Evening star., 1938-01-04
CUMMINGS SEEKS
POWER BANS END
Immediate Dissolution of so
= Injunctions on P. w. A.
Projects.

Asserting he was "very much graft
lied" with the Sureme Courts rulings
in the Alabama and Duke power cases,
Attorney General Cummings stated to-
day that he will seek immediate dis
solution of nearly SO temporary in
functions now blocking public power
projects in % States.
Ending three-year controversy, the
court held unanimously yesterday the
private power companies cannot chal-
lenge validity of Government grants
and loans to municipally-oW power
plants.
Public Works Administration Of
Meals also were making preparations
to push through 81 power projects in
various sections of the country, which
are being partially financed with Goy-
ernment funds.
1t was said the total construction
cost of these projects will be sl46,-
sl7,8O8, of which P. w. A. has allotted
$61 .225,544 as loans and $38,412,408
as grants. 1t is estimated the work
will give 100,OOOOOO man hours of
employment.
The courts decision was hailed as
an important victory by P. w. A.
Administrator Ickes, although he was
highly critical of the fact that it took
three yeaSs to get q final ruling.
Won Two Victories.
In reality the New Deal won two
victories in the court yesterday in its
long and bitter battle with private
utility interests.
In one ruling the court unanimously
upheld the right of the Public Works
Administration to make loans and
grants to municipalities for construc-
ton OF publicly owned electric plants.
The court did not pass directly on the
constitutional questions raised but
held the Alabama and Duke power
companies had no standing to ques-
ton the validity of the loans and
grants.
The companies had contended the
loans and grants were unlawful, since
they were to be used in building power
systems to compete with and perhaps
destroy their businesses.
Speaking for the court, Justice
Sutherland said such competition was
entirely lawful"
while the loan" he added, might
frustrate compliments hopes of a
profitable investment, it would not
violate any legal right"
Not Basis for Rate Making.
Deciding litigation instituted origi-
nally by the Pacific Gas & Electric
Co. against the Railroad Commission
OF California, the court divided six to
two in holding that the cost of repro
duction" need not necessarily serve
as basis for rate-making purposes.
The commission had received evil
dence as to cost of reproduction but
did not follow it, preferring to fix
the rates to be charged by the con-
cern in accordance with the his
torical cost or prudent investment
theory advocated by President Roose-
velt.
The Supreme Court, reversing
three judge District Court, held this
did not deprive the company of due
process of law but sent the case back
with instructions to ascertain whether
the rates fixed were confiscatory.
Last year the court divided, four
to four, in upholding the lower court,
but granted rehearing. With JUS
tice Black replacing Justice Van De-
vanter, the vote was six to two to re-
verse the lower tribunal, Justice Suth-
erland not participating either time
Justices Butler and McReynolds dis
sented today.
The court also agreed to review a
suit by the Electric Bond & Share
Co. and 26 subsidiaries challenging
the constitutionality of the 1885 act
regulating public utility holding COM
panies. The act had been upheld in
the lower courts.