Evening star., 1938-01-13

would not be de-
laying q settlement If he could avoid
1t because 1t is to the interests Of
everybody to get such q settlement
under way. Who then is blocking the
making Of peace formula?
Various explanations are being ad-
vanced. One Is that the President
Is waiting for the decisions of the
Federal Courts on the rights of the
T. v. A. and on the registration
Of holding companies Both decisions
will probably be forthcoming in an
other couple months. But the trouble
with this theory IS that even If the
New Deal wins both cases, and for
purposes Of discussioA today, such
an assumption might be made, then
the administration Is doubly saddled
with the importance Of making . plan
at once to solve the controversy.
A Question Of Policy.
To put 1t another way, the courts
may decide that the Federal Govern
ment can make grants Of money even
to permit competition between States
or cities and the utilities or between
Abe Federal Government and the
utilities. The courts, however, are
not dealing with the wisdom OF the
policy, but legal rights.
AS for the administration. 1t is
faced with the necessity Of deciding
whether duplication Of existing utility
facilities is desirable Is q matter Of
public policy and as . proper use Of
public funds at time Of severely un-
balanced budgets.
Mr. Roosevelt knows all this as we'll
as anybody outside the Government.
He Is well aware that If he permits
Federal funds to be used to set up
municipal plants in many cities where
existing companies already supply
electricity. there Is bound to be chaos
among investors not only in utility
operating companies, but in other
lines Of business as well where Gov
eminent entry into business would be
as logical to bring consumer benefits
as in the electric light industry.
May Be Forcing Issue.
- One possible explanation IS that
some Of the public ownership and
State Socialism advocates are trying
to put Mr.. Roosevelt on the spot and
that they have been building a back
fire with the evident intent of blocking
any settlement between the admins
tration and the utilities. If this Is
the correct answer to the question Of
what forces are blocking . settlement
then the issue Is bound to flare up in
Congress soon and the lines Of cleavage
drawn. This would be distinct gain
because the investors Of the country
want to know now II there Is any
group in Congress who want State
Socialism irrespective Of the expense
and human misery involved in aggra-
waiting an already severe business re-
cession in which millions Of persons
have been added to the relief rolls in
the last two months.
The President in his Wednesday
conference with the head Of . Cali
fornia utility company found that even
where there had been cooperation
with New Deal policies, Federal funds
had been used to menace the private
investment.
It Is this issue of competition which
b coming to the surface rapidly. VIII
the Federal Government lend money
TO cities with which to drive out the
existing utility company There may
Be . legal right to do 20, but is this
wise economic policy?
The utilities could, of course, sell out
10 the cities after . fair appraisal Of
the worth Of the properties involved.
But in the case Of Chattanooga and
Knoxville, for instance, the holding
companies have offered to sell their
distribution facilities, but the cities
are unwilling to buy the systems
themselves, preferring to confine
themselves only to the purchase
Of distribution lines within q city
and ignoring the investment in gen.
oration and transmission equipment
outside that area, which would be
rendered almost worthless If the many
customers within . given city were
gubtracted from q private company's
market.
Will Be Forced to Decide.
While the T. v. A. cases are being
argued, the T. v. A. officials and public
ownership group have been quiet
about duplication Of facilities and
about starting any moves actually de-
stroying an existing company's invest
ment. But Is soon as the courts
hand down their decision, Mr.. Roose-
velt will be compelled to decide be-