Evening star., 1936-05-30
GREAT NEW FIGHT
. ON IVA. |MPENDS.
Filing of Suit by 19 Concerns
Presages Hard Battle
Through Courts.
By the Associated Press

-" SAS' SVe' tos
By the Associated Press.
Friends and foes of the New Deals
power program began preparations to-
day for new and gigantic legal
struggle over T. v. A.
Opening Of the fight was signaled
yesterday when 10 operating utility
companies. including most of the majcr
ones in the Tennessee Valley area, filed
injunction suits in Birmingham, Ala,
and Knoxville, Tenn, attacking the
constitutionality of the Tennessee
Valley Authority. They are largely
subsidiaries of Commonwealth and
Southern Corp, Cities Service Co +.
Associated Gas & Electric Co. and
Electric Bond g. Share Co.
The T. v. A. yardstick for wholesale
electric rates was characterized by the
bill of complaint as dishonest, unfair,
unreasonable and confiscatory" as
measure Of rates of the complainants
"or other privately-owned and operated
utilities" The companies charged that
the yardstick excludes the cost of the
major part of the investment necessary
to render the service and excludes
necessary operating expenses, which
T. V. A. either ignores or recoups from
State and Federal taxpayers instead
OF from rates"
Conspiracy Is Charged.
The companies accuse T. v. A. ana
Secretary Ickes of having "conspired"
to force owners Of some utility prop
critics to sell at distress prices.
The defendants" they said. Inform
owners Of properties desired that un-
less they sell at a price arbitrarily
fixed by the defendants, either T. v. A.
or the municipalities viii build
duplicate distribution system or trans
mission system with Federal funds and,
by competition, so subsidized with
Feoeral funds as to be completely
destructive to competitors not having
access to the Federal Treasury, render
the property of the 'recalcitrant uti,-
tiles valueless except for junk"
The companies declare in their
complaint that they are capable of
meeting all present demand for elec-
trio power in the Tennessee Valley
area, and are willing and able to
supply more facilities when needed"
Constitutional Points Stressed.
Among the points stressed are:
They (the defendants) attempt to
extend Federal power over matters of
intrastate commerce and local police
power, in contravention of the ninth
and tenth amendments;
The act fails TO indicate any ade-
quate legislative standard to guide
the administrative officers. but, on the
contrary. attempts unlawfully to dele
gate legislative powers to the Presi-
dent of the United States and such
administrative officers:
The act fails to provide any hear
ing for persons whose rights will be
injured and whose property will be
taken away by the T. v. A
The T. v. A. power director, David
E. Lilienthal. Immediately replied,
The electric power monopoly is gang
ing up, but the people need not be
concerned over this latest effort to
deny them the use of their own nat
ural resources"
Hearing in September.
Hearing on the plea for an injunc-
tion is not expected to start in Birm-
ingham until September.
The new attack recalled the Su-
preme Courts opinion last February
II on the first test case. started by
preferred stockholders of the Alabama
Power Co. The Government scored
an 8-to-l victory.
The court decided that construction
Of Wilson Dam at Muscle Shoals was
valid, and that T. v. A. had authority
to buy transmission lines from the
Alabama Power Co. to carry surplus
power from the dam to market.
The court withheld Judgment on
any other dam or power development,
and did not rule on the validity of