Evening star., 1934-12-11
NORR|SSAYST.V.A.
READY TO COMPETE.
Senator Declares Rate War
May Be Brought On by
StockhoIder Suits.
BY DAVID LAWRENCE.

of electric light and power companies
throughout the country are interested
in the effect of governmental policy
on the future of their investments,
the writer today interviewed Senator
George w. Norris of Nebraska, father
of the Federal policy represented by
the Tennessee Valley Authority.
Sitting in his room on the top floor
of the Senate Office Building, he an
swered questions unhesitatingly.
THE investors in public utility Sc
curities," I said, have been restive
lately. What can be said of their
future?"
well, If we take what is happen
ing in the Tennessee Valley as an ex-
ample" he replied, "the T. v. A. Of
fered a fair price for the properties
1t agreed to purchase, as at Knoxville,
and I feel that the price was what the
property was really worth after de-
ducting all the water and write-ups.
Would Make Purchases.
"I am not in favor of ruinous COM
petition between municipalities and
private power companies and think
that wherever possible the private
company's facilities should be pur-
chased at their real value. This
should protect those investors who
are entitled to protection. I do not
believe public funds should be used
to pay off any investors who are the
victims Of miSmanagement by pri-
vate companies"
What of the litigation that has
developed in the Tennessee Valley
cases?"
The T. " A made fair contracts
and the companies agreed to sell. But
now several stockholders have OBJ
tained injunctions. I suspect that
some of these companies are really
back Of this litigation, and if they
are, they are guilty of bad faith. 1t
will take long time for these suits
to be adjudicated, especially if they
are carried to the Supreme Court OF
the United States. Meanwhile, there
is uncertainty"
Yes" I commented, 'the public
Is interested in what steps are to be
taken in view of the litigation"
We'll" the Senator replied, "the
T. V. A. certainly can't stop what
1t is doing. The municipalities have
voted to buy power from the T. v. A.
and there's nothing left to do but
for the municipalities to build their
own distributing systems with funds
from the P. w. A."
Foresees Competition.
"But will not this mean injurious
competition"
Indeed, it will" said Norris, "and
the private companies will lose money
and so will the T. V. A. But as long
as stockholders block these agree
ments by lawsuits I don't see any,
thing else that can be done about it
but go ahead with the next step
competition.
do you think the public will really
be getting lower rates if the taxes
which private companies pay are
eliminated?" I queried.
II have said before" said the
Nebraska Senator and believe most
Of the municipalities are following the
suggestion that they should set aside
an amount exactly equal to the
amount of taxes that private. COM
panies would pay. They ought to do
this for their own protection. If
efficiency were equal and taxes just
the same as under private opera
ton, I believe the municipalities
would still have the better of it be-
cause they can borrow money more
cheaply than the private companies
can.
Lower Rates Is Goal.
"All I am interested in is lower
rates to the people and increased
consumption of electricity. The pri-
vate companies have brought the
present situation on themselves
largely by their inter company fees
and management charges and interest
and dividends on stocks representing
O write-up."
do you see any way" I inquired,
"that the situation now confronting
the owners can be handled SO that
private companies may continue to
exist and buy power from Federal
projects?"
1.-The law would have to be
changed" Senator Norris answered,
''as now only surplus power can be
sold. There are certain sections of the
country where power will doubtless be
supplied as heretofore. But the de-
velopment of national policy de-
pends on how the yardstick in the
Tennessee Valley works out, and at
present the injunction suits have made
1t difficult to say just what the future
will bring unless all parties are ready
to look at all the facts of the situa-
ton and find ways and means of
giving the people at low rates the
benefit of civilizations greatest bless
ing-electrictiy."
Situation Studied.
At the other end of Pennsylvania
avenue inquiry as to what the future
policy would be was met with the
statement that the matter was being
given careful consideration by Presi-
dent Roosevelt and that for the pres
ent the P. w. A. would not make Fed
eral funds available to Knoxville for a
competitive fight until further canvass
had been made of the entire situation.
Conferences are to be held at the
White House beginning today, with
various executives and representatives
of utility companies, including Newton
D. Baker. who recently rendered a
legal opinion that the Tennessee VAL
ley act was unconstitutional and that
the T. v. A. was exceeding its au-
thority in its sale of power to mu-
inequalities and in the purchase of the
properties of private companies.
1t is believed, however. that within
the next few weeks Federal policy
governing the relations of private
companies and the Federal Govern
ment will be formulated, because the
P. w. A. is getting applications from
various municipalities to erect power
plants.
Copyright. 1934D
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