Evening star., 1934-06-22
Company to Continue Vir-
ginia Project Despite
High Court Ruling.
ACTION CHALLENGES
FEDERAL BOARD ORDER
Electric Concern Refuses to Seek
Major License Under Water
Legislation.
BY the Associated Press.

~ ehe AoooCldlco FTeSs.
In new challenge to the Govern
ment, the Appalachian Electric Power
Co. has served notice on the Federal
Power Commission that it was going
ahead with the construction of a dam
on the New River, in Virginia, In
defiance Of the commissions order
compelling it to seek a major license.
it was made known today.
The companys move was made
despite the loss of its suit in the Fed
eral Courts to test the Power Com
missions authority.
In this case Huston Thompson
represented the Government as spe-
cial counsel, with Newton D. Baker
appearing for the power corporation.
New Test Foreseen.
A new test of the constitutionality
of the Federal water power act was
foreshadowed by the company's de-
NAo4O1l W SO Will lIlC Odul III
violation of the commissions order.
The famous test case was instigated
several years ago when the Power
Commission issued an order prohibit
ing construction Of the dam without
permit under the water power act.
The company sued George Otis
Smith, then chairman of the COM
mission, and other members of the
body, as individuals, saying they had
entered an order beyond their powers.
The case went through the various
courts to the Supreme Court, which
refused to consider the company's ap-
peal from q decision of the Circuit
Court. holding it had no jurisdiction
in the case.
Claims Improper Procedure.
The contention of the Appalachian
firm now is that the case was not heard
on its merits previously, when its
challenge was directed at the juris-
diction of the Federal regulatory body.
Under the law, the commission and
Attorney General now have the right
to go into court and seek to halt con-
struction of the project, but it was
not certain today just what move
would be made
The Appalachian case now has been
hanging fire for nine years, and has
tied up a development estimated to
cost $l1 100000 The commission has
insisted that the company acquire q
major license, which would impose
Federal regulation over its financial
structure. and give the Government
or State the right to recapture of the
property in so years The company
has disputed the right of the COM
mission to require this, holding that
ew River is non-navigable. and that
therefore Federal regulation does not
apply. 1t has been willing to give a
guarantee against interference with
navigation in tributaries, but to go no
further.
Another Case Up.
The decision of the Appalachian to
go ahead with the project puts it in
the same category with the Electro
Metallurgical Co., a subsidiary of
Union Carbide g. Carbon. which the
NO4AlAAAoo4OAA INV IL SCCAlA1S " kCCP
from building a dam for a $1,000, 900
hydroelectric project on the New
River at Hawks Nest in West Vir-
ginia. The Electro o-Metallurgical mas
denied the right of the commission
to come in under any circumstances.
and the commission recently went into
Federal Court in West Virginia and
asked for restraining order to halt
construction operations. pending is
suance of a major license.
Paradoxically, in appearing now in
behalf of Appalachian, former Secre-
tary Of War Baker is fighting against
operation of a law which he helped
frame while in his capacity at the
head of the War Department he held
membership in the old Power Com
mission composed of cabinet officers.