Evening star., 1938-03-20
IVA. DEAL HOT
UTILITIES HEAR
Buying of Tennessee Power
Firm Believed to Be
Near Completion.
By the Associated Press.

By the Associated Press.
NEW YORK, March l9.-The ne
gotiations between the T. v. A. and
Wendell L. Willkie, president of the
Commonwealth-So Southern Corp, for
the sale of the systems properties in
the Tennessee Valley. are getting
quite hot" utility circles heard today.
When an agreement is reached,
these circles believed. line would be
drawn in the Valley beyond which the
T " A. would not enter into COM
petition With private utility systems.
As dellneated in the conference be-
tween Mr. Willkie and David E. Lilien-
thai, this line extends from around
Columbus. in northeastern Mississippi,
across the northern part of Alabama
in zigzag course, nips the north
western corner of Georgia and en-
circles the State of Tennessee.
Lilienthal- -Willkie Line.
In the financial district, it is already
being referred to as the Lilienthal-
Willkie line"
Commonwealth-S Southern properties
with book value of around $685.
100000 are included in this area
out OF total book valuation Of around
$3.50, 100000 for all of the corporations S
properties in Southern States.
The conferences in Washington the
past week proceeded rapidly and made
substantial progress, it was reported.
In addition to the meetings between
Mr. Willkie and Mr. Lilienthal, it was
understood here that Jesse Jones.
chairman of the Reconstruction FL
nance Corp, and Chairman William
q. Douglas of the Securities and Ex-
change Commission, had discussed the
negotiations thoroughly at the White
House.
1t was said that a quick meeting
OF the minds" had been reached in
the negotiations on this point-that
"hen an agreement is reached. the
situation with respect to private COM
panles outside of the "Lilienthal-
Wlllkie' line becomes stabilized, as
lar as the T. V. A. is concerned.
Attorneys Will Meet.
The possibility of T. " A. creating
non-profit organization fully con-
trolled by T. V. A. to take over the
properties when the sale is made.
and hold them until ownership is
eventually passed on to cities and
localities, is being discussed.
II 1eor
Commonwealth &; Southern will meet
With T. V. A. attorneys in Washing
ton early next week to 60 over this
phase of the negotiations.
The question of the exact price to
be paid has not yet been discussed.
1t was said, and there is still dis
agreement as to the method to be
used in determining the price. Mr..
Llllenthal, it was understood. has
advocated using the cost Of the ofou-
erty. less still-to-be-d determine /
amount for depreciation, as a means
OF determining the value. Mr., Will
kle, on the other hand, believes the
T. V. A. should pay dollar for dol
lar for every dollar "prudently" in
vested in the properties, less the de.
probation allowed by the Federal
Trade Commission.
S150,000 Is Invested.
In the case of the Tennessee Elec-
trio Power Co.-a subsidiary which
would be taken over in its entirety
by the T. v. Ait was pointed out
that some S750,0oO had been invested
in the past few years to expand the
use OF appliances sold by the COM
pany. The system contends this
and similar expenditures-should be
included in the purchase price as
prudent investment"
The Tennessee company accounts
for around sl05 100000 of the s125,-
COO,OO0 worth of properties in the
area. This company serves the greater
part OF the State. including Nashville
and Chattanooga. The T. V. A.
also is desirous of including in its
public-oWned systems the cities of
Memphis and Knoxville, which are
served by subsidiaries of Electric
Bond g. Share, and it is understood
that MI. Lilienthal has arranged con-
ferences with officials of this system
for the coming week.