Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-07-18
/. VA. POWER SALE
UPHELD BY COURT
Circuit Ruling Says Surplus
Disposal of Electricity
| Within Constitution.
Ry the Associated Press.

by tuO hbSOClaIcu ElCoS.
i NEW ORLEANS, July 18.-Presi-
dent Roosevelt's vast social expert
ment-the sale of cheap electric power
by the Tennessee Valley Authority
was held constitutional by the Circuit
Court of Appeals here, but is still to
be tested in The U;ited States Su-
preme Court.
Joseph F. Johnston one of the at
torneys representing preferred stock
holders of the Alabama Power Co.,
who contested the validity OF the
T. v. A., said at Birmingham, Ala,
an appeal would be taken promptly
and probably heard BY the Supreme
Court in the Fall.
The opinion rendered yesterday. af-
fecting electric .llinty holders, con-
sumers and prospective consumers, re-
versed a finding by Judge w. /.
Grubb of the Northern District Court
of Alabama, who ruled Congress did
not have the right IL authorize sale
OF the power.
= The, attack on the act was
launched by preferred stockholders of
the Alabama Power c.. who sought
to prevent the company from selling
to the T. v. A. tor $1,150,000, its
transmission lines running from Will
son Dam at Muscle Shoals into seven
Alabama counties.
Cities Were Enjoined.
Judge Grubb in lis ruling enioined
~ Ia t-i,, xrciv,
Federal funds to acquire electric pow
er plants, conteuding that ct. v. A.
was engaged IN illegal competition
with the Alabama Power Co."
The Circuit Court here, conceding
that the project was launched prima-
rily as power supply for manufac-
ture of munitions in war time, asserted
: it was within the province of Con-
gress to adopt any reasonable means
to dispose of surplus power not needed
IN peace time.
'Of course it is true" the opinion
read, that the Government of the
United States cannot engage at will
7 in private business, but it by no means
follows that it cannot sell property
which it owns, even though in doing
SO it may enter into competition with
other public or private owners OF
property"
The ruling was hailed in various
quarters with conflicting reactions.
5 Jubilant citizens of Shefheld, Tus-
cumbia, Florence and Muscle Shoals
Ala, where the vast dams for power
production are located, shouted theil
approval in spontaneous demonstra-
tons.
Norris Gratified.
In Washington Senator Norris, Re-
publican, Of Nebraska, father of the
T. v. A. act, said: "It'S just what
expected. I think it's the only con-
clusion that any legal, logical mind
can reach under the T. v. A. act and
the Constitution"
Arthur E. Morgan, authority chair
man, said:
II only crow over glass eggs-this
looks like the real thing"
He declined to discuss the decision
without study
Representative May, Democrat, Of
Kentucky, bitter foe of the project,
said he had mo doubt" the Supreme
Court would reverse the opinion.
1T is within the province of Con-
gress to adopt any reasonable means,
whether of lease or sale, for disposing
Of the surplus" the Circuit Court
ruled. "The use of transmission lines
to facilitate sales cannot fairly be said
by the court to be unreasonable or in
appropriate. -"
'The act is unobjectionable from
q constitutional standpoint in so far
as it undertakes to confer on r. v. A..