Evening star., 1936-02-23
P. v. A. FINANCING
Of ELECTRIC PLANT
UPHELD BY COURT
49, ,00O,O 900 Project'at Buz-
yards Roost, S. C., Held
Proper Use of Funds.
CHARLOTTE APPELLATE
BODY MAKES DECISION
Judge Coleman Rules Against
Burco Co. in Holding Com
pany Action.
BY the Associated Press.

BY the Associated freSs.
CHARLOTTE, N. c., February 22.-
The New Deal won two major de-
cisions in the Fourth Circuit of Ap-
peals here today.
The court, in two to one decision,
upheld the right of Government to
provide funds for construction of a
publicly owned and operated hydro
electric project as part of the P. W. A..
program, and then overruled District
court decision that the public utility
act of 1885 was unconstitutional.
It did, however, hold that the act
was invalid as it might be applied to
a holding company which it con-
strued to be engaged solely in intra-
state business.
In the power ruling, on lower
court injunction against construction
with P. w. A. funds of $3,00O,O 900
hydroelectric project at Buzzards
Roost. Greenwood County, S. c., the
court upheld the P. w. A. act of Con-
gress in its entirety; upheld the loan
and grant as proper function of the
Public Works Administrator, and ruled
that the Duke Power Co., in its ap-
plication for the injunction, had failed
to show the prospect of any illegal
damage.
Baltimore Suit Lost.
The holding company decision was
in the case of Burco,, Inc, of Baiti-
more, which lost its suit before Judge
William c. Coleman in Baltimore to
force trustees of the American States
Public Service Co, its debtor. to reg
ister with the Security and Exchange
Commission.
The American States, in process Of
reorganization, was held by the Circuit
Court to be an intrastate business and
the 1885 utilities act was held invalid
as 1t might be invoked against such
a concern. But Judge Coleman was
overruled in his decision chat the reg
istration need not be made because
the act itself was unconstitutional.
The Circuit Court decision did not
rule on the arguments Of counsel
including John w. Davis, former DEM
ocratic presidential nominee, that the
act actually is unconstitutional. hold
ing this issue was not involved.
Part Of National Program.
The Buzzard's Roost decision spe-
cifically upheld such a hydro-electric
project as a part Of a great national
program to relieve unemployment and
bolster the durable goods industry,
Judge Parker writing that the Gov
ernment could not be. expected Ito
stand idly by" without taking such
steps to ease condition of unemploy-
ment which was Nationwide in
scope and had become a menace not
merely to the safety, morals, health
and general welfare of vast numbers
of the people, but also to the stability
of the Government ITSELF"
The decision also held that there
was no interference with States
rights; Greenwood County was merely
a part of the State, subject to all of
its regulations; that the Duke Power
Co. was not an exclusive franchise
holder in Greenwood County, and that
the right of county or municipality
to compete with private capital in
public service had been thoroughly
established.
Judge Morris A. Soper dissented,
contending the Government had no
right to establish project which
offcials had predicted would be a
''yardstick" for forcing down rate
schedules of the private concern. He
described the county as being lured
by a gift into a blindness toward its
(see HYpRoEIECTRIc, Page A-3)