believe my best 

memory is that the land was to be purchased by Brooks, and tha t the partn ership would pay me for the other par t. Now, th at ’s the best of my memory.

Q. All right. Then, as a ma tter of fact, in F ebruary of 1966 you caused this land 

to be tran sfe rred to Mr. Brooks subject to the first mortgage of Pru den tial?

A. Yes.

Q. And he owed you $100,000 for the sale price, but you didn't secure tha t 

$100,000 by second mortgage recorded at the court house, is tha t correct?

A. That's correct, because it was all part of a complete package, the hundred 

plus the hundred and seventy-five.

I would not have sold either one without the othe r at that time. Let ’s put it 

th at way.

Q. All right. Now, when and under what circumstances did Mr. Brooks agree 

to transfe r this land back to you?

A. In 1968. We went over the history of flow of funds, and as you can see in 

Exh ibit 3, it was obvious that I had not been paid any substan tial sum of money. 

And it was agreed at that time that he would tra nsfer it back to me. and tha t 

we would go forw ard on just the equipment and machinery partnership.

Q. W hat month in 1968 was this?

A. Oh, October. [1, pp. 52-55.1

• • * * • * *

Q. So, when you got this land back, Mr. Brooks had a net investment in the 

par tnership of $220,000, righ t?

A. Yes, sir.

Q. On the same date, that is the date you received the land back, your with ­

draw al from the par tne rsh ip account exceeded your investment by $88,000. did 

it not? And I am looking at the figure at the bottom of page two in the fourth 

column.’

A. At the bottom of page two in the fourth column. The $88,000 is the net income 

T had withdrawn.

Q. But your withdrawa ls exceeded your investments by that amount, did it 

not?

A. Well, T didn’t have any investment. These sums, as you see. are from deposits. or some of it is money tha t I put back in there from having withdraw n 

it first. I don’t know what the correct—T guess you wou’d call it investment. My 

investment was the original 175.000 of machinery and cattle. That is my basic 

investment. So. at this point von would have to add the 175 to the 37 if you w ant 

to take th at route. [1. pp. 59-60.1

• • • • • ♦ •

Q. What was your agreement with Mr. Brooks concerning about who would 

furnish the cash to operate this p artn ership?

A. Tt was my understanding Mr. Brooks.

Q. And in tu rn he was going to be given wha t?

•M r. .Tones is re ndin g I'm m Mr. ll onner' s “ Peti ti on nn d A cc ou nt in g" filed Ja n u a ry 19. 

1971. rso. 1

6
253

A. Half interest.

Q. And w hat contribution did you make?

A. Management, use of a going concern, moving into a going concern.

Q. Did this par tne rsh ip ever make a profit?

A. No, sir. [1, pp. 62-63.]

Q. Now, when and under what circumstances did you and Mr. Brooks reach 

this agreement you would be paid a s alar y as a herdsma n?

A. To the best of my knowledge that would be in the period of 1968 when we 

looked the record over and realized that I was completely, physically involved in 

the thing, and it had not flowed to pay me my money, which could be off to one 

side. In othe r words, I was jus t simply in the position of a herd manager, and 

it was agreeable that it should have been done that way from the very beginning. 

The initial concept was tha t in a ma tte r of, oh, less than six months that the 

funds would have been paid to me completely free of the partn ers hip situatio n, 

and we would go forward on some kind of mutual agreement. When this didn’t 

materialize, why, we had to redo it. 11, p. 64.]

Q. Now, during the last two months of 1965, twelve months of 1966, and 

twelve months of 1967, this partne rsh ip operated, did it not, had a bank account 

at The First Columbus National Bank?

A. Yes, sir.

Q. And during that time not one check was paid to you out of that account as 

salary, is tha t right?

A. I made periodic withdrawals as needed with the understanding that we 

would adjus t it whenever we settled down.

Q. Now, are these w ithd raw als listed on page two?

A. Yes, sir.

Q. Now, on tha t basis you withdrew $25,000 before it had been in operation a month, d idn’t you?

A. Yes, sir, a nd retu rned 7,500 within a few days.

Q. Then, you had 17,500 tha t you with drew in the first two or thr ee months, 

is that righ t?

A. Yes, sir.

Q. What did you do w ith tha t $17,500?

A. Lived on it.

Q. Then, six months later you withdrew $22,000 didn’t you? No. I beg your 

pardon. I beg your pardon. Th at’s your total for 1966 there, isn ’t it?

A. Yes, sir.

Q. Well, is th at in a ddition to the 25?

A. Yes, sir, each year.

Q. I see.

A. Coming down.

Q. So, then 18 months later you withdrew $34,000, didn’t you?

A. No, sir. They are each summary of each year.

Q. Each year, all right. How did you draw that $22,000 in 1966, as you needed 

it for living expense?

A. 1,000, 2,000, yes, sir.

Q. What was your agreement with Mr. Brooks concerning that?

A. Going into the partnership , the assumption was th at I would be paid 

the hundred plus the hund red and seventy-five with in a six month period as a 

lump sum or, certainly, within that period dur ing which where I could invest 

it and have an income on which to live.

I would say since we were never able o r in th at position from funds furnished, 

could not be withdr awn to pay me, then I just withdrew it on hand-to-mouth 

basis. And after reviewing and realizing that th at 's what was happening, 

actually, then we agreed I should be ent itled to a salary, that I was actu ally 

furn ishing a salary because I bad no othe r income.

In othe r words, I had turn ed over the business to a partne rsh ip and had n’t 

been paid for it, so, obviously, I would have to be paid a salary, too, during 

th at period.

Q. Well, this money you drew out, was it ever credited —was Mr. Brooks 

ever given a cred it of it towards the $100,000 for the land $175 thou sand for 

the cattle and the m achin ery?

A. Well, other tha n the way we have got it listed here, in which it does 

give it credit back and forth, it shows the withdr awals and deposits by each 

of the two partners.

6 7 -5 2 0 0 - 76 - 17

7
Q. Now, Mr. Brooks, so you testified, agreed to pay you $100,000 for the 

land and $175,000 for the cattle and machinery.

A. Right.

Q. And he never did that, did he?

A. No, sir.

Q. Well, now let’s brea k that down. The $100,000 was supposed to come personally from Mr. Brooks, right?

A. Yes, sir.

Q. And the $175,000 was supposed to come from the partnership , right?

A. Yes, sir.

Q. So, Mr. Brooks would be only liable for $57,500 of that, wouldn’t he? 

Wouldn’t you be liable for the other eighty-seven five?

A. Fran kly, it just leaves me blank when you st ar t as to dividing this back 

and forth. If you take it th at route, then you are saying that I still owned—• 

I shouldn’t have put in hut half of my equipment and stuff. I mean it frankly 

ju st confuses me on an accounting basis. As fa r as he and I understood it, I 

was to withdra w a total from the partnership of $175,000 and the $100,000 for 

the land.

And as a ma tte r of fact, what happened is dribbles were put into the i>artnership, required by the partnership, and therefo re left me in a position of 

obviously dribbles coming out of it.

Q. Was there an apprais al made of your cattle and machinery in October

1965?

A. October of 1965, as between us, yes. We agreed on the value.

Q. Well, did you have any head count of t he ca ttle ?

A. Yes, sir.

Q. How many c attl e were there ?

A. I don’t remember.

Q. Is there any record of th at anywhere?

A. (No response.)

Q. W hat about a description of the machinery?

A. Yes sir, there was a description of the machinery listing, and I’m sure 

the number of cattle, because there was some correspondence between ToucheRoss and my accountant as to my tax impact.

Q. Did the ca ttle and machine ry have a m arket value of $175,000?

A. Yes, sir.

Q. Who placed it on th ere?

A. Hope and I plus common knowledge.

Q. As a ma tte r of fact, what happened during the first two and a half years 

was Mr. Brooks put money in and you drew it out and lived on it, and Mr. 

Brooks didn ’t receive any cap ital retu rn on his investment at all, isn’t tha t 

correct?

A. Mr. Brooks put in sums of money periodically as per agreed, but not in 

sufficient qua ntity nor at the conditions under which we had both of us ant icipate d would be available. And this forced it to where it was a situation in 

which he was putting a little bit in at a time, therefo re the thing was never 

able to pay me.

Q. But t ha t w asn't w hat I asked you, sir.

A. I know i t’s not.

Q. What I asked you was we had a situation where Mr. Brooks was putting 

money in and getting no return on it, hut you were getting your living expenses.

A. Th at’s correct.

Q. You didn’t get any return on your cattle and machinery, did you, other than 

your living expenses?

A. Other tha n these sums I h ave withdrawn here.

Q. All right. Well, looking nt this accounting, through 1965 it’s apparent that 

Mr. Brooks put in there somewhere in the neighborhood of a hundred and fifty to 

two-hundred odd-thousand dollars, and he didn’t get any retu rn, at all, on tha t 

money, did he?

A. Right.

Q. You put in your cat tle and machinery, hut you did get a retu rn of about 

$90,000 through 1965—well, make.that $100,000, isn ’t tha t correct, if my arithmetic 

is righ t? The first four figures under withdra wals, I am saying ar e $100,000, 

approxim ately in the fourth column.

A. Well, if you subtr act from tha t the salary, then the difference is what I 

was being paid for my machinery and cattle.

Q. But Mr. Brooks did n't get any salary, did he?

A. No sir, he didn't operate it.
Q. T he part ner s hi p di d n't pa y hi m a n y i nterest o n his m o ne y, di d it?

A. No, sir.

Q. All ri g ht. Di d yo u o perate t his b usi ness f ull ti me?

A. Yes sir, at t hat ti me. [ 1, p p. 6 5- 7 1.]

T H K P R O FI T A BI L I T Y O F T H E F A R M O P E R A TI O N

I n his de p ositi o n i n t he ba n kr u pt c y case Mr. H o o per affir me d t h at t he 

part ners hi p di d n ot s h o w a pr ofit at a n y ti me d uri n g its e xiste nce. 

[ 1, p. 6 3.] T he ta x ret u r ns f or t he part n ers hi p a n d Mr. H o o per’s p ers o nal ta x ret u r ns i n dicate t he f oll o wi n g i nc o me a n d l osses f or t he 

far m o per ati o n f or t he last 1 0 y ears [ 2 0, 2 1.] :

Y e ar

1 9 6 5.

1 9 6 6 •

1 9 6 7 '

1 9 6 8 ’

1 9 6 9 ’

1 9 7 0.

1 9 7 1.

1 9 7 2.

1 9 7 3.

1 9 7 4.

F ar m i n c o m e

------------------------------------------------------------- Mi s c ell a n e o u s

A ft e r f a r m r el at e d

C a s h b a si s d e pr e ci ati o n i n c o m e * *

( $ 2 1, 5 3 6 ) ( $ 3 7 , 9 2 3) $ 6, 1 8 8

1, 6 9 1 ( 3 2, 7 8 3 ) 8, 0 1 2

( 5 8, 1 8 1) ( 9 9, 8 0 0 ) 9, 8 1 6

( 5 0, 0 8 0) ( 9 5, 6 0 4 ) 9, 3 2 3

( 2 1, 1 0 2 ) ( 6 4, 5 5 8 ) 9, 7 0 6

( 1 8, 8 2 3 ) ( 4 6, 9 2 8 ) 8, 0 0 0

( 3 1, 1 1 3 ) ( 4 8, 1 2 3 ) 6, 9 7 0

( 2 8, 0 6 6 ) ( 4 5, 0 7 7 ) 1 6 , 6 4 3

( 3 4, 7 7 2) ( 5 1, 7 8 3 ) 1 0, 9 0 0

( 3 2, 1 6 3 ) ( 4 3, 5 3 0) 2 0, 7 4 5

( ) I n di c a t e s l o s s.

* I n di c at e s p a rt n e r s hi p o p er a ti o n.

* * I n cl u d e s i n c o m e fr o m s al e of l ot s, oil l e a s e s, gr a v el s al e s, a n d p a st u r e r e n t al s.

A clearer pict ure of t he i nc o me a n d l oss f or t he part ne rs hi p far m 

o perati o n is s h o w n i n t he f oll o wi n g ta bl e:

H O O P E R D AI R Y F A R M, F A R M I N C O M E A N D E X P E N S E S F R O M U S . P A R T N E R S HI P R E T U R N O F I N C O M E

1 9 6 6 1 9 6 7 1 9 6 8 1 9 6 9

I n c o m e :

S al e s:

C o tt o n...................................................................................................

S o y b e a n s............................................................................................. .

D ai r y pr o d u c t s...................................................................................

G r ai n......................................................................................................

R e b a t e s..........................................................................................................

$ 1 5

1 3 7,‘ 9 1 6

$ 1 5 5 , 1 7 5 $ 2 1 5 , 1 3 1

3, 5 2 5 .......................

1 1 6 .......................

$ 1, 3 3 0

1 5 7, 7 8 7

T o t al 1 3 7, 9 3 1 1 5 8, 8 1 6 2 1 5, 1 3 1 1 5 9, 1 1 7

>r

E x p e n s e s :

L a b or h i r e d ........................

R e p air s a n d m ai nt e n a n c e

I n t e r e st..................................

F e e d p u r c h a s e d..................

S e e d pl a nt s p u r c h a s e d...

M a c hi n e hir e........................

S u p pli e s p u r c h a s e d...........

Br e e di n g f e e s .......................

V et eri n ar y, m e di ci n e.........

G a s oli n e, f u el, oil................

T a x e s......................................

I n s u r a n c e..............................

U tiliti e s..................................

Fr ei g h t, tr u c ki n g................

C o n s er v ati o n e x p e n s e s...

C o m mi s si o n s........................

T r a v el.....................................

A c c o u n ti n g............................

R e nt c a ttl e ...........................

T e l e p h o n e.............................

E nt e rt ai n m e n t....................

Mi s c ell a n e o u s.....................

2 1, 0 5 4 2 8 , 2 3 7

3, 9 4 3 5, 0 5 0

8. 1 7 6 7, 8 7 4

8 2. 4 4 0 1 4 6, 7 7 6

4, 3 9 6

4. 3 7 3

9, 1 1 2

1. 4 1 2 1, 1 0 4

1, 3 3 6 4, 5 3 2

3, 8 6 4 4, 1 0 9

2, 4 7 7 2. 5 4 0

3, 4 1 2 2, 6 2 9

1 5 2 ..

1 5 8 4 5 0

1, 1 7 4

3 0 0 2 2 2

3 4 9 4 4 8

1, 7 0 0

2 4 5

1 3 3

1, 2 2 5 6 6 2

3 5, 5 5 8 3 7, 2 1 5

9, 6 9 8 6, 8 9 5

2 3, 1 4 9 1 1 , 6 1 0

1 6 8, 5 2 3 1 2 3, 8 1 3

5, 2 6 5 2, 6 8 4

4, 7 0 3 8. 7 4 5

3, 0 5 1

3, 9 6 2 5, 0 0 6

3, 2 4 9 3, 1 7 3

2, 5 1 8 5, 1 6 6

8 9 1 1, 0 6 9

0 ..

0 ..

2, 5 6 6 5, 9 8 3

7 0 0 ..

1, 0 8 5 .

2, 8 2 0

2 9 3 ..........................

T o t a l...........

D e p r e ci ati o n..

1 3 9, 0 6 7

3 4, 4 2 9

2 1 6 , 9 9 7

4 1 , 6 1 9

2 6 5 , 2 1 1

4 5, 5 2 4

2 1 6, 1 7 9

4 3, 4 5 6

T o t al d e d u cti o n s

1 7 3 , 4 9 6 2 5 8, 6 1 6 3 1 0, 7 3 5 2 5 9, 6 3 5

L o s s...............................................

A dj u st m e n t f o r s al e of c a ttl e

( 3 5. 5 6 5) ( 9 9, 8 0 0 ) ( 9 5 , 6 0 4 )

2, 8 2 7 .....................................................

( 1 0 0, 5 1 8 )

3 5, 9 6 0

N et l o s s

..................................................................................................... ( 3 2 , 7 3 8 ) ( 9 9, 8 0 0 ) ( 9 5 , 6 0 4 ) ( 6 4 , 5 5 8 )
25G

The memorandum set forth at pages 8 and 4 indicates that the

f

iartncrs were never able to obtain sufficient financing to “develop a 

arge-scale, factory-type dair y operation.” The foregoing income and 

expense statement, however, indicates tha t during the period of the 

partnership the depreciable property of the farm opera tion increased 

substantially. The depreciation schedule derived from the tax records 

of the partnership specifically shows t hat the cattle, equipment, and 

machinery were acquired from Mr. Hooper at a price of $175,000 in 

1966. At the end of 1967 additions to these assets had increased their 

value to $305,368.00—an increase of 74 percent.

When interviewed in 1975, Mr. Brooks attrib ute d the financial difficulties of the partnership, not to a lack of investment capital, but to 

an inability to market increased prod uct ion :

. . . our production of Hooper Dairy Farm was beginning to look bright. Our 

work and all had paid off, upgrading of the cattle, as I had mentioned, bet ter 

grade of cattle from the north and continuing culling which was brought out in 

the Murdock loan installm ent purchase of cattle. We were producing a tra ile r 

truck, tank truck load of milk per every othe r day as surplus milk which could 

only be sold at below’ our cost of production in th at it had to be utilized for 

powdered milk even though it was grade A prime quality milk. [12, p. 39.]

In 1969 and in the years following Mr. B rooks’ bankruptcy the farm 

opera tion declined considerably. The value of farm assets fell back to 

a level commensurate with pre-partners hip operations. Mr. Hooper 

asserted on numerous occasions in the bankruptcy case and in other 

legal actions tha t he was prevented from continuing (he operation on 

a sound basis by the uncertainties posed by the bankruptcy litigation.

The Hooper Dairy Farm was appraised at the request of the trustee 

in the Brooks Ban krup tcy in September, 1971 by Mr. W. C. W ilkinson who had been appointed appraiser in the bankrup tcy action for 

other properties of Mr. Brooks in the State of Mississippi. Ilis report 

of September 16, 1971, states tha t the total value of the dairy real 

property was $300,000 of which the land value was $258,225. T hat report estimates the income potential of the farm in its condition as of 

September, 1971, to be $10,122 per year. [ 174.]

In explanation of his conclusions Mr. Wilkinson includes the following two statements in the app raisa l:

Economic apprais al is based on potential possibilities not on actu al operation. 

Farm is badly neglected and rundown.

• • • • « • •

Land, buildings and fences show gross neglect. Saw only about 10 acres of milo 

growing. Saw’ about 100 head of cattie and caives.

D isso lu tion of t h e P artn er sh ip

REAL ASSETS

While it was originally proposed th at the farm real estate be included in the partnership, Mississippi law precludes the ownership of 

real estate by a partnership. Therefore, the tra nsfer of a one half interest in the real property was made to Mr. Brooks. The ha lf interest 

was first conveyed to E. M. Radcliffe Investm ent Company and then 

to Mr. Brooks.9

 Radcliffe Investment paid Mr. Hooper the agreed con-

• The tran saction was handled In the manner developed by Messrs. Brooks and Gordon 

Brent. For more detailed analysis of the Brooks-Brent rela tion ship see Appendix II.

10
257

sideration by a check dated Jun e 14.1966, in the amount of $100,000.00 

and canceled a credit due Mr. Brooks on othe r property. [57; 58; 59; 

62; 177; 12, pp. 1-6.] The $100,000 check was deposited in the J. F. 

Hooper-Farm Account, which was used thro ugh out the partnership 

for both partners hip business and Mr. Hooper's personal transa ctions. 

Touche Ross & Company showed the amount as a credit on the pa rtn ership ledgers to Mr. Hooper's personal account because Mr. Hooper 

did not immediately draw out the funds.

In addition to the $100,000 payment, Mr. Brooks assumed half of 

the $150,000 mortgage on the farm property held by Pru den tial In ­

surance Company.10 The total consideration for the tra nsfer is shown 

on Mr. Hoop er's personal 1966 Federal Income Tax Return, in the 

amount of $175,000 on which a g ain o f $144,089 was reported.

Mr. Hooper, however, stated th at he did not receive the consideration for the sale o f the one half interest, because he retu rned the bulk 

of the money to Mr. Brooks immediately in the form of a check for 

either $90,676.67 (according to his Petition and Accounting) [30.] 

or in the amount of $98,000 (according to his testimony in the case of 

Standa rd Union Life Insurance Com pany v. James F. H ooper). [8, p. 

7.] The discrepancy, apparently an erro r of memory, is cleared up by a 

letter from Mr. H ooper's attorney. Mr. H unter Gholson, to Mr. Brooks 

dated June 16, 1966 explaining th at a disbursement of $90,676.67 was 

to be made against the $100,000 received from Radcliffe Investm ent 

to the National Bank of Commerce in Memphis, Tennessee. [89.]

This $90,000 disbursement to the National Bank of Commerce, 

claimed by Mr. Hooper to represent a return of the proceeds of the 

check from Radcliffe Investm ent Company to Mr. Brooks, actually 

was a repaym ent of three loans obtained from that bank for the farm 

operation. The bank's records indicate that these loans were made as 

follows;

Date Amount Obligor

Nov. 9, 1965............................................................ $50,000.0 0 Mr. and Mrs. James F. Hooper.'

Jan. 13, 1966........................................................... 15,000.00 James F. Hooper and Everett H. Brooks.

Jan. 25,1 966 ........................................................... 25 ,000 .00 Do.

* 1

 Mr. Brooks endorsed this note.

The foregoing analysis is pertinent for on August 20, 1969, Mr. 

Hooper negotiated the reconveyance to himself of Mr. Brooks' one half 

t interest in the farm real property on the premise that Brooks had never

paid him for it. [165.] 11 Ten days before the reconveyance, Mr. Brooks 

had retained an attorney, Mr. Jam es S. Gilliland , to represent him in 

connection with his bankrup tcy. Six days l>efore the tran saction , on 

Augu st 14, 1969, Touche, Ross & Company filed an application with 

the Inter nal Revenue Service for an extension of time to file the 

Hooper Dairy Farm partner ship tax return due to Mr. Brooks’ illness. 

The specific statement in the extension request is as follows:

The prin cipal par tne r, E. H. Brooks, is seriously ill and hospitalized. His physician advises that his mental and physical conditions are such th at he is unab le

“ The partnership made the annual payments on this debt as ren t paym ents in 1966 

and 1967. In 1968, Mr. Brooks personally paid the entire install ment due.

11 See pages 25 throu gh 27 for furth er details rega rding the reconveyance of the farm 

property. The minutes of Stan dard Union reflect th at Mrs. Betty Brooks participated 

in the reconveyance.

11
to work with accountants with respect to completion of the return by the previously extended due date. [180.]

Dur ing the bankruptcy proceedings Mr. Brooks testified in response 

to an examination by bis attorney, Mr. Jam es S. Gilliland, as follows:

Q. [by Mr. Gilliland], Mr. Brooks, between you and I, let’s turn back the calendar a few days to those unpleasant days in August when I first came in the picture. You recall it was abou t the second week in August, August 9th or 10th, when 

I came into the picture, originally your wife had spoken at length to me, and I 

met with you, and, frankly, you were physically and emotionally dreadfu lly upset, were you not?

A. [by Brooks]. Yes, Sir.

Q. And frankly, at tha t time you were operating under strict doctor’s orders, 

were you not?

A. Yes, Sir.

Q. And your doctor’s ord ers were tha t in view of the dreadful stress and problems tha t you had, you were not to conduct any business until sometime the 

following—sometime in 1970?

A. Until quite some time in the future th at he would determine.

Q. And it was certainly clear both to you and to your wife and to me, that you 

were then suffering under a great deal of agony from your problems and that I 

guess you had pretty good reason a t that point?

A. And more a fterwa rds. [9, pp. 1161-1162.1

Mr. Hooper states tha t at the time of tbe reconveyance he was 

unaware th at Mr. Brooks bad hired a lawyer or th at be was physically 

and emotionally upset.

On September 23, 1975, Mr. Brooks state d be could not recall the 

details o f tbe reconveyance of bis half interest in tbe farm property. 

He confirmed th at tbe transactio n took place at a time when be bad 

been under mental stress due to bis financial problems. [12, p. 76.] 12

GENERAL ASSETS AND CA PIT AL ACCOUN TS

On July 28, 1970, Mr. Hooper filed under oath bis Petition to Authorize Trustee To Abandon a Burdensome Partnership Intere st of 

the Bankrupt. [26.] That petition asserted :

i.

All of the assets of Hooper Dairy Farm are encumbered by security agreement 

and financing statem ent with the Fir st Columbus National Bank of Columbus, 

Mississippi, as the lienholder. The amount of the indebtedness secured by said 

lien materially exceeds the value of the encumbered property.” The re are no 

assets of Hooper Dairy Farm which are unencumbered.

11 According to Mr. H ooper 's Peti ti on an d Acc ou nt in g, S ta n d ard Unio n Li fe tr an sfe rr ed 

$100,00 0 to th e Hoo pe r D ai ry Far m sh or tly be fore th e reco nv ey an ce of th e fa rm pr op er ty . 

Mr. Br oo ks wa s que st io ne d re gard in g th is tr ansacti on an d resp on de d as follo ws :

“Q. In Ju ly of 'fi9, on e m ont h pri or to th e re co nv ey an ce of th e fa rm pr oper ty to Mr. 

Hoo pe r which was In A ug us t of '09 . S ta ndard Union Li fe, which you ow ne d who lly , pa id 

to th e Hoo pe r D ai ry Farm th e $1 00,00 0 which we ta lk ed abou t ea rl ie r. • • » Why did 

you do It 7

"A. [By Mr. B ro ok s.] Well, now th a t I ’m go ing to ha ve to ch eck In to th e circu m st an ce s 

an d find out be cause, now fr an kly , an d ns I sa y. th is Is no t re he nr se d. I hadn’t see n th e 

reco rd s an d I'm hav in g to re const ru ct th in gs th a t took plac e be tw ee n th e los s o f my be st 

fr iend , on e th a t I was w illing to giv e mo ney to whe n I w oul dn ’t give It to my ch ildr en an d 

th in gs of th a t so rt. B ut I w asn 't th a t fr u st ra te d . I ca n see why mn.vbe I wo uld ha ve as ke d 

him to give me th e $1 00 ,000 h ack an d we'd ca ll It off.

"Q. Well, th e $1 00 ,00 0 wen t from S ta ndard Union . . .

“ A. I know . I sa y I ca n unders ta nd th e oth er way . but now th is you go t me. hu t I ca n 

guara nte e yon I m ig ht ha ve gotten pre tt y cr az y bu t I did n't ge t th a t craz y. The re Is a 

re as on but I don 't know If It hn d bee n ri ghtl y or wro ng ly. If it ha d. I wou ld ha ve go ne on 

an d nc cepted th a t It was to ca ll th e de al (iff if he hn d pa id me th e $100,00 0. Sinc e It 

work ed th e oth er way . I'd ha ve to check an d see w hat th e re as on w as .” [12, pp. 75 -7 0.1

Mr. Hoo pe r ac co un ts fo r th e $1 00 ,00 0 de po sit from S ta ndard Union to th e H oo pe r 

D ai ry Farm as an offset- to a w ithdra w al of $93,1 20 from th e Farm Acc ou nt by Mr. 

Br ooks In pa ym en t of a pe rs on al de bt to th e B an k of Yazoo C ity owed by Mr. Br oo ks .

” T he am ount of th e In de bt ed ne ss to th e F ir st Colum bu s N ational Ban k on Decem ber 31. 

1969, wa s $140,00 0. In te re st was du e on th e lo an on th a t date In th e am ount of $3,90 9.4 4.
259

ii.

. . . Petitioner affirmatively charg es that if the indebtedness is allowed to remain unpaid and foreclosure results, a large deficiency is likely to be incurred. 

Petition er would show that on the oth er hand, he is willing to assume all of 

the indebtedness owed on said assets a nd indemnify tlie b ank rup t esta te from any 

claim made by the First Columbus National Bank in connection with said indebtedness. . . .

On the basis of the foregoing allegations Mr. H ooper and his a tto rneys requested the Trustee in the bankruptcy case “to abandon any 

claim or interest on behalf of the bankruptcy estate in and to the assets 

of the dairy business.*’

In support of Mr. Hooper’s assertion tha t the assets of the p artnership were overburdened his attorney, Mr. Hunte r Gholson, forwarded 

to the Trustee two copies of a December 23,1969, “Statem ent of Assets 

and Liabilities” prepared by T. E. Lott & Company of Columbus, 

Mississippi. [122; 85.] 14 Although documentation does not indicate 

whether Mr. Gholson enclosed the accounta nt’s explanatory mate rials 

in his submission to the Trustee, that Statement was submitted to Mr. 

Gholson with a cover lette r from the accountants which stated :

We made no independent confirm ations or detailed aud it of the records of the 

Hooper D airy Farm o ther than verification of th e hank loan and accrued interest.

Due to the absence of usually accepted aud itin g procedures on th e part of this 

office, we cann ot express an opinion rega rdin g the correctness of tlie atta ched 

statements. [121.]

The Statem ent shows the partnership liabilities as follow s:

Accounts payable (sched ule)_________________________________ $31,453.73

Notes payable—First Columbus National Bank-------------------------- 140,000.00

Accrued inte rest on hank notes_______________________________ 3, 909. 44

Account due J. F. Hooper____________________________________ 133, 862. 22

Subto tal ______________ _____________________________ 309,225.39

Capital deficit_____________________________________________(170,878.17)

Total liab ilities____ _____ _____________________________ 138,347.22

Mr. Hooper undertook to show not only tha t the assets of the farm 

were overburdened but that he had not been paid for the farm assets 

he had placed in the partnership. On March 25, 1970, Mr. Hooper 

filed a “P roof of Claim” in the bankruptcy case asse rting tha t Mr. 

Brooks owed him $66,931.11 as the “unpaid purchase price of assets 

transferred to the partne rship.” [25.] The amount of the claim equals 

precisely half of the amount shown on the December 23, 1969, State ­

ment prepared by T. E. Ix>tt as “Account due J . F. Hooper.”

The claim was originally filed in the full amount, $133,862, and later 

lined through and reduced to $66,931.11. Apparently the modification 

of this claim represented a correction reflecting the fact tha t the pa rtnership and not Mr. Brooks personally owed Mr. Hooper for the f arm 

machinery and cattle. Mr. H ooper's Petition for Aband onment filed in 

July. 1970. indicates tha t he was at that time still pressing his claim 

for the full amount shown on the December 23. 1969. Statem ent. [26.] 

This would furth er confirm the confusion evidenced in Mr. Hooper’s 

testimony rega rding the tra nsfer of personalty to the partn ers hip:

Q. [by Mr. Jones.] ... The $175,000 was supposed to come from the partnership, 

righ t?

A. [by Mr. Hooj>er.] Yes, sir.

“ An interview with Eugene Beard the senior accountant for T. E. Lott A Company in ­

dicated th at he had not been advised by Mr. Hooper of several sub sta ntial transa ctions 

which would substantia lly aifect the balances shown on this Statement.

13
Q. So, Mr. Brooks would only be liable for $87,500 of tha t, wouldn’t he? 

Wouldn't you be liable for the othe r eighty-seven five?

A. Fran kly, it jus t leaves me blank when you sta rt as to dividing this back and 

forth. If you take that route, then you ar e saying lhat I still owned—I shouldn’t have put in but half of my equipment and stuff. I mean it frankly just confuses 

me on an accounting basis. As f ar as he and I understood it, I was to withdraw 

a tota l from the par tnership of $175,000. ... (1, pp. 67-68.1

Addition ally Mr. Hooper’s Petition For Abandonment failed to 

show tha t the assets were conveyed to the partne rship subject to an 

encumbrance to U.M. & M. ("’redit Company in the amount of 

$52,860.15 The Petition furth er failed to account for the transf er to 

the partnership of additiona l personal debts derived from the prepartnership dairy operation amou nting to more than $100,000.16 The 

partnership assumed and paid this entire indebtedness of $152,860.00. 

Thus, Mr. Hooper's equity in the assets tra nsf erred to the partnership 

amounted not to $175,000 as shown in the Petition for Abandonment, 

but to approximately $19,000.

th e court's dispo sition of th e partne rship

On December 16, 1970, Mr. Hooper’s atto rney requested that the 

Trustee hold an inform al proceeding so that information in support 

of the Petition for Abandonment could be presented. [128.1 This request was denied because of the complexity of the financial transactions involved. In Janu ary of 1971, a sworn Petition and Accounting 

. . . For Partnership Operation of Hooper Dairy Farm was executed 

at the request of the T ruste e's attorney. [ 129.30.] This accounting purported to show “all payments to and withdrawa ls from the Hooper 

.Farm Account hv l>oth James F. Hooper and Everett Hope Brooks, 

according to Mr. Hooper's bank records.” 17

The Petition and Accounting indicates tha t the partnership had a 

net deficit of assets o f $536,144.34 including partner's capital and loan 

accounts and an asset deficit of $71,227.93 excluding contributions and 

loans from partners. After setting forth the basis for the analysis of 

the partnership accounts, the Petition and Accounting goes on :

. . . your petitioner will have to assume and pay these debts in o rder to protect 

himself from personal bank ruptcy because of his j»ersonal liability . . . your petiti oner would show that the re is no equity for the cred itors of Eve rett Hope 

Brooks, . . . and that in equity and justice to your petitioner, as well as to ex­ pedite the business of the handling of the bankrupt’s estate, the Court should 

order the Trustee in Bankrup tcy to abandon any claim upon the assets of this 

partne rsh ip as being of no net equitable value. [30.]

On J uly 23, 1971, the Trustee filed an Objection to the claim of Mr. 

Hooper against the Brooks estate. [33.1 The Objection alleged tha t 

the conveyance of Mr. Brooks' interest in the farm property was “a 

preference void und er Section 60 of the Acts of Congress rela ting to 

Bankruptcy” and was “fraudulent under the terms of Section 67 of

“ There was some dispute as to the applicability of the U.M. A M. encumbrance to the 

partnership assets. Correspondence between T. E. Lott and Company and Touche, Ross 

and Company carefully discuss the matter. There apparently Is no dispute th at the pa rtnership paid this debt, however. See page 43. Appendix I.

“ See page 44. Appendix I.

w Although this accounting was apparen tly prepared with the assistance of Mr. Eugene 

Beard, CPA. T. E. Lo tt ft Company, it includes entries related to several tran saction s of 

which Mr. Beard stated In an interview he had no knowledge. There are sub stantia l questions raised regarding the accuracy of the accounting which are discussed In Appendix I 

at page 43. [ 130, 14. ]
261

the Ban kruptcy A ct.” On August 20.1971, Mr. Hooper’s attorney was 

notified that “the Trustee makes demand upon James F. Hooper and 

Mrs. Virginia Fite Hooper” for the reconveyance of the one-half interest of Mr. Brooks in the farm pro perty for the same reasons set 

forth in his Objection.

In October of 1971. the Trustee filed an Amended Objection to Mr. 

Hooper's claim against the ban krupt estate for the partne rship debt 

asserting that the $12,000 annual salary Mr. Hooper claimed did not 

show on the partne rship tax retu rns and was never credited to him 

on the. books of the partnership, that several of the items credited 

by Mr. Hooper in his accounting as his c apital contribution had been 

reported on the partnership tax returns as o rdinary income, and that 

Mr. H ooper’s accounting on its face showed a ca pital balance due Mr. 

Brooks of $80,000. 135.]

The matter was heard before the Honorable Clive Bare, referee, in 

Memphis on October 15, 1971. On November 5, 1971, an ord er was 

entered disposing of the claims of Mr. Hooper and settling the rights 

of the Trustee in the personal pro perty of the partnership by dismissing Mr. Hoo per’s claim 18 and oy ordering the Trustee to abandon the 

partne rship personal property. [37.] In supp ort of abandonment of 

these assets the Court found :

. . . th at such p roperty so fa r as the ban krupt esta te is concerned is worthless, 

overburdened, certain not to yield any benefit to the general esta te, and is 

burdensome property within the meaning of the bankrupt act as inte rprete d by 

the Courts.

Although the order did not end the controversy over the “p referentia l” conveyance of the farm real estate, it d id declare “the partner ship 

heretofore existing between Hooper and Brooks . . . liquidated, 

wound up and concluded.”

While the Trustee’s claim for $80,000 due Mr. Brooks for contrib utions to the partne rship app arently was abandoned, it was not spec ifically mentioned in the decree. It is clea r th at Mr. H ooper would have 

been unable to pay any significant portion of a claim for Mr. Brooks’ 

contribution at that time. [126; 135.]

Regarding the tra nsfer of Brooks’ ha lf interest in the farm real 

estate to Mr. Hooper, the Order sta te s:

« This order is ente red without prejudic e to the righ t of the Tru stee to petition

this Court for authority to enter a plen ary suit in a proper Court joining all 

proper and necessary parties to adju dic ate the claim of th e Trustee to an inte rest 

in said real estate: provided tha t any such petition must be accompanied with 

satisfa ctory proof of the probable success of such a suit and evidence that the 

same would be economically practical for the benefit of the credito rs of this 

estate.

