Coulee City dispatch. [volume] (Coulee City, Wash.) 19??-19??, 1935-06-13

Washington. - President I Roosevelt
nnnaunana n ,,oarAauo- that the Ten

announced year ago that the Ten
-asItno9 snHInessee - Valley u au-
j9ProbingJ hthorityi and the lex-i
1fheisTVA pertinent of govern
a58isa EGT ment production Of
electric power On a huge scale was to
serve as a yardstick on electric rates
charged by private power companies.
Lately, J. r., tMcCarl, comptroller
general Of the United States, has had
his bookkeeping y sleuths at work on
the records of the Tennessee Valley
authority, 1t being a government cor,
poration. Mr.. McCarl was not con-
cerned about the yardsdek for power
rates nor was he interested in expert
ments designed to prove the value Of
government ownership iii 7 the power
field. His job was t. determine what
had happened to all Of the money that
had been taken from the, treasury and
spent in the effort to transform the
Tennessee valley into modern Gar
den Of Eden kHT0 20 e
1t hanpened EtAat, Mr.. sM NJ ,l re-
port On the audit OF IVA affairs was
made pubic cofncidentally with a
moyementy by the IVA directors for
new observation-disclosures to their
basics.l law. which would give them. addiav
tipnal authority. This circumstance
resulted lss8ha IVA andaH y#dsfhkEE n
being sefapiHad by e@srBsPnaalkss
Committee sTader the strong lens ht u
magnifying glass. I believe it is gen.
orally agreed that IVA suffered ciu1
prestige. aPd goss .aE ai I pgfessshiPI
advocates came Of Second BEST be-
cause disclosures before the epmmit-,
tee were of such a nature as to se6n-
vince most sound thinking observers
that sthsse shs selected aeptlsPgan g. = Z
tile TVA woodpf1e.~ ~ =
5For INSTANCES rsMccarl Showed In
his report that the federal = GOVERN
ment had expended aS~totsl Of $780,
100000 in development of the power
facilitiese. sdaNpments and = NECESSARY
appurtenances. This property : was
tFEansfemeds bs { tteg feasTal govern
1nent to the Tennessee Valley author
ity,' corporation, and ~is carried ON
the corporation books at $51,OoO,OOO.
This is SO per cent Of the actual cost
to the Taxpayers Of the property trans
ferred
Disclosures Of this fact brought
mahv Silarges III tfie course VI the
Gommittee hearing and led to the con-
M1sionsbsgsveral stsodse menbers THAT
m eleaccfricc TN rate Based upon $50 per
3Ant of the cost of the production 4f afrt
dAities could be considered honest In
other words, the thought was, that a
Rrdstick based on such method Of
calculating investment1o necessarily
Would have to be made Of rubber.
Eur neca,, I'D 4. aas65hieel,ss5s:
Mat he had found various rhaphazard
"Trick" of Bookkeeping and
bookkeeping, thu that s hs had fouad It
H. nv m,lliosaolIa SShisI II said wsss
Illegal The comptroller general did
hetessfsf these nditpSes as haxs
ing been fraudulent1y made but he
tofd- the committee It was his opinion
that the law had to be stretched rath-
er far ny any spending agency "to-cons'
strue the payments as justifiahle.
The comptroller general took sharp
exception to the bookkeeping meth
DDS used by the IVA. 1t is upon these
records that the electric, rate IS BASEL
Likewise it is Upon the basis OH these
records that the hTvA @mustE show
whether it has carried a profit. N
"Despite the apparently excessive
deprecated value at which the Muscle
Shoals property was taken up on the
books, the authority is not using the
valuation basis for depreciation but
instead is basing depreciation on ire
earnings from the sale of power ny I
charging 10 per cent of the gross reyy7I,i
enue to operations as depreciation and
accommodating the amount of 3#tsuchl55
charges as a reserve for depre cfa ton,
Assuming very conserva tiYe !ra " !. {
of valuation consnmpt ion for exFmple,s
2 per cent, the!amount Of deprecl atfon,
based upon the value at which the
properties in question were Scapi tall:
lied by the authority. would be aT,.s'
proximately s1,ooo,oo0 persannnrn
"a larger revenue will propgrfton-
ately increase the reserve ,for depreTt3|
citation at the present 10 & per cent
method Of amortization, but to ac-
cumulate a reserve on the 10 per cent
plan equivalent tossthe amount that
would be charged to depreciation on
valuation basis at 2 per- cent, the
gross revenueswou ldfhavesto1 be fmpres
than ten times the present a q s1t, or
about S1o,00o,00Q per aHnur4; 5000
"rhere is very littles basis fore as.
Stunning that revenues will ever reach
such a figure" 3.s
The comptroller's report touched on
many other phases Of 5TlYtA mi Affairs
which he found sub
Much fotps9ject to criticism and
Criticiseoa o9it made mention of
1lsa1ua7 factor that, o lit.
seems to me, ought to he of vital I'M
portance to communities throughout