Evening star., 1938-11-18
Republicans on iva.
Probe Hit Opening
OF Tax Returns
Charge It Involves q
Dangerous Precedent
Involving Rights
BY the Associated Press,

BY the Associated Press.
Two Republican members Of the
T. v. A. Investigating Committee
criticized vigorously today an execu-
tive order of President Roosevelt
opening income tax returns to COM
mittee scrutiny.
Representatives Wolverton, Re-
publican, of New Jersey and Jenkins,
Republican, of Ohio clashed with
Chairman Donahey. Democrat, of
Ohio over the action Of Francis
Biddle, committee counsel, in OBJ
tanning the order.
They contended it involved a
dangerous precedent" tending to-
ward invasion of the rights of pri-
vate citizens.
Senator Donahey retorted that he
approved the action of the counsel,
taken without full committee con-
sent.
Il think it is perfectly proper"
Mr.. Donahey shouted, that these
utilities be brought in here and
made to show anything this COM
mittee wants them TO show"
Salary Top of $4,000.
In proceedings just before the dis
pute the committee had heard
statement that one of the reasons
T. V. A. power can be sold at COM
paratively low rates was that the
Authority had a top salary limit of
500 year.
This explanation came from Fran
els Biddle. committee counsel dis
putting cost estimates offered by Ed
ward L. Moreland. utility witness.
Mr.. Moreland had predicted that
T. V. A. would spend $1,000, 900 a
year on administrative expenses
alone after the 11dam program is
completed. He contended that oper-
alton OF T. V. A. at its "yardstick
rates would result in a deficit Of
more than sl0,0O0,O00 annually.
He and Mr.. Biddle wrangled at
length on how depreciation, interest
and tax costs should be figured.
Mr.. Moreland. under brisk cross
examination, said at one point:
II don't care whether this deficit
is So, 900 900 or s1O,OOO,0OO The thing
that matters to me as taxpayer is
that there is large deficit"
Seek Depreciation Figures.
Mr.. Biddle earlier had said the
committee would examine electric
utility income tax returns only to
obtain depreciation figures used by
the Tennessee Electric Power Co.
President Roosevelt gave the COM
mittee access to the tax files in an
executive order this week.
The depreciation figures, Mr.. Bid
die said will be used in questioning
Wendell Willkie. head of Common
wealth & Southern Corp. Mr.. Will
kie will be asked about negotiations
for sale Of the Tennessee company's s
electrical department to the 7. ".
A. and municipalities.
Stalemate Is Reached.
The negotiations reached a stale.
mate when Mr.. Willkie failed to
agree with the T. V. AS estimate
of approximately s23 1000, 900 depre-
citation on properties originally
costing about s81 100000 Mr.. Will
kie contended this depreciation was
too high.
Controversy arose in the commit
tee yesterday over Mr.. Morelands S
estimate that T. v. A. depreciation
on power houses and power facilities
would average l.94 per cent year
and that the depreciation on the re-
mainder of the investment would be
rs per cent a year.
Suggests Change in Figure.
Mr.. Biddle suggested that a change
Of g per cent in these figures, which
he indicated he thought was pos
sible, represented the difference be-
tween profit and loss in actual op-
Grafton of the T. " A.
Mr.. Moreland told the committee
he believed it was unfair to fix a
'yardstick' for power rates on the
basis of T. v. AS operation, because
Of the amount of guessing" which
he said would be involved.
Mr.. Moreland said T. V. A. rates
must be increased 43 per cent to
assure taxpayers the return of their
eventual investment in the public
power project.