The times-news. [volume] (Hendersonville, N.C.) 1927-current, 1938-01-03
PWA POWER LOANS
DECLARED LEGAL

(COnIluucu Ilou' b"~S WIZ
four projects it challenged.
THREE WITHDRAW
FROM SUIT
This suit was instituted as u
direct test Of lhc program valid
ity. and inv Owed three other phi
waite utilities as well aS the Ala-
bama Power company. After the
suit was started, however, the
Texas Utilities company, the OK,
lahoma Utilities company, ana
Power company withdrew.
After 7-daY trial. the district
court found that the company
had a right to sue for the nJunc-
ton but decided that the inJunc-
was not justified, and the PN A
program was constitutional. The
district of Columbia circuit court
affirmed the Judgment.
The Duke suit WAS instituted
in the western South Carolina
Federal district court in NoVemr
Der, 934. That tribunal granted
the Injunction sought by the COM
many, but the fourth circuit court
of appeals rcmanded the case to
district court because new
agreement had been entered INTO
bv PWA and Greenwood county
subsequent to the injunction.
The district court, after the sec
ond trial, affirmed the injunction.
When the government appealed
again, the circuit court reversed
the lower courts decision and or
dered the injunction vacated.
The supreme court then reviewed
the case, but remanded it for re-
trial on the grounds of proce-
dural error.
INJUNCTION RULED OUT
In the third trial, the district
court denied the injunction, but
held that the government must
pay one-half the costs of the llti-
CATION. When both litigants APP
pealed to the circuit court, that
tribunal affirmed the district
courts refusal to issue the inJunc-
ton.
The Alabama Power company
based its attack on validity of the
program, in argument before the
high court, on three principle
grounds:
|. The national Industrial re-
covcry act, title 2 of which all
thorized creation Of PWA, is un-
constitutional as a whole. Title l,
providing for the national indus
trial recovery act, already has
been declared unconstitutional
Title 2, the company contended,
is equally illegal as an unconSu-
tutional delegation of power.
9. Loans and grants under the
power program are illegal be
cause the administrator in approx
ing them has applied a standard
or criterion which congress has
not and could not validity pro-
vide" This standard, the COM
pany cOntended, was that Of low
ering rates charged by private
utilities. They characterized as
subtcrfugc PWA assertions that
projects were chosen on the basis
OF the amount Of work they
would supply.
8. If title 2 Of the MIRA is held
to authorize the power projects,
then it is unconstitutional in that
il infringeS deeply on rights re-
served to the states under the
constitution. Control of ntra-
state utility rates, which the COM
pany charged is the object of the
program, is solely state fune-
ton.
ATTACK BASED ON MIRA
Duke attorneys reiterated the
arguments that title 2 of the
MIRA is unconstitutional and that
the power program particularly Is
beyond the pale of the nations
highest law. $50.
They brought in one additional
primary contention-that compile
ton of the Buzzard Roost project
would deprive the company "of
it's property without due process
Of law, in violation of the fifth
amendment"
The governments defense was
similar in both cases. Specifically
taking each of the companies
charges and assertions, the gov
eminent, in it's briefs and oral
arguments, sought to refute them
Individually and as a whole.
WELFARE CLAUSE CITED
Reed sought to show that title
2 of the MIRA was constitutional
and authorized by the general
welfare clause of the constitu-
ton. He asserted that the power
program was fully authorized I'M
der that act, and that the primary
purpose of the program was to
create jobs, not reduce power
rates.
The governments brief pointed
out that when the MIRA was be-
ing considered, an amendment to
exclude competitive projects was
rejected by congress, and argued
that by that action congress in
effect authorized such projects.
The brief went on to deny that
the program was in any manner
an invasion of state rights since
it did not seek to control or regu-
late rates, and also denied that
there was any coercion of mu-
inequalities to build power sys-
tens.
BULLETS PROFIT CHILDREN