The Waterbury Democrat., 1935-12-19
NEW DEAL LEGAL
 FOES ON CARPET
Continued from Page 1.)

By all means"
 '"Then that is your point, isn't it?" Hughes asked.
 Justice Stone Queries.
 Justice Harlan F. Stone asked if the contract itself was questioned aside from the validity of the IVA program.
 Johnston said it was.
 Then you were wrong when you stated your point a moment ago!" Stone said.
 T referred only to the validity of the program" Johnston said.
 AS a result of the IVA act, he asserted, all power companies were threatened by competitive dupli- cation" of their services by IVA. Sale of the properties to the gov ernment was decided on by the utilities as "the lesser of two evils" Johnston said.
 The properties were bought by IVA, he asserted, admittedly at 60 per cent of present replacement costs.
 Cardozo Asks Information.
 "Has the state of Alabama ever manifested any objection?" Justice Benpamin N. Cardozo asked.
 The Alabama Public Service Com mission had approved the trans fer, the lawyer said, subject to actual performance of the contract for sale and interchange of power.
 Stone then asked the lawyer whether the constroversy did not involve a difference of judgment between the directors and the stock holders.
 Johnston answered that it did and Stone demanded, "is it ques- ton of bad faith?"
 Not at all, those gentlemen on the board of directors are my friends"
 Later he conceded that he be- lieved there was gross oversight" by the directors in approving the contract.
 Brandeis Starts In.
 Brandeis then took over the ques- tioning, apparently to determine whether holders of preferred stock had any right to sue. Johnston seemingly was unable to find al- legations of irreparable injuries or findings of the trial court on the point.
 Brandeis said he knew of no case where a preferred stockholder had been found to have a right to sue as in the present case. The justice noted that a preferred stockholder has much less interest than the common stockholders. Johnston said that 1900 preferred stockholders owning $3,000,O00 or $4,O0O, 900 of the total of $34,o00, 900 outstanding had joined in the Ashwanuer suit.
 Johnston concluded with a de- nunciation of the contracts between the IVA and enterprises in its area.
 Johnston Opened Fight Forney Johnston, representing minority stockholders of the Ala bama Power Co.,, opened the battle f to declare the IVA act invalid. He was supported by James M. Beck, American Liberty League attorney
 The government, victor in the lower court fight, was to present its arguments later. Opening with description of the IVA, Johnston said that the pro- gram permitted the government to operate permanent commercial utility"
 The "permanency" was established he said, by the fact that, once operations were begun in the 250- mile radius which transmission lines might serve, the populace would be permanently dependent on that power system for their needs.
 Hughes Wanted to Know
 Would you mind telling us first what this suit is, who brought it and why?" Chief Justice Charles Evans Hughes asked brusquely.
 Johnston proceeded to outline proceedings before the district court of Federal Judge William 1. Gribb. Associate Justice James c. McReynclds halteA him again.
 Tt would help me e lot if you'd tell me who brought Shis suit" he said. Johnston proceeded to de-