In accordance with the Referee’s instructions the Trustee’s attorney, 

John Paul Jone s conducted an investigation of the economic and legal 

prospects of an action to recover the real estate. His recommendation 

was forw arded to the Trustee in a letter dated March 24, 1972, which 

states :

In summary, the proof in this case rela tive to these sha rp issues of disputed 

fact would necessarily be the testimony of Messrs. Brooks and Hooper. The forum 

would probably la* the Northern District of Mississippi before a jur y of Mr. and 

Mrs. Hooper’s peers. With a foreign ban kru pt as a weak witness and that Jury.

“ The claim for the partnership debt was voluntarily withdraw n by Hooper as a part of the settlement of all claims. * k

15
I can not conscientiously advise a reasonable chance of success for you in this 

suit, the enforcem ent of a Federal statute .

• • • • • • •

The economic practicality of such a suit is less encouraging. There is no opportunity to settle this suit, Mr. Hooper, since the inception of these proceedings, 

has sta ted th at he has no cash. [135.]

The Trustee on March 31, 1972, responded to the foregoing s tating :

. . . I am completely satisfied that 1 cannot, as Trustee in Bankruptcy, pursue 

the proposed s uit on any basis which would be economically feasible to the bank ­

rup t estate. Accordingly, I authorize you to advise the Court and the Hoopers 

through their counsel tha t I am abandoning such proposed suit. [136.]

This decision term inated and dissolved any remaining vestige of 

the Hooper Dairy Farm partnership.

A detailed accounting of the capital accounts of the partners is found 

in Appendix I. The total equity of Mr. Brooks in the farm operation, 

both direct and as a result of the reconveyance, amounted to more than 

$215,258, and is set fo rth as follows:

Closing capital balan ce1________________________________________ $95, 758

Columbus Canning property conveyed to Mr. Hooper without consideration • ______________________________________________________ 13,000

Mr. Brooks’ appa rent equity in one-half interest in farm property reconveyed ---------------------------------------------------------------------------------- 106, 500

Total __________________________ 215,258

1

 T he part n ers h ip ex pe rien ce d opera ting los ses In th e to ta l am ount of $292,70 0 du ri ng Its 

ex iste nc e. Th es e los ses wer e sh ar ed b.v th e part ners an d are ac co un te d fo r as a re du ct io n 

In th e cap it al ac co un ts of th e part ners . Mr. Bro ok s’ shar e of th e opera ti ng losses of th e 

fa rm Is $170,35 0.

’ This fig ure Is Mr. Bro ok s' 196 6 co st fo r th is re al as se t. The m ark et va lu e In 196 9 Is 

un kn ow n.

P ar tn er ship Acco unting 19

The Hooper Dairy Farm partners hip accounting was done from 

1967 through August of 1969 by Touche. Ross & Company, Memphis, 

Tennessee.20 This firm prepared the tax retu rns for the partnership 

for 1966.1967, and 1968, and kept double-entry records of the partn ership accounts reflecting transactions from the beginning of the partn ership through August of 1969.21

Tn August of 1969. at about the time Mr. Brooks began preparations 

for his bank ruptcy, Touche. Ross Company ceased receiving financial information from Mr. Hooper rega rdin g the partnership.

Shortly th ere after Mr. Hooper tran sferred the partnership accounting to T. E. Lott & Company. Columbus. Mississippi. This firm had 

hand led Mr. Hooper's personal accounting for some time. The partn ership tax return for 1969 was prepared by T. E. Ixitt & Company under 

the supervision of Mr. Eugene T. Beard. Jr ., senior partner of the 

firm. The firm also prepared a December 23. 1969. Statement of Assets 

and Liabilities for the partners hip. [85.] and assisted in the prepara-

“ A det ai le d anal yst s of pa rt n e rs h ip tr ansacti ons an d ac co unts Is att ached to th is 

re port as App endix I.

" Tou ch e. Ro ss A Co mpa ny Is an In te rn ati onal ac co unting firm am on g th e fo ur or five 

la rg est wor ldwide w ith offices In fo rt y co untrie s an d In 75 U.8. ci tie s.

11 T he do ub le -e nt ry re co rd s were po sted to a Gen eral Led ge r as o f Ja n u a ry 1. 1969. 

T his Gen eral Le dg er was ke pt c u rr en t fo r tr ansacti ons rece iv ed by To uc he . Ro ss A Co mpa ny until Aug us t 19, 1969. [133.1
tion of Mr. Hoop er's Petition and Accounting which was filed in the 

Brooks Ban kruptcy case in sup port of Mr. Hoop er's claim. [30.]

The ap par ent “complexity” of the partnership accounting, especially 

for transactions dur ing 1969, has made the task of analysing the 

partne rship accounts difficult. In a letter dated August 4, 1970, the 

Trustee sta te d:

. . . we must get the proper answers because just too much money ran through 

this account and there were too many complicated tran saction s for one to ignore 

them. [120.]

There is nothing inherently complex about the partne rship business 

mode adopted by the Hooper Dairy Farm. The confusion results more 

from the use of the farm account as a conduit dur ing the summer and 

fall of 1969 and the failu re of T. E. Lott & Company to provide an 

accounting disposition for several tran saction s reflected in the General 

Ledger of the partner ship maintained by Touche, Ross & Company.

The cash transactions listed in the Petition and Accounting show 

that there was a substantial increase in ac tivity involving the pa rtn ership checking account at the Fir st Columbus National Bank after 

Jun e 20, 1969, and until about two weeks before Mr. Brooks filed his 

bank ruptcy. [30.] Althou gh the transactions are posted by Mr. Hooper 

as capital “deposits and withdrawa ls’’ by the part ners, on examination 

by Mr. John Paul Jones, atto rney for the Trustee, reg ard ing the 

transf er of the proceeds of a loan from the Fi rst National Bank of 

Marietta, Mr. Hooper explains:

Q. [by Mr. Jones.] Now, did Mr. Brooks with reference to that $65,000, put 

into the Hooper Dairy Farm p artnership account, $65,000 in cash, which was then 

transf erred to Little River Farm s, is that what you are telling us?

A. [by Mr. Hooper.] He had an account in Marietta in which he instructed me 

to draw the fifteen from t ha t—

Q. I see.

A. —to Columbus, and then from Columbus back to Little River Farm s, the 

same witli the fifty.

Q. In othe r words, that $65,000 never was pa rt of the assets of Hooper Dairy 

Farms, or p artnership?

A. Boom, boom, in and out.

Q. In other words, the Hooper Dairy Farm ’s account was only a conduit?

A. Precisely. [1, p. 24.]

While this explanation may shed some light upon the use of the 

partne rship checking account, it is inconsistent with Mr. Hooper's 

Petition and Accounting which shows no disbursement of the funds 

transferred to tha t account out of the proceeds of the loan from the 

First National Bank of Marietta, Georgia. 22

The Marietta loan transactio n was posted to the General Ledger of 

the partne rship by Touche, Ross & Company as a partnership “note 

payable,’’ and $153,500 received from Standard Union Life Insu rance 

Company in four checks dated April 11, July 2, 17 and 31, 1969, was 

posted as a “loan payable” to Standard Union Life Insuranc e Company .23 The final disposition of these items can not be determined.

3

 F or fu rth e r deta il s re gar din g th is lo an see pa ge s 31 th ro ugh 33. The P eti ti o n an d 

Acc ou nt in g In dic ate s th a t $1 00,00 0 w as tr a n sfe rr e d to th e fa rm ac co unt o ut of th e 

pr oc ee ds of th e M ari ett a loan . A ppar eh tly. ho wev er. Mr. Hoo pe r In co rr ec tly a tt ri b u te d a 

$5 0,00 0 pay m en t In to th e fa rm ac co un t from S ta n d a rd Union Li fe In sura nce Co mpa ny 

on Ju ly 17, 1969. to th e M ari ett a ac co un t. T here are num er ous o th e r In ac cu ra ci es In th e 

P eti ti o n and A cc ou nt in g which are di sc ov ered up on co m pa riso n of th e le dg er to th e re co rd s 

kep t by To uc he . Ro ss A Com pa ny an d th e p a rt n e rs h ip ba nk st ate m ents .

3

 Mr. Don S ta rk of Tou ch e. Ro ss & Com pa ny , in a le tt e r dat ed De cemb er 3, 1975, ex ­

pl ai ne d th e us e of th e te rm s "a cc ounts re ce iv ab le ," “ acc ounts pa ya ble ,” and “ note s payab le " were our metho d of se gre gating th es e tr a n sac ti o n s by so ur ce and were not m ea nt 

to In di ca te an ac kn ow ledg ed re la tionsh ip .
264

Mr. Beard state d on September 25,1975 that T. E . L ott & Company 

had moved its offices in November of 1974 and had at that time “ destroyed all working papers on individual tax return s th at were over 

6 years old. . . .” The destroyed materials, he stated, included the work 

papers on the Hooper Dairy Farm partne rship return for 1969. [14, 

p. 1.] Since the 1969 Partners hip Return of Income contains no p ar tners hip balance sheet or reconciliation of partn ers ’ capital accounts 

and also does not reflect t ha t the cash receipts from Sta ndard Union 

or the Marietta Bank were treated as income, there is no documentation regarding the accounting disposition of these transactions as of 

December 31, 1969, which is the date the partnership was effectively 

dissolved.

These transactions are reflected on the Petition and Accounting 

(with the inaccuracies noted previously). Although correspondence 

between Mr. Beard and Touche, Ross & Company indicates he had 

access to the ir accounting materials, Mr. Beard state d that he knew 

noth ing about “advances made by Sta ndard Union Life " to the 

Hooper Dairy Farm, [14, pp. 4-5.] that he knew “nothing about 

Little River Fa rms” or the proceeds of the Marietta loan, [14. pp. 6-7.] 

that the “only information that I have was furnished to me by Mr. 

Hooper,” [14, p. 7.] and t ha t he “did not receive any records of Touche, 

Ross & Company.” [14, p. 5.] 24

While Mr. Beard has indicated that he was unf am ilia r with the 

accounting work of Touche. Ross & Company in connection with the 

partners hip, Mr. Hu nte r Gholson, attorney for Mr. H ooper, wrote Mr. 

Beard on December 29,1970:

Enclosed please find a copy of a lette r I have received from Mr. John Paul 

Jone s relative to a par tnership accounting. . . .“

I hope that we can prepare a document tha t will present this ma tte r in the 

light most favorable to Jim and which will also be sufficient to withstand 

scrutiny and cross-examination based on the obviously differing accounting which 

will be presented by Touche, Ross & Company. [130.1

The document which resulted was the Petition and Accounting filed 

by Mr. Hooper in the B ank ruptcy proceedings on Ja nu ary 19, 1971. I t 

appears to have been based upon the 1 lecember 23,1969, Stateme nt p repare d by T. E. Lott & Company. [85.] 28

“ The se st ate m ents are contr adic te d by nu m er ou s ite m s of co rres po nd en ce ob ta in ed 

from th e flies of Mr. H oo pe r's a tt o rn ey s an d from th e flies of th e Federa l D is tr ic t C ou rt 

In Mem phis. Te nn esse e. Sp ec ifica lly , a le tt e r fro m Mr. Gho lso n to Mr. B ea rd da te d Novem ­

be r 26. 1969. [104 ] In dic at es th a t it was hi s “ unders ta ndin g" th a t Mr. Ben rd wo uld 

co nf er w ith To uc he , Ro ss & Com pan .v re gard in g th e pa rt n e rs h ip ac co un ts ; a le tt e r fro m 

Mr. B ea rd to Mr. D. F. S ta rk of To uc he . Ro ss At Co mp an y, dat ed Decem ber 18. 1969. [1 05 .] 

In dic at es th a t Mr. B ea rd di sc us se d an in de bt ed ne ss ass oci at ed w ith th e p art ners hip ass ets 

w ith To uc he . Ro ss & Com pan .v accounta nts bo th by te le ph one an d le tt e r ; To uc he . Ro ss & 

Com pa ny re sp on de d to th is le tt e r on Ja n u a ry 24. 1970, [1 07.]. w ith a de ta iled expla na tion 

of th e tr e a tm e n t of th e ite m, en cl os in g th eir re co rd s of Mr. Bro ok s' cap it al ac co un t from 

J a n u a ry 1. 1966. to De cemb er 31. 1968 a list of 196 9 tr an sacti o n s af fe ct in g th a t ac co un t, 

and a i9 67 sc he du le sh ow in g To uc he , R os s'A Com pa ny ’s tr e a tm e n t of Mr. H oo pe r’s co ntr ib uti on of m ac hi ne ry , eq ui pm en t an d c att le to th e p art n e rs h ip (w hi ch was In di re ct 

contr adic tion of th e acc ounting fo r th is la tt e r tr a n sacti o n on Mr. H oo pe r’s P eti ti o n an d 

Acc ou nt in g, whi ch appare ntl y Mr. Bea rd helped pre part ,) . [1 30 . |

28 S ee Doc um en t No. 129.

" F o r disc us sion of th e us e of th is Sta te m ent In th e B an kru ptc y pr oc ee di ng s, see pa ge 13.

18
265

The main disparities between the various accountings by Touche, 

Ross & Co. and the T. E. Ixitt & Co. for Hooper Dairy Farm pa rtn ership involve the following tran saction s:

1. The conveyance to the par tnership of cer tain personal debts of Mr. Hooper 

related to t he pre-partne rship farm operation. These debts reduced Mr. Hooper’s 

equity in the par tne rsh ip assets substantia lly and should have been reported in 

connection with his claim against the ban kru pt est ate for a partn ers hip debt.”

2. Paym ent for the conveyance to Mr. Brooks of half interest in the farm real 

property. Mr. Hooper received and deposited $100,000 from Radcliffe Investme nt 

Company, but claims to have returned $90,676.67 to Mr. Brooks, although correspondence and othe r records in dicate the la tte r payment was made in satis faction 

of certain partn ers hip debts.88

3. The tra nsfer to the partnership of $50,000 from the proceeds of a loan procured for the Little Rive r Farms corporation. Though these funds were accounted 

for by Touche, Ross & Company as a “loan payable” by the partnership, the debt 

was retired through the foreclosure of collateral supplied by third parties under 

an arrangement with Mr. Brooks.

4. The tra nsfer of $153,500 from the Standard Union Life Insurance Company 

during J une and July of 1069.

The final disposition of items numbered 3 and 4 above was never 

made by Touche, Ross & Co. or by T. E. Lo tt and Company who took 

over the farm accounting after August 1969. T. E. Lott and Company 

disclaimed any knowledge of the, items. Mr. Hooper, however, attributes these tran sactions to capital contributions by Mr. Brooks even 

though the partne rship accounts reflect t hat Mr. Brooks’ c apital obligation to th e p artner ship was paid on or before the end of 1967.

Although the disp arities regarding 1969 partnership transactions 

raise substantial questions with rega rd to the accuracy of the pa rtn ership accounts as reflected in Mr. Hooper's Petition and Accounting, 

Mr. Hooper's treatment of items 3 and 4, above was accepted in arriving at the final partner ship accounts shown on page 16 and in Appendix I, because Touche, Ross & Company was unable to confirm the ir 

treatment of these items with the partners .

27 See App en dix I, pa ge 3. 

See pa ge s 10 th ro ugh 12.

19
STANDARD UNION LIFE INSURANCE CO.

I ntroduction

On October 31.1968, while still a partner in the Hooper Da iry Farm 

partnership, Mr. Brooks acquired 100-percent ownership interest in 

Sta ndard Union Life Insurance Company, an Alabama corporation 

which had been doing business in the States of Alabama. Arkansas, 

Georgia. Mississippi, and Tennessee since its incorporation on Februuary 6, 1954.29 [100.]

When Mr. Brooks purchased Standard Union its only asset of any 

real value other than the corporate cha rter was approxim ately 

$100,000 to $140,000 in Treasury Bonds. [99.] At tha t time the insu rance business issued by Sta ndard Union had been tra nsf erred to other 

companies by its previous owners. It appe ars tha t during the 11 

months of Mr. Brooks’ control the only a uthorized insurance business 

transacted by Sta ndard Union was the reinsurance of two small blocks 

of insurance. On December 30, 1969, some 100 policies originally 

issued by Mid South Insurance Company, of Tennessee, were reinsured by Standard Union, [167.] and in April of 1969 the corp oration entered a reinsurance agreement with Trustee Life Insurance 

Company of Gadsen, Alabama assuming an unascertained number 

of credit life policies with a potential exposure of some $50,000 to 

$60,000. [17.]

Mr. H ooper’s I nvo lvem ent W ith Standard U nio n

Mr. H ooper became associated with S tan dard Union on November 1, 

1968, when at a joint meeting of directors and stockholders he was 

elected to its Board of Directors and to the position of corporate vice 

president. [153.] Sho rtly ther eafter, by Warranty Deed dated December 23, 1968. Mr. and Mrs. Hooper, together with Mr. Brooks, 

conveyed their interest in the Lowndes County farm property to 

Sta ndard I nion. [63.] By a deed executed 5 days lat er Mr. Brooks 

conveyed to Standard I nion his interest in the 68.5 acre parcel formerly owned by Mr. Hooper and used for the Columbus Canning

“ S ta n d ard Union en ded it s fi rs t year of bu sine ss w ith $3,078,000 of in su ra nce in fo rce "ndI fo r th e ne xt te n ye ar s co ntinued to ev iden ce gr ow th , hav in g $2 7,50 9,00 0 of in su ra nce in fo rc e at th e en d of 1960. In th e la tt e r part of 1966 Mr. Ro be rt I.. Moodv ac qu ired 

co ntrol of th e co mpa ny an d be came C hai rm an of th e Bo ard. Mr. Mo odv and S ta ndard 

Union s Pre si de nt. Mr. Ro be rt L. Hill, th en form ed th e Sec ur ltv N ational Li fe In su ra nce 

Com pa ny of M on tgom ery. Ala ba m a (l a te r rena med F ir st N ational Li fe In su ra nce Co mpan y ). On Ju ne 30, 1967, S ta ndard Un ion en te re d in to nn ag re em en t w ith Sec ur ltv 

N ational whe reby tile la tt e r re in su re d a blo ck of po licies c o n st it u ti n g SO.75 pe rc en t of 

S ta n d ard Unio n s bus in es s in force. As th e re su lt of li tigation. S ta ndard U ni on 's re m ai nhiir po lic ies, kn ow n ns th e “P re sid e n t’s Sp ec ial Po lic ie s” , wer e ev en tu al ly re in su re d b\ ’ 

F ir st N at io nal . [1 58.1
267

Company’s operation, [64.] 30 In addition to the Mississippi prop ertie s 

conveyed to th e corporation. Mr. Brooks contributed to the corporate 

assets two small parcels of property in Memphis and a 2900 acre parcel 

located in Desha County, Arkansas. In addition. Mr. Brooks contrib uted various stocks to the corporation including approxim ately 

42,000 shares of common and preferred stock in Cadillac Conduit 

Corporation. [65; 76; 77.]

Although Mr. Hooper was an officer and dire ctor in S tan dard Union 

Life Insuranc e Company he states tha t he played only a minor role 

in the insurance company's affairs. This position is confirmed by the 

company’s former attorney, Mr. Joh n Taber, [17.] and by Mr. Brooks:

Q. Regarding Mr. Hooper's involvement in Standa rd Union. Did Mr. Hooper 

par ticipa te in efforts to get Standard Union Life licensed in the States of Tennessee, Alabama and Georgia?

A. [By Mr. Brooks. 1 No.

Q. Did he assist . . .

A. I was the sole proprietor. As a ma tte r of fact it was licensed in all sta tes 

when I bought it, th e charte r.

Q. Did he ass ist in the preparation of financial statem ents th at were the basic 

prerequisites to this licensing?

A. No. I t was filed by me in John Taber ’s office and Taber filed them.

Q. One of the financial statements that was prep ared on Standard Union which 

is app arently consistent with the one filed in Tennessee is signed by Mr. Hooper. 

Did he p articipate in the prepa ration of th at financial statem ent?

A. No. He possibly had to sign it or someone thought that he should, probably 

John Taber, if he signed it, possibly it showed some of the assets as being his.

Q. Did Mr. Hooper evidence any interest in the company’s liquidity problems?

A. No, because I was working with the actua ries on tha t, Black and Company 

out of Nashville.

Q. Did Mr. Hooper keep apprised of the evaluation of assets on the financial 

statem ent of the insuranc e company?

A. No. I h ate to be blunt but that's the answer. [12, pp. 66-67.]

F inancial Statements and P roperty Valuations

From late 1968 thro ugh March, 1969 four financial statements 

were prepared reflecting the worth of Standard Union. Thr ee of these 

statements reflect Standard Union’s condition as of December 31, 

1968. Two are the Annual Statements filed in March. 1969 with the 

Insuranc e Commissioners of the S tates of Alabama and Georgia. [76, 

• 77.] They are signed by Mr. Brooks, his wife, and the corporation’s

attorney, Mr. Taber, and list Mr. Hooper as co rpora te vice president. 

While consistent with one another, the Alabama and Georgia Annual 

Statements are inconsistent in several respects with an undated Balance Sheet for Standa rd Union signed bv both Messrs. Hooper and 

Brooks purpo rtin g also to reflect the corjiorat ion’s condition as of 

December 31,1968. [78.] This Balance Sheet appears to have been submitted to the Tennessee Departm ent of Insurance and Banking.

The Annual Statements filed in Alabama and Georgia reflect total 

assets of $4,254,829.09, while the Balan ce Sheet submitted to Tennessee 

reflects assets o f $4,755,814.00. The values of stockholdings reported in 

the Alabama and Georgia Annual Statements are less than half those

*° A di sc us si on of th e ev en tu al tr a n s fe r of th is par ce l to Mr. Bro ok s Is in cl ude d at 

pa ge s 39 th ro ugh 40 dea ling w ith th e Co lumbu s C an ni ng Co mpa ny and th e fo re cl os ur e 

up on it s as se ts .

22
reflected in the Balance Sheet submitted to Tennessee ($619,356 as 

compared to $1,403,000). The real property holdings shown in the 

Alabama and Georgia Annual Statements are some $457,000 greater 

than reported on the Balance Sheet submitted to Tennessee. The worth 

of the four items of property carried as Corporate assets are variously 

valued on the three statem ents as fo llows:

Property

Balance sheet

submitted to

Tennessee

Desha County......................................................................................................................

With a mortgage of.............................................................................................................

1,550 acres, Lowndes County, Miss................................................................................

With a mortgage of........................................................... .................................................

Columbus Canning property, Mississippi.......................................................................

Memphis real estate............ ........................................ .....................................................

With a mortgage of.............................................................................................................

Alabama and

Georgia annual

statements

$1,902,082.00 

437,917.90 

1,199, 500.00 

142, 500.00 

132, 500.00 

60,077.05 

4,922.95

$2, 340. 000.00 

437,917.96 

465, 000.00 

142, 500.00

31, 500.^10 

4,922.95

Total........................... ......................................................................... 2,836,500.00 3,294,159.09

1

 Not listed as an asset.

The Alabama and Georgia Annual Statements thus show S tan dard 

Union’s equity interest in the Lowndes County farm property at 

$1,057,000, more than three times the $322,500 equity interest reflected 

in the Balance Sheet, submitted to the State of Tennessee. In addition, the stated market value figure of $1,199,500 indicated for that 

pro per ty on the Alabama and Georgia Annual Statements is more 

than twice the price for which Mr. Hooper sold the property to Weyerha user some live years later, [70.] and nearly four times the $300,- 

000 figure at which its was appraised in Septem ber of 1971 for the 

purpose of the Brooks Ban kruptcy proceedings. [175.]

Although his signature appears on a Sta ndard Union Life Insurance Company Balance Sheet which app arently was submitted to the 

State of Tennessee, Mr. Hooper did not particip ate in the actual p rep ­

aration of any of the financial statements submitted to the various 

state insurance commissions.31

The manner in which the $1,199,500 figure for the Hooper Dairy 

Farm land was arrived at is unclear. Mr. Hooper has state d th at he

81 Mr. Tab er pre par ed Id en tica l sta te m ents fo r filing in fo ur S ta te s ba sed up on In fo rm atio n re gard in g th e va lu e of th e co rp ora te ass ets fu rn ishe d him by Mr. Br oo ks . He st at ed 

th a t he se nt th os e sta te m ents to Mr. Br oo ks w ith In st ru ctions to ex ec ute an d re tu rn them 

to him fo r filin g. |1 7 .]

T her e Is n dis pute as to w heth er th e fo ur fina nc ia l st ate m ents su bm itte d to Mr. Br ooks 

cont ai ned th e valu ations sh ow n on th e Alaba ma an d Geo rgia Ann ua l Sta te m ents or 

w heth er th ey ref lec t th e valu ations used on th e B al an ce Sh ee t su bm itte d to Te nn essee. 

Mr. T aber ha s sta te d th a t he pre pare d th e or ig in al st ate m ents us in g as se t va lu ations 

which a re co ns is te nt w ith th ose which appear on th e B al an ce Sh ee t su bm itte d to Te nn essee. 

He re ca ll s th a t a modified sta te m en t m ay ha ve been pre par ed fo r filing w ith Te nn esse e 

re je c ti n g le ss er re al pro per ty va lu es th a n th os e show n on th e ori gin al st ate m ents fo r 

th e pu rn os e of in cr ea si ng th e in su ra nce co m pa ny ’s appar en t liquid it y. (17 .1 How ever, th e 

pro pert y valu ations which Mr. T ab er ad vi se d th e St af f were co nta in ed In th e or ig in al 

sta te m en ts are Id en tica l to th ose whi ch appear in th e modified B al nn ce Sh ee t fu rn is hed to 

Te nn es se e an d do no t ag ree w ith th e valu ations show n on th e 190 8 A nn ua l S ta te m ents 

fi'ed in Ala ba m a an d Geo rg ia an d sig ne d by Mr. Ta be r. We are un ab le to reso lve th is 

di sc re pan cy .

An in te rv ie w with Mr. Br oo ks conta in s th e fo llo win g expla nat io n of S ta ndard U ni on 's 

su bm ission of di ff er in g fin an cial sta te m e n ts :

*’(}. IMd Mr. Tab er pu t th e valu ati ons on th ’e pro pert y? W as th is Ills re sponsi bil it y?

"A. (B y Mr. Bro ok s] : No. he a p p are ntl y tu rn ed In to me an d mailed th em all in alike 

an d th en cu t them ba ck down be ca us e of th e fa ct th a t we th en, as I to ld yo u wou nd up w ith 

more re al est ate th an th e Ten ne ss ee la w wou ld . . . re qu ire. So he sa ys alr ig h t in th a t 

ca se we don’t ha ve tim e to tn ke it ou t. It wn s Ju st ab ou t, he sa ys , we'l l ju s t redo It an d 

cut th e val uat io ns. I don't know w heth er we did It on nil of th em or not. ” (1 2, d. 71-1
269

recalls a discussion with Mr. Brooks rega rdin g appraisal of the farm 

property at a figure reflecting the land’s “highest and best use.” He 

recalled tha t the discussion took place at about the time of the conveyance of this property to Sta ndard Union in December, 1968. Mr. 

Hooper stated that Mr. Brooks advised him that he thought they could 

obtain an “MAI app rais al" of the farm property at approxim ately 

$1,200,000 and that the farm p roperty would be submitted to the state 

insurance commissions as a reserve asset of the corporation having that 

k value.

In discussing the valuation of the farm property , Mr. Brooks stated 

tha t he and Mr. Ilooper agreed that t he y:

... would put it in and the idea being to have Sta nda rd Union come out with 

‘ a strong financial statem ent and get it before we sta rte d selling insu rance you

see, get it approved and find out how much cap ital we did have which meant 

getting an MAI ap pr ai sa l.... So we did atte mp t and contact several different 

firms but we never got an appra isal. [12, p. 69.]

Mr. Brooks’ furt her discussion of the property valuation procedure 

is, in pertinent p art, as follows:

Q. How did you arrive at the value per acre placed on the Hooper Dair y Farm 

property ?

A. [By Mr. Brooks.] : As I told you originallj’ I imagine tha t Mr. Hooper and 

I got the million dollar figure by taking a high priced land jus t like anythin g 

else, you p ut a price on i t and then see w hat it will appraise fo r. .. [12, p. 71.]

RESTRICTIONS ON AUTHORITY TO TRANSACT BUSINESS

Dur ing th e period of Mr. Brooks’ ownership, Standard Union was 

either suspended from doing business or its license was not renewed in 

four of the five States in which it had previously operated. The only 

State not to take such action against the corporation until aft er 

Mr. Brooks’ bankrup tcy was Alabam a, the State of its incorporation. r-56.]32

By May or June, 1969 the authority of Sta ndard Union to transact 

business in any State other than Alabama was seriously in jeopardy 

and was dependent largely upon increased liquidity of its assets. 

Simultaneous with Mr. Brooks’ attempts to persuade the Tennessee 

Departm ent of Insurance of his good f aith efforts to increase corporate

” M isslsslp nl and A rk an sa s bo th re fu se d to rene w S ta ndnrd U ni on 's C er tifica te of 

A uth ori ty fo r re as on s co nn ec te d with th e bu si nes s acti v it ie s of it s pri or ow ne rs. On 

Octob er 31. 1968, th e In su ra nce Com mission er fo r th e S ta te of A rk an sa s off icially ad vise d 

Sta ndard Un ion th a t It s C er tifica te of A uth ori ty ha d te rm in ate d on Mav 1. 1968. an d 

would not be rene wed . (95.1 S ta ndard U ni on 's lic en se was no t rene wed by th e S ta te of 

M ississip pi on Ja n u a ry 1, 196 9. fo r re as ons re la ti n g pri m ar ily to th e re in su ra nce of su bsta n ti all y nil of it s bus in es s by F ir st N ation al Li fe In su ra nce Co mpa ny . (1 13.,

The corp ora ti on’s au th o ri ty to en ga ge In any in su ra nce bu sine ss in th e S ta te s of 

Georgi a an d Te nn es se e was eit her su sp en de d or revoked on th e ba si s of th e af or ed is cu ss ed 

annual sta te m en ts of fina nc ia l co nd itio n filed w ith th ose st at es . In M arch , 1969 th e 

Chief Dep ut y In su ra nce Com mission er fo r th e S ta te of Geo rgia ad vi se d Mr. Bro ok s th a t 

S ta ndard U ni on ’s a u th o ri ty to oper at e in Geo rg ia would no t be rene wed du e la rg ely to th e 

fa ct th a t 77.4 pe rc en t of It s ass ets were In re al pro pert y a pro po rt io n gre atlv nu t of 

ba la nc e with th e re quir em en ts of th a t s ta te 's in su ra nce la ws. Mr. Br oo ks was offer ed th e 

op tion of volu nta ri ly w ithdra w in g th e corp ora ti on's ap plica ti on as an a lt e rn a ti v e to 

un de rg oi ng fo rm al hea ri ngs. (!JK.,

In May or ear ly Ju ne, 1969 th e D irec to r of In su ra nce fo r th e S ta te of Te nn es se e 

su sp en de d th e co m pa ny 's au th o ri ty to w ri te in su ra nce in th a t sta te . The su sp en si on wa s 

based In la rg e p a rt on th e fa ct th a t th e capit al s tr u c tu re of th e co m pa ny did not me et 

Ten ne ssee re quir em en ts as to liq ui di ty . W he re as Te nn es se e re qu ired th a t re al est n te hol dln gs no t excee d 10 pe rc en t, th e B al an ce Sh ee t su bm itte d by Messrs. Br oo ks an d Hoo pe r 

lis ted^ re al e sta te in vest m en ts as acc ounting fo r *2 .836 .50 0 of th e to ta l w ort h of 

f4 .7 55 ,814 — sli ghtly le ss th a n ha lf. Ten ne ss ee off ici all y revo ke d S ta n d a rd U nio n's Ce r 

tlfl ca te o f A uth ori ty on M arch 12. 1970. (112 . J

24

67 -5 20 0 - 76 - 18
270

liquidity .

33 $150,000 was transferred from Sta ndard Union to the 

Hooper Dairy Farm partnership account. The record contains no 

explanation for the tra nsfer of these funds in amounts of $95,000, 

$50,000 and $5,000 on duly 2. 17 and 31 respectively.

Standard U nion F oreclosure

1 lurin g the summer of 1969 Mr. Brooks negotiated a loan of $500,000 

with the Union National Bank of Little Rock, bringing his total indebtedness to that bank to $845,000. 1163.] As part of the collateral 

securing his loans, Mr. Brooks pledged 175,000 of th e 200,000 shares of 

Sta ndard Union stock then outstanding. On October 17, 1969, the 

Union National Bank foreclosed on its collateral and took over operation of the insurance company. [106.]

P roperty Reconveyance to Mr. H ooper

Two months liefore the Union National Bank's foreclosure and at 

about the time Mr. Brooks first consulted his attorney concerning a 

possible bankruptcy filing, [9, p. 1162.] the corporate minutes reflect 

that a special meeting of the Board of Directors of Sta ndard Union 

was held. At that August 19,1969, meeting attended by Mr. Brooks, his 

wife and Mr. Hooper, a resolution was adopted a uthorizing the reconveyance of the Lowndes County farm property to Mr. Hooper liecause 

“the Insurance Commissions of the States of Georgia and Tennessee 

had refused to accept the Hooper land conveyed to the corporation in 

Decemlier, 1968, as a reserve asset of the corporation.” [156.] This 

meeting occurred nearly 3 months after the Sta te of Tennessee had 

suspended Standard Union's authority to do business, 5 months a fter 

the S tate of Georgia had refused to renew the corporatio n’s Certificate 

of Authority, and well after both States had advised Sta ndard Union 

that its real estate holdings were greatly in excess of the ir respective 

reserve asset requirements. The resolution makes no mention of Mr. 

Brooks' half interest in the farm property, nor does it specifically 

address the conveyance of the Columbus Canning property. At the 

August 19 meeting Mr. Hooper tendered his resignation as a director 

of the corporation. He did not resign his position as vice president.

Pur suant to the above resolution, the T^owndes County farm pro perty and the Columbus Canning property were conveyed to Mr. Hooper 

by deed executed August 20, 1969. [66.] On the same day, the 2,900 

acre tra ct of property in Desha County. Arkansas, shown on the corporate financial statem ents as having a worth of from $1,902,082 to 

$2,340,000, was transferred to Radcliffe Investment Company for 

$50,000. [12, pp. 82-84 67.] In view of the lack of consideration for 

the tra nsfer of the Desha County property which was appraised at 

$785,000 in November. 1969, [174.] the Union National Bank was 

successful in obtaining the reconveyance of that parcel. The B ank did

” See Mr. Bro ok s’ le tt e rs of J u n e ’5. 1969 [1 00 .) an d Aug us t 29. 1969 [1 01 .] ad dr es se d to 

Roy F. Bess of th e Ten ne ssee D epar tm ent of In su ra nc e, th e la tt e r o f whi ch sta te s th a t 

‘‘co nc er te d ef fo rts nr e now be in c ma de to re dis tr ib ute th e ass ets of S ta n d ard Un ion fro m 

re al e sta te to thos e fo rm s of in vest m en ts W’hlch are reco gn ized ns adm it te d ass ets in 

Ten ne ss ee .”

25
271

not, however, prevail in its attem pt to set aside the reconveyance to 

Mr. Hooper. 34

Both the Lowndes County farm property and the Desha County 

property were, nevertheless, transferred out of Sta ndard Union hy 

deeds executed Augu st 20. 1969. At that time Mr. Brooks had alrea dy 

begun prep aration for his bankruptcy and was in ill health and under 

severe mental strain.3

’

In March, 1971 the Union National Bank of Little Rock brought 

suit in the name of Stan dar d Union in the Chancery C ourt of Lowndes 

County, Mississippi, against Mr. Hooper and his wife to have the conveyance of the farm pr ope rty set aside, asse rting that the reconveyance 

had been made without consideration and was in violation of Mr. 

Hooper’s duty as a corporate official. It sought a judgment cancelling 

the deed and requiring payment of amounts received by the Hoopers 

from the use or sale of the pr operty. [ 45.]

In answering the complaint, the Hoopers contended tha t the conveyance of Mr. Hooper’s ha lf interest in the farm property to Standard Unio n in December. 1968 had been made for the purpose of 

inducing the Commissioners of the States in which Sta ndard Union 

operated to accept the property as an asset for life insurance reserves, 

with the und erstanding tha t Mr. Hooper would in turn be issued 

stock in the insurance company, and fur the r tha t the reconveyance 

of the land was predicated on the failu re of these conditions. In his 

answer, Mr. Hooper stated tha t the Augu st 20 reconveyance was in 

accordance with “an agreement lx'tween the Hoopers and Everett IT. 

Brooks in satisfaction of an indebtedness owed by Brooks to Hooper." 

He furth er stated that “St andard Union neither at that time nor at 

any time prior or subsequent thereto had acquired any equitable 

interest in this real estate whatsoever, nor had Sta ndard Union paid 

any thing as purchase price for said pro perty.” [46.] The basis for the 

reconveyance has been also described by Mr. Hooper as follows:

A. [By Mr. Hooper] : . . . In December of 1968 we agreed tha t it would be 

of potential benefit to all of us if this land was put into ins (Brooks’) company 

known as S tandard Union Life Insurance.

This was done on December 31st of that yea r so tha t it could be presented to 

the Insurance Commissioners for approval or rejection, with the understanding 

that after the approval has been granted tha t I would then be issued stock in 

the corporation, the Standa rd Union Insurance Company, equal to the value of 

the entire land. [1, p. 55.]

