Evening star., 1938-11-12
Tennessee Utility
Cited, May Face
$4,000 Fine
Undue Preferences
Shown Newspaper,
State Charges
Ey the Associated Press.

Ey the Associated Press.
NASHVILLE, Tenn, Nov. IL
The State Utilities Commission,
charging the Tennessee Electric
Power Co. had extended undue
preferences and advantages" to the
Chattanooga Free Press and the
Chattanooga Home Stores, ordered
the utility today to "show cause"
why 1t should not be subjected to
penal court fines aggregating
maximum of $917,000
The commissions order came on
the heels of a congressional COM
mittee's investigation of the Ten
nessee Valley Authority and private
utilities, one phase of which Com
nnittee Counsel Francis Biddle said
had as its purpose Ito show that the
Tennessee Electric has been sub
sldizing the Free Press"
Roy Mcdonald was identified then
as publisher of the Free Press,
daily paper, and also as president of
the Home Stores.
The commission in citing the utili-
ty to appear November %, listed in
a 250-page order what it said were
GIT discriminatory acts involving
undue preferences and advantages
for the Free Press and the Home
Stores The commission identified
the discriminatory acts as re-
bates, indefinite extension of credit
and other means of making pay
ments into the newspaper treasury.
The utility was cited to show
cause why the commission should
not certify these alleged discrimi-
nations to adistrict attorney general
to the end that penalties provided
by law shall be recovered by the
State
S917.O00 Maximum Fine.
Albert Williams. commission coun-
sci, said the statute under which
the order was issued provided for
a fine Of $500 to $1,000 for each of
the GIT offenSeS, or a maximum in
this case of s9l7 900 "if the company
should be found guilty on all of
the counts listed
Asserting that prior to September,
1887, the utility had carried the
free press account as charge
against the home stores, the COM
mission cited one instance of what
it said was a rebate of $4,000 for
the use and benefit of the Chatta-
nooga Free Press.
1t described the instance as:
- The Tennessee Electric Pow
er Co. arranged to pay to one Silas
Williams. an attorney, under the
style and guise of counsel fees. the
sum of $4,000 All of which
said Williams shortly thereafter
turned over to the Chattanooga
Free Press in ostensible consider
alton for the issue to him of certain
shares of stock in said newspaper
publishing corporation.'
Such payment was not for bona
flde legal services the order con-
tinued, but was method by which
said power company rebated to the
Home Stores and the Chattanooga
Free Press the sum of $4,000 which
these customers owed for electric
current purchased from it.
Discrimination Charged.
BY this contribution the Chat
tanooga Free Press was enabled to
pay its accrued balance for Serv-
ices which had been charged to the
account of the Home Stores. This
constituted discrimination be-
tween the customers of the Tennes-
see Electric Power Co. and resulted
in an undue preference and advan-
tage to certain customers contrary
to the statutes of the State of Ten
nessee.'
Another count listed in the COM
mission order involved what it said
was purchase in 1887 of $l9.303
of Free Press advertising space at
price far in excess of the amount
arrived at by applying the regular
advertising rates
The commission pointed to this
as a method by which the Chat
tanooga Free Press was enabled
to receive money from the Tennes-
see Electric Power Co. with which
its accrued bills to the Tennessee
Electric Power Co. might be paid"
The order also contained list of
u months in which it said the
Free Press became delinquent in
its monthly bill, averaging about
$3.50 each, but upon payment re-
ceived the 5 per cent discount ad-
vertised as allowable only if payment
is made within 10 days.
In the commission order 1893 of
the alleged offenses involved de-
linquent payment of accounts by
the 40odd Home Stores in which
the discount was granted.