Evening star. [volume] (Washington, D.C.) 1854-1972, 1938-12-04

Mould giDe his side OF the case
only to committee of Congress.
Since then he has testified four
times before the joint Senate
House group conducting the in
Destigdtion.
By the Associated Press.
Arthur E. Morgan, ousted by
President Roosevelt from the chair
manship of the Tennessee Valley
Authority, told a congressional in
vestigating committee yesterday
that the T. V. A. was giving power
away" and was about $500. 900 in
the red for its first five years of
operation.
The tall, gray-haired executive,
who once headed Antioch College
at Yellow Springs, Ohio, thumbed
through voluminous, documents for
data to support his contention that
the present board had made err
roneous cost ALLEGATIONS, had
adopted a policy dangerous" to
flood control, and had demonstrated
lack of responsibility"
Raising long, bony hand to en-
phasize his points, the veteran en-
gineer testified before the special
committee investigating the gov
eminent agency. He traced through
a maze of complicated T. v. A. &C
counts and then asserted:
THE T. v. A. is serving as hold
ing and an operating company to
the so-called "yardstick" community
to which it provides power. 1t sets
up books and performs all the serv-
ices of a private holding or operat-
ing company.
"Giving Power Away"
'"They the T. v. A. board) are
ly-they are giving power away"
The witness asserted, in explana-
ton, that T. v. A. power sales were
made at less than cost.
Every time we sold kilowatt of
power" he asserted, I'VE gave 1t to
them"
DR.. Morgan testified that various
Government agencies had advanced
q total of $21 .700, 900 in loans and
grants to various Tennessee Valley
communities. The T. v. A. had
loaned 81, 3O4, 900 to communities at
31a per cent interest for construc-
ton of electric distribution systems,
he said.
"All the interest paid back to the
T. v. A. is reported as income" he
continued, "but no account is taken
~ fI,o tv,%n hoc
to pay on the money it borrowed for
the advances to the communities.
THE T. v. A. makes no charge for
losses on the loans, bad debts or
loan servicing If 'yardstick' COM
munity gets in bad, the T. V. A. takes
its electric system back, puts it on
its feet again and hands it back to
the community. The T. V. A.
makes no charge for this service.
THE T. V. A. makes the loans Oil
no security except the electric sys-
TENS. Under such conditions, the
loans at 81 per cent interest con-
stitute an outright subsidy to these
communities"
DR.. Morgan said Tupelo. Miss. was
an example of generous treatment
accorded "yardstick" communities
by the T. v. A. He did not elaborate.
The bespectacled witness, hunch-
ing his shoulders over the witness
table. derided statements he said
had been made by T. v. A. authori-
ties that the Government agency
was selling power at only few
mills" less than private utilities.
1.-THE difference of mill or two
per kilowatt hour" he said, means
the making or breaking of a private
utility company
DR.. Morgan said less than 10 per
cent of T. v. A. power was sold to
residential users, and that less than
20 per cent went to "yardstick" COM
munities.
so Per Cent to Industry.
"The remaining 80 per cent goes
to big industries and for uses of the
T. v. A. ITSELF" he said. THE yard
stick program can only exist-if it
can exist at all-because of big in
dustrial consumers"
The witness said the T. v. a. had
written off $30,0O0,00O of the value
of Wilson Dam when it took over
the dam. He said that was correct
write off, but added this comment:
If a private utility had made
mistake like that Gin fixing the dams
original valuationD the security hold
ers would have to pay for it. When
the Government makes such a mis-
take, the taxpayers have to pay. for
It,"
DR.. Morgan at first was subjected
to frequent interrogation by Francis
(See T. v. A., Page A-3)