The 1968 agreement between Messrs. Ho oper and Brooks regarding 

ret ran sfe r of the land was never formalized. However, for the purpose 

of the Bankruptcy proceedings, Mr. Hooper and Mr. Brooks jointly 

signed a memorandum purpo rtin g to reflect its provisions. [165.] T his 

memorandum, which bears neither title nor date, was admitted in 

evidence bv the Chancellor du rin g the course of Mr. Hooper’s te stimony in the Standard Union Life suit for the purpose of showing tha t Mr. Hooper had received no consideration for the transf er

•‘ The m in ute s of a Boa rd of D ir ecto rs m ee ting of O ct ob er 15. 196ft. at >• h lc b It wa s 

reso lved to set as id e th e co nv ey an ce of th e D es ha C ou nt y pro pert y to Rad cliff e refle ct th a t 

Mr. Hoo pe r did no t p a rt ic ip ate In th a t re co nv ey an ce nn d su gg es t th a t he was no t part y 

to th e dete rm in ation to tr a n sfe r th is pro pert y to Ra dc lif fe In th e fi rs t In st an ce . (1 57. ]

M F o r a more det ai le d di sc us si on of Mr. Bro ok s’ ph ys ic al an d m en ta l co nd itio n see 

pa ge s 11 th ro ugh 12.

26
of a half interest in the farm property to Mr. Brooks. [8, pp. 22-23.]

On .Inly 27. 1971, the Chancellor issued a decree in favor of Mr. and 

Mrs. Hooper dismissing the complaint tiled against them. Tha t decree 

contains the following language:

2. The evidence presented on behalf of complain ant proves that defendant, 

James P. Hooper, on August 19, 1969, occupied a fiduciary relationship to complainant and its shareholder, but the court finds, as a fact, that defendant, 

Jam es P. Hooper, received no consideration for conveyance of the subje ct land 

either to Everett II. Brooks or to complainant, made full and complete disclosure to complainant, and discharged his burden of proof by showing his good 

faith and the inherent fairnes s of the transaction from the viewpoint of complain ant: furthermore, the court finds tha t the sole shareholder of complainant, 

ratified the deed to defen dant, James P. Hooper, by executing the deed as Pre sident of com plainant; and, finally, the court finds tha t the evidence presented 

on behalf of complainant is insufficient to cancel and set aside the deed of August 20, 1969, from complainant to defendant, James P. Hoo|>er. [47.]

On September 24, 1971, the Chancellor entered a new decree making the prior decree final but preserving the interests of the Trustee 

in the Brooks Bankruptcy proceedings. [48.]
273

LITTLE RIVER FARMS, INC.

I ntroduction

Little Rive r Farm s, Inc., a Georgia corporation located in Alpharetta, Georgia, operated as a dairy, processing and marketing milk 

thro ugh a number of small franchise retail outlets. On Ja nu ary 22, 

1969, K. C. Investments conveyed Little River Farms together with 

* some $385,000 in corporate debts to Mr. Henry L. McMahan for $100.

Mr. McMahan transferred Little River Farms to Mr. Brooks for 

$5,000 on Febr uary 14.1969. [ 162; 1, pp. 6-7; 2. pp. 3,10,17-19,43-44.]

Mr. Hoop er's involvement with Little River Farms stemmed from 

his interest in obtaining a more favorable market for Hooper Dairy 

Farm ’s surplus milk. [12, pp. 39-40.] He stated Mr. Brooks “learned 

that Little River Far ms was p urch asin g milk at a much higher price 

in A tlanta and discussed with me the possibility of our sh ipping milk 

to Atlanta. It seemed feasible when first considered and he thou ght 

it likely we could net more for our milk aft er trans portation expenses 

than we were gettin g in Mississippi.” [ 160.]

It is difficult to reconstruct the precise natu re of Mr. Hooper's involvement with Little River Farm s. The fact that the corp oration ’s 

Minute Book has been tampered with is confirmed by both Mr. Hooper 

and Mr. McMahan. [ 1, p. 14; 2, pp. 46-47.] The financial statem ents of 

Little River Far ms are inconsistent.36 The objectivity of the individ ­

uals who participate d in the corporatio n’s management has lieen 

affected by th e threat of liability to the Inte rnal Revenue Service for 

the corporation’s nonpayment of withholding taxes.37

Mr. H ooper as a Manager. S hareholder, and O ffic er

The minutes of the shareholders meeting on April 17, 1969, reflect 

that Mr. McMahan was elected Presiden t o f Li ttle River Farms. [150.] 

The shares of the corporation were divided among Messrs. Hooper, 

Brooks, and McMahan. [1. p. 9.] Mr. McMahan was to manage the dayto-day affairs of the dairy. Mr. Hoojx’r was to “keep in touch” with 

him and advise Mr. Brooks when money was needed. The extent of 

* Mr. Hooper's particip atio n in the daily affairs of the corporation is

unclear. Mr. Hooper has state d tha t while he exercised no direct autho rity over Mr. McMahan he made periodic tri ps to Alphare tta and 

offered many suggestions as to what could be done to bring the corporation out of its problems. He has variously indicated tha t he made 

such tri ps as frequently as every other week and as infrequently as 

every other month. [1. p. 43.] It appears, however, tha t Mr. Hooper

•* Ref er to pa ge s 30 to 31 deta il in g In cons is te nc ie s In L it tl e Riv er F arm s' fin an cial 

st at em ents .

n

 R ef er to pa ge s 34 to 36 re gard in g th e d e ta il s of th e In te rn a l Rev en ue Ser vi ce ’s 

se iz ur e of L it tl e Riv er Fa rm s.

29
274

traveled to Alp har etta often during the first few months of his involvement with Little River Farms. [3, p. 29; 5, p. 12.] He was in telephone contact with other officials of the corpora tion on virtually a dayto-day basis during a period of some months preceding the onset of 

Mr. B rooks’ financial problems. [6, pp. 14, 30; 3. p. 29; 15, pp. 3-4.]

Mr. Hooper testified in connection with the Brooks Bankruptcy 

that with the exception of a ten minute period he was not a stockholder of Little River Farms. [1, p. 7.] Ili s name, however, appears in 

the corporate Minute Book as one of the three stockholders present at 

the April 17,1969, meeting, [149.] and he has variously testified in the 

bankrup tcy proceeding tha t he was issued stock certificate No. 46 for 

83,333 shares of stock in July, 1969 and in November. 1969 [1, pp. 

7, 18.] This certificate was apparen tly issued sometime dur ing the 

summer of 1969 but was not delivered to him until November, 1969 

when he endorsed it in blank to Mr. William C. Brickey. [177.] s* 

The minutes of the April 17.1969. meeting reflect Mr. Hooper's election to the Board of Directors. [149; 1, p. 14.] As a member of the 

Board, his name appears in minutes of meetings held between April 

and October, 1969, March 3 and 4. and May 29, 1970. It does not 

app ear that any meetings were held between the October. 1969, meeting 

and the March. 1970, meetings. [ 149.150,151.152, 153.] Notwith stan ding his signature in the minutes o f a Board of Dire ctor's meeting on 

October 28. 1969, Mr. Hooper testified in the bankruptcy proceedings 

tha t he resigned his position in the summer o f 1969. [1. p. 4.] He also 

testified that he resigned his post in November of 1969. but was reinstated in March, 1970 [1, pp. 15-17.] and that his resignation was 

not submitted in writin g or otherwise form ally tendered. [1, pp. 

16-17.]

Whatev er the precise nature of Mr. Hooper’s position as an officer 

and stockholder of TAttle River Farm s, he assumed the responsibility 

of “keeping in touch” with its operation and advising Mr. Brooks as 

to the corporation’s financial requirements. Mr. Brooks tran sferred 

some $248,000 to the company from Feb ruar y to July. [71. 72. 75.] 

Corporate Accounting

There are numerous inconsistencies in the balance sheets of Little 

Rive r Farms regarding the amount and source of funds tran sferred 

to the Corporation. The August 18. 1969, Record of Deposits shows 

payments totaling $248,598.36 comprised of contributions from Mr. 

Brooks of $74,598.36, loans from Mr. McMahan of $59,000 and deposits 

from the “Hooper Account” in the amount of $115,000. [71.] The 

Record indicates th at $15,000 of the $115,000 attr ibu ted to the Hooper 

Account was received Jun e 26, 1969. and prom ptly repaid. This left 

an aggregate of $233,598.30 deposited with Lit tle River Farms. Six 

weeks late r the September 30. 1969. Balance Sheet of Little River 

Farms shows as a liability a “loan payable to E. H. Brooks’’ in the

* Mr. Hooper’s Attempt* to sell Litt le Itlvpr Knrnts through Mr. Brickey Is discussed at 

pages 33 through 34.

30
275

amount of $248,598.36. [72.] The Balance Sheet of November 30,1969, 

attributes the $248,000 previously shown as owing to Mr. Brooks as 

comprised instead of a $50,000 loan payable to the Bank of Cumming, 

a $133,000 loan payable to Sta ndard Lnion Life Insurance Company, 

and a $65,000 loan payable to Mr. Hooper. [74.J

None of these statem ents of account app ears to reflect the true 

character of deposits made to Little River Farms.3* The depositions 

of both Messrs. McMahan and Hooper taken in connection with the 

Brooks B ankruptcy indicate tha t $133,000 of the $233,000 total ($248,- 

000 less the $15,000 repayment) was transferred eith er directly or 

indirectly to Little River Farms by Mr. Brooks and that the balance 

was part of a loan from the Fi rs t National Bank of Marietta. [1, pp. 

19-26; 2, pp. 34—70.] Many of the individual deposits to Little River 

Farms' benefit are represented by checks draw n to Mr. McMahan 

personally rather than to the corpora tion. [2, pp. 19, 68.] The reason 

lor tliis procedure has been given by Mr. Brooks as a method of assuring the accountability of Mr. McMahan. [12 pp. 51-53.] It appears, 

however, th at a Georgia State law allow ing creditors easy access to 

a debtor's funds by attachm ent of its bank account may also have 

influenced the decision not to tra nsfer fund s directly to Little River 

Farms. [1, p. 29; 12, p. 53.]

The Statements of Account for Little River Farms dated August 18, 

and November 30, 1969, show substan tial investments in the corporation by Mr. Hooper. However, Mr. Hooper stated that he invested 

no personal or partnership funds in Li ttle River Farms. [1, pp. 19-27.] 

He testified that the investments a ttri buted to his account are proceeds 

of a loan borrowed from the Fi rst National Bank of Marietta on 

Jun e 24, 1969, and deposited to an account from which he was a uth orized to d ra w :

Q. [By Mr. John P. Jones] I ask you if the money of Mr. Brooks which he 

tra nsf erred to Little River Farm s, Inc., involved $50,000 payment in Jun e of 

1900 and anoth er $50,000 payment in July of 1909?

A. [By Mr. Hooper] Jun e 26, June and July, th at ’s correct.

Q. All right. Is th at the Bank of Cumming transaction?

A. The money came from an account of a bank in Marietta and was paid 

direct to the Bank of Cumming.

Q. Who set up the a ccount in M arie tta, Georgia?

A. Hope. [Mr. Brooks]

Q. Uid you have anythin g, a t all, to do with that?

A. I had the signature card.

Q. Do you know why he chose the Bank of M arie tta ?

A. I t was the bank of account t ha t Little River F arm s was doing business with.

Q. Did you borrow money from the Bank of M arie tta?

A. No, Sir. [1, pp. 21-22.]

Mar iet ta B a nk L oan

In the spring or early summer o f 1969 Messrs. Hooper and Brooks 

approached Mr. W illiam Beasley, Presiden t of the F irst National Bank 

of Marietta, to apply for the $150,000 loan to be invested in Lit tle Riv er

• Mr. Hoo pe r te st ifie d as foH ows re gar d!tip th e con ditio n of th e corp ora te re co rd s of 

L it tl e R iv er fa rm s :

“A. I loo ked a t m an y fina nc ia l sta te m en ts , and no ne of th em were co m pl et e, no ne of 

them wer e ac cura te . The ex cu se was th a t th e co m pa ny ow ed th e a cco u n ta n ts so mu ch 

mo ney th a t th ey w ould n't continue w or ki ng . I re ca ll a t le a st th re e diffe re nt bo ok ke ep ers 

th a t th ey ha d fired to tr y to bri ng th e re co rd s to dat e. B ut I nev er co uld ge t a handle on 

it anyw ay ." [1, pp. 28-2 9.]

31
Farms. They explained to Mr. Beasley that they were going into L ittle 

River Fa rms as a “joint ventu re” and showed a joint financial statement 

listing th eir net worth at about $6,000,000. Additionally they offered to 

secure the loan with stock of Cadillac Conduit Company. It appears 

they had approached the Fi rst National Bank of Marietta because it 

was one of the few banks in the area which had not had a bad claims 

experience in its transactio ns with Tuttle River Farm s. Mr. Beasley 

would agree only to participate to the extent of $100,000 of a $150,00*0 

loan provided th at th e loan was obtained from a bank more familiar 

with th e offered security and with th e applicants. [16.]

Therefore in June, i960 Mr. Brooks returned to Memphis to negotiate the loan with Union Pla nte rs National Bank. According to the 

ledger sheet of the Union Pla nte rs National Bank, the Fi rs t National 

Bank of Marietta participated in this loan to the extent of $100,000 

and $50,000 of the proceeds was used to purchase a Certificate of 

Deposit in the name of Mr. Dabney II. Crump, a business associate of 

Mr. Brooks. [ 178.] 40

Mr. H ooper did not p articipat e in the loan negotiations in Memphis 

nor did he sign the note, Mr. Brooks’ recollection of the transaction 

is sketchy. From the magn itude and frequency of Mr. Brooks’ dealings with various Memphis banks, it would app ear simply tha t he 

handled the loan in a routine manner. Although Mr. Hooper was not 

involved in the arran gements for the loan in Memphis there is no 

evidence that the purpose of the loan or the business relationship of 

Messrs. Hooper and Brooks was modified. The ledger sheet of the F irs t 

National Bank of Ma rietta reflects that Mr. Hooper part icip ated in the 

loan. [16.]

Because there was probably an additional loan made to Mr. Brooks 

contemporaneously with the M arietta transaction in which Mr. Crump 

also participated, the various accountings for the proceeds of the loan 

are confused. I t appears, however, that Mr. ( ’rump retained $50,000 of 

the proceeds of the $150,000 total in the form of a Certificate of Deposit of the Union Pla nters National Bank and tha t the remainder of 

the loan was placed in an account at the Fi rst National Bank of 

Ma rietta upon which Mr. Hooper had checking authority. [1, pp. 21- 

22; 178.]

Although the loan was ostensibly borrowed for Little River Farms, 

no more than $55,800 of the proceeds was received by the corporation. 

Of that amount $50,000 was in the form of a check signed by Mr. 

Hooper and paid directly to the Bank of Cumming, Georgia, in sa tisfaction of a debt of Little River Farms. [179.]

Mr. Hooper’s Petition and Accounting filed with the Bankruptcy 

Court indicates that the $100,000 obtained from the Marietta bank 

was transferred to the Hooper Dairy Farm partne rship account in 

two deposits of $25,000 each made June 24 and 30, 1969, and a deposit 

of $50,000 made on Ju ly 14, 1969. The Petition and Accounting fur40 A bus in es s as so ci at e of Mr. -B ro ok s, Mr. Da bn ey H. Cru m p, was havin g diffi 

cu lty obta in in g a lo an . To ac co m m od at e Mr. Crump, Mr. Bro ok s ap pr oa ch ed th e Union 

P la n te rs N at io nal Ban k to ob ta in fu nds both fo r him an d fo r L it tl e R iv er Far m s. 112. pp. 

57 -6 3. 1 Mr. Br ooks ma v ha ve closed mo re th an one loan a t th e Union P la n te rs N at io na l 

Ban k In Ju ne of 1969. The ev iden ce in th is re ga rd is am bigu ou s. [39. pp. 7- 10 .1 How ev er, 

he did a t le ast pr oc ur e a loan In th e am ount of $150,00 0. The note fo r th a t lo an is sig ne d 

by Mr. Brook s an d co-signed by Mr. C ru m p an d is se cu re d by m unic ip al bo nd s fu rn is hed 

by a Mrs. Ful to n. [3 5 ; 38 ; 41.1
277

the r sets forth tha t, with the possible exception of $5,800 tran sfe rred 

to Little River Farms in August and September, 1969, that amount 

remained on the books of the partnership. [30.] This accounting, 

however, is inconsistent with the fact tha t $50,000 of the loan pro ­

ceeds did not pass through the partnership account but were tra ns ­

ferred directly to the Bank of ('ummin g by Mr. H ooper's check draw n 

directly on the Marietta bank. It is f urt her inconsistent with Touche, 

Ross & Co.'s determination tha t the $50,000 deposit of Ju ly 14, 1969, 

was received from Standard Union Life Insuranc e Company. [84.] 41

It appears the proceeds of the Union Planter s/M ari ett a loan were 

distribu ted as follows :

1. $50.000to Mr. Dabney ( 'rum p;

2. $50,000 to Little River F arm s; 42 and

3. $50,000 to Hooper Dairy Farm .42

Af ter commencement of the Brooks Bankruptcy proceedings, the 

Union Pla nters National Bank foreclosed on its secu rity.43

Mr. Hooper's Attempts T o Sell Little River F arms

In July, 1969. 5 months after acquisition of Little River Farms 

and 1 month pri or to Mr. Brooks' preparation s for ban kruptcy, Messrs. 

Hooper and Brooks became interested in selling the ir interests in the 

corporation. At about that time, they were introduced to Mr. W illiam C. Brickev who had been convicted of mail fraud and was free 

pend ing appeal. Mr. Hooper describes Mr. Brickey as “astute or 

shrewd . . . capable of doing what seemed to be an impossible thin g, 

which was to sell this particu lar piece of property . [1, pp. 31-32.] 44

Mr. Brickey's initial dealings were with Mr. Hooper who had approached him to see if Little River Farms could be “disposed of in 

view of its troubled financial picture.15 [13, pp. 1-2.] Mr. Hooper lias 

stated that he was not aware of Mr. Brickev’s criminal conviction 

until the fall of 1970 shortly before Mr. Brickey went to prison for 

2 years.

In July or August, 1969 Mr. Hooper contacted Mr. McMahan and 

asked tha t Lit tle River Farm s execute a demand note in blank for 

$248,000. the amount of Mr. Broo ks' “loans’’ to the corp oration, to 

enable Mr. Brickey to consummate a merger of the financially dis-

« A n ex te nde d di sc us si on of Tou ch e. Ro ss & Co .’s acc ounting fo r th is $5 0,00 0 tr a n sacti o n 

Is co nt ni ne il in App en dix I. . .

42 Mr H oo pe r's Peti ti on an d Acc ou nt in g sh ow s pay m en ts am ounting to $o .800 from th e 

fa rm ac co unt to L it tl e River Farm s which mig ht he ad ju st m en ts to th ese fig ures

•’ M un ic ip al bo nd s w orth appro xim ate ly $1 50 ,000 whi ch ha d been pledged by Mrs. 

Fult on as se cu ri ty fo r th e loan were so ld in sati sf acti on of th e in de bt ed nes s to Un ion 

P la n te rs N at io nal Ba nk . As an unse cu re d cre dit or of Mr. Brook s. Mrs. F ult on received 

$19 31 3 from th e B an kru ptc y C ourt in se tt le m ent of her cl ai m fo r $1 55 ,000 . [4 1. ]

44 The in tr oduct io n was ar ra nged th ro ugh Mr. Jack Le sse nberr.v . th e cr im in al att o rn e y 

wh o ha d re pre se nte d Mr. Br icke v in co nn ec tion w ith hi s co nv ic tio n fo r mall fr au d . [13 , 

pp. 1. 10- 11 . 18 -19.1

45 M r. Bric ke y ex pl ai ne d th a t Mr. Hoo pe r so ught him o u t:

“A. . . . I was go ing to Mobile , fo r I don,’t kn ow w hat re as on , no t to mee t Ji m Hooper 

bu t whe n Ji m fo und ou t th a t 1 was In Mo bile , he m et me th er e. . . .” [1 3. p. l.J

67 -5 20 0 - 76 - 19

33
tressed corporation with Gold Cloud Corporation. [2, pp. 24-30, 71; 

169.] At the meeting of the Board of Directors on October 28, 1969, a 

resolution was adopted auth orizing Mr. Brickey to negotiate the pro ­

posed merger. [151.] The meeting occurred after Mr. William L. 

Thu rma n, the corpo ration's controller, had advised Little River Farm s’ 

officers of the corp oration ’s failure to remit withholding taxes to the 

Int ern al Revenue Service. [4, pp. 10-11.] Mr. Brickey has stated tha t 

he also discussed the m atte r of the corpora tion's tax liability with Mr. 

Hooper at the October meeting. [13, pp. 12-13.] An agreem ent was 

drawn between “Li ttle River Farm s, Inc., a Georgia corporation, 

Hen ry L. McMahan, individually, and .James F. Hooper, individu ally,” 

and Mr. Brickey auth orizing the latter to effect a merger. Little River 

Far ms and Messrs. Hooper and McMahan were to be issued stock 

in the company surviving the merger having a market value of at 

least $300,000. | 168.] Messrs. Hooper and Brooks endorsed their stock 

certificates in blank, and the corporation in turn issued a new certificate for 125,000 shares to Mr. Brickey's nominee, B arbara Goin. [2, pp. 

28~29.] The demand note for $248,000 was a ppare ntly transferred to 

Mr. Brickey as well. [1, p. 25; 2, pg. 71.] These transactions occurred 

in November, 1969, shortly aft er Mr. Brooks' filing in b ankruptcy. On 

November 18, 1969, a certificate for 41.667 shares was issued to Mr. 

McMahan which, toge ther with the 83,333 shares already in his possession, gave him a stock interest equal to that held by Mr. Brickey. 

[2.p.7 7.]

Mr. Brickey was unable to negotiate the proposed merger with Gold 

Cloud and in late December, 1969, despite Mr. Hoop er's demands 

that he return the stock to the corporation, [108; 109.] Mr. Brickey 

undertook to assert an actual ownership interest in the corporation. 

[2, p. 24.] To resolve the mat ter of Mr. Brickey's intermeddling in 

corporate affairs, a special meeting of the Board of Directors was 

held on March 4, 1970. At that meeting the shares transferred to Mr. 

Brickey were declared “ lost a nd /or imprope rly retained" and instructions were issued to cancel the certificate in Barbara Coin’s favor 

and reissue the shares to their “rightful owners” . 1153.] It is unclear 

whether the shares that were eventually returned were reissued to 

Messrs. Brooks and Hooper.4

'

5

I nte rnal Reve nue Service S eizu re of L itt le R iver F arms

Little River Farms ' unpaid creditors at the end of 1969 included 

the Internal Revenue Service. [2, pp. 84-85.] On April 2, 1970. a tax 

lien in the amount of $69,980.50 was filed against Little River Farm s, 

followed by liens of $18,563.70 on April 8, 1970, and $40,000 on May

“ I n ord er to physi ca lly re se cu re th e ce rt ific at e an d th e de m an d no te. Mr. McM ah an 

arr anged to tr ade Mr. Bric ke y an os te ns ib ly w ort hle ss $7 ,50 0 bo nd. Mr. M cM ah an ’s te s timo ny as to th is tr a n sacti o n is In pert in ent pnrt as f ol lo ws :

"A co mpa ny In Flo ri da owed ns— owed th e corp or at io n $7 ,50 0 fo r a bon d th a t th ey ha d 

Issued us th a t w asn 't an y gortd. I t w asn 't a re al bo nd, so I m ad e arr angem ents w ith 

Bric ke y If he wo uld tu rn th ose st oc ks ov er to me th a t I would giv e him n le tt e r of a u ­

th o ri ty to n ’ck his m oner up which he d ’d. W het her he got $7 ,500 or no t I d o n 't know . 

He m ig ht ha ve se tt le d w ith them . I don't know exac tly w hat he got . I met him a t th e 

air p o rt on th e way to Miam i on a Su nd ay m or ni ng , an d he tu rn ed th e st oc ks ov er to me 

an d I tu rn ed ov er t he l e tt e r. " [2 . pp. 23 30.]

A re le as e iss ue d by L it tl e Riv er Far m s In dic at es th a t Mr. Brlc ke v wa s ab le to re co ve r 

$4 ,00 0 on th e bon d. [17 2.1
18, 1970. The property of the corporation was sold at public auction 

on May 15, 1970, for $21,800. [53; 117.] 47

On July 17, 1970, Mr. McMahan executed an affidavit which states 

the following:

D ur in g th e pe rio d of aff ian t s m an ag em en t of th is bu sine ss, Ja m es F. II oojkt

of Co lum bus, Miss issipp i, lia s been list ed as a mem be r of th e Boa rd of D irec to rs , 

alon g with Al ton Haw k, an d as Vice Pre si den t. Mr. Ho op er has att ended se ve ra l 

mee tin gs in A tl an ta in wh ich th e ov er al l bu sine ss of th e co rp ora tion has been 

discussed. He has offered ad vice re gar din g po ssible sa le s an d oth er fin an cial 

ar ra ngem en ts , has attem pte d to obt ai n fin an cing fo r th e co rp or at io n or pr os pe ctive purc has er s fo r th e ass ets or co rp ora te stoc k, bu t he ha s, as a ge ne ra l ru le, 

during th e m an ag em en t of th e affia nt, no t p art ic ip ate d ac tiv el y in th e da ily 

ope ra tion of th e bu sine ss. To th e be st of my kn ow ledg e an d be lie f, Mr. Hoo pe r 

was first in fo rm ed of th e co mpa ny ’s fa il u re to remit w ithh ol di ng ta xes by me 

a fte r Leo n Sm ith left th e co rp or at io n on M ar ch 9, 1970. [18.]

The foregoing affidavit was repudiated by Mr. McMahan in S eptem ­

ber, 1975 insofar as it indicates tha t Mr. Hooper played no part in 

the daily operations of Little River Farm s. 111, pp. 33-34.J

At a Board of Director’s meeting on May 29, 1970, the corporation 

adopted a resolution to retain an attorney to protect its interest. [ 154.] 

Sho rtly thereafter, on June 8, 1970, Mr. Fred L. Somers, the attorney , 

filed suit on beha lf of Little River Farms and Mr. J ack Holloway as 

plaintiff's against the United States and Messrs. Bowman and Green, 

who had purchased the company at the tax sale. The suit sought to set 

aside the tax sale for procedural irregularit ies.4

'

The United States Attorney questioned Mr. Jack Holloway’s stan ding as a party to the suit. Plaintiffs amended their complaint on 

September 25, 1970, seeking to fur the r establish Mr. Holloway ’s 

interest as an app rop riate party to the suit, adding the following 

lan guage:

Pl ai nt iff, Ja ck Holloway , at th e tim e an d date of th e sa id au ct io n sa le was 

re pre se nting an d was th e ag en t of Ja m es F. Ho op er who, on sa id d ate an d tim e 

he ld a no te of Pla in tiff . Little R iv er Far m s, Inc. in th e am ou nt of $248,000 

se cu red by a chatt el m or tg ag e wh ich const itute d a lien ag ai nst much of th e 

pro per ty s eized by th e D ef en da nt , U ni te d Sta te s of A merica. Sa id no te re pre se nte d 

a p art ners hip as se t in co nn ec tio n with on e E ver et te Ho pe Brook s wh os e p a rt n e rsh ip ass et s or in te re sts on sa id date wer e su bje ct to a re st ra in in g ord er of th e 

United Sta te s D is tr ic t Cou rt fo r th e W es te rn D is tric t of Te nn esse e. The ac t 

of th e D ef en da nt , United Sta te s of Am erica in ca us in g th e ass ets of Pl ai nt iff, 

L ittle Riv er F arm s to he sold at un co ns cion ab ly low pr ices was in vi ola tion of 

th e afo re sa id O rd er of th e U ni ted Sta te s D is tr ic t Cou rt fo r th e W es te rn D is tr ic t 

of Ten ne ss ee an d da m ag ed Pla in tiff , Ja ck Ho llo wa y an d his pri nci pal s to th e 

ex te nt of th e loss of sa id co llat er al in th e am ou nt of $248,000. [5 0 .]

In a dejxisition taken Feb ruar y 2, 1972, for the purpose of the Lit tle 

River Farms suit. Mr. Holloway affirmed that he acted on behalf of 

Messrs. Hooper and McMahan in bidding at the tax sale. He said 

there had been an agreement between the three of them that Mr. 

Hooper wotdd furn ish whatever amount was successfully bid by Mr. 

Holloway and tha t Little River Farms would the rea fter be opera ted

47 T here aft er, on A pr il 10, 1073, th e U nited S ta te s bro ught su it a g ain st Mr. M cM ah an In th e sa me court fo r th e pu rp os e of re duci ng to ju dgm en t th e "o u ts ta n d in g fe de ra l ta x 

li ability of H en ry L. M cM ah an as re sp onsi ble officer of I. lt tl e Elv er fa rm s ." [53.1 Pesp it e 

att em p ts to show th a t he did not direc t th e finan ci al aff ai rs o f th e corp ora tion or p a rti cip ate in de ci sion s as to which cre ditors sh ou ld be pa id , th e Cou rt fo un d to th e contr ary 

an d ord er ed th a t th e M cM ah an 's re side nc e be so ld In sati fa ctl on of th e $8 8,54 8.58 ju dgm ent 

en te re d ag ain st him. [54 ; 55. J

** S pe cific ally? th e co m pla in t filed al le ge s th a t th e ta x sa le was co nd uc te d In vio la tion of th e In te rn a l Rev en ue Ser vi ce ’s re gula to ry re quir em en t th a t 20 per ce nt of th e p u rch as e pr ic e be pa id a t th e date o f sa le. [49. J
as a three-way partnership. (7, pp. 9-12.] Mr. Hooper has stated that 

he knew noth ing about the purp orted agreement to which Mr. Holloway testified.40 He also indicated that he knew noth ing about Mr. Holloway’s assertion that he acted as Mr. Hooper's agent or the fact tha t 

the Chattel Mortgage in his name was used in b ringing the suit.50 Mr. Hooper maintains tha t it was his attorn ey who first advised the Tr us ­

tee in the Brooks Bankruptcy of the ( ’battel Mortgage in Mr. Hooper's 

name and tha t the instrument evidenced an indebtedness of Little 

River Farms to Mr. Brooks. This advice to the Trustee regarding the 

Chattel Mortgage in the amount of $248,000 is confirmed by correspondence. [123; 124.] Mr. Hooper's attorney, however, had previously advised Mr. Somers, the attorney for Little River Farm s, that 

his c lient would be glad to “do anything with reference to that mo rtgage which may help, your i>osition vis-a-vis the Intern al Revenue 

Service and other creditors.” [116.]

S eal right Guarante e

In the summer or fall of 1969, Mr. Hoojx*r executed a gua ranty of 

Little River Farms' corporate account to Sealright Co., Inc., a subsidiary of Phillips Petroleum Company. That guara nty bears an execution date of October 7, 1969—within two weeks of Mr. Brooks’ filing 

in bankruptcy. [171.] To the best of Mr. Hooper's recollection, his 

signature was required because Sealright was extending credit for the 

shipment of containers to Little River Far ms on the basis of his and 

Mr. Brooks' joint financial statement indicating the ir join t net worth 

at over $6,000,000. [ 1. pp. 41-43; 160.] 51 Mr. Hooper offers the following explanation for his execution of a g uaranty at approxim ately the 

time of Mr. Brooks' ba nkruptcy :

Hojk* [Brooks] and I both signed this instrument at mv house, witnessed by two 

domestic employees there, an d sent it to McMahan with the express understa nding 

tha t it would not l>e delivered to Sealright at tha t time and would only l>e used 

if Sealright planned to cut off deliveries without it. . . . This purported gua ran ty 

instrument bears an October, 11X8), date, which was a time after Dabney Crump's 

suicide and Hope Brooks’ first filing with the bank ruptcy court. I certainl y would 

not and did not sign any such document in October of 1969. [16 2.]“

In January . 1970, after having failed to secure paym ent of the 

account from Little River Farms, Sealright requested paym ent from 

Mr. Hooper. By September 18, 1970. the total indebtedness claimed 

bv Sealright amounted to $19,653.14 [125.] Throughout 1970 and into 

March, 1971. there was a considerable exchange of correspondence 

between Sealright and Mr. Hooper’s attorneys. Initially. Mr. H ooper 

insisted that the guaranty should be first aserted in the Brooks ban kruptcy proceedings and declined to make any payment on the basis

* The St af f h as attem pte d to l oca te Mr. Holloway w ithout success .

“ T he reco rd In di ca te s th a t up on Mr. Brlck ev 's re tu rn of th e $2 48 ,000 no te dr aw n In 

bl an k a t M r H oo pe r's re qu es t, a C hatt el M or tg ag e fo r $2 48 ,000 was dra w n In Mr. H oo pe r’s 

fa vgr se cu ring his a n d /o r Mr. B ro ok s' “ lo ans” to th e co rp ora tion In app ro xi m at el y th a t 

am ount . [ 1, pp. 2.>—26 : 17 0.] Mr. Hoo pe r cl ai m s to ha ve no kn ow ledg e of th e ci rc um st an ce s 

surr oundin g I ts i ssua nc e.

, l A ppa re nt ly th e Jo in t fina nc ia l sta te m en t re lie d up on bv S ealr ig ht Is th e sa me Jo in t 

fina nc ia l st ate m en t [8 6 ] su bm itte d to Mr. W illiam L. Bea sley In co nn ec tio n w ith th e 

M ar ie tt a lo an tr ansa ction.

■ “ Fli es ob ta in ed fr o m S ealr ig ht Co.. In c. . In dic at e th a t th e g u a ra n ty or ig in al ly sig ne d 

in Ju ly of 1969 was re ex ec ut ed a t a la te r date be ca us e th e or ig in al g u ara n ty ha d not bee n properly witnessed.
281

that he had executed the guaranty only as an agent for or in accommodation to Mr. Brooks. 1114; 126.]

In March, 1970 Mr. Hooper filed a claim against the bankrup t 

estate, based on a “contingent claim by Sea lrig ht, Inc., Kansas City, 

Missouri, for a debt of Little River Farms , Inc., guaranteed by Hooper 

to accommodate Brooks.” [31.] In his amended objection to that claim, 

the Tiustee argued tha t Mr. Hooper’s execution of the gua ran ty was 

not made solely as an accommodation to Mr. Brooks but in an attempt 

to better the financial condition of Little River Far ms and create a 

market for the Hooper Hairy Fa rm ’s milk. In tha t amended objection, 

the Tiustee alleges:

4. Claimant, Jan ies F. Hooper, was negligent as a director of Little River 

Farms, Inc. at the time of the execution of the g uaranty on October 7, 1968, and 

at the time of the purchases from the Debtor Sea lrig ht Company to Little River, 

from Septeber 2, 1969, to January 14, 1970, in th at he knew, or should have 

known, that Little River Farms, Inc. had a deficit net worth during this jieriod, 

and tha t there was no reasonable expe ctation of it converting tha t deficit net 

worth into anythin g but bankruptcy or insolvency as the final result of the 

corporation. [35.]

The claim was ultimately disallowed because it was not liquidated at 

the time the bank ruptcy was settled.

In September, 1970, Mr. Hooper’s a ttorney advised Sealrigh t tha t 

they could demonstrate that the liabilities of the Hooper Daily Farm 

exceeded its assets by more than $25,000. The precise representation 

was as follows:

With resjiect to Mr. Hooper’s financial condition, I lndieve that we could demons trate to you, niton a visit, that Mr. Hooper has a dairy farm which was conveyed to a partne rsh ip consisting of Hooper and Eve rette II. Brooks; that 

Everette H. Brooks is now in bankruptcy in the Western District of Tennessee; 

and that the outstanding indebtedness on the assets of this dairy farm exceeds 

the value of the assets by more than $25,000.00, and would exceed the ir price 

considerably more than tha t if they are sold at a forced sale. Mr. Hooper is 

delinquent in his payments to the First Columbus National Bank and other 

cred itors largely because of the entanglement with Mr. Brooks; and he is subject 

to restrain ing o rders of the Federal Ban krup tcy Court which prevent his moving 

in any way with respect to any of the assets in which the bankrupt has any 

possible interest.

» • ♦ * * * *

Despite all these entanglemen ts, it is possible tha t we could obtain some money 

from a member of Mr. Hooper’s family to discharge the alleged obligation to 

your company, if a considerable reduction in the demand could l>e made. [126.]

Sealright requested a balance sheet showing Mr. Hooper’s financial 

condition. [125; 137, 138, 141, 142.] Based on the joint financial sta tement of March, 1969, showing Messi’s. Hoo per’s and Brooks' net worth 

at more than $6,000,000, and on Mr. Brooks’ jietition in bankruptcy 

showing assets of only some $4,000,000, Sealrig ht questioned the representations of insolvency made on Mr. H ooper's liehalf. [140; 144; 145.] 

Finally, in .July. 1973. Sealright was provid ed a hand written document sketchily por traying Mr. Hooper’s net worth as a negative $5,666. 

Together with tha t financial statement Mr. Hooper offered to settle 

the $19,653.44 claim for $2,000. [139.]

