Evening star., 1939-01-30
II Power Companies
Lose T.V. A. Attack
In Supreme Court
Tribunal Rules They
Have No Standing
To Maintain Suit
BY the Associated Press.

BY the Associated Press.
The Supreme Court ruled today
that IA private power companies
had no legal right to challenge the
Governments gigantic Tennessee
Valley Authority power program.
In decision delivered by Justice
Roberts, the tribunal held the util-
tiles had mo right to be free of
competition
I'm no aspect Of the case have
the appellants standing to maintain
the suit" Justice Roberts asserted.
Justices Butler and McReynolds
dissented to the 5-to-2 decision, con-
tending it goes too far"
The opinion gave the Government
a go-ahead sign for continued con-
struction Of series of dams in the
Tennessee Valley and for sale of
surplus power produced.
The high court affirmed a decree
in favor of the Government by a
three Judge Federal Court in East
ern Tennessee.
The three-judge court had held the
T. V. A. Act constitutional and that
the utilities have no immunity
from lawful competition even if their
business be curtailed or destroyed"
No Constitutionality Ruling.
The Supreme Court, however, did
not rule directly on constitutional
ity of the T. V. A. law, contning
itself to the right of the utilities to
bring suit
Justice Butler, who wrote the dis
senting opinion, contended the util-
tiles were entitled to have this
court decide upon the constitutional
questions they have brought here"
Justice Reed did not participate
in the decision. AS Solicitor General
ne had argued a previous T. v. A.
case before the tribunal
Justice Roberts asserted that "the
vice of the position" taken by the
power companies lis that neither
their charters nor their local fran
chises involve the grant of a mo-
nopoly or render competition lille
GAL
THE franchise to exist as cor
poration, and to function as public
utility, in the absence of a specific
charter contract on the subject" the
opinion continued, creates no right
to be free of competition, and affords
the corporation no legal cause of
complaint by reason of the States
subsequently authorizing another to
enter and operate in the same field.
THE local franchises, while hav-
ing elements of property. confer no
contractual or property right to be
free of competition either from in
dividuals, other public utility cor
porations. or the State or munici.
pality granting the franchise.
Obligation Not Asserted.
''The grantor may preclude itself
by contract from initiating or per-
mitting such competition, but no
such contractual obligation is here
asserted"
Justice Roberts said the Federal
District Court finds that the au-
thority has not indulged in coercion,
duress, fraud or misrepresentation
in procuring contracts with NUM-
clpalltles, co-operatives or other
purchasers of power; has not acted
with any malicious or malevolent
motive. and has not conspired with
municipalities or other purchaser of
power
THE record justifies these find
ings," Justice Roberts asserted.
The IA utility companies had
challenged the T. V. A. program,
designed to furnish a ''yardstick"
for measuring the proper cost Of
electricity in the United States.
They sought an injunction to re-
strain the T. v. A. from construct
ing dams in the Tennessee River
and its tributaries. from generating
electric energy at the dams and
from marketing the energy in ter
ritory claimed by the power COM
panies, They contended they were
| threatened with imminent destruc-
ton or serious injury by competition
| from T. V. A.-produced power.
The T. V. A. argued that the
prime purposes of the vast enter
prise was to create and maintain
9-foot navigable waterway
throughout the 650-mile length of
the Tennessee River, to promote
navigation on the Tennessee River
and its tributaries, to control de-
structive flood waters in both the
Tennessee and the Mississippi River
basins and to improve Wilson Dam
properties at Muscle Shoals in the
interest of national defense.
Construction of series of seven
high dams on the main stream Of
the Tennessee and two reservoir
dams on two of the principal tribu-
taries, the Clinch and Hiwassee
Rivers, is included in the plan.
Dissenters Assail Setup.
The dissenting opinion of Justices
Butler and McReynolds assailed the
T. v. A. setup and declaring "pur-
suant to a plan promulgated in 1888,
the defendants are conducting q
systematic campaign for disrupting
the established business relations
between compliments and their Gus
toners, destroying the goodwill
built up by the complainants and
seizing their markets and melting
(See UTILITIES, Page A-5.)