Evening star., 1935-07-12
I. y. A. CONFIRMS
SOC|AL|ST|C FEARS
Passage of Bill Permits
U. S. to Wreck Private
Companies.
RY DAVID LAWRENCE.

II LIe uIulty executives Ia 1iie
country have any poetry left in their
souls they are pretty well fraz-
zled after their long fight here-they
will still be able to quote the famous
poem of Southey, made even more
famous recently by President Roose-
velt when he quoted the line, But
twas a famous victory"
The utility companies have been
contending that the Roosevelt ad-
ministration was about to put the
Government into competition with
them and ultimately to force them
out of business. This has been vehe-
mently denied. Now comes the ad-
ministration and puts pressure on the
House of Representatives and secures
a victory whereby:
First, the Tennessee Valley Author
fly is not required to sell electricity at
cost or above. but may continue to sell
1t below cost indefinitely, with the
American taxpayer footing the bill in
the form of a Government subsidy
paid for out of tax receipts.
McCarl Safeguard Rejected.
Second the Tennessee Valley Au-
thority is not required to submit its
expenditures to the same kind of an
audit as every regular establishment
of the Government This was ac-
complished by rejecting the recon-
mendations of Controller General Nc
Carl that the T. V. A. be required to
buy materials on a bidding system
and conform in other ways to Govern
ment rules.
Third, the Tennessee Valley Au-
thority may build transmission lines
to compete with those of private COM
panies and may use its financial re-
sources to force the sale by private
companies of their lines to the Fed
eral or State or city governments.
Fourth the Tennessee Valley Au.
thority may build whatever dams or
projects it may deem desirable and
connect them into one or more power
systems.
THUS the Federal Government. by
the terms of the House and Senate
bills about to become law, has def
nitely entered the power business. and
the socialistic demand for public
ownership has at last been fulfilled
by the New Deal.
Purely SociaIistic."
1t was Norman Thomas, Socialist
Candidate for the presidency, who
ssid the T. V. A. was the only purely
sccialistic project of the New Deal
And now Congress has removed all
doubts on that score by the new pro-
visions granting to the T. V. A. the
right to do anything and everything
necessary to conduct power system
or systems.
The utility companies have been
trying to prove that the Government
vas bent on their destruction alto
gether, but they have had no proc.
of it except general charges. Now
the language of the new T. v. A. Law
confirms their charges and makes the
issue clear enough for the country
to understand. For this, the utility
executives and utility investors, who
own about Sl2 900, 900 of Securi-
ties. have both houses of Congress tc
thank, and the administration in
Particular T. v. A. is at last in the
open as a Government competitor
and as a Government business for the
financing, management and operation
of power generation and Transmission
in a vast area of the South.
Reasons Explained.
Just why the members of the House.
who, few days ago, refused to accept
the administrations dictation on the
matter of a death sentence for hold
ing companies, should turn around
and vote extensive authority to the
T. v. A. may seem on the surface a
contradiction of view. Actually
many members thought this was a
good chance to retrieve themselves
with the administration. Others
thought that, since the T. " A. was
going concern, it ought not be
stopped at this stage Others thought
It would be an excellent thing to
make the T. " A. issue clearer and
see whether, having been granted all
the necessary funds and authority, it
would prove to be 'yardStlck" for
the measurement of electric power
costs or just another Government
adventure in the realm of high-coSt
operation of a private business.
Other Fights in Prospect.
The utility men are far from grieved
about the result. They think that
T. v. A. will be invalidated in the
courts, anyway, but they have been
presented with the best argument they
have had in two years. For, if the
Government can get excited about a
$3.50, 100000 electric light bill, it might
go into the food business, which in
wolves an expenditure of many times
that sum; the clothing business
which is again many times the electric
light bill, and there would then be a
completion of tn socialistic program
wherein the tax burden rises to the
point of breaking down the whole
economic system Already the Presi-
dent has said he would extend his
fight against holding companies ir
the utility field to holding companies
in all other lines of business.
So, to sum up, the administration
scored victory on the T. v. A. act
but it will be victory" that vii
remain for long time in the chan.
nels of public discussion till the peo.
pie decide whether they want Gov.
eminent entering as a competitor anc
ultimately as the master of all man.
ner of private businesses.