In December. 1973, Mr. Hooper furnished a new financial sta tement prepared by him showing his net worth at $2,000. The letter 

from Mr. Hoop er's attorney forwarding th at statement to Sea lrig ht

37
282

stated that “Mr. Hooper's CPA advised us that because of the necessary disclaimers he would have to insert, it would be a waste of money 

to have him prepare the financial statement." | 143.]

Sea lrig ht refused to settle the claim for the offered $2,000 and requested specific information as to the appraised value of Mr. H ooper’s 

assets which were included in the joint financial statement. In addition, Sea lrig ht requested to be advised as to the disposition of those 

assets or reasons tor their substantially lessened value. [146.] In response Mr. Hooper's attorney, Mr. Ralph Rood, reix>rted that he was 

unable to reconcile the valuation of assets contained in the joint financial statement. In restati ng Mr. Hooper's settlement offer of $2,000 

Mr. Rood 53 represented Mr. Hooper's overall condition as follows:

I ca n no t reca ll w heth er or no t I have giv en you an y ba ck gr ou nd in fo rm at io n 

on Mr. Ho oper. If I ha ve , pl ea se ac ce pt my ap olog ies fo r r e f u tin g my self, ho wever, I belie ve it is im port an t in ord er th at yon ma y under st an d my leg al ad vice 

to th em co nc er ning Sealr ig ht’s cla im . Mr. II oojht is nea rl y si xty year s old an d 

has been in i>oor hea lt h fo r a nu m be r of ye ar s, hav in g su ffer ed m aj or heart a tta ck s in 1963 an d in 1969. The la st m aj or hear t att ack oc cu rred duri ng th e jterio d 

whi ch ga ve rise to S ealr ig ht’s cla im . Mr. IIoo |4*r is woe fu lly un de rins ur ed an d, 

as you m ight ex pect, has been unin su ra hle fo r a nu m be r of ye ar s. Dur in g th e la te 

1950’s Mr. Hoo pe r su ffer ed a m aj or bu sine ss re ver sa l in co nn ec tio n with his part 

ow ne rshi p of th e Co lumb us Can ni ng Co mp any . He in her it ed a trem en do us de bt 

lo ad a t th at tim e which ha s co nt in ue d until th e pre se nt . For th e fo rego ing reason s, 

am on g ot he rs , I ha ve in si st ed th at th e re al est ate no t be su bj ec te d to fu rt h er 

encumbrance. [147.] 6*

Mr. Hooper agreed to Sealright’s counter-offer to settle for $S,000 in 

August, 1974. and. upon payment of that amoun t, was released from 

any furthe r liability a rising out of the gua ranty. [173.]

“ Mr. Ralph Rood is also Mr. Hooper’s son-in-law.

m With reference to Mr. Hooper’s indebtedness derived from his involvement with the 

Colum bu s ( a im in g Com pa ny , see pa ge 40. in dic ating th a t tie as su m ed pe rs on al re sp ons lb illty 

‘

(

'

r

. I >fl-’'m e n t °f $15,000 of its outsta nding indebtedness of some half million dollars in

38
283

COLUMBUS CANNING COMPANY

The Columbus Canning Company, Inc. was incorporated Janu ary 

15, 1946. Mr. Hooper provided virtuall y all of the $7,500 authorized 

and paid in capital for the company. W hile there is little inform ation 

available regarding this venture. Dun and Bradstr eet repo rts that the 

corporation, which Mr. Hooper served as Presiden t, was discontinued 

in 1949 “due to unprofitable operations.” [159]

From 1950 until 1957 Mr. Hooper and Mr. W. Pra tt Thomas und ertook to revitalize the operation as a partne rship known as th e Columbus Cannin g Company. Mr. Hooper served as manag ing partner. This 

partne rship was not the subject of a formal partne rship agreement.

[ 10. pp. 119-121.] On November 25, 1957, the Columbus C anning Company was incorporated under the laws of Mississippi in order to secure, 

additional capital. [ 159.] Messrs. Hooper and Thomas conveyed to the 

corporation all their partne rship assets on November 31, 1957. This 

tra nsfer included the 68.5 acre parcel of land known as the Columbus 

Canning tract on which the plant was situated and which adjoins the 

Dairy Farm. [60; 61.] Mr. H ooper, Mr. Thomas, and Mr. W . O. Ga rrard were the initial subscribers to 50,000 shares each of the authorized 

1,000,000 shares of $1 par value stock.

The documentation is con tradictory as to the nature of Mr. Hooper's 

ownership interests in Columbus Canning Co.. Inc., af ter July 7, 1958. 

Dun and Bradstreet reported that on October 1, 1958, “President 

Jam es F. Hooper” stated to them that he held 51 percent of the corporate stock and th at the remaining 49 percent was held by the corporate 

vice president. Mr. E. E. Rockwell, who represented “certain investors”—app arently Rhodes Optical Company, Inc. [159.] Mr. Hooper 

indicated in the case of Prem ium Associates v. J. F. Hooper et al. that 

on J uly 7. 1958, he sold all of the stock in the corporation to Rhodes 

Optical Company, Inc. and that he owned no stock in the corporation 

thereafter. [10, p. 18; 43.]

Although Mr. H ooper retaine d the title of corpora te president aft er 

the conveyance of a substantial stock interest to Rhodes Optical Company, Inc. [160.], Mr. Hooper states that his control of the company 

ceased during the summer of 1958 and that he th ere after participated 

* in the corporate affairs only to the extent desired bv Rhodes Optical

Company, Inc. for the purpose of mainta inin g sales. The nominee 

offers in substantiatio n of these assertions a letter dated April 25, 

1975, to himself from Mr. Roge r C. Landrum of Jackson, Mississippi:

Due to the rapid grow th of the business and in order to 

assure its continued grow th and expansion, it was decided 

th at additional capital should be invested. You asked that I, 

as the company attorney, assume the Responsibility for locating such capital. I contacted several different sources and 

finally made contact with Rhodes Optical Company of At39
284

lanta, Georgia, through a businessman who enjoyed a good 

repu tation in the Georgia political and business communities.

T undertook a very intensive investigation of Rhodes and 

its principals, including going to Georgia and Flo rida, checking with individuals there such as bank presidents, looking at 

other businesses in which Rhodes had invested and doing 

everything within my ability to assure myself tha t Rhodes 

would be a desirable type investor. My investigation led me 

to the definite conclusion that it would be and T so recommended to you.

Based on my recommendation, Columbus Can ning entered 

into certain contractual relationships with Rhodes. While T 

do not remember the exact terms of the arrangem ents, I do 

recall that one Ray Goodman, a principal of Rhodes, assumed 

almost, complete control of the affairs of Columbus Canning 

and that your services were retained only to the extent desired by Rhodes and Goodman. I recall lieing present in the 

offices of Columbus Canning on several occasions during the 

early stages of this relationship when Goodman would call 

past and prospective new suppliers of raw mate rials and 

assure them that Rhodes was to guarantee the accounts. 

Apparently these suppliers must have made credit checks 

and received the same type inform ation tha t I did because 

they immediately started shipping mate rials in unlimted 

quantities.

It was expected tha t the infusion of additional capital by Rhodes 

Optical would permit the corpo ration to engage in added promotional 

activities and expand its sales. The anticipated expansion never m aterialized. During 1958 the corporation’s assets were encumbered by a 

$30,000 deed of tru st in favor of Tintin Corp oration, as well as by four 

chattel mortgages exceeding $24,000. On Janu ary 27, 1959, the corporate assets were fur the r encumbered by a deed of tru st executed by 

Mr. Hooper as Presiden t in favor of Weisse and Geller et al. for 

$40,000. This deed of tru st was secured by all the real and personal 

assets of the canning company. The earlier deed of tru st in favor of 

Tintin was subrogated to it. 55

By the summer of 1959 the corporation had virtually ceased ope rations and on August 15, 1959, Weisse and Geller foreclosed on its 

collateral. The corporate properties were sold for $41,600.5fl Dun and 

Bradstreet in its supplemental report dated August 19, 1959, gives the 

following account of the termination of the Columbus Canning 

Comp any :

Current efforts to interview President, James F. Hooper, have been unsuccessful. Efforts to develop information relative to the remaining assets and liabilities 

of the company have not been fruitfu l. However, it is known that the mortgage 

which was foreclosed covered land, buildings, machinery, equipm ent, office f urn iture, fixtures, trucks and tra ile rs of the company, and all were sold August 15th. 

It is unlikely tha t there are any assets left to speak of in the corporation. Liabilities have been estimated in some quarters to range between $200,000 and $500,000. 

Apparently, there have been no provisions made for these liabilities. (161.]

“ Refer to Document No. 57 indicating filing In the Lowndes County Chancery Court of th e following :

1. 7-18 58. $30,000 deed of trus t to Tintin. Inc., Book 278, page 250.

2. 1-17-59. $40,000 deed of t ru st to Weisse and Geller. Book 280. Dago 59.

“ Refer to Document No. 57 Indicating foreclosure by deed of August 19. 1959 recorded at Book 291, page 101, In the Lowndes County Chancery Court.

40
285

In a suit subsequently brought by one of its cred itors the unpaid 

corporate debt was stated to be in excess of a half million dollars. 

[10, pp. 23-26.]

Info rma tion is available relatin g to only two of the corpo ration s 

unpaid obligations as of the date of its dissolution. The first of these 

is a $61,000 debt owed Premium Associates Inc. which was the subject 

of a lawsuit filed against Messrs. Hooper and Thomas in March of 

1060. [42. J Premium Associates' alleged that a coupon collection and 

advertising contract signed by Mr. Hooper in August, 1057, three 

months before incorporation of Columbus Canning Company, was 

an obligation of the partnership. The jury returned a verdict in favor 

of Messrs. Hooper and Thomas, finding that the written contract 

executed by Mr. Hooper had been superseded by an oral agreem ent 

between the parties to the effect that the corporation rat her than the 

partne rship would receive the benefits and bear the liabilities under 

the contract. [44.]

According to Mr. Hooper, he and Mr. Thomas personally g uaranteed 

certain debts owed to the American Can Company. They “agreed to 

pay American Can Company the amounts due on its account at the 

time of the sale of Columbus Can ning Company to Rhodes Optical. 

The amount was approximately $30,000 or $15,000 for each of the 

partne rs.’’ [166.] According to Mr. Hooper this was the only debt he 

inherited as a result of the demise of Columbus Can ning ('om pany, 

Inc.

Between the date of foreclosure in 1959 and the end of 1966 the 

Columbus ('aiming tract changed ownership five times. On December 9, 1966. it was acquired by Mr. Brooks.57 It was subsequently tra ns ­

ferred to Sta ndard Union Life Insurance Company and, on August 

20, 1969, Standard Union conveyed the property to Mr. Hooper.58 The 

t ract was subsequently sold to Weyerhaueser Company as a part of the 

farm.

67 See Document No. 57 listing filing In the Lowndes County Chancery Court of the 

following : 1. Deed to Radcliffe Investment Company dated November 29, 1966, and recorded at 

Book 380. page 288. 2. Deed from Radcliffe to Brooks dated December 9, 1966, and recorded at Book 380. r» Conveyance of the Columbus Canning tract to Standard Union Life Insurance Company and subsequently to Mr. Hooper is discussed at pages 25 through 27.

41
APPENDIX I

Hooper Dairy F arm Accounting Analysis

/. / ntroduction.

From spring, 1967, until August 19, 1969, Mr. Hooper and Mr. 

Brooks retained the services of Touche, Ross & Company, Memphis, 

Tennessee, to maintain the hooks of the partne rship and prepared all 

its tax documents.

T. E. Lott & Company of Columbus, Mississippi, was retained by 

Mr. Hooper to prepare the part nership's 1969 tax return. This accounting firm had represented Mr. Hooper for some time prior to 1969.

The following accounting analysis is based upon information received from these accounting firms and documents furnished by Mr. 

Hooper.

7/. Background.

James F. Hooper and Eve rett IT. Brooks formed a p artn ership, the 

Hooper Dairy Farm, commencing operations as of Janu ary 1, 1966. 

This partnership originated from discussions held and agreements 

reached by them in 1965. A formal partne rship agreement was not 

drawn up. The following analysis of the financial relationship of 

Messrs. Hooper and Brooks in the operation of the H ooper Dairy Farm 

is based on various documents referenced in the attached Table of Documents. In this Appendix factual d ata is referenced to these documents 

in the same manner as in the Report.

h or some years prior to the formation of the pa rtnership Mr. Hooper 

had maintained a checking account. ‘‘.I. F. Hooper—Farm Account" 

(h arm Account). in the Firs t Columbus National Bank, ( ’olumbus. 

Mississippi. 'Phis same account was used by the partnership and bv 

Mr. Hooper in the years subsequent to termination of the partners hip.

On October IS. 1965, Mr. Brooks deposited $15,000.00 in this account. 

On November 10, 1965, the proceeds of a $50,000.00 loan obtained from 

the National Bank of Commerce, Memphis. Tennessee, were also 

deposited in this account. On this same date Mr. Hooper withdrew 

$25,000.00. As of December 31, 1965, the outstan ding checks drawn 

on the Farm Account exceeded the balance according to the hank 

statement by $7,327.62. On Jan uary 3 and 7. 1966, Mr. Hooper made 

deposits tota ling $7,500.00 to cover the overdra ft.

On Jun e 14. 1966, a half interest in the Hooper Dairy Farm real 

property was conveyed by Mr. Hooper to Radcliffe Investment Company (Radcliffe) for $100,000.00.’ Mr. Hooper deposited Radcliffe's 

check for that amount in the Farm Account on Jun e 16. 1966. On the 

same date a check was drawn on the Farm Account, payable to the 

National Bank of Commerce, Memphis. Tennessee, in the amount of

1

 Ra dcliffe was an In te rm ed ia ry under n re al est ate purc has e arr anc^nie nt de vised by 

Mr. Br ooks as n ta x sh el te r. See App endix II . Ra dc lif fe su bs eq ue ntly co nveyed th e hal f 

In te re st In th e fa rm pro pert y to Mr . Brooks.
$90,676.67, repaying loans made November 9. 1965, and Janu ary 13 

and 25, 1966, in the amounts of $50,000.00, $15,000.00 and $25,000.00, 

respectively, plus interest of $676.67? The $100,000.00 received from 

Radcliffe was credited to Mr. Hooper’s c apital account. In addition 

Mr. Brooks assumed half o f the mortgage on the farm property owed 

to Pru den tial Insurance Company in the amount of $150,000.00. Mr. 

Hooper’s 1966 I ’.S. In dividual Income Tax Return reported the selling 

price for the half interest in the farm property as $175,000.00.

As of Janu ary 1. 1966, the partnership acquired assets tota ling 

$177,400.00 from Mr. Hooper * 3 and assumed his personal indebtedness 

of $155,190.42, as follows :

Fi rst Columbus National Bank-------------------------------------------------$30. 000. 00

U. M. & M. Credit Corp_____________________________________ 52,862.80

Overdraft of checking account—First Columbus National Bank----- 7,327.62

National Bank of Commerce__________________________________ 50. (MX). (Mi

B. II. Brooks—Octol>er 18, 1965_______________________________ 15, 000. 00

Total ________________________________________________ 155,190.42

Mr. Brooks’ capital account was credited by Touche. Ross & Co. for 

his $15,000.00 contribution of October 18, 1965. T he item was treated 

also as a debt of Mr. Hooper because the money was used in the prepartnership period.

In accounting for the operation of the dairy farm , the partners 

were to share equally the profit, loss and income from the sale of lots, 

timb er and gravel (land income). The partners were to be in dividually 

charged with personal expenses paid out of partne rship funds and 

were to be given credit for partne rship expenditures made out of th eir 

personal funds. Paym ents on the Prudential Insurance Company 

mortgage were to be made by the partnership and charged equally to 

the partners.4

 The par tners agreed to put up $50,000.00 each as capital 

and that contributions in excess of this amount would be credited to 

the ir loan accounts. In 1968, however, the loan accounts were closed 

into the capital accounts.

Ill - Inconsistencies Contained in Mr. H oop ers P etition and Accounting.

Mr. Hoo per’s “P etition and Accounting’’ filed in the Brooks Ban kruptcy proceedings states :

The following constitute all payments to and withdrawa ls from the Hooper 

Farm Account by both Jam es F. Hooper and Eve rette Hope Brooks, according 

to your petitioner’s bank records, these deposits or paym ents constitutin g the 

only paym ents ever made by Brooks for his equity in certain cat tle and dairy 

machinery and equipment. These withdr awals constitute the only payments 

which Hooper received for his cattle, machinery and equipment which the 

par tne rsh ip agreed to purchase from him for $175,000.00. [30.]

* T he b an k's re co rd s in dic at e th a t th es e lo an s were m ad e as fo llo ws :

D at e, am ount, a nd ob lig or

Nov em be r 9. 1965, $50,0 00, Mr. and Mrs. Ja m es F. Hoo pe r.

J a n u a ry 13. 1966, $15,0 00. Ja m es F. H oo pe r an d E vere tt 11. Br oo ks .

J a n u a ry 25, 1966, $25,0 00, Ja m es F. H oo pe r an d E vere tt H. Br oo ks . •T h is am oun t co ns is te d of c att le and m ac hi ne ry $1 75 ,000 .00 . an d st oc k of Rea lic lo us 

D ai ries . In c.— $2 ,40 0.0 0.

4

 In 1966 an d 196 7 th es e pay m en ts were mad e by th e p a rt n e rs h ip In ac co rd an ce with 

th e ag re em en t. In 196S. ho wev er, th e e n ti re pay m en t was mad e by Mr. Brook s. Th e 1969 

pri ncip al pay m en t was def er re d ; Mr. Br oo ks pa id th e in te re st fo r th a t ye ar.
The following accounting furnished to the Bankruptcy court as a 

part of tha t document purpo rts to be a chronological listing of all the 

deposits and with draw als from the Farm Account made by Messrs. 

Hooper and Brooks from October 18, 1965, thro ugh December 31, 

196 9:5

Farm account

Deposits Withdraw als Deposits With drawals

(Brooks) (B rook s) (Hooper) (Hooper)

Oct. 1 8 ,1 9 6 5 .. .. '.................

Nov. 10. 1965.. .......................

Do........................................

Jan. 3, 1966.........................................

Jan. 7, 1966 ...........

Jan. 11, 1966 .........................

Jan. 24,1 966.................................

Ma r. 10, 1966.................

Apr. 22, 1966 ...................

May 27, 1966......................................

June 10, 196 6............................

Do................................................ ..

J.F.H. total for 1966................. ..........

1966 (land incom e)...........................

Nov. 1, 1967........ ........................

Nov. 21, 1967.......................................

Nov. 23, 1967...

Dec. 15,19 67......................................

Dec. 22, 1967........................................

J.F.H. tota l for 1967............................

1967 (land inc om e)...........................

Jan. 7, 1968...................................

March 1968 ........ ...............................

June 21, 1968.......................................

Aug. 26, 1968.......................................

J.F.H. total for 1968............................

1968 (land income).

Aug. 31. 1969.......................................

(C rump) June 2C, 1969.......................

(LRF ) June 20, 1969 . .......................

(C rump) June 23, 196 9......................

Do.........................................

(J. C. Bradford) June 24, 1969 

(M ar ietta) June 24, 1969

(Brooks Co ) June 25, 1969...............

(C rump) June 26, 1969.......................

(M ar ietta) June 30. 1969 

(Bank of Yazoo C ity ) June 30, 1969

(Standard Un ion) July 2, 1969_____

(C rump) July 7, 1969

(M ar ietta) July 14. 1969....................

(Standard Un ion ) July 31, 1969 . . .

(LRF ) Aug 23, 1969 .................

(Brooks Cotton Co.) Aug. 28, 1969 

(LRF ) Sept. 10, 1969

(E .H .B.)Oct. 15. 1969.......................

J.F .H. total fo r 1969..........................

(b ) $15,000. 00 

(a, b) 50, 000.00

(a ) 15,000 .00 

(a ) 25,000.0 0 

10,000.00 

25, 000. 00 

27,000.0 0 

(c ) 100 ,00C. 00

(d ) $90 ,676.67

$5,00 0.0 0 

2, 500.00

(b ) $25, 0 00.00

3,0 00.00 

2, 500.00 

4, 500. 00 

1,500.00

10,000.00

5,0 00.00

6,25 0.00

(g ) 10,024 .94

22 ,011 .03

(g ) 10, 306. 42

34,010.75

20.OCO.00 

20, 000. 00

25,000.0 0

40,000.0 0 

25,00 0.0 0 

95.00 0.0 0

(f) 50,000.00 

5,000.0 0

2,32 6.00

"2 ,0 0 0 .0 6

2,00 0.00

is.ooo.oo

40,00 0.0 0 

(e ) 33,350. CO

10,00 0.0 0

93,125.56 

50,000. CO

(h ) 4. 750.00 

( j) 232. 50

(i) 1,0 50.00 

(e ) 2,0 00.00

(g ) 9, 323. 42

23 ,116 .00

21,070.92

Total 573,5 00.00 352,760.7 3 37,154.78 125,2 08.70

220 ,73 9.2 7 ..................... .................................... 88,053.92

This accounting is inconsistent in many ways with the workpapers 

maintained by Touche. Boss & Co. an d/or cancelled checks drawn on 

the Farm Account. [19; 81; 82; 83; 84.] B The following discussion 

shows their natu re and magnitude.7

5

 In 1966 nnd 100 7 th es e pay m en ts were ma rie by th e p art n e rs h ln In ac co rd an ce w ith 

th e ac re em en t. In 19 68, .h ow ev er, th e enti re pa ym en t w as mad e by Mr. Br ooks. The 1969 

pr ln el nn l pay m en t was def er re d : Mr. Br ooks pa id th e in te re st fo r th a t ye ar.

• N ot at io ns were m ad e on th e ba nk sta te m ents fo r th e J. P. H ooper- F arm Acc ou nt. 

6 20 69 to 7-1 9-6 9 an d 7 20-6 9 to 8-19 - 69. a s to th e pa ye e of mos t of th e ln re er ch ecks 

an d th e so ur ce of all th e dep os its duri ng th is tw o m onth pe rio d. Th es e nota ti ons w er e 

ma de by Mr. Ho op er.

7

 T he le tt e r ke ys a re re fe re nce s to Ite m s In th e fo re go in g table.
(a ) The deposits (Brooks) on 11-10-4)5, 1-11-60 and 1-24-66 of $50,000.00, 

$15,000.00 and $25,000.00, respectively, represent the proceeds of the loans 

obtained from the National Bank of Commerce in Memphis by Mr. Hooper and 

Mr. Brooks a nd thus should not be shown as cap ital contributions of Mr. Brooks.

(b) The National Bank of Commerce loan of 11-10-65 and the capital contributio n of Mr. B rooks of 10-18-65 totaling $65,000.00, were used by Mr. Hooper 

In financing the 1965 prepar tne rsh ip far m operations and thus were included 

by Touche, Ross & Co. in the personal indebtedness of Mr. Hooper assumed by 

the Par tnership. Since the with drawal (Hooper) of 11-10-65 of $25,000.00 was 

made out of fund s thu s charged, it is excluded by Touche, Ross & Co. from the 

withdraw als charged to Mr. Hooper’s capital account. (c) The 6-10-66 deposit (Brooks) of $100,000.00 represents the proceeds of 

the sale of the half interest in tne 1550 acre farm to Radcliffe. Touche, Ross & 

Co. shows this as a cred it (cash cont ribu tion ) to Mr. H ooper’s account.

(d) The 6-10-66 withdrawa l (Brooks) of $90,676.67 is shown by Touche, 

Ross & Co. to be the repayment of loans mentioned in “a” above. The interest, 

$676.67, was charged to Mr. Hooper’s cap ital account. (e) The withdrawals (Bro oks) of 6-24-69. $33,350.00, and of 10-15-69, 

$2,000.00, are corrected by reference to canceled checks to 6-24-69, $32,350.00. 

and 10-22-69, $200.00. (f) The deposits (Brooks) of 7-14-69, $50,000.00, indicated as received from 

“M arietta” should have been att rib ute d to "Stan dar d Union Life Insu rance 

Company”, according to Touche, Ross & Co.’ (g) The deposits (Hooper) for “land income” for 1966. $10,024.94; 1967, 

$10,306.42: and 1968, $9,323.42. were cred ited on a 50-50 basis to the partners ' 

accounts by Touche. Ross & Co. and Mr. Hooper’s personal income tax return s 

nrepared by T. E. Lott ft Oo. (h) Wi thdraw al (Brooks) of 8-23-69, $4,750.00, indicated as a payment to 

Little River Farms was a payment to the order of “N.Y. exchange to Murry 

Director.” We bnv e not h ^n •»>»’*» to identify the purpose of this bank dra ft. It 

was not signed by either Mr. Hooper or Mr. Brooks. This tran saction was subsequent to the date that Touche, Ross & Co. received the las t document for 

posting to the Hooper Dairy Fa rm hooks. (i) Withdrawa l (Bro oks) of 9-10-69, $1,050.00. We cannot identify this item 

to the cancelled checks of the J. F. Hooper—Far m Account.

(j) Withdraw al (Brooks) of 8-28-69, $232.50, was a check signed by Mr. 

Brooks payable to "Brooks Cotton Company” which was noted “Replacement of 

check No. 6192—Brooks Cotton Co. tra ns fer of funds.” This item appears to be 

the regular inte rest payment on a $30,000.00 loan from Murdock Acceptance Corporation. Touche, Ross & Co. has consistently trea ted interest on thi s loan ns a 

par tnership expense, chargeable to the farm oj>ernti<»n. The loan was included by 

Mr. Brooks in the bankruptcy proceedings as a personal liability.*

The workpapers of Touche, Ross & Co. disclose that Mr. Hooper’s 

accounts were credited, as of Ja nu ary 1.1966. with the $175,000.00 sales 

price for the cattle, d airy machinery and equipment. At th is date, however, he also had personal indebtedness amounting to $155,190.42, as 

discussed above, which was assumed and paid by the partners hip and 

charged by Touche. Ross & Co. to Mr. H ooper’s capital account on the 

books of the Hooper Dairy Farm partnership. Thus, the Petition and 

Accounting should have shown Mr. Hooper’s equity in the partne rship 

assets as $19,809.58 rathe r than $175,000.00.

In contrast with Mr. Hoo per’s Petition and Accounting. Touche, 

Ross & Co. in recording the transaction s which affected Mr. Hooper’s 

accounts credited cash contributions, his share of land income, expenditures made on be half of the partnership out of personal funds, as well 

as the assets that were contribute d, and charged his accounts with cash

* See di sc us si on of th e M ar ie tt a loan tr ansacti on conta in ed a t pajres .31 th ro ugh 3.3. 

•M r. Bro ok s ad vi se d th e Rtntf th a t th e $.3 0,00 0.00 was bo rrow ed fr om M urdo ck Acc ep tan ce C orp ora tion to pu rc hase c att le fo r th e p art ners hip . The lo an w as no t se cu re d an d 

wa s se tt le d as a liabil it y of Mr. B ro ok s' ban k ru p t est ate . [12. pp. R4-S5 .1
290

withd rawals, personal expenses paid out of the Farm Account, half 

of the partnership losses sustained, half of the payments to the Pru ­

dential Insurance Company on the Farm mortgage, and Mr. Hoope rs 

personal indebtedness assumed by the partners hip.

A Par tnership Return of Income for 1970 was not tiled for the 

Hooper Dairy Farm . The Petition and Accounting contained data 

perta ini ngto the 1970 farm operation, including a $15,000.00 loan from 

Mrs. Hooper, 1970 land rent of $13,500.00, and 1970 salary for Mr. 

Hooper of $12,000.00, because at the time of its prep aration no final 

decision had been made as to the date of the termination of the partn ership. The inclusion of such data is inconsistent with the fact that the 

partnership was eventually terminated as of I)eceml>er 31, 1969.

The Petition and Accounting included the following balance sheet 

of the p artn ership prepare d as of some date in 1970:

Halance sheet

Assets:

Cattle and present appraised valu e________________________ $76, 725. 00 Machinery and equipment as per a ppraisal__________________ 34, 000. 00 Accounts receivable____________________________________ 3, 500. 00 Cash -------------------------------------------------------------------------- 2,211.07

Total ass ets__________________________________________

1 115, 436. 07

Lia bilities :

Accounts payable to 3rd iwirties___________________________ 34, 000. 00 Notes payable to F irst Columbus National Bank_____________ 140, 000. 00 Accrued interest to han k_________________________________ 12, 664. 00 Owed to Hooper for excess contributions or capital account____ 177, 846. 08 Owed to Brooks for excess contributions or capital acco unt____ 287, 070. 33

Total liabilities______________________________________ 651, 580. 41

‘ T his Is an In co rr ec t Ad dit ion . Th e co rr ect sum of th e fig ur es sh ow n Is $1 16 ,43 6.0 7.

This balance, sheet shows a liability owed to Mr. Hooper of $177,- 

846.08 for “excess contributions or capital account." This, however, 

includes the 1970 transactio ns am ounting to a total of $40,500.00, which 

are not properly attr ibutable to the partners hip. After deducting th is 

amount, the partne rship liability to Mr. Hooper should lx1

 shown as $137,346.08.

Touche, Ross & Co. shows Mr. Hooper's capital account with a 

deficit balance of $52,118.38 as of December 31,1968. Th is deficit would 

be increased to $94,397 aft er posting all transactions affecting Mr. 

Hooper's account for 1969.

The balance sheet in the Petition and Accounting shows $287,070.33 

owed to Mr. Brooks for “excess contributitons or capital account.” 

According to Touche. Ross & Co., Mr. Brooks' capital account balance 

as of December 31, 1968, was $115,004.45. After the posting of 1969 

transactions affecting Mr. Brooks' account his balance would be adjusted to $95,758.00. The accounting for 1969 transactions is discussed 

at pages 55 through 56 of this Appendix. The capital balances computed by Touche. Ross <£ Co. are reflected in the 1968 partne rship tax 

return s prepared by that firm, copies of which were provided to Mr. 

Hooper and toT . E. Loft.

47
291

IV . Preparation of the 1969 U.S. Partnership Re turn o f Income for

the Hooper Dairy Farm.

The 19(59 Partnership Retu rn of Income for the Hooper Dairy 

Farm, prepared by T. E. Lott, was filed on September 14, 1970. Schedule L (Balance Sheets) and Schedule M (Reconciliation of Pa rtn er’s 

Capital Accounts) were left blank on this return. On September 25, 

1975, Mr. Eugene T. Beard, Jr ., Senior Partner. T. E. Lott & Company, in an interview indicated th a t:

(a) T. E. Lott had prepared the 1969 partn ers hip return from incomplete 

Information received from Mr. Hooper and from T. R. & Co. [14, p. 1.]

(b) The 1969 par tnership return is correct except that the re was no inform ation rega rdin g balance sheet items. [14, p. 1.]

(c) T. E. Lott had moved their office in abou t November, 1974, and had 

destroyed all working papers on individu al tax return s that were over 6 years 

old. [14, p. 1.]

(d) The working papers for the 1969 partn ers hip return were also destroyed. 

[14, p.1.1

(e) T. E. Lott was never furnished any bank state ments. The cash tra nsactions of the par tnership were reconstructed from a hook maintained by Mr. 

Hooper which supposedly contained all of the deposits and checks of the J. F. 

Hooper—Farm Account which related to the par tne rsh ip operation. [14, pp. 2, 

12-15.]

(f) T. E. Lott received a 1968 partn ers hip retu rn from Touche Ross & Co. 

[14. p. 3.] 10

(g) T. E. L ott had no inform ation regarding assets other tha n physical assets. 

114, p. 4.1 ”

(h) He didn 't know anything about the $153,500.00 received from Sta nda rd 

Union Life Insurance Company in 1969. [14, p. 5.]

(I) He was not awa re of the $15,000.00 due from Little River Farm s. [14, p. 6.]

(j) He was not advised of a $10,000.00 indebted ness dv.e from Dabney Crump. 

[14, p. 6.]

(k ) He was not awa re of the $50,000.00 liability att rib uta ble to funds received 

from the Bank of Marietta. [14. p. 6.]

(l) Information for the 1969 tax ret urn was furnished to him only by Mr. 

Hooper. He believed this information consisted of data from Touche, Ross & 

Co. through August, 1969, and data compiled by Mr. Hooper after tha t date. 

[14, pp. 6-7.]

(m) In years prior to 1969 he had talked to Mr. Sta rk of Touche. Ross & Co. 

regarding the partne rsh ip accounts. As time went on the ir communications 

became less freq uent and thus he knew nothing of the transa ctions referenced 

in h, i, j and k above. [14. p. 7.]

(n) He did not recall making an effort to obtain the bank statements from

• the First Columbus National Bank (J. F. Hooper—Farm Account). [14. p. 7.1

(o) “Something happe ned up in Memphis with Touche. Ross in August . . . 

no records were available to Mr. Hooper after August.” [14, p. 7.]

Many of the foregoing statements are contradicted by items of correspondence set forth in the follow ing E xh ib it:

EX HIBIT I

Correspondence I nvolving T. E. Lott & Company P artnership

Accounting, 1969-71

October 1, 1969, from Ms. Martha Coleman, Touche, Ross & Co., to Mr. Jam es 

F. Ho oper:

Enclosed are the analysis of your draw ing account for the years 1966 

through 1968 and a list of checks drawn from 1969 through July 31. 

Sorrv it took so long. If vou need any othe r inform ation, please advise. 

[102.]

10 T he se tw o sta te m ents are In consi st ent be ca us e th e 196 8 p art n e rs h ip ta x re tu rn 

pr ep ar ed by Tou ch e. R o ss A Co. Incl ud ed a bala nce sh ee t which sh ow ed th e bal an ce s of 

th e p a rt n e rs h ip ass ets , liabilitie s, and th e p a rt n e rs ' capit al ac co unts as of Decem be r 31. 

1968.

48
292

November 26, 1969, from Mr. Hunter M. Gholson, to Mr. Eugene T. Beard, T. E. 

L ott:

This will follow up our conference of November 18, 1969, regarding 

the Union National Bank of Little Rock, Arkansas, claim to the Hooper 

land.

It was my understanding tha t you would discuss various items in 

the tax return s which we studied with the partn er in the Touche Ross 

firm who prepared these returns. After this we need to get together 

with Jim Hooiter and go over the entire ma tte r so th at we can prepare to defend such claim as they may press.

I will be glad to get toge ther with you and Jim at a time of mutual 

convenience. [104.]

December 18, 1969, from Mr. Eugene T. Beard. T. E. Lott, to Mr. D. F. 

Stark, Touche, Ross & Co.:

This is a follow up of our conversation on Tuesday. I have been 

out of the office and have not been able to forw ard you the enclosed 

material.

It appe ars from our records and from the statements of Mr. Hooper 

tha t the farm equipment covered under the U.M.&M. lease was not 

covered in the sale of the $41,600 of farm machinery by Hooper to 

the partnership.

It would therefore seem tha t the $52,862.80 due U.M.&M. at the time 

of the formation of the dairy should have been charged to Machinery and 

Equipment rather th an to Mr. Hooper.

We will be glad to answer any furthe r questions that you have on 

this matter.

Mr. Hooper also requested tha t we ask you for a copy of Mr. Brook’s 

personal account on the partnership records from inception to the 

present.

As you know. Mr. Hooper is quite concerned about the condition of 

Mr. Brook's personal affairs on the partne rsh ip and we are trying to 

clarify the situation as much as possible.

We will appreciate your cooperation in this m atte r. [105.]

January 24, 1970, from Mr. I). F. Stark , Touche, Ross & Co., to Mr. Eugene 

T. Beard. T. E. Lott :

In accordance with your request, we ar e enclosing an analysis of Mr.

E. II. Brooks' capitnl account on the books of Hooper Dairy Farm from 

Jan uary 1. 1966, to December 31, 1968, and also a list of i960 transactions affecting tha t account.

We have reviewed our flies with respect to the accounting for the 

$52,862.50 U.M.&M. Credit Corporation obligation and we believe the 

accounting was proper.

Our understa nding of the business relationship of Mr. Brooks and 

Mr. Hooper was tha t they entered into a partne rsh ip on January 1,

1966, to operate a dairy farm on jointly owned land. The farm hnd 

been operated previously by Mr. Hooper as a sole proprietorship. On 

Jan uary 1, 1966, Mr. Hooper sold all the cattle and machinery used in 

the dairy business to the par tnership and assumed certain indebtedness 

of Mr. Hooper which had been incurred in connection with the dairy 

business, including the obligation to U.M.&M. Credit Corporation in the 

amount of $52,862.50.

After January 1. 1966, all payments on the indebtedness of Mr. Hooper 

assumed by the par tne rsh ip were paid out of partn ers hip funds.

On May 2. 1967, we met with Mr. Hooper and Mr. Brooks concerning 

the oiierntion of the ir dairy farm. At the meeting Mr. Hooper furnished 

a balance sheet of the dairy farm dated October 18, 1965, which listed 

an item for machinery and cattle at $175,000 and the U.M.&M. obligation at $60,000. Mr. Hooper explained tha t he had previously sold his 

equipment and lensed it irnck, tha t this tran sac tion hnd been treate d 

merely as a financing arrangement on his records and tha t the equipment 

was that shown in the balance sheet. A list of the equipment was attached to the balance sheet.

