The Kennewick courier-reporter. [volume] (Kennewick, Wash.) 1914-1938, 1935-06-06
Probing the iva
National Topics Interpreted

President Roosevelt announced 8
year ago that the Tennessee Valley
authority and the experiment Of
government production Of power
on a huge scale was to serve as a
yardstick on electric rates charged
by private companies.
Lately j. r. McCarI, comptrolle6
general of the United States, ha:
had his bookkeeping sleuths at work
ON the records of the Tennessee
Valley authority, it being a govern
ment corporation. Mr.. McCarl was
not concerned about the yardStich
for power rates nor was he inter
ested in experiments designed tt
prove the value of government own
ership In the power field. His jot
was to determine what had hap
pened to all Of the money that had
been taken from thetreasury and
spent In the effort to transform the
Tennessee valley into modern
Garden Of Eden.
It happened that Mr.. McCarls
report on the audit Of iva affairs
was made public coincidentally
with movement by she iva d'rec-
tors for new legislation-amend-
ntents to their basic law which
would give them additional author
ity. This circumstance resulted IN
the iva and it's yardstick being
examined by a congressional COM
nlittee under the strong lens Of a
uiagnifyiny glass. ! believe 1t is
generally agreed that iva suffered
IN lrestige and government owner
ship advocates came off second best
because disclosures before the COM
u:it.ee were IT such nature as to
convince mist sound thinking OBJ
seSvers that rherc Is a colored gen.
tleman In flle iva woodrile.
For instance, Mr. McCarl showed
In his repor. that the federal gov
e.nment had expended a total OF
3l32, 7g2, 900 in development ct the
power facilities, equipment and
necessary appurtenances. This
property was transit .rred by the
rec Valley authority, q corporation,
and u carried on the corporation
books at ISL ,000, 600. This is 80 per
cent Of the actual cost to the tax
payers Of the property transferred.
Disclosures Of this fact brought
many charges In the course Of the
committee hearing and led to the
conclusion by several house menu
hers that no electric rate based
upon 50 per cent Of the cost Of the
production facilities could be con-
sidered honest. In other words, the
thought was that a yardstick based
On such q method Of calculating in
vestment necessarily would have to
be made Of rubber.
Trick Bookkeeping
Mr.. McCarl told the COMMITTEES
also that he had found various hap
hazard and trick" methods Of
bookkeeping and that he found 1t
necessary to disallow expenditures
Of something over two million fol-
lars which he said were illegal.
The comptroller general did not re-
fer to these expenditures as having
been fradulently made but he told
the committee it was his opinion
that the law had to be stretched
rather far by any spending agency
to construe the payments as JUS
tifiable.
The comptroller general took
sharp exception to the bookkeeping
methods used by the iva. It is
upon these records that the electric
rate is based. Likewise it is upon
the basis Of these records that the
iva must show whether it has
earned profit.
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 the earnings from
the sale Of power by charging 10
per cent Of the gross revenue to
operations as depreciation and ac-
cumulating the amount of such