Evening star., 1935-09-12
EDISON INSTITUTE
TOF|GHT NEWLAWS
John w. Davis and Newton
D. Baker Among Attorneys
Retained by Trustees.
BY the ASsociated Press

DI tiiS HSSOClateo preSS.
NEW YORK, September I2.-The
board OF trustees of the Edison Elec-
trlc Institute has retained John w.
Davis to aid in contesting the consti-
tutionality Of the public utilities act
OF 1885. it was announced today.
The institute has also retained New
ton D. Baker TO participate in a case
which will contest the validity of
gifts and loans Of Federal money n
enable municipalities to compete with
private companies.
1t has retained the services of Forney
Johnston and James M Beck TO argue
before the Supreme Court in the case
now pending on the constitutionality
of the Tennessee Valley Authority.
McCarter Gives Reasons.
Following the meeting Of the board
of trustees Of the institute held today,
Thomas NJ. McCarter. president, issued
a statement saying, in part.
In addition to the imposition Of
largely increased and discriminatory
taxation. recent Federal legislation has
attacked the electric industry in three
different ways as follows:
First, the public utility act Of 1885
or. as it is familiarly called the
Wheeler -Rayburn holding company
act This act will injure the interest
of the consuming public, directly af-
feet the security Of the present en-
ployment of 25O,O00 people and NAV
injure, perhaps to the point Of de-
struction the rights of large portion
of utility investors. The amendment
is an ambiguous. involved. cOntradic-
tory and unworkable law II places
practically the absolute control and
management Of local industry in the
hands Of Federal bureaus in Wash
ington. To large extent, merely be-
cause the stock of the local companies,
doing a local business. is owned BY
holding company domiciled in an
other State. il provides for Fedora,
domination of matters subject 70 Stat
Jurisdiction.
Legalizes Unfair Competition.
1T attempts by legislative fiat ~
correct alleged abuses which. if exist
ing in the past, have already in the
main been corrected by the operation
Of economic law and the Federal Sc
curities act. II is an attempt to 50
weaken the smaller operating COM
psnleS in securing a central financing.
engineering. accounting and such seTy-
ices as to render such operating COM
panles more vulnerable 70 the attack
Of the professional advocates Of Gov
eminent and political ownership Il
excludes from its provisions all Gov
eminent or publicly owned plants.
thus legalizing and perpetuating the
unfair competition Of such agencies
against private owners"
Dictates to investors.
The enactment gives 10 Federal bu-
reaus broad and practically unre-
stricted powers over the welfare OF
a consuming and investing public.
whose right may be determined or
dissipated according to the Whim and
fancy of such bureaus. This law was
enacted despite the fact that the total
money value of the interstate power
at present unregulated amounts only
TO about 100000 a year. The Fed
eral bureaus have initlally asked for
approximately one-half of this amount
for administration costs. The law Will
also add many millions of dollars 10
the annual expenses of operation Of
the companies, which expense would.
in the main part. be borne by the
consuming public. and certainly would
retard. if not prevent. a continuation
of the record Of progressive rate re-
duCtion made by the industry over a
period OF years.
'Second-That portion OF the ma
tional recovery act which purports to
give the Government the right, by
gift or loan. TO aio municipalities in
erecting power plants TO compete with
existing facilities For thus purpose
many millions of dollars have already
been expended or appropriated by the
Government.
Puts L. s. in Power Business.
"Third-The Tennessee Valley Au-
thority legislation. which seeks TO put
the Government directly in the power
business, involving the construction OF
existing facilities.
In the opinion of eminent counsel
the greater part of this legislation Is
unconstitutional. The power prn-
gram of the Federal Government in
wolves the expenditures of millions OF
dollars. which. in the main. is 70
haraSs and destroy private operation
in the electric light end power indus
try in the United States, despite the
fact that the people of this country
enjoy the most efficient and wide
spread electric service at reasonable
rates of any people in any country
Such service is the envy of the entire
world and has resulted from private
initiative without Government sub
sides.
That the industry is well builded
is best attested by the fact that 1t ha~
never borrowed from the r. F. c. Il
not suffocated by Government med
ding the industry will continue its
splendid record 1t is inconceivable
that this Wasteful and destructive eX-
penditure Of the taxpayers money
should be continued.
Counsel Is Retained.
McCarter continued that the inSti-
tute trustees had determined that the
question of the constitutionahty OF
these statutes should be presented 20
the court at the earliest opportunity.
To that end it has retained the
services of Davis. former Democratic
candidate for President, New York, to
participate in the conduct of the case
or cases which will contest the va
lidity and constitutionality of the pub
lie utility act of 1885.
1t has retained the services Of for
mer War Secretary Baker TO partici-
pate in the conduct If the case or
cases which will contest the validity
and the constitutionality of the gift
and loans of Federal money to induce
or enable municipalities TO compete
with private companies now rendering
efficient service through the United
States"
The Sprx-icar of Eaor,,o,, ToL-..a. -