Evening star., 1939-08-16
Forced to Self

Now that the sale of the assets of
the Tennessee Electric Power Com
pany to the Tennessee Valley Au-
thority has been consummated on
terms which indicate that the own
ers of securities of the private utility
will at least salvage their original
investments, it is to be expected that
much Of the bitterness which has
accentuated the controversy between
the public and private power groups
will disappear. But that prospect of
better feeling does not minimize the
Importance of one observation made
in connection with the sale by Wen
dell L. Willkie, president of the Com
monwealth and Southern Corpora
ton, which had common stock con-
troll Of the subsidiary Tennessee
utility.
This transaction" he said, "has
demonstrated that no business, how
ever we'll run, can endure against
the competition of the Federal Gov
ernment with its vast financial re-
sources"
Mr.. Willkie, in other words, was
stating the obvious truth that his
concern was forced out of business
by the Government through the use
of taxpayers money or the threat of
such use. In the past, T. V. A. off,
cials have disputed the assertion that
the success of its power program
depended on subsidization, but the
correctness Of such claims would
seem to be established by David E.
Llllenthals comment of yesterday
that the purchase of the Tennessee
company, and the acquisition of it's
customers, puts T. v. A. on a profit
making basis"
But, even if it is assumed that
T. V. A. will now be able to show a
profit, 1t does not follow that the
policy of Government competition
with private business is sound. Nor
does the fact that in this case more
or less reasonable price was paid for
the assets of the private concern
after it had been forced to the wall
offer any support for the arguments
OF those who would broaden the scope
of T. V. A. operations.
The T. v. A. was established in
the expectation that its principal
function would be that of flood con-
troll, and that it's national defense
aspect and its power program would
be incidental to the main purpose.
But as the experiment progressed, it
soon became evident that first en-
phasis was being placed on the de-
velopment of power and the search
Tor possible marketing opportunities,
regardless of what might happen to
the businesses of the private utili-
ties already supplying those needs.
So aggressive did the proponents of
public power development become
that for while there was consider
able talk of establishing a number
OF regional T. V. AS" throughout
the country
Before this expansion passed the
conversational stage, however, a re-
action set in, arising principally as
a result of the continued New Deal
attacks on the utilities and the fear
that Government competition with
business eventually would be extended
still further. This sentiment was re-
f1ected in the last session of Congress,
where legislation to authorize yester-
days sale was rescued only with great
difficulty from the hands of Con-
gressmen who were determined to
place drastic restrictions around T.
V. A. operations.
In the light of these DEVELOPMENTS
it does not seem unreasonable to be-
lieve that the growing volume of pro-
tests against Government competi-
ton with private industry is bearing
fruit.