49
293

W e wer e fu rn is hed a copy of a le tt e r from Mr. H u n te r M. Gh ols on to 

you da te d Jan u ary 27. 190-4, in which Mr. Gh olson ex pl ai ne d th e fina nc ­

in g arr an gem en t an d m ad e re fe re nce to a “Sc he du le A” at ta ch ed . Th e 

attach ed sc he du le co nta in s a list of eq ui pm en t invo lved which is th e 

sa m e as th a t co nt ai ne d in th e list att ached to th e Oct ob er 1R. 1965 ba lla nc e sh ee t. Fo llo win g th e li st of eq ui pm en t on th e “Sc he du le A” th ere 

is la nguag e to th e effect th a t it de sc rib ed al l th e ite m s lo ca te d up on th e 

dair y fa rm o wn ed by Mr. Ho op er.

On May 25. 1967. we met ag ai n w ith Mr. Bro ok s an d Mr . Hoo pe r re la ­

tiv e to ac co un ting fo r th eir bu si ne ss re la tionsh ip . D uri ng th e mee tin g 

we di sc us se d with you by te le ph on e Mr. Hoo pe r’s sa le of catt le an d m ach in er y t o th e part n ers h ip a nd on th e f ol lowing da y we w ro te y ou e nc lo sin g a cop y of a sc he du le sh ow in g th e co m puta tions of M r. Hoo pe r’s ga in 

from th e tr an sa cti on. The to ta l bas is fo r co mpu tin g th e ga in w as ta ken 

fro m th e de pr ec ia tion sc he du le on Mr . Hoo pe r's 1965 income ta x re tu rn . 

A co py of o ur l ett er was s en t to bo th p art ners .

Ag ain , on Ju ne 7. 1967, we w ro te you with a cop y to th e part n ers 

en clos ing a cop y of th e 1966 part n ers h ip re tu rn an d ad vi se d th a t in 

pre par in g th e re tu rn we had al lo ca te d th e purc has e pr ic e of $175,000 fo r 

th e pro pert y ac qu ired by th e part n ers h ip from Mr. Hoo pe r as fo llow s:

C att le _____________________________ •________________________$123,4 00

M ac hi ne ry _________________________________________________ 51 ,600

T ota l ________________________________________________ 175.0 00

Als o enclo sed was a copy of a sc he du le dat ed Ju ne 1. 1967. sh ow ing 

an anal ysi s of Mr. Hoo pe r’s ac co un t w he re in he ha d been cr ed ited with 

th e $175,000 sa le s pr ic e fo r catt le an d m ac hin er y an d ch ar ged with v ari ­

ou s ite m s of hi s bu si ne ss in de bt ed ne ss as su m ed by th e p art ners hip 

in cl udin g hi s ob lig at ion to th e V.M.&M . C re dit Cor po ra tio n. A ft er a 

su bs eq ue nt te le ph on e co nver sa tion w ith you. th e al lo ca tion of th e p urch as e pr ic e was ch an ge d to dec re as e th e am ou nt al lo ca te d to m ac hi ne ry 

to $41,600 with th e ba la nc e al lo ca te d to cat tle.

To su m m ar iz e th e si tu at io n, th e ac co un ting tr eatm ent on th e bo oks of 

H oo pe r D ai ry Farm refle cts th e pa yab le to V.M.&M. C re dit C or po ra tio n 

he cn us e we wer e in fo rm ed th a t th e sa le-lea se ba ck had been tr eate d by 

Mr. Hoo pe r as a fin an cing arr angem ent ra th e r th an a sa le an d th at th e 

eq ui pm en t covered by th e “lea se " w as in clud ed in th e ass ets sol d to th e 

part ners hip .

We are se nd in g copie s of th is le tt er to all in te re st ed p art ie s to in fo rm 

them of t he qu es tio n invo lved , to get her with a cop y of y our le tt er. [ 107.1

Aug us t 4. 1970. fro m Mr. Ro y W. H en dri x, Jr .. T ru st ee in th e Bro ok s Ban k 

ru ptc y proce ed ings , to Mr. Jo hn Paul Jo ne s, att orn ey f or th e T ru ste e :

J need to ge t an ui» -to-da te re port fro m you on th e sta tu s of t he Ho op er 

D air y an d th e IJtt le R iv er F arm s m at te rs , p art ic u la rl y as to Ho op er 

D ai ry . H u n te r Gh ols on has filed a P etiti on se ek in g th e ab an donm en t of 

th e Hoo pe r D air y ass et s to Mr. Ho op er. I ha ve met w ith Ro y Thu rm on d 

of To uc he Ro ss an d he sta te s th a t th er e are m an y m att ers invo lvin g 

Ji m Hoo pe r w hich need t o be resolved.

It appea rs th at he go t aw ay w ith some $115,060.00 in ass ets an d h asn ’t 

fu rn is hed in fo rm at io n re ques te d by th e acc ounta nts . T her e are ju st 

m an y unan sw er ed qu es tio ns , m an y of wh ich I am su re h e ca n ad eq uat el y 

an sw er . Nev erth eles s, we m ust ge t th e pr oper an sw er s be ca us e ju st too 

much mo ney ra n th ro ugh th is ac co un t an d th ere w er e too m an y complica te d tr an sa cti ons fo r me t o i gn or e them .

I wo uld th er ef ore lik e to ge t co mpl etely up -to- da te on th is m att er well 

be fo re y our official re port t o t he C ou rt. [120.1 

Aug us t 5, 1970, f ro m T . E . Lot t & Co. t o Mr. H unte r M. G ho lso n :

At your re qu es t we hav e pre par ed a Sta te m en t of Ass ets an d L ia biliti es an d an Inco me an d Exp en se S ta te m en t fo r Hoo pe r D ai ry Farm as of 

De ce mbe r 23. 1969.

The s ta te m en ts wer e pre par ed from in fo rm at io n an d re co rd s fu rn is hed 

to us by Mr. Ja m es F. Hoo pe r an d by th e F ir st Colum bu s N at io na l Ban k.

50

67 -520 0 - 76 - 20
The estimate of the value of machinery, equipment, and cat tle was 

made by Mr. Hooper.

We made no independent confirmations or details audit of the records 

of the Hoojter Dairy Farm othe r than verification of the bank loan 

and accrued interest.

Due to the absence of usually accepted auditing procedures on the 

pa rt of this office, we cannot express an opinion regarding tlie correctness of the attached state ments. 1121.] 11

August 6, 1970, from Mr. Hunter M. Gholson to Mr. Roy W. Hendrix, Jr., 

Tru stee :

I have received a statem ent of assets and liabilitie s and an operating 

stateme nt for 1969 for Hooper Dairy Farm furnished to me by Mr. 

Eugene T. Beard, a certified public account of T. E. Lott & Company.

Two copies of these statem ents are enclosed. If you wish Mr. Lott's 

office to prepare the income tax return for 1969. 1 presume tha t they could 

do so from these statements, or I presume tha t the statem ent could be 

used for pre paratio n of the r etu rn by Touche Ross & Co.

I tru st tha t it will serve the fur the r purpose of indication to you and 

your investigating assistan ts the lack of equity on the part of the bank ­

rupt esta te in any assets of this dairy farm. 1 know tha t the note to 

Fir st Columbus National Bank is delinquent, and I do not know how 

any arrangements can !«• made to pay it off until the ma tte r of th e bankrupt est ate ’s inte rest in this dairy farm can be settled. I realize tha t 

this is just a small part of a very large and complicated myriad of 

problems which you have. Realizing that, we waited since January hoping tha t the matter would be resolved in the due course of the bankruptcy proceedings and without the bank note coming to foreclosure. 

However, this has now become a matter of some urgency, and we tru st 

tha t it can be resolved without much more delay.

I will be glad to cooperate with you in any way in f urthe r proceedings 

in this matter. [122.]

December 29, 1970, from Mr. H unter M. Gholson to Mr. Eugene T. Beard, T. E. 

L ott:

Enclosed please find a copy of a let ter I have received from Mr. Jo hn 

Paul Jones relative to a par tnership accounting, a copy of my answer 

and a copy of a preliminary accounting which I have prepared based on 

the records brought to me by Jim Hooper about a week ago. It is my 

understanding from Jim tha t since we prepared this preliminary draft 

of an accounting, he has compiled additional figures which he has gone 

over with you and which will change the figures, but not the basic thrust 

and position of this accounting.

I would appreciate your exam ining these documents and an opportunity to get with you and perhaps with Jim in the next several days so 

th at we may make such changes as you thin k appropriate. I hope that 

we can prepare a document tha t will present this ma tte r in the light 

most favorable to Jim and which will also be sufficient to with stan d 

scrutiny and cross-examination based on the obviously differing accounting which will be presented by Touche, Ross & Company, [130.]

March 2, 1971, from Mr. Hunter M. Gholson to Mr. Eugene T. Beard, T. E. 

L ott:

On February 18, 1971, Jim Hooper and I met with Mr. John Paul Jones 

representing the tru ste e in bank ruptcy of Everet te II. Brooks. Mr. 

Hooper was deposed and Mr. Jones seemed basically satisfied with his 

answ ers regarding the dairy partnership. He would like copies of the 

1969 State and Federal income tax return s for the Hoopers and a 1970 

financial statem ent on the operation of the dairy. I don't know what you 

and Jim had planned to do regarding the 1970 tax return, but it was Mr. 

Jones' opinion tha t we should proceed to file a tax return and consider it

’* A lth ou gh T. E. L ott A Co. sta te d th a t th ey could no t ex pr es s an op in io n as to th e 

ac cu ra cy of th e De cemb er 23. 1969, fina nc ia l st at em ent, th ey did no t di sc lo se th a t th ey hml th e In fo rm at io n. In cl ud in g th e 196S P art n ers h ip Ta x R et urn , whi ch would In di ca te 

th a t th e ac cu ra cy o f th is fina nc ia l st ate m en t wa s hi gh ly ques tion ab le .
295

a partne rsh ip in the process of liquidation. If you could furn ish us copies 

of the income tax return s requested and prep are anythin g for 1970 which 

might satisfy the trustee, we would appreciate it. Jim or I or both will 

he glad to set with you at your convenience about this. [131.]

March 3, 1971, from Mr. Eugene T. Beard, T. E. Lott, to Mr. Hu nte r M. 

Gho lson:

Please find enclosed copies of the income tax return s for 1969 for J. F. 

and Virginia Hooper and for the Hooper Dairy Farms.

With reference to the preparatio n of the income ta x return s for 1970,

Jim usually furnishes us with a worksheet which he prepares from his 

bank statemen ts and we can prepare a return for the Hooper Dairy F arm 

afte r we receive this information. [132.]

F. Tabulation of Closing Capital Balances.

The balance of the Hooper Dairy Farm Partn ers hip as of December 31, 1969. cannot be established with precision. As the tabulatio n 

below will indicate, however, it app ears that as of this date Mr. Hooper 

had a deficit balance of at least $94,397.00. while Mr. Brooks had a 

balance of about $95,758. T his tabulation is based on copies of workpapers and files obtained from Touche, Ross & Co., from the 1969 

checks and the 1969 partner ship tax retu rn prepared by T. E. Lott and 

from Mr. Hooper’s Petition and Accounting.

Analyses of the partnership capital accounts derived from Touche, 

Ross & Co. workpapers and tabu late d from the F.S . Partners hip Retur ns of Income for the years 1966 through 1968 are in balance as of 

December 31, 1968. These analyses of the partners ’ capital accounts 

are as fo llow s: 12

HOOPER DAIRY EAR M-ANA LY SIS OF PARTNERS CAPITAL ACCOUNTS FOR THE YEARS 1966 THROUGH 1969 

(FROM U.S. PARTNERSHIP RETURN OF INCOME)

Tota l Hooper Brooks

1966 (fr om U.S. partners hip return of incom e):

Capital contributed during y e a r ......................................... $100,000 $50,000 $50,000

Loss..................................... ........ (3 2.73 8) (16. 369) (16. 369)

Capital account at end of year 67. 262 33.631 33.631

1967 (fr om U.S. partnership return of income):

Capital contributed during year ____ 99,910 0 99,910

Los s....... (99. 800) (4 9.90 0) (49. 900)

Withdraw als and dis tributio ns .. (1 5,51 5) (8, 938) (6 .577)

Capital account at end of ye ar.......................................... ......... 51.857 (2 5,2 07) 77,064

1968 (from U.S. partners hip return of income):

Capital contribu ted during ye ar........................................ 106,632 20. 890 85, 742

Lo ss ........... .............................................. (95,60 4) (47.80 2) (47. 802)

Capital accounts at end of ye ar...................................... 62, 885 (5 2.11 9) 115,004

Hooper Dairy Farm— Analysis of J ame s F. Hooper capital account for the 3-year

period January 1, 1966, through December 31, 1968*

Jan . 1,1966:

Purchase of prop ert ies :

Cattle and machinery________________________________ $175. 000. 00

Stock of Realicious Da irie s__________________________ 2, 400. 00

Subtotal ___________________ _____________________ 177. 400. 00

1

 From Touche. Ross & Co. work papers.

11 A recapitulatio n of the pa rtn ers ' capital accounts for the entire four year term of the 

partnership Is atta ched ns Exhibit II to this Appendix.

52
Hoope r D air y Farm— An alysis of Jam es F. Hoo per capital accoun t fo r the 3 -year

period Ja nu ar y 1, 1966, through Dec emb er 31, 1968 *—Con tinu ed

Ja n. 1,1966—Con tinu ed

Pu rcha se of p rope rties—Contin ued 

Less inde bte dness ass um ed :

F ir st Columbus Na tional Ba nk_____________________ $30, 000. 00

I’.M. & M. Cr edit Corp_____________________________ 52, 862. 80

Overdraf t of checking acc ount—First Columbus National Ban k_____________________________________ 327. ((2

K. H. Brooks—Oct. 18, 1965________________________ 15,000 .00

Na tional Ban k of Commerce—Nov. 10, 1965_________ 50,00 0.0 0

Su bto tal ----------------------------------------------------------- 155,190. 42

Total (purch ase of pr op er tie s)___________________ 22,209.5 8

Cash rece ived :

Ja n. 3, 1966, J. F. Ho oper______________________________ 5, OOO. 00

Jan. 8, 15)66, J. F. Ho oper______________________________ 2, 500. 00

Ju ne 16, 1966, Radcliffe ________________________________ 100 ,000.00

Dec. 22, 1966 (erro r-a djus tm en t included in 1967 dra w in gs) _ 2, 000. 00

Total (cash rece ived )______________________ _______ 109 ,500.00

Par tn er sh ip ex pen ses paid by Mr. H oop er____________________ 1, 130. 87

Lan d income—one-h alf_____________________________________ 5, 012. 47

Su bto tal _______________________________________________ 137, 852. 92

Les s:

Dr aw ing s—19 66_______________________________________ 22,011.0 3

Loss—1966—on e- hal f__________________________________ 16, 368. 98

Subtotal -------------- ------------------------------------- -------—38,3 80.0 1

Balance Dec. 31, 1966________________________________ 99, 472. 91

Jan. 1, 1967:

B ala n ce---------------------------------------------------------- ---------------- 99, 472. 91 Lan d incom e—one-h alf_____________________________________ 5, 153. 21

Su bto tal ---------------------------------------------------------------------- 104, 626. 12

Ijes s:

Dr aw ings—1967 --------------------------------- ---------------- ------- 34,01 0.7 5

Prud en tia l loan paym ent—one-half_____________________ 6, 576. 87

Loss—1967—on e-h alf __________________________________ 49, 895). 86

Total --------------------------------------------------------------------- —90,487.4 8

Ba lan ce Dec. 31. 1967________________________________ 14, 138. 64

Jnn . 1. 1968:

B ala nce--------------------------------------------------------------------------- 14,138. 64

Land income—one-h alf___'_________________________________ 4, 661. 71

Su bto tal ----------------------------------------------------------------------- 18, 800. 35

Les s:

Dr aw ing s—1968 _________ _ ___________________________ 23,116.6 0

Loss—1968—one-h alf ______;_______________________ 47, 802. 13

Total --------------------------------------------------------------------- -7 0.9 18.7 3

Ba lance Dec. 31, 1968—deficit— .......................................... —52,118.38
297

Hooper Da iry Fa rm — An aly sis of Eve re tt H. Broo ks capital acc oun t for the

3-ye ar period Ja nu ar y 1, 1966, through Decem ber 31, 1968 1

Ja n. 1. 1966:

Advance to Jam es F. Hooper, Oct. 18, 1965----------------------------- $15, 000. 00

Cash rece iv ed :

March 10, 1966________________________________________ 10,000.0 0

Ap ril 22, 1966_________________________________________ 25, 000. 00

May 27, 1966__________________________________________ 27, 000. OO

Su btotal ___________________________________________ 62, 000. 00

Stock of Ag ric ultural, In du strial Dev elopment Co------------------ 5, 000. 00

Land incom e—1966—one-ha lf----------------------------------------------- 5, 012. 47

87. 012. 47

Ix*ss loss—1966—one-h alf__________________________________ —-16 .36 8.9 8

Ba lan ce Dec. 31, 1966_______ ________ __________________ 70, 643. 49

Ja n. 1, 1967:

B a la n c e __________________________________________________ 70, 643. 49

Cash rec eiv ed_____________________________________________ 43. 810. 00

Ca ttl e pu rcha se d__________________________________________ 5(5. 100. OO

Lan d incom e— 1967—one- half----------------------------------------------- 5, 153. 21

Par tn er sh ip e xpe nses paid by Mr. Brooks____________________ 6, 4(56. 40

S u b to ta l________________________________________________ 182. 173. 10

L ess :

Pr ud en tial loan paym ent—one-ha lf-------------------------------- 6, 576. 87

Loss—1967—one-h alf __________________________________ 49, 899. 86

To tal ______________________________________________ —56,47 6.7 3

Ba lan ce Dec. 31, 1967________________________________ 125, 696. 37

Ja n. 1, 1968:

B a la n c e __________________________________________________ 125. 696. 37

Cash rec eiv ed_____________________________________________ 30. 587. 95

Lan d inconu— 1968—one-ha lf______________________________ 4,(561.71

Pru de nt ial loan paym ent (pa id by Mr. Bro ok s)______________ 15, 14 5.00

Sk yla rk Buick autom obile pu rcha sed for pa rtne rs hi p_________ 3, 255. 47

Par tn er sh ip exp enses paid by Mr. Brook s___________________ 3,3 74 .02

• ------------------

Su bto tal _______________________________________________ 182. 7 20.52

Les s:

Dr aw ing s ____________________________________________ 4, 913. 95

Na tio na l Bank of Comm erce loan (Mr. Bro oks received procee ds) ____________________________________________ 15,000.00

Loss—1968—one -half ________________________________ 47, 802. 12

To tal ______________________________________________ 67,71 6.0 7

Ba lan ce Dec. 31, 1968_______________________________ 115 ,004.4 5

1

 F rom Touche, Ross & Co. work papers.

The following talde shows adju stments to the partne rs’ capital accounts necessary to reflect 1969 transactions. It is keyed to ex planatory 

comments which f ollow :

54
Balance Jan. 1, 1969................................................................................................

1969 Lo ss -S ha red .....................................................................................

1969 Partners salary......................................................................................

1969 Sale of cattle —Shared ..........................................................................

1966 68 salary ad justmen t..........................................................................

1969 Land income— Shared____________________________________

1969 Partnership expenses paid out of personal fun ds .........................

1969 S kylark Buick repossessed................................................................

1968 Prudential loan payment— Sh ared...... ...... ...........

1969 Prude ntia l loan payment (in terest on ly) paid by Mr. Brooks .

1969 Pruden tial loan payment—Shared ....................................................

1969 Ag ric ultural Indu strial Development Co.—S tock............................

1969 Realicious Dairies, Inc.— S to ck..........................................................

1969 Partners drawings ...............................................................................

ent Mr. Brooks Mr Hooper

$115,004 ($52 ,119 )

(a ) (59, 509) (59, 509)

<b) 18, 500

(c ) 17,980 17,980

<b) (14,75 0) 14,750

(d ) 2, 455 2,455

<«> 1,095 ..

(») (1 ,628)

(R> (7 ,5 73) (7 ,5 73)

(8 )

f t

8,2 20 .

(4 .1 10)

(2, 500)

(4 ,1 10) 

(2, 500)

(h ) (1 ,2 00) (1 ,2 00)

(2 1,0 71)

Subtotal 53,484 (94, 397)

Deposits Standard Union Life Insurance Co.:

Apr. 11,19 69...................................................................................................

July 2, 1969.....................................................................................................

July 17, 1969....................................................................................................

July 31, 1969....................................................................................................

De posits—Dabney Crump:

June 20 ,196 9...................................................................................................

June 23,19 69...................................................................................................

June 26, 1969...................................................................................................

Payments—Dabney Crump:

June 23, 1969...................................................................................................

July 7, 1969.....................................................................................................

Deposits— First Nationa l Bank of Ma rietta, Ga.:

June 24, 1969...................................................................................................

June 30, 1969...................................................................................................

Deposit— Loan— Creditor unknow n: Jan. 3, 1969............................................

Paym ents:

E. H. B ro ok s- M ay 23, 1969........... ........................................................

J. C. Bradford & Co.—June 24, 1969..........................................................

The Brooks Co —June 25, 1969...................................................................

The Bank of Yazoo City— June 30, 196 9.. _____ .

Consolidated Business Services— Oct. 22 ,196 9____ ____

Little River Farms— June 20,1 96 9..........................................................

NY exchange to Murray Direc to r..................... ........................................

( i) 3,500

(i) 95,000

( ') 50,000 .

( ') 5,000

8 1 20,000 

20,000

(i) 40,000 .

(1) (4 0,0 00)..

( i) (50, 000)

(k ) 25, 000

(k ) 25,000

(1) 6, 200

(m ) (2 ,000 )

(m ) (3 2,3 50) .

(m ) (1 0,0 00) .

(m ) (9 3,126) .

(n ) (2 00) .

(o ) (1 5,0 00) .

(P ) (4 ,7 50).

Balance Dec. 31, 1969 ........................................................................................................... 95,758 (9 4,39 7)

C O M M E N T

(a) The 1969 Partnersh ip operating loss is taken from the 1969 V.S. Pa rtn ership Return of Income prep ared by T. E. Lott. Since the workpapers of T. E. 

Lott were destroyed there are no adju sting journal entries and this figure c annot lie verified.13

(b) On the 1969 partn ers hip return $18,500.00 was recorded as salary of 

Mr. Hooper. Mr. Hooper claims a salary for the 4 years in which the partnership 

existed of $12,000.00 per year, or $48,000.00. He was given credit for salary in 

the amount of $18,500.00 on the 1969 p artn ers hip tax return leaving a balance 

due him for salary of $29,500.00. Since this $29,500.00 would increase the pa rtn ership loss by the same amount and half of the loss would be charged to bis 

capital account, the net adjustm ent is a cred it to Mr. Hooper of $14,750.00 and 

a charge to Mr. Brooks of a like amount.

(c) The 1969 partne rsh ip return showed this sale of cat tle for $35,960.00 as 

“old-cull milk cows raised,” and no depreciation was taken for this asset. The 

full sales price is shown on the retu rn as a “Gain on Sale of Exchange of 

Property under section 1231.” Touche, Ross & Co. treated this same transa ctio n 

as a reduction of the asset account for cattle at salvage value, and thus did not 

recognize any gain.

” A cc or ding to th e U.8. P art n e rs h ip re tu rn s, th e pa rt n e rs h ip su ffe red cum ul at iv e 

los ses fo r th e yea rs 1966 th ro ugh 1969 In th e am ou nt of $2 92 ,700 .00 of which Mr. Bro ok s’ 

sh ar e wa s $1 55 ,600 .00 an d Mr. H oo pe r’s sh ar e was $1 37 ,100 .00 . Mr. Hoo pe r’s sh ar e of 

th e p art ners hip opera ti ng losses a ft e r adju st m en t fo r sa la ry Is $122,35 0.0 0. Mr. Bro ok s' 

sh ar e of th e p a rt n ers h ip opera ting los ses a ft e r th e sa ln ry adju st m ent Is In crea se d to 

$170,35 0.0 0.
299

td) Land income of $4,910.00 is shown on Mr. Hooper’s 1969 Indiv idua l Return. 

However, to give consistent trea tme nt this item should be allocated on a .50-50 

basis to the partners, Touche, Ross & Co. showed $3,695.00 as land income for 

1968 through 8-19-69.

(e) The $1,095.00 for Mr. Brooks' expenses on behalf of the par tne rsh ip was 

taken from the Touche. Ross & Co. workpapers. This figure may be incomplete.

(f) This item for a Buick automobile apparently purchased for Mr. Hooper's 

use was take n from Touche, Ross & Co. workpapers.

(g) Pru dential mortgage paym ents were chargeab le to the partn ers on a 

50-50 basis. This entry adjusts the 1968 payment which was made by Mr. Brooks 

individually. Mr. Brooks is also given cre dit by Touche, Ross & Co. for the 1969 

inte rest payment on the Pru den tial mortgage which he made individually and 

both partn ers are charged with half.

(h ) These stocks, according to Touche, Ross & Co. files, were worthless. T. E. 

Lott did not include them as assets in the December 23, 1969, balance sheet.

(i) Touche, Ross & Co. showed the $153,500.00 amount due Sta nda rd Union 

Life Insurance Company as a liability rather tha n as a contribution to capital. 

The items below the sub-total amount to a net increase in liabilities and/or 

capital of $44,074.00.'* The par tnership must account for the liabilities, whether 

due Mr. Brooks or to others.

(j) These five tran saction s resulted in a net payment by the par tne rsh ip of 

$10,000.00 to Mr. Crump. Touche, Ross & Co. showed this ns a receivable from Mr. 

Crump rather tha n as a charg e to Mr. Brooks' capital account. These tra ns ­

actions are unexplain ed and the final accountin g for the $10,000.00 receivable 

is not known.

(k) Touche, Ross & Co. showed this $50,000.00 as a “note payab le" to the First 

National Bank of Marietta, Georgia, with a nota tion saying, “However, a confirmation was received from the bank as of 7-31-69 in the name of Evere tte H. 

Brooks or J. F. Hooper which showed the ir liability as ‘none.’ ” 1S

(l) Touche, Ross & Co., as of August 19, 1969, did not have info rmation as to 

the disposition of this $6,200.00 loan or the iden tity of the cred itor.

(m) Both Touche, Ross & Co. and Mr. Hooper in his Petition and Accounting 

charged these four items to Mr. Brooks’ capital account.

(n) This $200.00 paid to Consolidated Busin ess Services, a company owned 

by Mr. Brooks, was subsequent to the dat e that Touche, Ross & Co. last received 

data to post to the books of the Hooper Dairy Farm partnership .

(o) Touche, Ross & Co. records the $15,000.00 payment to Little River Farms, 

Inc. as an account receivable. However, they wrote this off, charging “loss on investment” account, with the journal ent ry explanation “to write off payments 

made to Little River Farms. Company is ban kru pt.” The above tabulation by 

Staff shows this item as a charg e aga inst Mr. Brooks’ capital account in accordance with Mr. Hooper’s Petition nnd Accounting. However, Touche, Ross & Co. 

charged the item equally to both partners.

(p) In his Petition and Accounting, Mr. Hooper indicated tha t this $4,750.00 

payment to Murray Director, a New York investment concern with whom Mr. 

Hooper had dealings, was as a disbursement to Little River Far ms chargeable 

to Mr. Brooks’ capital account. The Staff has no information as to the purpose 

of this paym ent or wha t connection it has to the operations of Little River 

Farm s, Inc.

’‘ Bec au se we ha ve not received ba ck -u p In fo rm ation re enrd ln g m an y of th e Item s belo w 

th e su b to ta l am ount, we ca nnot a tt rib u te th em co nc lu sive ly to Mr. Bro ok s’ ca pit nl or 

separa te lo an or rece iv ab le ac co un ts. The y would In nny ev en t re pre se nt Item s which 

would ha ve to be ac co unt ed fo r by th e p a rt n ers h ip nn d th e ne t am ount wou ld re pre se nt a 

li ability o f th e part ners hip .

13 T he loan was re pa id out of th e pr oc ee ds of th e sa le of coll ate ra l fu rn is hed by th ir d 

part ie s under an arr angem ent w ith Mr. Br ooks.

56
300

EXHIB IT II

Re capit ula tio n: Ja mes F. Hooper—cap ital acc oun t— Hooper Da iry Farm

pa rtn ers hip 1966 throug h 1969

C re di ts :

Sales pri ce of ca ttle an d ma chinery ____________________________ $175, 000

Stock—Ite alicio us Da iries, In c________________________________ 2, 400

Cash—includ es $100,000 check from Radcliffe Inv estm en t Co. for

one-lmlf in tere st in 1,550-acre fa rm __________________________ 107,500

Lan d income—one-h alf_______________________________________ 17, 282

Sa lar y—at $12,000 pe r yea r___________________________________ 48, 000

Sale of ca ttl e—one-h alf----------------------------------------------------------- 17, 980

Pa rtne rshi p expense s paid out of Mr. Ho ope r's per sonal fu nd s------- 1, 130

Total cr ed its______________________________________________ 369, 292

Cha rg es :

Mr. Hoope r’s p ersonal indebt edness assumed by the pa rtne rs hi p— 155, 190

Loss—one-h alf _______________________________________________ 173, 579

Loss—one-half—inc rea se due to th at pa rt of Mr. Hoope r's 

salary which wa s not report ed on tax re tu rn s—$29,500

($48,000—18,500) __________________________________________ 14,750

Draw ing s—excludin g $2,000 for 1907 ad ju st m en t_______________ 98,210

Pr ud en tia l loa n paym ents—one-h alf___________________________ 18, 260

Write of f o f investm ents—one-half_____________________________ 3, 700

Total ch arge s______________________________________________ 403, OS!)

Deficit balance—Dec. 31, 1969________________________________ 94, 397

Re ca pitulatio n: Ev erett H. Brook s—ca pital accou nt—Hoope r Da iry Farm

partn ers hip 1966 th rough 1969

C re dits:

Stock—Agricu ltu ral In du strial Dev elopment Co__________________ $5, 000

Cash ________________________________________________________ 441,098

Lan d income—on e-ha lf__________________________________________ 17, 282

Pa rtne rshi p ex pe nd itu res mad e out of Mr. Brook s’ person al fu nd s:

Pu rch ase of catt le ________________________________________ 56, 100

Expen ses ________________________________________________ 10,935

Pu rch ase of autom ob ile___________________________________ 3, 255

Pru de nt ial loan pa ym en ts__________________________________ 23. 365

Sale of ca ttle —on e-h alf________________________________________ 17,9 80

To tal cr ed its________________________________________________ 575, 015

Cha rg es : *

Loss—one-h alf ________________________________________________ 173, 579

Loss—one -ha lf—increase due to th at par t of Mr. Hooper’s salary 

which was not rep orted on tax re tu rn s—$29,500 ($48,000—$18,-

500) 14,750

Draw ing s ____________________________________________________ 267, 340

Pru de nt ial loan paym ents—one-h alf___________________________ 18, 260

Writeo ff of inve stmen ts________________________________________ 3,700

Automobile repossesse d (book val ue) _____________________________ 1,628

To tal ch arge s_______________ i ______________________________ 479, 257

Balan ce—Dec. 31, 1969______________________________________ 95,758

57
301

APPENDIX II

Genera l B ackground of E verett H ope Brooks

The business career of Everett Hope Brooks l>egan in the mid-1950’s 

when he formed a partnership with a Mr. Gordon Brent to buy, improve and sell agricu ltural properties. The partnership was never 

evidenced by a written agreement, but continued until Mr. Brooks’ 

bankruptcy in 1969. During the term of this partnership the partne rs 

completed about eighteen so-called “swaps’* of improved agr icultural 

lands. [32.1

Briefly the partnership business involved the acquisition of unim ­

proved farm land which the partnership would clear and grade for cultivation. This property would then l>e conveyed to an intermediary, 

E. M. Radcliffe Investment Company, in exchange for other unim ­

proved properties. In this mann er no taxable gain was realized and the 

latter property was acquired with the same basis fo r capital gains pu rposes of the former property.

According to the Referee’s findings in the Ban kruptcy case the 

Brooks-Brent partnership was very successful, but Mr. Brooks became 

involved in various other business en terprises which were not successful and which, in the fall of 1969, resulted in his personal bankrup tcy. 

[32.1 ........................................... . *

Mr. Gordon Brent refused to submit to bankruptcy jurisdiction and 

eventually by settling the accounts of the partnership was able to d issolve the p artnership in an orderly fashion. The interest of Mr. Brooks 

in tiie assets of this partne rship was the main source of funds in the 

bankrup tcy settlem ent. The Trustee was able to liquidate Mr. Brooks' 

share of the partne rship assets in an amount sufficient to pay substantially all of tlie debts of his secured cred itors and to pay a dividend of 

12.5 percent on the debts of his unsecured creditors. [41.1

The initial filing by Mr. Brooks in October, 1969. was und er Chapter X II of the Bankruptcy Act. This little used section of the Act provides for a moratorium on indebtedness to permit a de btor in effect to 

resolve liquidity problems. It app are ntly was Mr. Brooks’ lielief tha t 

his real assets built up prim arily thro ugh the Brooks-Brent pa rtn ership would assure his solvency i f he were given time to make an orderly 

liquidation. His “Summary of Debts and Assets” filed with his C hap ter 

X II petition showed assets of $4,133,118.37 balanced against debts of 

$3,882,024.06. [22.1

However, on J uly 31. 1970. an Order was entered adjudicating Mr. 

Brooks ban krupt and allowing him to w ithdraw his proposed C hap ter 

X II arrangement. [27.1 Two months later the Trustee, Mr. Roy W. 

Hen drix . Jr., was discharged of his responsibilities u nder Ch apt er X II 

though he continued as Trustee in the bankruptcy. [29.1 An att achment was filed with the O rder of September 23,1970, which sets fo rth

59
broadly the course and purpose of the proceedings. In pertinent pa rt 

that attachment states:

Controlling idea of these proceedings under Cha pter XII was one of co nserv ation and preservation of the assets, evolving a workable plan providing for a 

moratorium on indebtedness to enable d ebtor to work out his financial difficulties 

and salvage a sub stantia l portion of his vas t financial holdings. A combination 

of various circumstances resulted in debtor’s decision to convert to a straig ht 

bankruptcy.

Paramo unt among these reasons was the news that Cadillac Cable Corporation 

had closed its doors and filed bankruptcy. . . . Since this stock had apparently 

become worthless, one of the largest single potential assets of debtor has become 

worthless. In addition, virtually all other investments of the debtor have likewise proved to be worthless. lie was left in the main, only with his inte rest in 

vario us farm properties, and in the face of the declining farm land market and 

high interest rates, his e state had dwindled drastically.

* * * * * * *

The debtor’s method of doing business and hand ling his affa irs had been very 

loose, haphazard and Unbusinesslike, most often orally and with litt le or no 

records having been kept. In many cases, the entire record of tran saction s involving large sums of money would consist only of a canceled check. [28.]
303

APPENDIX III

The following news articles regarding the business background of 

Janies F. Hooper ran in the Nashville Tennessean newspaper. They are 

the result of an investigation by Nat ('ald well and Keel Hunt, staff 

writers for tha t n ewspaper:

(F ro m th e Nas hv ille T en ne ss ea n. Ju n e 22, 19751 

Contradictions Dot Ford’s TVA Choice

(By Nat Caldwell)

Columbus, Miss .—The re seem to be two Jam es F. Hooper's living inside one 

skin—two different personalities—and his hometown wonders which “Jim ” 

Preside nt Ford has named to the Tennessee Valley Authority board.

One Jim Hooper, lavishly endowed with sales and promotion skills, hut constantly haunted by had business judgment or luck, appears as the sporadic contriver of a series of elab orate commercial v entu res that flopped.

Usually drama and laws uits followed business failure. This is Jim Hooper, 

the huckste r and hustler.

The othe r Jim Hooper is the civic leader, the visionary pioneer of waterw ays 

projects, the volunteer pilot for regional charity drives or public improvement 

projects, the tireless worker for the Republican party in his home state. This is 

Jim Hooper, the solid, sta ble citizen.

These conflicting images of the man emerge from a careful resea rch of court 

suits brought a gainst him and his associates, from interviews with local businessmen and lawy ers who know him, and from a study of news clips recounting some 

of his activities.

Research into the past of this controversial but colorful man whom the President wants to be a TVA director, shows him to be a remarkable but questionable 

candidate for th e high federal office he soon may hold.

There is Hooper the ex-band lead er who escorted more new bands into the 

historic hall rooms of Memphis’ Peabody hotel in fou r years tha n any other 

musician or promoter.

There is Hooper the self-proclaimed inventor of the U.S. Air Force crash helmet (a dozen Mississippi newspapers front-paged this Hooper claim to fame 

when it appeared he was high on President Ford's list for the TVA post).

Then* is Hooper, the priv ate pilot, who talks of his days in the cockpit of his 

personal, pr ivate plane as th e times he has enjoyed the most.

Ther e is Hooper the business entrepreneur whose business associate s seem 

plagued by ghastly fates ; two of them, a decade ajxirt, suicide victims: a third , 

in deep financial trouble, was involved in a tragic head-on collision as he retu rned 

from a disap pointing business tr ip in Memphis.

