Evening star. [volume] (Washington, D.C.) 1854-1972, 1935-02-23
Another Test for "Legalism.'

Judge w. !. Grub, who presides IN
the Federal District Court at Bir-
mingham, has in previous decisions
on recent legislation proved himself
to be something of a thorn IN the
side of New Deal progress. He held
the N. r. A. was unconstitutional in
an opinion rendered last October and
in January issued a temporary re-
straining order against fourteen Ala
bama municipalities that sought to
borrow money from the P. w. A. to
construct their own power distribu-
ton plants. But his decision of yes
terday, holding that sale of electric
energy by the Tennessee Valley Au-
thority in competition with private
business was illegal, and making per-
manent the temporary restraining Or
der against the municipalities, seems
destined to bring decisive legal test
Of one Of the fundamental elements
of New Deal experimentation, not
only in the Immediately affected
Tennessee Valley. but elsewhere as
we'll.
The case before Judge Grub dealt
specifically with contract under which
the Alabama Power Company, a pri-
vate utility, was to transfer a portion
of its transmission lines to the T. V. A.
for sale of Government-made cleo
tricity. The judge held that this
would put the Government directly
into the competitive power business.
He suggested, in his discussion of the
points at issue with counsel during
the argument, that he could not 'see
where the United States gets any
power under the Constitution to en-
gage In any business permanently"
The sale of surplus power. generated
from plant built primarily for war
purposes, might be one thing, he said.
But in the Tennessee Valley expert
ment the Government is not merely
disposing of surplus power, but is pre-
pairing to use all the power that can
be taken out of the river and dispose
of it in a permanent utility business.
That, said the judge, would be
benevolent dictatorship" for which
he could find no constitutional war
rant.
If the Government could go per-
rnanently into the power business,
with attendant "yardstick" demon
STATIONS, then it would follow that
the Government could build a steel
plant for defensive purposes in war
and later 60 into the business Of SELL
ing steel permanently in competition
with the private steel business.
While the State Of Alabama in this
case has waived It's rights, in the mat
ter Of regulation and others, "other
States might not do So" And in
reply to q question from Government
counsel whether there was any differ
ence between the sale Of power by the
Alabama Power Company and the sale
of power by the Government, the court |
answered: eyes, the Alabama Power
Company is subject to regulation. If the |
Government cannot sell power with |
out violating the law, then it is better |
to waste it. I have never been
able to bring myself to believe that
the United States could 60 into a
permanent business within the limits
of the States. OF course, I suppose
within the limits Of the territories 1t |
has the right"
The Tennessee Valley experiment |
naturally presents the most conclusive
test Of the power which Judge Grubb |
questions-the right of the Govern
ment to 60 permanently into any field
Of business in competition with citi-
zens. The case is one which so d.
rectly affects other New Deal theories |
that its early disposition by the high |
est court in the land should be expe-
dited. Judge Grub has the reputa- |
ton of Icing an exact legalist. Pure
'legalism" does not carry much water |
with Observation-Disclosures New Dealists.