Evening star., 1936-02-18
T.V. A. CASE HELD
STILL UNSETTLED
-
Limitation Cited in Ruling
Seen as Opening Door
to Many Suits.
by DAVID LAWRENCE.


the court would decide, namely, the
so-called narrow issue arising out OF
the sale of surplus power in particu-
lar contract.
The broad questions are by no
means settled and will not be till cases
drawing the issues are brought before
the Supreme Court.
What has been decided is that Will
son Dam was built in 1915 under war
powers, but that not everything built
allegedly for war purposes is neces-
sarily a proper exercise OF the war
power.
I'VE may take" says Chief Justice
Hughes. judicial notice OF the inter-
national situation at the time the act
Of 1915 was passed"
But even conceding the Wilson Dam
was constructed in pursuance OF
constitutional power, the Supreme
Court in the majority opinion sup
ported by eight justices did not say
that the disposal of electric energy
was, even in such instances, matter
of arbitrary discretion on the part OF
the Federal Government. The court
drew attention to the method" by
which surplus power is disposed OF,
and significantly discussed what might
be called limitations upon that
method"
Silent on Disposition.
"The constitutional provision" says
the Chief Justice, "is silent as to the
method Of disposing of property be-
longing to the United States. That
method must be an appropriate means
of disposition according to the nature
Of the property, it must be one adopted
in the public interest as distinguished
from private or personal ends, and we
may assume that it must be consistent
with the foundation principles OF our
dual system of government. and must
not be contrived to govern the con-
Germs reserved to the States. See
Kansas VS.. Colorado"
Now, the Kansas case mentioned
by the court involved an effort by tne
Federal Government to reclaim ard
lands of the States by system OF lrrl-
CATION that was tied up with an alleged
pover to control navigation. The
supreme Court held this was VIOLA
ton of the rights of the States.
Mr.. Hughes opinion implies that II
in the method of disposing OF any
Federal property, including surplus
water power, the Federal Government
invades the rights of the States or
the rights of the people that are re-
served. then such an issue can be
presented on its merits for adjudica-
ton. This is particularly apparent IN
another passage from his opinion,
which reads as follows:
The transmission lines for electric
energy are but facility for conveying
to market that particular sort OF
property and the acquisition OF these
lines raises no different constitutional
question unless in some way there Is
an invasion of the rights reserved to
the States or to the people. We f1nd
no basis for concluding that the limited
undertaking with the Alabama Power
Co. amounts to such an INVASION.
Words Significant. -.
The use of the words Limited under
taking" Is significant because almost
Immediately afterward follows this
sentence: I'VE limit our decision TO
the case before us as we have de-
fined it,"
It is important to note that the
Chief Justice then says all the ques-
tions about the Government getting
into commercial competition are "ir-
relevant to the issue here which
means that the Supreme Court con-
fined itself, as did the Circuit Court
of Appeals. solely to what the contract
between the T. v. A and the Alabama
Power Co. appeared to be and did not
pass upon the implications OF the
Government sale of surplus power or
what the T. v. A. officials said or
claimed TO be their purposes. Here Is
a sentence from Mr.. Hughes opinion
which is bound to be quoted again and
again:
THE question here is simply as to
the acquisition of the transmission
lines as a facility for the disposal OF
that energy. And the Government
rightly conceded at the bar, in sub
stance. that it was without consti-
tutional authority to acquire or dis
pose of such energy except as it comes
into being in the operation OF works
constructed in the exercise OF some
power delegated to the United States.
Then Mr.. Hughes proceeds to say
that the case decided doesn't relate
to any other dam already constructed,
or about to be constructed, which
means that every case will have to
stand on its own bottom and 1t Will
have to be proved in the matter OF
power developments in the Northwest
or in the Missouri Valley that they
properly fall in the category Of those
improved for purposes of navigation
or In conformity with the war power.
Power Plants Sidetracked.
While surplus power can be sold at
wholesale and brought to cities for
their use by transmission lines, the
question still remains how far Gov
ernment money can be used to aid
cities in building power plants that
are to engage In local competition with
private companies.
"As we have said" wrote the Chief
Justice. these transmission lines lead
directly from the dam, which has
been lawfully constructed, and the
question of the constitutional right
Of the Government to acquire or op-
crate local or urban distribution sys-
TENS Is not involved. We express
no opinion as to the validity OF such
an effort"
On the whole, therefore, the court
has decided q question Of limited ap-
plication. Justice McReynolds in his
vigorous dissent thought the court
should take cognizance Of the public
statements of r. v. A. officials and
questions Of T. v. A. operations as
revealed by the record in the trial
court. Far more important than the
narrow issue that was settled by the
s-to-1 opinion may be the controversy
over the rights of preferred stock
holders to claim q hearing on consti-
vx,I,a fk,n NO a.