Two persons in the other car were killed. The business pa rtn er was arrested . 

Later, he went on to suffer bankruptcy, his assets $5 million sho rt—and othe r 

tragedies still stalk this former associate of Hooper.

Ther e is Hooper who has known business failin gs and civil court actio ns that 

have grown out of the flops of these enterprises. He has won these laws uits, 

but he has been accused by opposing counsel of being a conman, a four-flusher 

and a hapless splurger.

All of this makes this greying; strikingly handsome man less than attra cti ve 

ns a potential TVA board member.

No man with such a unique, diverse past has ev er been seriously considered for 

the TVA board.

Hooper, in person, responded to this rep orter's questions in an out-going man ­

ner, seemingly unconcerned that already his nomination is sti rri ng early 

opposition.

61
“ I am ba si ca lly a co ns er va tive bu sine ss m an ," lie says. “I ha ve of te n been a 

su cc es sful on e.”

The pre si den ts of th re e Colum bu s ba nk s ag ree. So do M iss issip pi GO P lend er s 

(H oo pe r’s w ife is Rep ub lic an nat io nal co mm itt ee wom an ) wh ose su pp or t fo r th e 

TV A p ost he first solicite d.

It is as su m ed , sin ce Fo rd has se nt Hoo pe r's na me to the Se na te fo r co nf irm atio n 

to th e TV A bo ard, th at th e F B I fo un d no th in g in hi s pas t th at bars hi s 

ap po in tm en t.

W he n he w as as ke d by a re port er ab ou t his record of bu sine ss fa il u re Ho op er 

ur ge d th e jo urn ali st to ta lk to oth er pe ople in Miss iss ippi wh o kn ow him an d 

wh o wo uld vouch fo r h im .

He list ed ha nk er s, civ il le ad er s an d old fr ie nds to see . He men tio ne d hi s law ye rs, 

mem be rs of th e most su cc essful an d most pote nt law firm in Nor th Miss iss ippi. 

T his cros s-se ction of pe ople wh o kn ew him wo uld co rr obora te his sta tu s as a 

so lid citiz en .

Hoo pe r is we ll-know n in Colum bu s bu sine ss cir cle s. Tho se wh o kn ow him an* 

willing t o d iscu ss him.

Rome pra is ed him fo r att ri buti on, bu t as su re d at th eir re ques t th ey wo uld not 

be qu ot ed by name s, w ar ne d th a t he has pr op en si ties th ey co ns id er undes irab le 

which m ight fol low h im to TVA.

A few civi c le ad er s, not na med by Ho op er, or hi s la w ye rs, vo lu nt ee re d th eir 

tr ib ute s, ex te ndin g his li st o f a ch ieve m en ts.

H is ca lm in th e fa ce of a re port er's toug h qu es tio ns was ev iden ce th at be ha s 

poise . H e is a groome d man . tr im an d look ing cool, even on th e hott est da ys . When 

he goe s out in his kh ak i ju m psu it to su pe rv is e th e sm all dair y th at re m ai ns of all 

th e bu si ne ss ven tu re s, or at le ast th e on ly su rv iv in g ven tu re th at he will discuss, 

he look s ne at .

Hoo pe r was th e pr om ot er of a fa iled dai ry in tend ed to be M ississ ip pi 's la rg es t, 

an d a fa iled pe t food fa ct or y th at, fo r a sh or t tim e, en joye d the la rg est sa les 

vo lume of a ny in th e So uth. He was a co -p ro mot er of a n in su ra nce c om pa ny wh ich 

had it s Ten ne ss ee lic en se revo ke d in Febru ary , 1970.

Hoo pe r told a re p o rt er: “I was ou t of th e Sta ndar d Un ion Life In su ra nce 

Co mpa ny long be fo re it was su sp en de d in Ten ne ss ee or an y oth er st ate ." But he 

was su ed by men wh o re plac ed him as m aj ori ty stoc kh o’d er s an yw ay . He po inted 

out th at th e Ten ne ss ee su sp en sion invo lved no qu es tion ab le pr ac tice , simply a 

re -insu ra nce pl an th at se nt Ten ne ss ee po lic y ho ld ers to anoth er co inpa nv .

Lik e mos t of th e bu si ne ss fa il ure s th a t Hoo pe r ac kn ow ledg ed , in cr ed ib ly bad 

lu ck co uld ha ve been a ca us e as we ll as m an ag em en t fa ilure .

B ut th ere was no eq uivo ca tio n from th e A ir Fo rc e on Hoo pe r's clai m to ha ve 

In ve nted th e pr ot ec tive h ea dgea r. Calls t o A ir F or ce Sy stem s Co mman ds, ar ch iv es , 

pr ote ct iv e c’o th in g an d head gear re se ar ch , prod uc ed neit her reco rd no r me mo ry 

th a t he pl ay ed even a m in or ro le in th e developm ent of the f am ed sa fe ty he ad ge ar .

B ut Don al d E. Hux le y, of Day to n, Ohio, a re tire d civ il se rv ic e su per vis or of th e 

re se ar ch se ct or sa id : “H oo pe r’s na m e rings a bell. I th in k In* w as on e of ou r very 

m in or he lp er s. He could be as sign ed ab ou t one-one hund re d an d sixt y- se ve nt h of 

th e cr ed it fo r one act iv ity a t on e tim e. B ut th er e are oth er na mes , pri nci pal contr ib uto rs . I wo uld w ri te abo ut ."

Ho op er, wh en in te rv ie w ed ear lier, de sc rib ed hi m se lf as th e “k ey m an " in 

de ve lo pi ng th e cr as h he lm et.

He sa ys he is su rp ri se d th a t th e ne ws media has no t fo un d more people wh o 

oppose h im .

“I am fla bb er ga sted be ca us e all of th e pr es s has fo un d so few d etr acto rs . . .

I am not a fooli sh man. If I were, ev ery to p office hold er an d po lit ical le ader of 

bo th p art ie s in Mississippi wo uld no t ha ve en do rsed me fo r on e of th e most 

re sp on sibl e as si gn m en ts in th e nat io nal go ve rn men t se rv ice."

Que stio ns ab ou t hi s bu si ne ss re co rd see me d to ir rit a te him, ho wev er. Once in 

an in te rv ie w in his home , he su dd en ly pu lle d tw o pieces of paper ou t of a re ar 

po ck et. He ex te nd ed th es e to be r ea d.

On e w as on th e m em or an du m pa d of Co lumb us N at io na l Ban k of Comm erc e, 

th e oth er was on th e m em or an du m pa d of th e F ir st Colum bu s N at io nal Ba nk . 

Sign ed by th e p re si den ts of th es e tw o ba nk s, th es e me mo s sa id they wer e evide nce 

Hoo pe r ow ned ce rtific at es of de po sit of ,<200.000 an d $100,000.

To p officia ls of bo th ha nks sa id la te r th eir re gu ’at io ns pre ve nt ed them fro m 

su b sta n ti ati n g Hoo pe r’s claim or th e siz e of an y oth er dep osi to r’s acco un t.

He re trie ved th e memo s, flou rish in g them an d gr in ni ng . He de cl ar ed th a t “if 

an yb od y qu es tio ns my siR'cess, her e’s $300,000 cash to s ta rt w ith. And I ’ll be
305

ready with a sworn net worth statem ent In excess of $600,000. It ’s a shame to 

goad a man until he is forced to boast of his success . . . This, almost, gets to me.”

One who volunteered commendation in beha lf of Hooper's civil efforts and 

‘‘imaginative effort in behalf of the Tennessee Tombigbee waterw ay” insisted 

he would not presum e to discuss Hooper's financial affairs.

Glover Williams, executive dire ctor of the Tennesse Tombigbee Waterw ay 

Authority, called from Washington. “I wan t a chance to boost Hooper," Williams 

said.

"To any of the old gu ard of river development, flood control, soil conservation, 

scientifically improved farming, and wild life protection, bad mouthing Jim 

Hooper, as some environme ntalist groups seem to be doing, is unjust, un fai r and 

totally lacking in tru th,” said Williams.

"Jim Hooper was one of the original plank holders of the Tennessee Tom 

wate rway,” Williams continued. "How many trips over the South can I remember 

in his Bonanza, buying the gas was on him too, barnstorming for money to pay 

for lobbying just to get the Corps of Engine ers st arted? ”

Reading the court records must make Hooper wince. Fifteen years ago at 

Aberdeen, Miss., a Columbus lawyer was trying to garner some money for a 

client, af te r Hooper's large southwide pet food factory went down. He offered the 

federal court jury an acid critique to the man, who soon may be casting the 

deciding vote on whether and how much the Tennessee Valley Authority will 

increase light bills for 3 million valley citizens.

The lawyer said, "Th at Jim Hooper continued in his usual man ner to operate 

the business, to fly around in his plane, to tak e the biggest suites in the hotels, 

saying ‘Now things are going . . . B usiness was booming.’ . . . and, while he was 

behind on his bills, he was going to have some people put new money in the 

business .. . . ”

Hooper responds, "I reject the idea tha t a series of incidents show I was 

no manager. This was at a time when the whole U.S. was rolling the dice, trying 

to get rich quick . . . But 1 won all those law suits you read, overtur ned in 

court, all of the fra ud charges . . . I have made money and still make money in 

my business deals. I am a basic co nserv ative.”

Hooper added more strokes to this portrait. "I respect and greatly admire both 

the purposes and the achievements of the TVA, and I know of no othe r Republican, with a chance for White House appointment, who, conscientiously, as I 

can, could stick in there and uphold Red Wagn er's hand.”

“On top of that,” he continued, flicking the string tie of a woven white sport 

shir t as he spoke. “I know tha t the TVA board needs a man who will battle for 

new industry and new jobs. Also, it needs a man who und erstand s the full 

potential contribution of the Tennessee Tom waterway to the Tennessee Valley 

and to the cen tral South. 1 dearly love that wate rway and I helped to organize 

most of the groups tha t promoted it in the early days.”

Failed pet food factory, failed 500 cow dairy which was planned to be the 

largest in Mississippi with four milkings per day and a Hooper devised high 

protein feed formula to keep the dairy cows producing at this level—how do 

these fit in?

It may square with Hooper whose friends insist tha t he "never missed” on a 

civic promotion. From Tenn Tom to the kidney machine badly needed by a Jackson 

hospital a few yea rs ago and obtained, according to Hooper, from federal H.E.W., 

he listed these successes.

And the very lawyer who offered the jury the bitin g synopsis of Hooper's 

business methods has been won over. He is Sta te Sen. Bill Burgin and, as head 

of the local law firm tha t now represen ts Hooper, he's slated to coach his client 

through the Senate confirmation committee hearings tha t alone bar his path to a 

$38,000 ann ual wage and a full third of the responsibility for running TVA.

Burgin said : “On t ha t law suit, we were trying to get the ju ry ’s atte ntion, at 

a time when Hooper's lawyer had all the facts and all the proof on his side.”

Burgin’s associate, Hun ter Gholson, ad de d: "Hooper’s an innocent victim of 

bad luck on lots of those cases.”

What about the law suit to recover from Hooper his dairy farm , previously 

pledged as reserve aga inst policy premiums of th e Standa rd Union Life Insu rance 

Company?

"He won tha t case in the Mississippi sta te courts. He was absolved of all fraud 

charges.”

What about the suit of the federal receiver in b ankruptcy, also directed against 

Hooper’s farm?

“The record will show t ha t Hooper won th at too."

63
306

Neither Burgin, who obtained for Hooper unanim ous endorsements from the 

Mississippi legislature and strongly worded stateme nts from all majo r Democrat 

officeholders, nor any of his Republican sponsors believe lie'll be even lightly 

skinned in the confirmation procedures.

And Burgin seemed totally unimpressed by the protests of anti-strip mine 

and environm entalist groups against Hooper’s environmental positions. These 

protests had sta rte d to come in when Hooper and Burgin were interviewed two 

weeks ago.

Twelve national and TVA regional environmental groups filed formal protests 

against the Hooper nomination before the Senate Public Works Committee, 

Tuesday. They pledged a battle against confirmation.

Another Hooper adm irer in Columbus, Louis Wise, manager of Four Counties 

Electric Cooperative, said that “with Mississippi’s two very senior senators, 

Eastland and Stennis, carryin g the ball for him. the environm entalists will 

have to come on stronger with the votes than they have ever done before to even 

slow him down.”

“Jim Hooper has n’t told the press how he stood on any of the environm ental 

issues,’’ Wise declared. “So these 12 groups must have gotten mad because he said 

he’s like to back up the TVA board chairman, who lias been having some hard 

going recently. Th at’s a poor ground to fault him on.”

[F ro m th e N as hv ill e Ten ne ss ea n, Ju ly 6. 19 75]

Hooper’s Swapping Detailed

(By Nat Caldwell)

Memphis.—Jam es F. Hooper, nominated as the new TVA director, used his 

Mississippi dairy fnrm ns a conduit to divert $100,000 from a financially-troubled 

Alabama insurance company he served as director.

Hooper’s involvement in a check-swapping scheme tha t took $154,000 from 

the small, ailing Standa rd Union Life Insu ranc e Co., of Greenville, Ala., is 

spelled out in fed eral court records on file here.

The full story of Hooper’s financial dealings is not easy to piece together, 

but sworn documents in these voluminous court records show the diversion of 

money from the insuranc e company.

Hooper’s sworn accounting statement, date d Janu ary 1971, documents tha t 

$100,000 from Standa rd Union Life Insurance Co., came into the account of 

his dairy farm, through his then partner, Everet t Hope Brooks, of Memphis, 

who went b ankrupt in October 1909.

Ear lier in this series of articles on Hooper, who is President Ford’s choice 

for the TVA board, court testimony was quoted which traced another $54,000 

from the account of Stnndard Union Life to a Georgia milk processing firm 

which Hooper and his pa rtn er Brooks also served as directors. Brooks was 

presid ent of Standard Union.

Hooper's own deposition, taken in the bank ruptcy proceedings of his partner, 

Brooks, includes the following exchange with John Paul Jones, Memphis atto rney 

who represented the bankruptcy t ru stee :

J ones. “In other words the Hooper d airy farm ’s account was only a cond uit? ”

Hooper. “Precisely.”

He said that he put money into the account of the farm at Brooks’ instruction s 

and took it out the same way.

“Boom, boom ! In and out," he testified as he told how, on one occasion, he 

turn ed over $65,000 to the Georgia milk processing firm known as Little River 

Farms. Inc.

Hooper is scheduled to appear before a U.8. Senate Committee Tuesday as he 

seeks to be confirmed as President Ford’s TVA Director. Whe ther the Senate 

Committee is awa re of the check-swapping operation in which he was a central 

figure could not be learned-.

It is not known whether President Ford was advised of Hooper's involvement 

in the check-swapping before the White House announced him for the vacant 

$38,000 TVA direc torship.

Records show tha t in July of 1969. at a time Brooks was obviously in financial 

straits, that two checks tota ling $100,000 from Union Standa rd Life came into 

the account of the Hooper Dairy Farm.

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307

Hooper’s accounting statem ent sho ws:

A check for $95,000 from Standard Union Life was put into the Hooper 

Dairy Far m account by Brooks on July 2, 1969.

A second check for $5,000 from the insu rance company was pu t into the 

Hooper D airy Farm account on July 31, 1969.

Other documents show tha t four checks, tota ling $54,600, went from Standa rd 

Union Life into th e Georgia Milk Processing company.

These checks were deposited as fo llow s:

A $20,000 check on February 27, 1969.

An $8,600 check on March 11,1969.

A $10,000 check on March 3,1969.

A $16,000 check on April 2, 1969.

Henry L. McMahan, operator of the Georgia firm which both Hooper and 

Brooks served as directors, said when the ir company, Little River Farms, Inc., 

of Atlanta, needed funds he always telephoned Hooper.

The reafter, McMahan testified in Brooks’ bank ruptcy hearings, he would 

receive checks from Brooks. Some of the checks were on the insu rance firm, 

he said.

“I always worked through Mr. Hooper. Never through Mr. Brooks,” said 

McMahan. Sometimes he got checks from Hooper, but usually it was Brooks who 

sent money, he said.

McMahan state d that he had been told by Brooks to take checks which came to 

him and dejiosit them to his personal account, then write ano ther check "back to 

back” and deposit it into the account of the dairy processing company.

Why was it done this way?

“For reasons unknown,” McMahan said.

Hooper, contacted by this reporte r yesterday at his Columbus, Miss., home, 

was asked to explain the tra nsfer of checks from the insurance company to his 

farm and to the dairy processing company in A tlanta.

“Hope (Brooks) could do what he wanted to with his own money,” he said. 

“This all was his money. These all were his companies. I tried to do what he 

asked me to whenever I could. I don’t know why ..

During the deposition-taking in Brooks’ bankrup tcy case Hooper testified tha t 

it was Brooks, not he, who bought the dairy processing concern from McMahan 

in Atlanta early in 1969.

He claimed at one jtoint he had been a stockholder of the financially hurting 

Little River Farms for only about ten minu tes—then contended he didn’t know 

what the definition of a stockholder was. He also insisted tha t he had resigned— 

verbally—as a dire ctor of tha t company, but couldn't remember when he had 

done so.

Hooper, whose business ventu res throughout his career have often suffered 

from mismanagement, had luck or both, is a colorful, attra cti ve prom oter who 

claims credit for the creatio n of the U.S. Air Force crash helmet.

His relationship with Everett Hope Brooks is one of the more unusual pa rtnerships in the histo ry of American business.

The two men, Hooper, of Mississippi, and Brooks, of Memphis, met in 1964 

when Hooper’s d aug hter was a member of the queen's court at the Memphis Cotton Carnival. Brooks was a ca rnival official that yea r and the two men apparentlv 

bit it off.

Two years later they joined in a business venture —the operation of Hooper's 

1400 acre farm in Columbus. Miss. This land was lat er a subject of court dispute 

when Brooks went bank rupt.

According to court records Brooks pumped money into the Hooper Dair y 

Farm and arra nge d to buy an undivided 50% of the land for $100,000. He also 

planned to purchase ha lf the ca ttle and equipment for $175,000.

In the thr ee years before he was to go bank rup t Brooks put $573,000 into the 

Hooper f arm —including the $100,000 from Sta nda rd Union Life.

It is not clear from court documents exactly when Hooper and Brooks became 

fellow directors in Standa rd Union Life, but it appears to have been around December 1968—less than a year before Brooks financial debacle came to a climax.

In December. 1968 Hooper's farm, then held in par tnership with Brooks, was 

tran sfe rred for $10 “and othe r considera tions" to Standa rd Union Life.

Then, early in 1969 Hooper and Brooks went to Atlanta and purchased for 

$5,000 the Little River Farms milk processing pla nt and five subsidiary reta il 

dairy o utle ts in the Atlanta area.

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Hooper insists that, although he at one time held in his name one-third of the 

Little River stock, that Brooks was the actual purchaser of the company.

He testified that Brooks bought the Atlanta concern from McMahan— who had 

paid $100 for it a month earlier— because it was anticipated that the Atlanta 

plant would help market farm products from the Mississippi farm oi>erntion. The 

Atlanta firm was $3(58,(MM) in debt when they bought it.

By June 1069 Hooper and Brooks had arranged for a total of $148,000 to be 

funneled into the Atlanta operation, $54,000 from Union Standard.

Then, in June, Hooper signed a $50,000 check on a bank in Cumming. Ga., over 

to the Little River Farms operation in Atlanta. A month later, in July, another 

$50,000 check was sent to Little Rivers in Atlanta.

(Just a month later, the 3-member board of Union Standard met in Memphis 

and Brooks, his wife and Hooper, by unanimous resolution, transferred the 1,400 

acre farm back to Hooper.)

Still another check for $15,(MM) went from Hooper's dairy farm account in 

Mississippi into the Little River Farms— but Hoojht testified that this $15,(MM) 

was a “mistake." He said he got it back.

A hint of the check-swapping activities engaged in by Hooper and Brooks can 

be gleaned from Hooper’s own testimony about this $15,000.

“He (Brooks) had an account in Marietta (Ca.) in which he instructed me 

to draw the $15,(MM) from that . . . to Columbus (Miss.) and then from Columbus, 

Miss., back to L ittle River Farms . . . ”

A survey of the accounting statement of the Hooper Dairy Farm shows that 

at the time the two $50,(MM) checks and the subsequent $15.0(M) check went from 

Hooper to the Atlanta dairy concern, there were the following deposits by 

Brooks into the Hooper Dairy Farm account:

The two Standard Union Life checks for $100,000.

Two $25,000 checks from a Marietta bank— dated June 24 and June 30.

A $50,000 check from Marietta July 14.

Three checks totaling $80,000 from Dabney H. Crump, of Memphis, a 

business associate of Brooks.

Within six months, Crump, also facing bankruptcy, died from a self-inflicted 

shotgun blast.

Other details of Hooper's financial arrangements and dealings will be carried 

in subsequent articles in this series.

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APPENDIX IV

Hooper Response to Staff Analysis

The following materials were supplied to the staff by Mr. Hooper 

with a request that they lx* furnished Committee members in conjunction with the Staff Analysis.

The staff has reviewed the materials and feels that there are two 

items which require comment—the two specifically raised in the letter 

dated Feb ruar y 2.197(5. from Ralp h Rood to the Committee staff.

The first of these relates to the negotiations for a loan at the First 

National Bank of Marietta, Georgia, a loan eventually obtained at the 

Union Planters Bank Memphis, Tennessee, with a particip atio n by the 

former bank. The staff has reviewed the correspondence from the 

Union Pla nte rs Bank solicited by Mr. Hooper’s attorneys and finds 

no inconsistency with the treatment of this item in the Staff Analysis. 

The letter is an accurate account of information previously given the 

investigative staff regarding that portion of the loan t rans action which 

occured at the Memphis Bank.

The second item raised in Mr. Hooper's response alleges that the 

Staff Analysis fails to account for partne rship obligations assumed 

by Mr. Hooper at the conclusion of the partnership. The analysis of 

partnership accounts in the Staff Analysis was prepared bv a Certified Public Accountant detailed to the Committee by the General 

Accounting Office. His analysis of partners hip accounts is based upon 

data derived from Court documents filed by Mr. Hooper in the legal 

action that led to the dissolution of the partners hip ; work papers. 

General Ledg ers of the partne rship, and partne rship income retu rns 

prepared by Touche. Ross and Company, accountants for the partnership; the bank statem ents and canceled checks of the partnership.

The capital accounts balances shown in Appendix I to the Staff 

Analysis show all liabilities of the partne rship ascertained or ascertainable from the above materials.

Although Mr. Hooper main tains tha t he assumed sufficient liabilities to counterbalance his net capital balance deficit of almost $95,000 

and Mr. Brooks' capital balance in a like amount, he has not in any 

staff interview or in any of the four objections related to this issue 

contained in his response offered information or documentation regar din gth ese allegedly assumed partne rship liabilities.

67

67-520 0 - 76 - 2
310

WILLIAM O BuKOIM JR

MUMTER M OMOliON

OCWiTT ▼ MICKS UR

AUBREY C MICMOLS

ROBfRT • RRATHIR

RALRM C ROOD

JOMM W CROWtLt

• v e r m in c cnoe

FRANK ■ WEBB

B U R G IN . G H O L S O N . H I C K S A N D N I C H O L S 

P R O FE SSIO N A L A S S O C IA T IO N

ATTORNEYS AT LA W

A. O BOX 32

BIB NORTH SCCO NO AV EN UE

C O L U M B U S . M IS S IS S IP P I 3 0 7 0 1

Febru ary 2, 1976

TE LE PHONE

Mr . M. B arr y Me yer

C h ie f Counsel

Co mmittee on P u b li c Works

U nited S ta te s Se na te

D irksen Se na te O ffic e B u il d in g

W as hing ton D. C. , 2051 0

Dear B a rr y:

Per our con fe re nce o f la s t F rid a y , ple ase fin d encl ose d 

th e fu r th e r re sp on se on b e h a lf o f Mr . Hooper to th e s t a f f 

a n a ly s is as m o d if ie d January 30 , 1976.

I t is my u n d e rs ta n d in g th a t Mr. Joh n II. Hembree o f Un ion 

P la n te rs N a ti o n a l Bank in Me mp his, Te nn es se e, and Mr . Bea sley 

o f th e F ir s t N a ti o n a l Bank o f Cobb C ounty , G e o rg ia , w ill 

corr espond w it h you d ir e c t ly r e la tiv e to th e Union P la n te rs 

Bank lo a n . I t r u s t th a t th e ir corr espondence w i l l help 

c le a r th e a ir w it h re s p e c t to th a t p a r t ic u lia r s itu a tio n .

1 do not b e li e v e we dis cussed on F rid a y th e fa c t th a t 

none o f th e r e c o n c ilia tio n o f c a p it a l accounts re cogniz e s 

or giv es Mr . Hooper c r e d it f o r , th e l i a b i l i t i e s assumed 

a t th e c o n c lu s io n . T h is has been d e ta il e d in th e . re sponse.

Sh ou ld th e re be a n y th in g a t a ll th a t 1 m ig h t c le a r up p r io r 

to th e b r ie f in g , ple ase do not h e s it a te to c a l l . O th erw is e,

W ith best w is h e s, I re m ain ,

«

RR /er

CC: Mr. James F. Hoo per , Mr . W. E. C re s w e ll , Mr. B ill Sim pso n

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Febru ary 2, 1976

H r. M. B arr y Me yer 

. C h ie f Co un sel

Co mmittee on P u b li c Works 

U n ite d S ta te s Se na te 

D irksen Sen ate O ffic e B u il d in g 

W ashin gto n, D. C. 20510 

Dear B a rr y:

Upon h is re tu rn from W as hing ton la s t S a tu rd a y , Ralph Rood 

advis ed me o f h is d is c u s s io n s w it h you and th e s t a f f con cern in g 

th e p r o f i t a b i l i t y o f th e farm o p e ra tio n .

I wou ld a p p re c ia te i t i f , d u ri n g th e b r ie fin g on Febru ary 5 th , 

you wo uld p o in t ou t to th e Members my sta te m e n t and comments 

in th is re g a rd . B r ie f ly , th ey are as fo ll o w s :

1. An a n a ly s is o f th e la s t ta b le on page 9 w i l l r e f le c t 

th a t th e c o s t o f fe ed c o n s tit u te d 60% o f incom e fo r th e year

19 66 , 95% fo r th e ye a r 19 67 , 78% fo r th e yea r 19 68 , and 78% 

fo r th e year 19 69. Ma xim ium fe ed c o s t in r e la tio n to m il k 

incom e d u ri n g th is p e ri o d o f tim e should hav e been no more 

th an 45 %. The fe ed c o s t were e xtr e m e ly hig h sin ce we were 

re q u ir e d to fe ed a l l c a t t le , pro ducin g and n o n -p ro d u cin g , 

fo r a p e ri o d o f one and o n e -h a lf to two years u n t il the 

in f e r io r and no n -p ro d u cin g c a t t le cou ld be p ro p e rly te s te d 

and c u ll e d . I t was a n tic ip a te d th a t th is expe ns e wou ld 

le v e l out a f t e r a p e ri o d o f fo u r to f iv e y e a rs . How ever, 

due to M r. B ro o k's ba n kru p tc y we were unable to go fo rw a rd .

I t should a ls o be note d th a t d u ri n g th e f i r s t fiv e years o f 

th e 19 70 s, th e co s t o f fe e d in g has a c c e la ra te d much more 

r a p id ly th an th e p ric e o f raw m il k .

2. I wou ld a ls o lik e to p o in t o u t th a t, i f th e cash ba sis 

fo r th e p a rtn e rs h ip o p e ra ti o n is a d ju s te d to e li m in a te th e 

exce ssiv e fe ed c o s t, i t w ill show an a d ju s te d cash fl o w

o f $22,0 69.0 0 fo r th e yea r 19 66 , $1 8,7 6 7.0 0 fo r th e year

19 67 , $2 1, 635.0 0 fo r th e yea r 19 68 , and $31,7 07.0 0 fo r 

th e year 19 69.

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3. I t is my co n sid ere d b e lie f th a t th e ta b le shown on 

page 9 r e fle c ts th e ty p ic a l pr ob lem s o f th e d a ir y in d u s try 

d u rin g th e past te n y e a rs . W hile m il k p ric e s hav e re maine d 

a r t i f i c a l l y depre ssed, th e co s t o f la b o r, fe e d , m achin ery and 

equip m ent, fu e l, and v e te rin a r y m edic in e have in cre ased 

r a p id ly in an in f la t io n a r y s p ir a l. Added to th is is th e 

fa c t th a t once one. ha s s ta rte d in to th e d a ir y busin ess he 

is lo cked in sin ce i t is p r a c t ic a lly im p o ssib le to liq u id a te 

w it h o u t s u ffe rin g s u b s ta n tia l and d e v e s ta ti n g lo s s e s .

Yo ur c o u rte s ie s have been s in c e re ly a p p re c ia te d . I lo o k 

fo rw a rd to seein g you again d u ri n g th e week o f th e 16th .

JF H /e r

S in c e re ly ,

CC:

Mr. W. E. C re sw ell

Mr. B i l l Sim pson

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RESPONSE ANO OBJECTIONS OF JAMES F. HOOPER, I l l , TO STAFF 

ANA LYSIS:

X

The fo llo w in g c o n s titu te s p e c if ic re sp onses and o b je c tio n s 

o f James F. H ooper, I I I , to s t a f f a n a ly s is o f h is ba ck gro und 

as pro m ulg ate d by th e S ta ff o f th e Com m ittee on P u b li c Porks 

in O c to b e r, 19 75 , to g e th e r w it h m o d if ic a tio n s o f January 30,

1 976 .

1. The no minee re q u e sts th a t h is l e t t e r o f Fe bru ary 2, 19 76 , 

be in c lu d e d in an y b r ie fin g r e la t iv e to th e p r o f i t a b i l i t y o f th e 

fa rm o p e ra tio n as s e t fo r th on pag e 9 o f th e a n a ly s is .

2 . The no minee re q u e sts th a t th e f i r s t se nte nce o f th e la s t 

g ra m m a tical para gra ph on page 11 be r e - w r itte n to re ad as fo llo w s :

"On A ugust 20, 19 69 , p u rs u a n t to a re s o lu tio n o f th e

Boa rd o f D ir e c to rs o f S ta ndard Union L ife In su ra n ce

Comp any, t i t l e o f th e re a l p ro p e rty was co nv ey ed to th e 

n o m in ee ."

The no mine e fe e ls th a t th e fo re g o in g se nte nce w i l l more 

p ro p e rly r e f le c t th e a c tu a l c ir cu m sta n ce s as th e re is no 

e vid e nce th a t th e re were any n e g o tia tio n s r e la t iv e to th e 

re -c o ve ya n ce conducte d on Aug us t. 20 , 19 69 , o r a t any tim e 

p re v io u s th e re to .

3. I t is re qu e ste d th a t th e wo rd ’’a lle g a tio n s ” in th e 

f i r s t com ple te gra m m a tical para gra ph on page 13 be d e le te d 

and th e wo rd " p e t it io n " be s u b s titu te d .

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314

4. On page 1,4 o f th e a n a ly s is , i t is re queste d th a t a 

fo o tn o te be added to th e f i r s t quote un de r th e s e c ti o n o u tlin in g th e c o u r t's d is p o s itio n o f th e p a rtn e rs h ip to re ad as 

fo llo w s :

Mr, Ho op er di.d su b se q u e n tly assume and pay a l l 

p a rtn e rs h ip d e b ts ."

5. The no minee r e s p e c tfu lly subm its th a t th e sta te m e n t 

co n ta in e d on page 16 and qu ot ed as fo ll o w s is in c o r r e c t:

" I t appe ar s th a t M r. Brook s th us c o n trib u te d a to t a l o f

$215,2 58.0 0 to Mr. Hoo per , e ith e r th ro u g h th e p a rtn e rs h ip o r th ro u g h tra n s a c tio n s a n c illa r y to th e p a r tn e r ­

s h ip ."

The brea kd ow n c o n ta in e d fo ll o w in g th e ab ove m is -s ta te s 

Mr. Brook s c a p it a l c o n tr ib u tio n to th e p a rtn e rs h ip s in c e i t 

does no t decre ase th a t am ount by Mr. B ro o k's p o rtio n o f 

th e ex ce ss l i a b i l i t i e s over assets assumed by M r. Hooper a t 

th e te rm in a tio n o f the p a rtn e rs h ip . F u rth e rm o re , th e 

no minee r e s p e c tfu lly suggests th a t th e in c lu s io n in th e to t a l 

fig u r e o f $106,5 00.0 0 as M r. B ro o k's e q u it y in o n e -h a lf in te r e s t 

in fa rm p ro p e rty re -c onve yed w it h o u t c o n s id e ra tio n is e n t ir e ly 

im p ro p e r. A d d it io n a lly , M r. Brook es c o n tr ib u tio n should be 

o ff s e t by M r. H ooper's ex pe ns es in c u rre d in p r o te c tin g h is

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/

315

in te r e s t from th e c la im s o f th e T ru ste e and from th e c la im o f 

S ta ndard Union L ife In su ra n ce Com pan y. M r. C ro o k's c a p it a l

c o n tr ib u tio n sho uld a ls o be ch arg ed w it h o n e -h a lf o f th e $ 8 ,0 0 0 .0 0

x

s e tt le m e n t p a id to th e P h illip s P etr o le um Company.

6. The no mine e r e s p e c tfu lly suggests th a t th e n e xt to 

th e la s t gra m m a tical para gra ph on page 17 is in c o r r e c t and 

would re s p e c tfu l 11y p o in t o u t th a t th e p e t it io n and a c c o u n ti n g 

on page 45 shows th a t th e tr a n s fe r from th e M a rie tta ban k 

acco u n t re p la c e d $ 5 0 ,0 0 0.0 0 w ithdra w n by M r. Bro ok s on J u ly 7, 

19 69 , and p a id to H r. Dabne y Crump o f Mem ph is, Tenn ess ee .

7. The no minee r e s p e c tfu lly suggests th a t th e re fe re n c e

to pro ceeds o f th e lo a n from th e F ir s t N a ti o n a l Bank o f M a r ie tta , 

G e o rg ia , c o n ta in e d on page 17 is an in c o r r e c t c h a r a c te r iz a tio n 

o f th e a c tu a l tr a n s a c tio n . The lo an pro ce eds were from th e 

Union P la n te rs N a ti o n a l Bank o f Mem ph is, Tenn ess ee , and we re 

d e p o s it e d in to a che ckin g a cco unt a t th e F ir s t N a ti o n a l Bank 

o f M a r ie tta , G e o rg ia . No lo an was eve r made by th e F ir s t 

N a ti o n a l Bank o f M a r ie tta , G e o rg ia , to th e no mine e o r to th e 

p a rtn e rs h ip .

8. W ith re s p e c t to page 19 o f th e a n a ly s is , i t is 

r e s p e c tfu lly suggeste d th a t para gra phs No. 3 and 4 he d e le te d , 

to g e th e r w it h th e e n tir e la s t gra m m a tical p a ra g ra p h . M r.

® S ta rk has e x p la in e d in c o n n e c ti o n w it h th e 1969 tra n s a c tio n th a t

th e tr e a tm e n t g iv e n th e item s was m e re ly te n ta tiv e and

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316

d id n o t r e f le c t any e x is tin g le g a l r e la tio n s h ip be tw ee n any 

o f th e p a r tie s .

s

9. The no mine e re quests th a t th e fo ll o w in g sente nce be 

added to th e f i r s t , gra m m atical para gra ph on page 26:

" The no minee has s ta te d th a t he was un aw are o f any 

p re p a ra ti o n s fo r b a nkru p tc y by H r. Br oo ks or th a t 

M r. Bro ok s was under severe m enta l s tr a in a t th e ti m e ,

and th e re is no evid ence to th e c o n tr a r y ," f

10 . I t is re queste d th a t th e fo ll o w in g sente nce be 

added a f t e r th e f i r s t sente nce o f th e la s t gra m m a tical 

para gra ph on pag e 30 :

" H r. Ho op er s ta te d d u ri n g h is 1971 d e p o s it io n th a t:

'A . I lo oke d a t many fin a n c ia l s ta te m e n ts , and non e 

o f them we re co m p le te , none o f them we re a c c u r a te .'"

The no minee re q u e sts th a t th e la s t gra m m atical para gra ph 

b e g in n in g on page 31 and c o n ti n u in g on page 32 be r e - w r itte n 

as fo llo w s :

In th e e a rly summer o f 19 69 , M r. B ro o ks, ac co mpa nied by

H r. H ooper, ap pr oa ch ed H r. W il li a m B e a sle y, P re s id e n t o f

th e F ir s t N a ti o n a l Bank o f M a r ie tta , G e o rg ia , to ap p ly

f o r a $150,0 00.0 0 lo an to be in v e s te d in L i t t l e R iv e r

Fa rm s. H r. Bro ok s o ff e re d to secure th e lo an w it h sto ck

o f C a d a ll ic C o n d u it Com pany. M r. B easle y was n o t fa m - 4

i l i a r w it h th e c o lla te r a l o ffe re d and wou ld agre e o n ly

to p a r tic ip a te to th e e x te n t o f $1 00,0 00.0 0 in a lo an

fc

74
317

o b ta in e d from a bank more f a m ilia r w it h th e o ffe re d 

s e c u r ity and w it h th e a p p lic a n t . ”

x

12 . The nominee re q u e s ts th a t th e la s t two sente nces o f 

th e m o d if ie d gra m m atical pa ra gra ph 2 on page 32 be d e le te d .

