The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1936-02-17

assured Jndt the vast New Deal eX-
pertinent could go forward at pres
ent without essential legal him
drance.
Hughes Sets Out Case
Chief Justice Hughes majority
opinion in the courts ruling said
in part:
"On Jan. 4, 1884, the IVA, an
agency of the Federal government,
entered into a contract with the
Alabama Power Co. providing,
l. For the purchase by the au-
thority from the power company of
certain transmission lines, substa-
tons and auxiliary properties for
100000.
2. For the purchase by the au-
thority from the power company of
certain real property for $l50000.
3. For an interchange of hydro
electric energy and in addition for
the sale by the authority TO the
power company of its surplus
power" on stated terms, and
4. For mutual restriction as to the
areas to be served in the sale Of
power.
Finds No Distinctions
1.-THE Circuit Court of Appeals
limited its discussion to the precise
issue to the effect and validity of
the contract Of Jan. a. 1884.
I'VE think that they decisions in
the pasD should be followed, and
that the opportunity to resort to
equity in the absence of an ade-
quate legal remedy, in order to pre-
vent illegal transactions by those
in control of corporate properties
should not be curtailed because of
reluctance to decide constitutional
questions. We find no distinctions
which would justify us in refusing
to entertain the present controversy.
I'VE agree with the Circuit Court
OF Appeals that the question to be
determined is limited to the validity
of the contract of Jan. 4, 1884. The
announcements, policies and pro-
gram of the IVA and its directors,
their motives and desires, did not
give rise to justifiable controversy
save as they had fruition in action
of definite and concrete character
constituting an actual or threatened
interference with the rights of the
persons complaining. The judicial
power does not extend to the de-
termination of abstract questions.
Excitement Precedes Reading
A ripple of excitement ran through
the chamber as Justice Hughes an
nounced. after reading one minor
opinion, that he was to read the
IVA decision.
Mr.. Hughes read rapidly from a
prepared opinion. He glanced from
side to side aC the audience.
His early words dealt with the
history of the famous case.
He said the court was only in
terested in the transmission line sale
contract of the Alabama Power CO.
and not in IVA contracts with other
commonwealth and Southern sub
salaries.
The IVA ruling was presented in
the suit of a group of minority pre-
ferred stockholders of the Alabama
Power Co. to have the courts set
aside a contract between their con-
Germ and the IVA for sale of trans
mission lines which the company
had previously used to convey sur
plus power from Wilson Dam.
Stakeholder Files Action.
The stockholders, headed by
George Ashwander, brought their
suit against the company's directors
who made the contract, the IVA
and its officials and various munich
palities who were seeking PWA
loans for the construction of mu-
nicipal power distribution plants.
Hughes said that before passing
on the basic question of validity of
IVA operations. the court must de-
eide whether the preferred stock
holders of Alabama Power Co. had
the right to sue.
In arguing the iva case, the
Alabama Power Co. shareholders
contended that the sale and future
contemplated operations threatened
to Deprive them of their property
The late Judge William I. Grub
in the Alabama Federal District
Court upheld the claim of the stock
holders. He decided that develop
ment Of power at Wilson Dam, other
than surplus unavoidably produced,
was unconstitutional
An appeal was taken by IVA to
the Fifth Circuit Court of Appeals
which reversed this ruling. Ash
wander and his associates appealed
to the Supreme Court.
IVA was created soon after
President Roosevelt took Office. It
was designed to dispose of the per-
ennially troublesome Muscle Shoals
problem. Due to opposition by pre-
vious Administrations to any pro-
posal to have the government oper-
ate the project and objections in
Congress to private operation, little
use had been made of the great
power plant.
Mrs. Hughes in Courtroom
Police guarding the auStere cham
Der were given orders just before
noon to rearrange their luncheon
periods.
The presence of Mrs. Charles
Evans Hughes in the courtroom was
significant. She is a rare visitor
to the courtroom.
A record crowd again attempted
to enter the chamber, as has hap
pened during the last seven Mon
days.
More than 500 persons were lined
up in rows of three in the corridors
leading to the courtroom 80 min
utes before the juristS assembled.
Rep. John Rankin. Cd, Miss.) &C.
tive proponent of IVA, hurried into
the chamber at 1880 a. IN. Attend
ants rushed extra chairs into the
room to seat part of the unprece-
denied crowd.