13 . I t is re queste d th a t th e second sente nce o f th e

. la s t gra m m a tical para gra ph b e g in n in g on page 32 and c o n tin u in g 

on page 33 be d e le te d . The p e t it io n and a c c o u n ti n g p u rp o rte d 

to r e f le c t o n ly th ose ca sh d e p o s it s and w it h d ra w ls in to and 

o u t o f th e p a rtn e rs h ip a cco unt and d id no t p u rp o rt to r e f le c t 

any fu nds tra n s fe r re d o u ts id e o f th e a c c o u n t; th e r e fo r e , th e 

tr e a tm e n t is n o t in c o n s is te n t.

14 . I t is re queste d th a t th e la s t sente nce o f th e la s t 

g ra m m a tical para gra ph b e g in n in g on pag e 32 and c o n tin u in g on 

page 33 be d e le te d p u rs u a n t to M r. S ta rk 's l e t t e r o f Decem ber 

3, 19 76 .

15 . I t is re queste d th a t th e la s t gra m m a tical pa ra gra ph 

b e g in n in g on page 33 be p re fa ce d w it h th e p h ra se , "H r. McMahan 

says th a t , " . I t is re qu e ste d th a t th e fo li o w in g para gra ph

be added on page 36 p r io r to th e S e c ti o n d e a li n g w it h th e 

S e a lr ig h t g u a ra n te e :

Ther e is no evid e nce th a t H r. Ho op er was a p a rty to ,

J o r t e s t if ie d in , by d e p o s it io n o r o th e rw is e , any o f

th e In te rn a l Reven ue S e rv ic e p ro c e e d in g s . F u rt h e rm o re , 

no evid e nce th a t th e In te rn a l Revenu e S e rv ic e eve r

75
318

q u e s ti o n e d M r, Ho op er con cern in g th e ta x l i a b i l i t y o f

L i t t l e R iv e r Fa rm s.

s,

16 . I t is re queste d th a t th e seco nd sente nce o f th e la s t 

gra m m atical para gra ph on page 36 re ad as fo ll o w s :

“ On Sep tembe r 18 , 19 70 , S e a lr ig h t cla im e d a to t a l 

in de b te d n e ss o f $19,6 5 3.1 4 .

17 . The no mine e re quests th a t para gra ph 4 on pag e 37 be 

d e le te d f o r th e re ason th a t, as su ming fo r th e purp ose s o f 

arg um ent, th e v a la d ity o f th e g u a ra n ty agre em ent, th e e x e c u ti o n 

th e re o f by a d ir e c to r fo r th e b e n e fit o f th e c o rp o ra tio n as an 

ac co mmod ation or o th e rw is e w ould , in and o f i t s e l f , n o t be 

n e g li g e n c e , s in c e i t was o f b e n e fit to th e c o r p o ra tio n .

18 . The no minee r e s p e c tfu lly re q u e sts th a t th e d is c u s s io n s 

o f net w ort h in th e n e xt to th e la s t gra m m a tical para gra ph and 

th e la s t gra m m a tical para gra ph on page 37 , c o n ti n u e d on page 38 , 

be ac co mpa nied by a pro m in e nt sta te m en t th a t th e net w ort h fig u re s 

a p p li e d o n ly to th e d a ir y o p e ra tio n , e x c lu s iv e o f re a l e s ta te , and 

th a t th e l i a b i l i t i e s a t th e tim e in c lu d e d th ose l i a b i l i t i e s 

assumed from th e p a rtn e rs h ip o p e ra tio n .

19 . I t is r e s p e c tfu lly re queste d th a t th e fo ll o w in g 

para gra ph be added p r io r to th e la s t gra m m a tical para gra ph 

on page 39:

76
319

" The Dunn and C ra d s tr e e t re p o rt was p u rp o rte d ly th e 

r e s u lt o f a te le p h o n e in te r v ie w . The nominee has s ta te d 

th a t he d id n o t make such a re p o rt to Dunn and C ra d s tr e e t. 

A c c o rd in g ly , th e p o s s ib ilit y o f someone w it h Rhodes

O p tic a l h o ld in g h im s e lf o u t to be M r. Hooper mu st be

♦/

re c o g n iz e d ."

20 . I t is re queste d th a t th e fo ll o w in g se nte nce be added 

to th e n e xt to th e la s t gra m m a tical pa ra gra ph on page 43:

" The te rm " o v e r d r a ft" as h e re in use d is in th e 

a c c o u n ti n g c o n te x t and in no way im p li e s th a t th e re 

was an a c tu a l o v e rd ra ft in th e bankin g se n se ."

21 . The d e ta il in fo o tn o te 2 on pag e 44 fo ll o w in g th e 

November 9, 19 65 , lo an should c o n ta in th e n o ta tio n th a t s a id lo an 

was en do rs ed by Mr. Bro oks.

22 . I t is re queste d th a t th e la s t para gra ph on page 45 

be r e - w r itte n as fo ll o w s :

" The a c c o u n ti n g d if f e r s in c e r ta in re s p e c ts from th e 

work pape rs m a in ta in e d by Touche, Ross & C o ., a n d /o r 

c a n c e ll e d ch eck s draw n on th e fa rm a cco u n t. The fo ll o w in g 

d is c u s s io n d e ta ils th e d iffe r e n c e s . I t sho uld be note d 

a t th e o u ts e t th a t Touc he , Ross & C o ., has s ta te d th a t 

th e 1969 tr a n s a c tio n s do n o t p u rp o rt to in d ic a te any 

le g a l r e la tio n s h ip s .

77
23 . P ara gra ph ( f ) on page 46 should be d e le te d s in c e 

th e Touc he , Ross t Co. tr e a tm e n t a p p a re n tl y re s u lt e d from an 

e r r o r in re a d in g th e sourc e o f fu nds lis t e d on th e ban k s ta t e ­

m ent .

24 . I t is re queste d th a t th e la s t sente nce o f th e la s t

com ple te gra m m a tical para gra ph on page 46 be r e - w r itte n to 

re ad as fo llo w s : •

* A cco rd in g to th e To uc he , Ross & C o ., wor k p a p e rs , H r.

H ooper's a p pare nt e q u it y in th e p a rtn e rs h ip as such wou ld 

have been $ 1 9 ,8 0 9 .5 8 . I t should be n o te d , howeve r, th a t 

a re p re s e n ta tiv e o f To uc he , Ross & Co. t e s t if ie d a t th e 

h e a ri n g on th e P e titio n and A cco u n ti n g and was unable to 

v e r if y th a t co m pa ny 's tr e a tm e n t."

25 . I t is r e s p e c tfu lly su ggeste d th a t th e la s t th re e 

gra m m atical para gra phs on page 47 be r e - w r itte n to r e f le c t any 

assum ption by N r. Hoope r o f th e e n tir e o u ts ta n d in g in debte dness 

o f th e p a rtn e rs h ip su bse quent to i t s te r m in a tio n .

26 . I t is r e s p e c tfu lly re queste d th a t th e com puta tion

and ta b u la tio n s o f a l l c a p it a l bala nces c o n ta in e d in th e re m ain der 

o f th e a n a ly s is be r e - w r itte n to r e f le c t th a t assum ption o f 

l i a b i l i t i e s by M r. Hoo pe r.

27 . I t is r e s p e c tfu lly su b m it te d th a t para gra ph ( i ) 

on pag e 56 o f th e a n a ly s is b e ^d e le te d .
321

Union

Planters

NAIIONAl BASK O» M IM I’HI'l

F eb ru ary 4, 1976

J

H , E B i u i 9 7 G

BAaarw, o. c. 2K10

H onora ble M. B arr y Me yer 

C h ie f C ou ns el 

Com m itte e on P u b lic Works 

U. S. S en ate 

D ir k sen B u il d in g

D ir k sen S e n a te O ffic e B u il d in g 

W ash in gto n, DC 20S10 

Dea r Mr. M ey er:

Mr. Ja m es F. Ho op er o f Col um bu s, M is s is s ip p i, no minee to th e 

Bo ard o f D ir e c to rs o f th e T en n ess ee V a ll e y A u th o rity has r e ­

q u e s te d t h a t I c l a r i f y to yo u th e c ir c u m s ta n c e s o f a c e r t a i n 

lo an made in 196 9 by t h i s ba nk to Mr. E v e re tt H. Bro ok s an d 

Mr. Da bney Crump.

F i r s t , I wo uld l i k e to s t a t e t h a t I hav e n ev er met Mr. H oo pe r.

My o n ly c o n ta c t w it h him was by te le p h o n e t h i s p a s t Monday. I 

d id m ee t b r i e f l y w it h h is a tto r n e y in Sep te m ber o f 197 5 an d 

r e l a t e d to h is a tto r n e y th e f a c t s c o n ta in e d in t h i s l e t t e r .

S ec ond, as a ba ck gro und an d f o r your in fo rm a ti o n I d id b u s in e s s 

on b e h a lf o f th e ba nk f o r a number o f y e a rs w it h b o th Mr. Br oo ks 

an d Mr. Cru mp. Th ey were b o th s u b s t a n t i a l b u si ness m en an d 

v a lu e d cu sto m e rs o f th e ban k.

So meti me d u rin g th e summer o f 1969 Mr. Bro ok s an d Mr. Crump 

ap p ro ach ed me co n c e rn in g a lo an in th e a p p ro x im ate am ou nt o f 

$ 1 5 0 ,0 0 0 . At t h i s p a r t i c u l a r p o in t th e b a n k 's le n d a b lc fu nds 

w er e l im ite d , ho w ev er , Mr. Bro ok s a d v is e d me t h a t th e F i r s t 

N a ti o n a l Bank o f M a rie tta , G e o rg ia , was w illin g to p la c e w it h us 

$100,0 00 to be use d to p a r t i a l l y fu nd th e lo a n . Mr. Br oo ks 

o ffe r e d as c o l l a t e r a l f o r th e lo a n c e r t a i n Common S to c k s whi ch 

I fo und u n a c c e p ta b le . I th en a rra n g e d f o r o th e r c o l l a t e r a l , 

w hi ch w as , as I r e c a l l , M u n ic ip a l Bonds owned by a t h i r d p a r ty 

b u t ac co m pan ie d by th e p ro p e r d o c u m e n ta ti o n . T h is was

79
322

H onora ble M. B arr y Me yer 2 2 /4 /7 6

a c c e p ta b le an d th e lo a n was d u ly made. I was o u t o f tow n when 

th e lo a n was c lo s e d , how ev er , Mr. Wayne C la rk h an d le d i t in my 

a b s e n c e .

In th e f a l l o f 19 69 , Mr. Crump to ok h is l i f e an d Mr, Bro ok s 

s u f f e re d se v e re f in a n c ia l r e v e r s a l s . I t was n e c e s s a ry fo r th e 

ba nk to li q u i d a t e th e c o l l a t e r a l to s a t i s f y th e lo a n . T h is was 

do ne in du e c o u rs e .

Mr. Ho op er d id n o t p a r t i c i p a t e in th e lo an n e g o tia tio n s an d was 

n ev er l i a b l e l e g a lly o r m o ra ll y fo r th e o b lig a t i o n . Had he 

b een , you ca n r e s t a s su re d I wo uld ha ve made dem and up on him 

an d p u rs u ed him v ig o r o u s ly . The lo an was made by t h i s ba nk an d 

t h i s bank was o b lig a te d to th e F i r s t N a ti o n a l Ban k o f M a rie tta 

f o r i t s p a r t i c i p a t i o n .

I t r u s t t h i s c le a r s up an y c o n tr o v e rs y r e l a t i v e to Mr. H o o p er' s 

in v o lv em en t in th e lo a n . He was n o t in v o lv e d .

I f I may be o f f u r t h e r a s s i s t a n c e , p le a s e a d v is e .

80

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323

TABLE OF DOCUMENTS

Depositions

1. Mr. Jam es F. Hooper’s deposition taken Febru ary 18, 1971, in connection 

with Mr. Brooks' Bankrup tcy proceedings In The Matter of Everett II. Brooks,

Individually, and d/b /a Consolidated Business Service, in the United States District Court for the Western District of Tennessee, Western Division, No. Bk 

69-2453.

2. Mr. Henry L. McMahan's deposition taken March 24, 1970, in connection 

with Mr. Brooks' Bankruptcy proceedings.

3. Mr. Henry L. McMahan's deposition taken Jun e 5, 1974, in the case of United

States of America v. Henry L. McMahan, et al., in the United States District 

Court for the Northern District of Georgia, Atlanta Division, Civil Action No. 

18152.

4. Mr. William L. Thu rman’s deposition take n Jun e 5, 1974, in the case of 

United States of America v. Henry L. McMahan, ct al.

5. Mr. Leon C. Smith’s deposition take n July 30, 1974, in the case of United

States of America v. Henry L. McMahan, et al.—notes and verbatim excerpts 

therefrom.

6. Mr. Alton Haw k’s deposition take n March 4, 1975, in the case of United

States of America v. Henry L. McMahan, et al.

7. Mr. Jac k Holloway’s deposition take n Feb ruary 2, 1972, in the case of 

Little Hire r Farms, Inc., a Georgia Corporation and Jac k Holloway v. United

States of America, Harold J. Bowman and Charles Green, in the United States 

District Court for the Northern District of Georgia, Atlanta Division, Civil 

Action No. 13837—notes and verbatim excerpts therefrom.

Transcripts of Testimony

8. Mr. J ames F. Hooper’s testimony on July 29. 1971, in the case of Standard

Union Life Insurance Company v. Jam es F. Hooper, ct al., in the Chancery Court 

of Lowndes County, Mississippi, No. 11926.

9. Transc ript of testimony from the Brooks Bankrup tcy proceedings. In The

Matter of Everett II. Brooks, Ind ivid ually and d/ b/ a Consolidated Business

Service, in the United States District Court for the Western District of Tennessee, Western Division. No. Bk 69-2453 (excerpts of testimony take n November 3. 4 and 6. 1969; J an uary 5, 14 and 15, 1970; Feb ruary 19, 20 and 24, 1970; 

and March 5, 1970.)

10. Tra nsc ript of testimony from Premium Associates Inc. v. Jam es F. Hooper

and IF. Pratt Thomas. Co-Partners d/b/a Columbus Canning Company of Columbus. Mississippi, in the United States Dis tric t Court for the Northern District 

of Mississippi, E astern Division, No. E-C -22-60 (excerpts.)

Transcripts of Staff I nterviews

i 11. Tra nsc ript of Staff interv iew with Henry L. McMahan, August 25, 1975.

12. Tra nsc ript of Staff interv iew with Everett. H. Brooks on September 23. 

1975.

13. Tra nsc ript of Staff interv iew with William L. Brickey on Septem ber 24. 

1975.

14. Tra nsc ript of Staff interv iew with Eugene T. Beard of T. E. Lott and 

Company on September 25. 1975.

15. Tra nsc ript of Staff interv iew with Alton Hawk, August 27, 1975.

Memoranda of Staff I nterviews

16. Memorandum of Staff interview with Mr. J. P. Smith, Vice Presid ent, and 

Mr. William L. Beasley. Chairman of the Board, of the Fi rst National Bank of 

Cobb Countv (formerly the First National Bank of Ma rietta) on August 26. 

1975.

81
324

17. Memorandum of Staff telephone interview with John Taber, Esq. on October 2, 1075.

Affidavits

18. Mr. Henry L. McMahan's affidavit executed July 17, 1070.

Bank Statements

10. Bank Statements, 1060 and 1070, together with selected checks—Hooper 

Dairy Farm Account at the First Columbus National Bank, Columbus, Mississippi.

T ax Returns

20. Hooper Dairy Farm Partn ership Tax Returns for 1066-1060.

21. James F. and Virginia Hooper Individual Tax Returns 1065-1074.

I

Court Documents

BROOKS BANKRUPTCY PROCEEDINGS

22. Petition for Chapter XII Arrangement, “Summary of Debts and Assets”, 

filed October 27, 1960, In The Matter of Everett H. Brooks, Individ ually, and

d/ h/ a Consolidated Business Service, in the United States District Court for 

the Western District of Tennessee, Western Division, No. Bk 60-2453.

23. Petition For Authority to Employ Certified Public Accountants in Aid of 

Proceedings, filed Feb ruary 2, 1070, in the Brooks Ban krup tcy proceedings.

24. Order Authorizing Employment of Attorney John Paul Jones By Roy W.

Hend rix, Jr., Trustee, dated February 20, 1070, in the Brooks Bankruptcy 

proceedings.

25. Proof of Claim in Bankruptcy, No. 32, filed Mandi 25, 1070, in the Brooks 

Ban krup tcy proceedings.

26. Petition to Authorize Trustee to Abandon A Burdensome Partn ership of 

the Bank rupt, filed July 28, 1070, in the Brooks Bankruptcy proceedings.

27. Order Allowing Debtor To With draw His Proj>osed Arran geme nt and 

Adjudicating Debtor a Ban krup t, filed July 31. 1070, in the Brooks Bankruptcy 

proceedings.

28. Attachment, to Order term inating Chapter XII Proceedings, entited “Everett H. Brooks, Septem ber 17. 1070", filed September 23, 1070, in the Brooks 

Bankrup tcy proceedings.

20. Order Approving Tru stee's Accounting, Dicharging T rustee and the Surety 

on His Bond, filed Septem ber 23, 1070.

30. Petition and Accounting of James F. Hooper For Partnership Ojieration 

of Hooper Dairy Farm, filed January 10, 1071, in the Brooks Bankruptcy 

proceedings.

31. Proof of Claim in Bankrup tcy, No. ,33. filed March 26, 1070, in the Brooks 

Bankrup tcy proceedings.

32. Memorandum, Findings of Fact and Conclusions of Law, filed Jun e 18 4

1071, in the Brooks Bankrup tcy proceedings.

33. Objections to Clnim of J ames F. Hooj»er. filed July 23, 1071, in the Brooks 

Bankrup tcy proceedings.

34. Order Disallowing Objection to Claim, filed September 17, 1071, in the

Brooks Bankruptcy proceedings. N

35. Amended Objection of Trustee to Claim No. 33 of Jam es F. Hooper, filed 

November 5, 1071, in the Brooks Bankruptcy proceedings.

36. Amended Objection of Trustee to Claim No. 32 of Jam es F. Hooper and 

Response of Trus tee to Claimant’s Petition For Accounting, filed November 5,

1071.

37. Order, dated Noveml>er 5. 1071, in the Brooks Ban krup tcy proceedings.

38. Memo in Support of Clnim of Charles M. Crump. Executor, filed April 13.

1072, in the Brooks Bankruptcy proceedings.

30. Tru stee’s Brief in Opposition to the Claim of Charles M. Crump, Executor, 

filed April 13. 1072, in the Brooks Bankruptcy proceedings.

40. Memorandum. Fin al Report and Order, filed August 10, 1072, in the Brooks 

Bankruptcj- proceedings.

41. Order For Payment of Dividends, filed October 30, 1072, in the Brooks 

Bankruptcy proceedings.

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325

PREMIUM ASSOCIATES CASE

42. Complaint, Premium Associates Inc. v. James F. Hooper and IF. Pratt

Thomas, Co-Partners d/ b/ a Columbus Canning Company of Columbus, Mississippi, in tlie United States D istrict Court for the Northern District of Mississippi, 

Eastern Division, No. E-C-22-60, tiled March 24,1900.

43. Answer of Mr. James F. Hooper in the case of Premium Associates vs. 

Jame s F. Hooper, et al, filed Jun e 3, 1960.

44. Jury Verdict in Premium Associates vs. James F. Hooper, et al., filed September 28, I960.

STANDARD UN ION V. HOOPER

45. Complaint in Standard Union Life Insurance Company v. Jame s F. Hooper,

et al., in the Chancery Court of Lowndes County, Mississippi, No. 11926, filed 

March 19, 1971.

46. Answer in Standard Union v. Hooper, filed April 12,1971.

47. Final Decree, Stan dard Union v. Hooper entered July 27, 1971.

48. Decree in Standard Unionw Hooper entered Septem ber 21, 1971.

I.ITTLE RIVER FARMS & HOLLOWAY V. U .S ., BOWMAN AND OREEN

49. Complaint, Li ttle River Farms, Inc. a Georgia Corporation and J ack Hollou'ay v. United Sta tes of America, Harold J. Bowm an and Charles Green, in the 

United States District Court for the Northern District of Georgia, Atlanta Division, Civil Action No. 13837. Filed JuneS, 1970.

50. Amendment to Complaint Little Riv er Farm s d Holloway v. U.S., Bowman

and Green filed September 25, 1970.

51. Consolidated Pretr ial Order Little R ive r Farms d Holloway v. U.S., Bowman

and Green, filed Ju ne 2, 1972.

52. Judg men t and Orde r Little River Farm s d Hollow ay v. U.S., Bowman and

Green, entered December 29, 1972.

u.s. v. m’mahan

53. Complaint in United States o f America v. Hen ry L. McMahan, et al., in the 

United States District Court for the Northern District of Georgia, Atlanta 

Division, Civil Action No. 18152, filed April 10,1973.

54. Order in U.S. v. McMahan, entered May 15, 1975.

55. Judg men t in U.S. v. McMahan, entered May 27,1975.

ALABAMA V. STANDARD UN ION

56. Decree for Temporary Res training Order and Partia l Inju nction and Appointm ent of Agent, in Sta te of Alabama v. Standard Union Life Insurance Company, in the Circuit Court of Jefferson County, Alabama, in Equity No. 161-098, 

entered May 4,1970.

Docum en ts Related to Conv eyance of P rope rties

57. List of conveyances of projterty inte rest to and from Mr. and Mrs. Hooper, 

based on search of the records of the Chancery Court, Lowndes County, Mississippi.

58. Agreement of October 31, 1964, between E. M. Radcliffe and Johnson, first 

parties, and Mary M. Crump, Charles M. Crump, Dabney Crump and E. Hope 

Brooks, second parties, to purchase a half inte rest in the Hooper Dair y Farm 

property.

59. Instructio n to Escrow Agent Under Real Estat e Exchange and Escrow 

Agreement, dated October 31.1964.

60. Bill of Sale from Messrs. Hooper and Thomas to Columbus Canning Company, Inc., conveying all farm er partn ers hip assets, date d November 31, 1957.

61. Deed dated November 31, 1957, from Messrs. Hooper and Thomas conveying 

the Columbus Canning tra ct to Columbus Canning Company, Inc., recorded at 

Book 272, page 230, Chancery Court, Lowndes Countv, Mississippi.

62. Deed from Radcliffe Investment Company to Mr. Brooks, executed April 22, 

1966. and recorded Jun e 16. 1966. at book 375, page 672, Chancery Court, Lowndes 

County, Mississippi.

6 7 -5 2 0 0 - 76 - 22

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326

63. Deed from Mr. and Mrs. Hooper and Mr. Brooks to Standa rd Union Life 

Insurance Company executed December 23, 1968, and recorded December 27, 1908, 

at Book 403, page 337, Chancery Court, Lowndes County, Mississippi.

64. Deed of the Columbus Canning trac t from Mr. Brooks to Standard Union 

Life Insurance Company executed December 28, 1968, and recorded Jan uary 3, 

1969, at Book 403, page 397, Chancery Court, Lowndes County, Mississippi.

65. Deed from Mr. and Mrs. Brooks to Standard Union Life Insu rance Company 

of the Desha County property executed Decemlier 30, 1968 and recorded at Book 

188, page 456 with the Recorder for Desha County. Arkansas.

66. Deed from Standard Union Life Insurance Company to Mr. Hooper executed August 20, 1969, and recorded September 9, 1969, at Book 416, page 216, Chancery Court, Lowndes County, Mississippi.

67. Deed from Standard Union Life Insurance Company to Radcliffe Inv estment Company of the Desha County, Arkansas, property.

68. Option of Weyerliauser to purchase the Hooper Dairy Farm land, dated September 12,1974.

69. Ix*ed from Mr. and Mrs. Hooper to Weyerliauser, executed February, 1975.

70. Disbursement Stateme nt in connection with sale of the Hooper Dairy Farm land to Weyerliauser.

Balance Sheets, Financial Statements, Etc.

LIT TL E RIVER FARMS

71. Record of Deposits, L ittle River Farms, for August 18, 1969.

72. Little River Farms Balance Sheet as of September 30. 1969.

73. Little River Farm s Balance Sheet as of October 31, 1969.

74. Little River Farm s Balance Sheet as of November 30, 1969.

75. Touche, Ross and Co.'s letter of February 11, 1970. listing payments to or on 

beha lf of L ittle River F arms by Mr. Brooks of his related entities.

STANDARD UN IO N LI FE INSU RA NC E COM PAN Y

76. Stan dard Union’s Annual State ment for the Year Ended December 31, 1968, filed in the State of Alabama.

77. Standard Union’s Annual Statement for the Year Ended December 31, 

1968, filed in the State of Georgia.

78. Standa rd Union Life Insu ranc e Company Balance Sheet, December 31. 1968, signed by Messrs. Hooper and Brooks.

79. Statement of Account Number 26-4954-9 for the period from 6-20-69 to 7-19-69, F irs t Columbus National Bank.

HOOPER DAIRY FARM

80. Financial Statement, James F. Hooper and Everet t Hope Brooks, Dairv Farm , Jun e 30, 1966.

81. Trial Balance of the Hooper Dairy Farm Partnership as of December 31.

1966, with su pporting schedules and workpapers, prepared by Touche, Ross & Co.

82. Trial Balance of the Hooper Dairy Farm Partn ership as of December 31,

1967, with supporting schedules and workpapers, prepared by Touche. Ross & Co.

83. Trial Balance of the Hooper Dairy Farm Partnership as of December 31,

1968, with supporting schedules and workpapers, prepared by Touche. Ross & Co.

84. Balance Sheet of Hooper Dairy Farm par tnership as of August 19, 1969, 

prep ared by Roy Thurman of Touche, Ross & Co. and forw arded to Roy W. Hendrix, Jr., Trustee.

85. Statement of Assets and Liabilities and an Income and Expenses Statement 

for Hooper Dairy Farm as of December 23, 1969 prep ared by T. E. Lott and Co. and forwarded to Mr. Gholson.

MISCELLANEOUS

86. Joi nt Financial Statement, Everet t II. Brooks and Jam es F. Hooper, March 15,1969.

87. Current Financial State ment. Mr. and Mrs. J. F. Hooper, submitted to Senate Public Works Committee.

84
CORRESVON DENCE

88. Undated lett er to All Stockholders, Standa rd Union Life Insurance 

Company.

80. Jun e 16, 1066; lett er from Mr. Gholson to Mr. Brooks.

90. April 18, 1967; lett er from T. E. Lott & Co. to Mr. Hooper, including 

attachments. 91. May 4, 1967, Memo to File from I). F. Sta rk of Touche. Ross & Co.

92. May 26, 1967; letter from Mr. 1). F. Sta rk to Touche, Ross & Co., to Mr. 

Beard, including attachments.

93. Jun e 6, 1967; letter from Mr. John A. Rice to Mr. Brooks.

94. Jun e 7, 1967; letter from Mr. I). F. Sta rk to Mr. Beard.

95. October 31, 1968; letter from Mr. Allan W. Horne, Arkansa s Insurance 

Commission, to Mr. Robert L. Hill, then Pres iden t of Standa rd I nion.

96. November 8, 1968; lett er from Mr. Tabe r to Mr. Allan W. Horne, Ark ansas 

Insurance Commission. 97. March 3, 1969, letter from Mr. Taber to the Insurance Commissioner, 

State of Tennessee. 98. March 27, 1969; letter from Mr. J. B. Perdue, Chief Deputy Insu rance 

Commissioner, Georgia, to Mr. Brooks. 95). April 23, 1969; letter from Mr. Taber to Mr. Tidwell. Chief Examin er of 

the Tennessee Departmen t of Insurance and Banking.

100. June 5, 1969; letter together with biographical sketch from Mr. Brooks 

to Mr. Roy F. Bess, of the Tennessee Depa rtment of Insu ranc e and Banking.

101. August 29, 1969; letter from Mr. Brooks to Mr. Roy F. Bess, of the 

Tennessee Departm ent of Insu rance and Banking.

102. October 1, 1969; letter from Martha Coleman of Touche, Ross & Co. to 

Mr. Hooper, including attachments.

103. November 4, 1969; letter from Mr. Gholson to Mr. Gilliland.

104. November 26. 1969; letter from Mr. Gholson to Mr. Beard.

105. December 18, 1969; letter from Mr. Beard to Mr. Stark.

106. Janu ary 7. 1970; let ter from Mr. Vic Hiryak to Mr. Wooley D. Box, 

Deputy Commissioner, Insurance Commission, Mississippi.

107. Janu ary 24, 1970; letter from Mr. Stark to Mr. Beard, including attach ­

ments.

108. February 9, 1970; letter from Mr. Hoojter to Mr. Brickey.

109. February 10. 1976; letter from Mr. Hooper to Mr. McMahan.

110. Feb rua ry 24, 1970; lett er from Alabama's Superintendent of Insurance to 

Mr. Joe Reid. 111. March 5. 1970; memorandum from Mr. Vic llirynk to Mr. Douglas F. 

Graves. 112. March 12, 1970; let ter and telegram from Mr. Roy F. Bess of the Tennessee Departm ent of Insurance and Banking to Sta nda rd Union.

113. March 25. 1970; memorandum from Mr. W. I). Box, Mississippi Insu rance 

Commission, regarding Stan dard Union.

114. April 14.1970 : letter from Mr. Gholson to Mr. Gilchrist.

115. Jun e 22. 1970; le tte r from Mr. Somers to Mr. Gholson.

116. June 29. 1970 ; lett er from Mr. Gholson to Mr. Somers.

117. July 6. 1970; l etter from Mr. Somers to Mr. McMahan.

118. July 13. 1970; letter from Mr. Gholson to Mr. Somers.

119. July 28. 1970; lett er from Mr. Somers to Mr. Gholson.

120. August 4. 1970: letter from Mr. Hendrix to Mr. Jones.

121. August 5, 1970; letter from T. E. Lott & Co. to Mr. Gholson, including 

attachm ents. 122. August 6. 1970; letter from Mr. Gholson to Mr Hendrix, including attach ­

ments.

123. August 21,1970 ; lette r from Mr. Somers to Mr. Gholson.

124. Septem ber 2. 1970; le tter from Mr. Hendrix to Mr. Somers.

125. September 18. 1970; le tter from Mr. LnGrone to Mr. Gholson.

126. September 28.1970; letter from Mr. Gholson to Mr. LaGrone.

127. October 1. 1970; le tter from Pru dential Insu ranc e Company to Mr. Ilirya k.

128. December 16. 1970; letter from Mr. Gholson to Mr. Jones.

129. December 22. 1970 ; le tte r from Mr. Jones to Mr. Gholson.

130. December 29,1970; lette r from Mr. Gholson to Mr. Beard.
131. March 2, 1971 ; letter from Mr. Gholson to Mr. Beard.

132. March 3, 1971; lette r from Mr. Beard to Mr. Gholson.

133. May 3, 1971; letter from Mr. Roy Thurmond of Touche, Ross & Co., to 

Mr. Jones, including attac hme nts.

134. August 30,1971, le tte r from Mr. Hendrix to Mr. Wilkinson.

135. March 24, 1972; letter from Mr. Jones to Mr. Hendrix.

136. March 31,1972 ; letter from Mr. Hendrix to Mr. Jones.

137. May 17,1973; lette r from Mr. Savage to Mr. Rood.

138. June 29,1973 ; letter from Mr. Savage to Mr. Rood.

139. July 16,1973; lett er from Mr. Rood to Mr. Savage.

140. July 27,1973 ; Memorandum from Mr. C. G. Meese to Mr. Gilchrist.

141. August 7,1973 ; l ett er from Mr. Savage to Mr. Rood.

142. September 28,1973 ; lett er from Mr. Savage to Mr. Rood.

143. December 17,1973 ; le tte r from Mr. Rood to Mr. Savage.

144. Janu ary 9,1974 ; let ter from Mr. R. E. Hall to Mr. R. A. Xygaard.

145. March 6,1974 ; letter from Mr. R. E. Hall to Mr. Savage.

146. March 29, 1974; let ter from Mr. Savage to Mr. Rood.

147. April 15, 1974; letter from Mr. Rood to Mr. Savage.

147A. August 9, 1974 ; le tte r from Mr. Rood to Mr. Savage.

148. October 16, 1974 ; l ett er from Mr. Beard to Mr. Hooper.

Min ute s of Corporate Meetin gs

LITTLE RIVER FARMS

149. Minutes of Stockholders Meeting, Little River Farm s, held April 17, 1969 

at 9:00 a.m.

150. Minutes of Meeting of Board of Directors, Little River Farms, held April 

17,1969 at 10:00 a.m.

151. Minutes of Meeting of Board of Directors, Little River Farm s, held 

October 28,1969.

152. Minutes of Meeting of Board of Directors, Little River Farm s, held 

March 3,1970.

153. Minutes of Special Meeting of Board of Directors, Little River Farms, 

held March 4,1970.

154. Minutes of Special Meeting of Board of Directors, Tattle River Farms, 

held May 29,1970.

STANDARD UNION LIFE INSURANCE COMPANY

155. Minutes of Joint Meeting of Directors and Stockholders of Standard 

Union Life Insurance Company held on November 1,1968.

156. Minutes of Special Meeting of the Board of Directors of Standard Union 

Life I nsurance Company held on August 19. 1969.

157. Minutes of Special Meeting of the Board of Directors of Standard Union 

Life Insurance Company held on October 15.1969.

Reports

158. Best’s Life Insurance Reports for 1966, 1967, 1968 and 1969 in regard 

to S tandard Union Life Insu ranc e Company.

159. Dun and Brads tree t Report on Columbus Canning Company, Inc. dated 

October 14.1958.

160. Supplement to Dun and Bradstreet Report of October 14. 1958 dated 

March 10. 1959.

161. Supplement to prior Dun and Brads tree t Reports dated August 19, 1959.

Memoranda

162. Mr. Hooper’s undated memorandum entitled “Memorandum of James F 

Hooper Regarding Little River Farms.”

I •S a t i o n a I Bank of Little Rock’s memorandum dated Julv 10, 1969. 

entitled Everett II. Brooks D/B/A Consolidated Business Systems.”

164. Memo of Union National Bank of Little Rock, dated Novemlter 3. 1969. 

t o a "^B stin g in Memphis with Eve rett Brooks, his attorney, Jim 

Gilliland. Bob Chowning and Vic Hiryak."
165. Memorandum, Exhibit #3 to Mr. Hooper’s deposition take n in connection 

with the Brooks Bankruptcy proceedings. Undated, but tiled with the Bankruptcy Court of Feb ruary IS, 1971. 166. Mr. Hooper's Memorandum dat ed Jun e 23, 1975, furnished to the Senate 

Public Works Committee.

Agreements

167 Reinsurance Agreement between American Life Assurance Company of

Columbus, Georgia, and Standard Union Life Insu ranc e Company date d December 30, 1968. .

168 Agreement between Little River Farms, Inc., Messrs. McMahan and 

Hoojier, first parties, and Mr. William L. Brickey, second par ty, date d October 

of 1969.

Notes, Guara nties and Releases

16!). Little River Farm s, Inc., note for $248,000 dated July 26, 1969.

170. Chattel Mortgage for $248,000, executed by Little River Farms in favor 

of J.F. Hooper and d ated July 26, 1969.

171. Sealrigh t gu aranty, executed October 7,1969.

172. Undated General Release issued in favo r of NWN Und erw riters by Little 

River Farm s, Inc.

173. Release of Sealright claim, d ated August 13, 1974.

Appraisals

174. Appraisal of Desha County property by Morris Real Estate Company, 

dated November 24, 1969. 175. Appraisal of the Hoojier Dair y Farm land by Mr. Wya tt C. Wilkinson, 

submitted September 16, 1971, in the Brooks Bankruptcy proceedings.

Stock Certificates

176. Little River Farms Stock Certificate No. 45.

177. Little River Farm s Stock Ce rtificate No. 46.

Miscellaneous

178. Ledger Sheet of Union Planter s’ National Bank, dated Jun e 25, 1969.

17!). Mr. Hooper’s July 21, 1969, check for $50,000 to the Bank of Cumming

wri tten on Account No. 0612-0132 01—461-3 at the Fir st National Bank of 

Marietta, Georgia. 180. Check No. 145 for $100,000 from Radcliffe Investment Co. to Jam es F. 

Hooper and Virginia F. Hooper.

181. IRS Form 2768, Application For Extension of Time To File Hooper Dairy 

Farm Partn ers hip Return dated Augu st 14, 1969.
Sta te m e n t of J am es F. H o o p e r, R e : R ep ort of St a ff o f t h e C o m m it tee

on P u blic W o r k s, U n it ed Sta tes S en a te

During the period 1966 to 1969, I was engaged in a partnership with Mr. E. H. 

Brooks of Memphis, Tenn. Since this repo rt is primarily concerned with that relationship, it is imp ortant to understa nd the background and objectives of our 

business together.

As stated in the report, Mr. Brooks was very successful for number of years in 

the acquisition of small farm trac ts. After clearing, grading, consolidating and 

placing these farms into production, he operated or sold at a profit the resulting 

units developed.

His successful track record is evidence by a credit report dated 2/19/68 “Est. 

net worth $3,900,000.00 bank credit, $500,000.00 unsecured, over $1,000,000.00 

secured, owes nothing at this time. Regarded by bank as one of the ir most valued 

customers.” (copy attached)

The financial format Mr. Brooks adopted for his farm development activities 

from standa rd commercial procedure was the use of short term bank loans to 

acquire, consolidate, and improve farm units. Once completed, long term mortgages repaid the short term ‘ construction” loans and the units proceeded with a 

manageable d ebt load.

The Hooper-Brooks dairy partnership was formed in 1965 using the same basic 

format. Our purchase was to consolidate small unprofitable dairies into one large 

central facility along the line of proven dairy development in California. Mr. 

Brooks was to furnish interim sh ort te rm financing to the partnership and was to be 

repaid from long term funds once the project was completed. I was to accum ulate 

the required qua ntity of cattle and develop a feeding program suitable for a 

confinement dairy system.

For many years Mr. Brooks had made available his credit resources to an 

associate in Memphis to help the associate in extensive cotto n buying activities. 

In late August of 1969, his associate committed suicide. This precipitated a large 

unexpected cash demand on Mr. Brooks which he was unable to meet. In October 

of 1969, Mr. Brooks petitioned the court for a reorganization to allow him time to 

absorb this demand. After six or seven months of discussions, investigations and 

appraisals, the petition was denied and in July or August of 1970 he was declared 

bankrupt.

Mr. Brooks was a very energetic and aggressive businessman. During the years 

of our association, he owned and opera ted several large farms scattered over five 

states, one being located on the banks of the Rio Grande in Texas. He continued 

to buy and develop other farm properties on a large scale and engaged in numerous 

real estate construction ventures including a high rise apartme nt building in 

Memphis.

Of his many ventures only two, Little River Farms and Standa rd Union Life 

Insurance Co., had a bearing on our partnership.

In 1969 Mr. Brooks bought an Atla nta firm, L ittle River Inc. The firm owned 

a bottling p lant, delivery equipment and thirty retail “milk jug ” stores stra tegically located throughout Metro-Atlanta. At the time of purchase the Company 

had a sho rt term debt loan of approximately $300,000.00. This was owed primarily 

to unpaid suppliers. Mr. Brooks paid $5,000.00 for the corporate stock and made 

available advances to the company pending long term financing. A shortage of 

loan funds in the banking comm unity and a continuous rise in interest rates in 

1969 delayed commitments for long term financing that had been extended to 

Mr. Brooks. His advances were never adequate for proper management of the 

firm.

In the October petition for reorganization filed w'ith the B ankruptcy Court, Mr. 

Brooks advances to Little River Farms were listed by his attorney as a possible 

asset. During th e period of attem pted reorganization an att em pt was made to sell 

the Company. While the store locations were attractive to several groups int erested in taking up Mr. Brooks note and the company debt, the complications of 

dealing with the Court for approval of any proposal while the company continue 

to operate was too much to overcome. Consequently, the trustee abandoned the 

prop erty as useless to the Estate. It was sold for taxes around 1970.

Mr. Brooks, recognizing a need for consolidation and central management of 

his many business activities, bought Standard Union Life Insurance Co., an 

Alabama chartered company, in 1968 to use as an overall holding company for 

his assets. The home office was to be established in Memphis. Since the bulk of 

his estate was in farm land, the Alabama regulations allowing unlim ited real
331

esta te as adm itted assets was particularly attrac tive to him. In the insurance 

business those assets admitted and approved each year by the insurance commission is the basis, or volume, on which the company may write insurance.

Pur sua nt to an agreement we reached, Mr. Brooks submitted my farm real 

estate along with his in December of 1968. If approved as adm itte d assets. I was 

to be issued stock on values to be appraised. In March of 1969 the Insurance Commissions of Tennessee and Georgia notified the Company th at it had too much 

real esta te and to qualify for a renewal certificate it had to have a better balance 

between liquid and real estate assets. According to our understanding, my land was 

returned to me by the company since it did not qualify. My activ e participation 

in the Company management was contingent upon my becoming a stockholder. 

Since this never occurred, I was never actively involved. The record shows however, th at during the entire period of Brooks ownership, Standa rd Union Life 

Insurance had on deposit with the insurance commissioners over twice as much 

cash as the maximum policyholders exposure.

The list of assets and liabilities filed with the Court by Mr. Brooks’ attorn ey in 

October 1969 shows Stan dard Union was foreclosed by the Union Nation al Bank of 

Little Rock. Mr. Brooks pledged the stock of the company to the bank in connection with a large loan listed under his liabilities. Since the b ank was a secured 

creditor the Company became their prop erty and was not involved in the 

bankruptcy .

The staff report dwells at length on app are nt inconsistencies between Touche 

Ross & Co. work papers and partnership accounting and my Petition and Accounting to the Court. Actually, these are two different reports. Touche Ross 

& Co.’s function and responsibility was to review partnership operations and 

determ ine the tax impact. Their posting to capital accounts was based on their 

impressions (See Stark letter) of the relations between the partners. My report, 

taken from the bank ledger sheets, shows all funds advances by Brooks to the 

partnership and all withdrawals by each of the partners. It also reflects the actual 

agreements between the two partners as to their correct relationship as evidenced 

by a memo of understanding signed by both partners.

While Touche Ross & Co. treats the partner relationship differently from the 

intent of the partners, the two reports are not m utually exclusive. No funds were 

unreported or unaccounted for and IRS rules were complied with. Corrections 

in the capital accounts were u nim portant to the partners since the intent was to 

merge and a dju st these accounts at the tim e of pe rmanent financing. Touche Ross 

& Co. was hired by the Court to aud it all of Mr. Brooks affairs and was the expert 

witness at the hearing on accountings for the Hooper-Brooks partnership. The 

Court after full examination accepted my re port and a mutually agreeable dissolution of the partnership was reached.

Everything I reported was consistent with a reasonable equity position beginning with the 1965 balance sheet, written agreem ent between partners and Mr. 

Brooks methods of financing over the prior 10 to 15 year period.

While the chaos of the Brooks bankruptcy and the many re ports and accountings 

of various authorities contribute to the complexity of the staff report and while 

2 there is nothing illegal or immoral in these records, it is im por tant to me to point 

out th at these were valid and serious business projects and had they not been 

halted in mid-stream, I remain convinced that they would be in successful operation today.

After reviewing the files and tran scripts of this trau matic period, I see no thing 

I could have or ought to have done to prevent the events that occurred. If my 

judg men t is at fault in not anticipating the suicide then my company includes 

many of the majo r bankers and insurance companies in the Mid-South. I coopera ted with all authorities in the various proceedings, was n ot evasive and did 

not dodge my responsibilities. Whenever the facts were presented in the proper 

manner and forum, the rulings consistently confirmed my position.

With reference to the selected newspaper articles, I am pleased to report th at 

the three major Tennessee newspapers editorially approved of my qualifications 

and applauded my nominatoin by the President (Enclosures)

On the basis th at several conclusions and comments by this paper th at are in 

error have a bearing on evalu ation of my background, I have atta che d detailed 

corrections of the most pertinent points.

1. “ Can find no Air Force records of work on Protective headgear” . See attache d 

(a) others from General Welch, Train ing Command, detaching me to Wright 

Field Research and Development, (b) Military requirements for my project, (c) 

letter of commendation for result achieved.
332

2. “Financially troubled Insurance Co.” The attorn ey of the Insurance Company points out that a t no time was the total liability for policyholders potential 

claims anywhere near the cash reserves on deposit with the Alabama Insurance 

Commission, the domicile State of the Corporation. The only “trouble” was an 

excess of assets in real estate. While Alabama rules permitted unlimited real 

estate as admitted assets, the State of Tennessee admits only a small percentage 

of such assets. When instructed by the Tennessee Commission to reduce the real 

esta te holdings in March of 1969, Mr. Brooks made an effort to market some of 

his farm properties, returned my land to me and continued to report these efforts 

through August of 1969 to the Tennessee Commission. At no time was the financial 

condition such as to threate n the security of the policyholders.

3. “Check swapping” . This is referring to the flow’ of checks detailed in my 

report to Mr. Brooks bankruptcy showing Mr. Brooks allocations of his resources. 

If his project “A” had surplus funds and his project “ B” had a financial need, 

he would transfer funds from A to B. The main purpose of my report was to show 

year by year the net funds remaining in the partnership acco unt after deposits 

and withdrawals which constituted th e obligation to Mr. Brooks from the partn ership and wras the basis on which Mr. Brooks’ advances were to be returned out of 

perm anent financing.

4. “Failed Pet Food Man ufac turer”. I sold my interests in Columbus Canning 

Co., Inc. in early 1958. Midway in 1959 the new owners suffered severe reversals 

in one of the businesses, primarily a Miami hotel, and shu t down Columbus 

Canning Co. in August of 1959, See attached. All of the creditors asserted their 

claims against the new owners with two exceptions and these claims were for sums 

owed by the Company prior to the sale of 1958. In one case, for lack of records, 

we settled the claim and in the other we proved the claim invalid in a cou rt proceeding. We sold a going business and the failure was clearly the responsibility of 

the new owners and beyond tha t, was not the fault of the p roduct or facilities we 

sold.

5. “ Would uphold Chairman Red Wagner if confirmed” . This sta tem ent belongs 

exclusively to the reporter. In spite of my denials he came to me and left expressing 

his conviction that this would be my position. Clearly, if, on a three man board, 

two are always together, you have in effect a one man board. What his concern 

was a bout this matter, I was unable to determine.

To give some perspective it is interestin g to note tha t, in 1972, during the confirmation hearing on Mr. Jenkins to the TV A Board, Senator Cooper stated as 

follows: “apparently every time a new member of the board is nominated there is 

always a great controversy over it as I have seen on this comm ittee . . .

It is also interesting to note that while Senator Brock and Senator Baker 

endorsed Mr. Jenkins qualifications and track record in administration and 

environmental concerns the same newspaper and groups atta cking me were 

emphatic in their opposition to Mr. Jenkins. “In our opinion he has done a far 

from adequate job as Commissioner of Conservation. He has demonstrated his 

lack of initiative and leadership . . . .”

. . Based on our experience with Mr. Jenkins we are certain he cares little 

for the common people of this area.” “. . . He had not done his job . . . lobbied 

vigorously against any strengthening of strip laws . . . Does not represent the 

needs of the public he serves but works for a small powerful group of moneyed 

men . . . He will use the office as a stepping stone in his own political career . . . 

Jenkins is not worthy of the public tru st of a TVA directorship” .

In spite of these dire predictions, Mr. Jenkins has done an excellent job during 

a period th at has seen a severe dislocation of energy economics. Maybe these 

remarks point up what Mr. McBride, the retiring board member, had in mind 

when he suggested the advantages of having a nominee from out of State. (See 

atta che d, p. 337.)

From what I have been able to determine, the environmental groups and this 

one newspaper seem most concerned over the abuses in strip mining areas, particu larly about acid wastes into water supplies. Since TVA purchases approximately 5 percent of total coal production, it must, along with the purchases of the 

other 95 percent, be concerned with proper production method. However to 

concentrate on this problem is to ignore the much larger impact of, for example, 

agricultural nitrogen on the water supply all over the United States. Nitrogen 

is required in practically all food and fibre production. In its present fast release 

form it is of growing concern to the Environmental Protection Agency. Since 

90 percent of all fertilizer is produced under TVA formulas and developments and 

accounts for of the tota l food and fibre produced in this country, it is vital
333

th at TVA be given the su pport to place in the hands of the farmer a slow release 

form of nitrogen to stop this danger before it becomes more widespread. In the 

1972 hearings Senators Cooper, Muskie and Brock voiced concern th at TVA 

re-emphasize the original objectives, i.e., water, land and agriculture and not be 

exclusively a power company. I share this concern.

Touche Ross & Co., 

Memphis, Tenn., November IS, 1976.

Mr. J ames F. Hooper,

800 Eighty Street North,

Columbus, M iss.

Dear Mr. Hoop er: P ursuan t to your request we are enclosing a copy of a memorandum which I dictated to the file on May 4, 1967 from notes which I had prepared during th e meeting at which the three of us discussed the p reparation of the 

1966 tax retu rn of Hooper Dairy Farm.

You m ust keep in mind t ha t this meeting was our first meeting and th at we had 

not analized any of the financial transactions for the year. This memorandum, of 

course, represented my impressions of the items discussed and was prepared for 

the purpose of guiding us in the prep aration of the first tax return.

Also enclosed are th e five pages of workpapers which you furnished to me at t ha t 

meeting and which are referred to in the memo.

Sincerely,

Don F. Stark.

Enclosures.

December 3, 1975.

Mr. J ames F. Hooper,

800 North 8th Street,

Columbus, Miss.

Dear Mr. Hooper: You have asked t ha t we clarify certain points with respect 

to the services which we rendered to Hooper Dairy Farm for the years 1968 and 

1969. As you know, we were engaged to prepare the partnership’s tax returns from 

data furnished to us and did not in any way perform an aud it or otherwise independently verify the transactions submitted to us.

You will also recall t ha t you and I had very few direct dealings after our initial 

meeting on May 2, 1967. Accordingly the following comments are for the most 

part made as a result of my review of workpapers prepared by others and from 

my recollection of events that occurred six or more years ago.

With respect to the year 1968, our records indicate that the first con tact 

occurred on May 2, 1969, when Martha Coleman wrote to you requesting information concerning 1968 transactions and that by May 20th part of the inform ation 

had been received from you. A further note of May 27, 1969 indicates th at the 

bank statements were mailed to us on th at date. There is no indication in the 

workpapers th at you ever personally m et with any represen tative of Touche Ross 

to go over in detail any of the transactions for the year 1968. My best recollection 

is that all specific questions raised by us were handled either by correspondence 

and/or telephone. The type of questions handled in this manner would have 

been the accounting classification to be accorded to specific checks and/or deposits 

rather than any overall discussions of the results of operations for the year. The 

tax retu rn itself was mailed to Mr. Brooks with a copy to you on/or about September 30, 1969. An extension of time within which to file the return had been 

obtained to October 15, 1969.

With respect to 1969 operations, the initial classification of receipts and disbursements for the months of Ja nuary through August 19, 1969 was probably performed during August and September of 1969, and was limited to a review of bank 

stateme nts, deposits slips and eancelled checks. Since we did not ultim ately prepare 

the tax retu rn for this year our classifications were not reviewed in detail with 

either you or Mr. Brooks. For example, receipts and disbursements with respe ct to 

Little River Farms, Stan dard Union Life Insurance, Dabney Crum p and First 

National Bank of M arietta, Georgia were classified separately because these were 

the indicated source of certain deposits and or/payee of certain checks. At no time 

did we receive or examine any underlying documents which explained any of these 

transactions. Thus the use of the terms “accounts receivable” , “accounts payable ” 

and “notes payable ” were our method of segregating these tran sactions by source 

and were not m eant to indicate an acknowledged relationship. In fact, a confirmation request sent to First National Bank of Marietta, Georgia was returne d to us
indica ting th at neither Everett H. Brooks nor J. F. Hooper were directly liable to 

them as of July 31, 1969. Unfortunately , we have not been able to locate the b ank’s 

response at this time. This confirmation was, I believe, sent at the requ est of Roy 

Hendrix, Trustee in Bankruptcy, and may be in his possession.

We t rust that this is responsive to your request, but if you have any further 

questions, please let us hear from you.

Sincerely,

Don F. Stark.

Williamson and T aber, 

Greenville, Ala., November 24, 1976.

Re: Standa rd Union Life Insurance Co.

Mr. J ames F. Hooper,

c/o Burgin, Gholson, Hicks & Nichols, Attorneys at Law,

Columbus, Miss.

Dear Jim: I have had an opportunity to review the portion of the report as 

perta ins to Standard Union and am returning it herewith along with my comments.

I am of the opinion that the introduction itself creates a misleading form at as 

to th at which follows. The writers editorialize: “By that time, not only had its 

business and assets been drained by prior owners but its very author ity to engage 

in the insurance business was seriously in jeopardy.” The language “been drained 

by prior owners” would infer wrongdoing on the part of previous owners.

Standard Union Life Insurance Company was a viable insurance company 

domiciled in Montgomery, Alabama. Because of the operating losses incurred in 

the immediate past, the shareholders of Standard Union deemed it in that company’s best interest to enter into a corporate reorganization with Security National Life Insurance Company (now Firs t National Life Insurance Company). 

Because of certain litigation then pending concerning a small block of Standard 

Union’s business, the vehicle of reinsurance was used to accomplish this reorganization. I am enclosing herewith copy of the proxy statem ent th at was used in 

conjunction with the Annual Meeting of Standard Union shareholders seeking 

approval of th e Reinsurance Agreement.

You will note, from the proxy statement, that it provides, should the litigation 

concerning the “President’s Special” policies be resolved that a total reinsurance 

would be accomplished. This, in fact, did occur and Security Natio nal was able 

to reinsure 100% of Standa rd Union’s business.

This was a negotiated agreement done a t arm’s length with full value being paid 

for business and assets. There was nothing involved in this transaction that 

jeopardized Standard Union in any manner.

The introduction also refers to the reinsurance of Mid-South and Trustee Life 

business. I think it imp ortant th at both of these Reinsurance Agreements were 

approved by the appropriate regulatory authority which was, in both instances, the 

Insurance Department of the .State of Alabama. I am enclosing herewith copy of 

lett er from Superintendent of Insurance, State of Alabama, dated February 3, 

1969, wherein he states th at the Reinsurance Agreement re Mid-South which 

came through reinsurance with American Family Life was in proper order and I 

also enclose copy of Reinsurance Agreement with Trustee which was approved 

by the Superintenden t of Insurance, State of Alabama, on April 29, 1969.

There is some misunderstanding concerning my statements in regard to the 

financial stateme nts filed with the States of Mississippi, Tennessee, Alabama and 

Georgia reflecting year end 1968 financial condition of Stan dard Union Life 

Insurance Company. As I recall my telephone conversation with Ms. Wilcox and 

Mr. Herod, I stated that I prepared December 31, 1968, Convention Statements 

for Stan dard Union Life Insurance Company. All of these statements were 

identical and were mailed from this office on March 3, 1969. Any sta tements that 

would have been changed after they left this office would have been the statem ents 

filed with the State of Tennessee which was not done by me. I am still of the 

opinion th at Mr. Brooks requested permission to redo the Tennessee statement 

in an effort to have Standard Union qualified to do business in th at state.

In regard to the financial s tatem ents, I am enclosing herewith the following:

1. Copy of a letter from me to Evere tt II. Brooks da ted March 1, 1969, which 

reflects enclosure to him of four copies of Annual Statements for execution by him
335

as Preside nt and his wife, Betty, as Secretary of Standard Union. There is nothing 

in this letter to indicate th at there is any difference in these Annual Stateme nts.

I am absolutely positive that the statements th at accompanied my March 1, 

1969, state men ts were identical and are those statem ents as shown in th e Insurance 

Departments of Georgia and Alabama.

2. Copies of letters of March 3, 1969, to the Departm ent of Insurance, State of 

Tennessee, Departm ent of Insurance, State of Mississippi, Dep artm ent of Insurance, State of Georgia, and Departm ent of Insurance, State of Alabama. These 

letters are su bstantially identical and all show tha t Annual Statement of Standa rd 

Union reflected the condition as of December 31, 1968, were enclosed. These sta tements were identical and did not bear your signature thereon. I have personal 

knowledge of the fact that these statements were not shown to you nor were the 

figures contained therein discussed with you at the time of their preparation nor 

dissemination to the various insurance departments.

3. Copy of lett er from me to Eve rett II . Brooks, date d March 5, 1969. You will 

note t ha t the last para graph of the first page thereof again shows th at I forwarded 

the Annual Statements to the various departm ents. Again, I call a ttention to the 

fact that there is nothing in this letter nor in my recollection th at would indicate 

there was any difference in the figures reflected thereon.

Page 23 of the report states that your signature appears on a Standa rd Union 

Life Insurance Company balance sheet th at was submitted to the Sta te of Tennessee. As stated above, your signature did n ot appear on any balance sheets or other 

financial statements going from this office to the Insurance Dep artm ent of Tennessee. If in fact, you did sign such a s tate ment, I have nothing in my file nor recollection concerning tha t.

On Page 24, the report states th at in May or June of 1969, you and Mr. Brooks 

were aware th at the authority of Stan dard Union to tran sac t business in any state 

other than Alabama was seriously in jeopardy and was dependent largely upon 

increased liquidity of assets. I, of course, have no way of knowing whether or not 

you were aware of the liquidity problems with Standard Union in th e s tates other 

than Alabama. However, I feel that the language “eith er suspended from doing 

business or have his license revoked in four of the five states in which it had 

previously operate d” is misleading. Footnote 32 is correct wherein it states th a t 

the licenses of Stan dard Union in various states were not renewed. All sta te 

insurance departm ents are asked each year to renew licenses of insurance companies theretofore doing business in the states. It is no t a question of revocation or 

suspension b ut is merely a question as to whether or not the company is in financial 

state to have such a renewal. Standard Union in as far as these other state s were 

concerned, was not in a position to have its license renewed.

However, it was qualified to do business within the State of Alabama at all 

times pertine nt hereto. In fact, Alabama never undertook any action against 

Standard Union Life Insurance Company because of its asset portfolio. Alabama 

took action only when it came to their attention th at Mr. Brooks had pledged 

Standard Union stock as collateral on a bank loan and th at the Bank had to 

institute foreclosure proceedings. I am enclosing herewith copy of a letter dated 

October 1, 1969, from the Superintendent of Insurance of the Sta te of Alabama 

to that end.

Insofar as the memorandum of Ms. Wilcox and Mr. Herod concerning the ir 

telephone interview with me of October 2, 1975, I find it to be basically correct. 

However, there is obviously some misunderstanding as to my statem ent concerning what annual stateme nts of Standard Union of December 31, 1968, were 

changed, if any. Again, the stateme nts dissem inated from this office were identical. 

The stateme nts that were reviewed in Georgia, Alabama and Mississippi are the 

figures tha t were on the Tennessee statem ent at the time it was originally forwarded to the Insurance Department, Sta te of Tennessee. Any changes in th at 

statement would have been subsequent to handling by this office and would have 

been done by Mr. Brooks through his actu arial associates in Nashville, Tennessee, 

and, I am sure, with approval from the S tate of Tennessee as t o refiling.

If you have any other questions in this regard, please call me.

Yours truly,

Enclosure.

J ohn A. Taber.
State o f Ala ba ma, D epa r tm en t o f I n su r a n c e,

Montgomery, Ala., February 3, 1969.

Ite: Reinsurance Agreement, Stan dard Union Life Insurance Co. (Alabama), 

American Family Life Assurance Co. of Columbus, Ga.

Mr. J ohn A. T a b er,

Williamson and Taber,

Attorneys at Law,

Greenville, Ala.

D ea r M r . T a b e r : The above Reinsurance Agreement has been received in this 

office and appears to be in proper order. Had this submission been made in duplicate, the duplicate copy would have been stamped “Filed” and returned to you 

but inasmuch as only one copy was received, we will retain it for our file.

Very truly yours,

R. F rank U sse ry, 

Superintendent of Insurance.

Arm y Air F orces,

H ea d q u a r ter s, Air T ec h n ic al S er v ic e C om man d,

October 3, 1946. Subject: Letter of Commendation.

To: Captain James F. Hooper, 0-789997.

1. On the occasion of your return to inactive duty I wish to express my appreciation for your individual effort and contribution toward our common goal, 

the successful and victorious conclusion of the war, and to commend you for the 

conscientious and efficient manner in which you have performed the duty assigned 

you in the Personal Equipment Laboratory of the Engineering Division.

2. Your a ttention to detail, perseverance and devotion to duty has co ntributed 

in a great measure to the prestige of this Division and has assisted materially in 

the accomplishment of the final victory.

3. It is desired to particularly commend you for your outstanding effort in the 

development of Suit; Protective, Forest Landing, and Helmet; Flying, For High 

Speed Aircraft, Protective.

4. Your recognition of the problems involved, and your superior ability in 

solving these problems has resulted in an accomplishment of which I am justifiably proud.

5. The undersigned desires to convey to you his very best wishes for a prosperous 

and happy future.

M il lard L. I I a sk in ,

Colonel, Air Corps.

Arm y Air F o rces,

H ea d q u a r ter s, Air T ec h n ic a l S er v ic e C om man d,

Dayton, Ohio, May 8, 1945. Serial No.: TI-2021, Addendum No. 5.

Subject: Protective Helmet for Fighter Aircraft Pilots.

To: Engineering Division.

1. Problem Presented: (a) To develop a protective helmet for fighter aircraft 

pilots.

2. Authority: (o) CG, AAF. By 1st Indorsement dated 2 May 45, subject as 

above, received from Chief, Materiel Division, AC/AS, M&S.

3. Action desired:

(а) That the Engineering Division develop the subject helmet in accordance 

with the attac hed Statem ent of Military Requirements.

(1) Samples of the subject helmets are to be forwarded to the AAF Board for 

evalu ation for service use.

(2) Samples of the helmets are to be sent to the 412th Fighter Group for 

inspection at the same time they a re sent to the Army Air Forces Board.

(б) Status report on the subject project is to be forw’arded to AC/AS, M&S, 

by 1 June 1945. This report should include an estimate of when sample articles 

can be sent to th e AAF Board.

(c) This project carries a 1-C priority.

By command of Major General MEYERS:

T. A. Sims, 

Colonel, A ir Corps. Inc .: Statement of Mil. Req. d td April 23,1945.
337

[From the Commercial Appeal, Monday, Mar. 31, 1975]

Top TV A Choice

The White House personnel office has recommended that President Ford appoint 

James F. Hooper of Columbus, Miss., to be the new member of the Tennessee 

Valley A utho rity board of directors.

It is a good choice. Hooper’s experience in agriculture toge ther with his background in water resources managem ent and his long efforts to establish the 

Tennessee-Tombigbee Waterway Development Auth ority all capped by his 

training as an industrial engineer surely make him a highly qualified person for 

this post.

But if th at were not enough, his philosophy in regard to TV A certainly would 

make the difference. The Mid-South, he says, is "a t an emerging period” in its 

development and the future success of the TVA is essential to th at emergence.

Th at is a progressive attitu de which combined with his openmindedness abo ut 

how TVA develops and expands is what the region and the nation need at this 

time.

Butler, Snow, O’Mara, Stevens & Cannada,

Jackson, Miss., April 25, 1975.

Mr. James F. Hooper,

800 North 8th Street,

Columbus, Miss.

Dear Jim: You have requested th at I give you the history of my contacts 

with Rhodes Optical Company, Atlanta, Georgia, in connection with my efforts 

to obtain capital investment in Columbus Canning Company in and about the 

year 1958. My b est recollection of the events leading up to and having to do with 

Rhodes Investm ent in Columbus Canning Company is as follows:

Due to the rapid growth of the business and in order to assure its continued 

growth and expansion, it was decided th at additional capital should be invested. 

You asked t ha t I, as the Company attorn ey, assume th e responsibility for locating 

such capital. I contacted several different sources and finally made contact with 

Rhodes Optical Company of Atlanta, Georgia, through a businessman who 

enjoyed a good reputation in the Georgia political and business communities. I 

undertook a very intensive investigation of Rhodes and its principals, including 

going to Georgia and Florida, checking with individuals there such as bank 

presidents, looking at other businesses in which Rhodes had invested and doing 

everything within my ability to assure myself that Rhodes would be a desirable 

type investor. My investigation led me to the definite conclusion t ha t it would be 

and I so recommended to you.

Based on my recommendation, Columbus Canning entered into certain contractual relationships with Rhodes. While I do not remember the exact term s of 

the arrangements, I do recall th at one Ray Goodman, a principal of Rhodes, 

assumed almost complete control of the affairs of Columbus Canning and th at 

your services were retaine d only to the e xten t desired by Rhodes and Goodman. 

I recall being present in the offices of Columbus Canning on several occasions 

during the early stages of this relationship when Goodman would call past and 

prospective new suppliers of raw materials and assure them that Rhodes was to 

guarantee the accounts. Apparently these suppliers must have made credit checks 

and received the same type inform ation that I did because they immediately 

started shipping materials in unlimited quan tities.

July 1, 1959, I moved to Jackson, Mississippi, from Columbus in order to 

accept a senior partnership in the above firm. Prior to my departure, as a pa rt 

of closing out my Columbus practice, I had to advise you to obtain other counsel 

so I am not familiar with the events tha t occurred in connection with th e op eration 

of the business afte r mid-1959 and for a short time before that. However, I do 

remember learning that vou, Pratt Thomas and Otis Garard, they being th e other 

principals in Columbus Canning, were shocked to learn some time abo ut middle or 

late 1959 tha t the accounts of the business were not being paid by Goodman and 

th at he had apparen tly diverted the proceeds of the sales of the com pany’s 

products.

In summary, the steps taken by you in entrusting to me as the company 

attorney the responsibility of locating new capital and in relying on my advice 

were in keeping with accepted and usual business practices. You exercised what I 

considered excellent business judgment, with every step based on the best info rmation available to you. I made what I consider a very thorough investigation and
received favorable reports on Rhodes. Many suppliers and businesses with 

investigative facilities much more complete and far reaching tha n mine reached 

the same conclusion as indicated by the fact that tremendous amounts of goods 

were shipped to Columbus Canning Company on the strength of Rhodes’ credit 

reputation. The business was appa rently growing and prospering under the control 

of Rhodes and its principals for a considerable period of time after the takeover 

and there was certainly nothing to indicate the events or conditions that were to 

lead to the downfall of the business. Certainly these events and conditions were 

beyond your control.

If I can be of any further assistance, please do not hesitate to call on me. 

Very truly yours,

Roger C. Landrum.

(From the Chattanooga Times, Monday, June 16, 1975]

A Choice for TV A

Early reports indicate President Ford scored well on his nomination of James F. 

Hooper, a Columbus, Miss., businessman, for a nine-year term on the TV A board 

of directors. If confirmed by the Senate, Mr. Hooper will succeed Don McBride, 

who did not seek reappointment.

Associates who know him well describe Mr. Hooper as a levelheaded, strongminded businessman and industrial engineer who has long been interested in 

problems of land conservation and waterways development. lie is a former member 

of the Mississippi Rivers and Harbors Association, and an early participan t in the 

Tombigbee River Water Management District.

Admittedly without expertise in the field of electrical energy generation and 

distribution Mr. Hooper is well qualified by experience to deal with many of the 

TVA’s oth er resource utilization programs such as fertilizer research, tree farming 

and similar projects. And, of course, the agency is fully as concerned with these 

as it is with its power program, althou gh the latter gets more than its share of 

public atten tion.

His Mississippi residence, while not essential to his usefulness as a TVA director, 

is a plus since it gives him a ready-made knowledge of regional problems ana 

potentials.

Friends of the TVA, as well as of Mr. Hooper, will aw ait with interest a fuller 

development of his viewpoints during confirmation hearings. We foresee little 

opposition.

[From the Nashville Banner, June 11, 1975]

A Good Selection

President Ford ’s decision to nominate James F. Hooper of Columbus, Miss., 

to be a new director of the Tennessee Valley Authority is fitting for the challenges 

facing the TVA region.

Mr. Hooper’s background is broad enough to bring close-to-the-ground experience to the TVA board. A businessman, a farmer, a civic leader, a political leader, 

Mr. Hooper has demonstrated through personal involvement an appreciation for 

the region’s development.

TVA’s role in the growth of this region is well-documented. Its contribution 

will be no less in the coming decade when the availability of energy supplies 

will shape the region’s destiny, as well as the country’s.

In this trying period ahead, the insights of Mr. Hooper should serve the TVA 

board of directors well.

As one of the early leaders in the development of the Tennessee-Tombigbee 

Waterway, Mr. Hooper has shown a healthy regard for both growth and environmental concerns.

In doing so, he has not emerged as a narrow-minded representa tive of any 

special-interest group. He is not a mouthpiece for private power. Nor is he an 

ecological zealot.

Avoiding the extremes, Mr. Hooper has shown himself to be a level headed 

citizen whose ideas seem to parallel closely those of the people served by TVA.

He is a good choice. His nomination deserves prompt Senate confirmation.
339

(From the Sun-Democrat, Paducah, Ky„ Friday, Jan. 31, 1975]

R et ir in g TVA D ir ector S ays S ucces so r S ho uld B e O u tsid e r

Knoxville, Tenn. (AP)—Donald O. McBride says he feels his successor on the 

Tennessee Valley Authority board of directors should be a “nonresident of the 

Tennessee Valley area .”

And McBride says he thinks it would be helpful if the new directo r is versed in 

natural resource development.

McBride’s nine-year term on the three-member TVA board expires May 18. He 

is 71 and plans to retire in Knoxville. Other members of the board are chairman 

Aubrey J. Wagner and William L. Jenkins.

President Ford will nominate McBride’s successor, who must be confirmed by 

the Senate.

One reason McBride believes his successor should come from outside the valley 

is th at an outsider “could serve without prejudice toward any particular valley 

section.

“ I’m no t saying the next man would be prejudiced, bu t it would be less susceptible to pressure from valley areas.”

McBride is originally from Oklahoma and he said he felt “I ’ve had an advantage 

because of th at .” He was appointed to the TVA board in 1966 by the late President 

Lyndon Johnson.

His successor, McBride said in an interview, should possess “a broad experience 

in land, woods and water. And it wouldn’t hurt if he knew something abo ut nuclear 

energy.”

The TVA power system is now concentrating on nuclear electric facilities.

McBride said TVA m ust continue to work toward raising per cap ita income in 

the Tennessee Valley.

“ We must raise per capita income up to and beyond the national average,” he 

declared. “In 1933 the valley per capita income was 45 per cent of the national 

average. Now it’s 76 per cent.”

The authority was created by Congress in May 1933.

M erch a nts & F arm er s B ank,

Columbus, Miss., July 3, 1975.

Mr. J ames F. Hooper,

800 Eight Street N.,

Columbus, Miss.

Dear Jim, A friend in Nashville has sent me clippings from the Na t Caldwell 

stories in the Nashville Tennessean regarding your nomination for the TVA 

Directorship, and I hasten to tell you that I am astounded that Na t would turn 

out such unfactua l diatribe.

When he was in Columbus to dig up the facts in the matter, Na t told me t ha t 

he could find nothing whatsoever against your character.

He said that, in carrying out his assignment from the Tennessean to do a 

“hatchet job ” on you, he expected to resort to ridicule.

He said he intended to create such a public reaction th at your nomination 

should be laughed off.

I have known Nat a long time. When I was with the Internatio nal News Service, 

he and I covered a number of major southern political stories. I do not, then, 

believe for a minute t ha t Nat Caldwell would misrepresent the matt er as he saw i t.

As you know, I was in good faith when I suggested to you th at you meet with 

Na t and th at you lay the cards on the table. I felt confident tha t, notwithsta nding 

the pressure his editors undoubtedly would bring upon him to make you appear 

less than honest, he could be expected to stick at least to the basic facts.

While I knew that the Tennessean, ever since this newspaper was handed over 

to the late publisher Silliman Evans by FD R through the RFC and Jesse Jones, 

had been an ultra-liberal publication, I think they have gone beyond the pale of 

good reporting when they forced Na t to use their news columns to fulfill editoria l 

objectives. The stories t ha t Nat has concocted, in his opinion perhaps poke ridicule 

your way, but they are plainly ridiculous to anyone who knows you.
340

All this adverse nonsense, confined exclusively as far as I can tell to the columns 

of the Tennessean, is not likely to damage your image seriously anywhere that 

counts. So, be of cheer!

With best regards, I am,

Sincerely,

John R. Henry,

President.

Columbus, Miss., January 22, 1976. Mr. James F. Hooper,

Columbus, Miss.

Dear Jim: When I read the article about you written by Na t Caldwell in the 

June 22nd issue of The Nashville Tennesseean (which I had not seen before now), 

I was astounded at the statem ent he made quoting me as saying that I told him I 

was sure that you would support Red Wagner all the way, etc., (this is not verbatim .) I made no such statem ent an d as you know, I would have had no basis to 

make it. I do not recall that you ever told me tha t you would supp ort Red Wagner 

or Bill Jenkins or any other person. The statement is a deliberate newspaper 

fabrication.

I do recall, Jim, that during our conversation while he was here in Columbus, I 

asked him why he was asking all those questions a bout you and trying to dig up 

as many derogatory things abo ut you as he could. I asked him why he did n’t 

forget it and tr y to find some of the good things he could find. His answer to me was 

that he was sent down here by his editor and publisher to dig up all of the things 

he could find on you and he said that, “ You know, Louis, when vour editor and 

publisher sends you down to do a job, you do it. I am working for The Tennesseean 

and I’ve got to do w hat they tell me to do.”

Jim, I can assure you that I never made such a state ment to Na t or to any one 

else. I would have had no basis for such a sta tement because I am convinced as you 

are th at you are your own man and that you are going to vote and make decisions 

on what your own judgment dictates and not what anyone else tells you to do.

You can assure anyone th at questions that statement att rib ute d to me th at it is 

complete fabrication.

Best regards,

x. Louis Wise.

o