Evening star. [volume] (Washington, D.C.) 1854-1972, 1939-07-02
Tennessee Reported
Considering Buying
Power Properties
Conferences Here Over
Week End Declared
Planned by Leaders
~ the Associated Press.

~ the Associated Press.
NEW YORK, July IA plan is
being studied by Tennessee political
leaders for that State to purchase
Commonwealth & Southern Corp.
electric properties there, usually re-
liable sources said today.
The plan was said to have been
proposed by Mayor Tom Cummings
of Nashville as result of the failure
of Congress to sanction the $78 ,600,-
900 deal whereby the Tennessee VAL
ley Authority and several munich
palities would take over the power
company properties. That deal ex-
pired last night.
Political sources said they under
stood Mayor Cummings was to dis
cuss the plan today with Gov. Prem
tice Cooper and other State officials.
While the Mayor was said to have
originated the plan chiefly to help
his city and Chattanooga in the
event T. " A., c. e. S., and munich
palities involved cannot agree on
further extension to permit con-
gressional approval, the proposal
was said to have the following ad-
vantages, outlined by Mayor Cum
mings, for the State as compared
with the original plan:
l. 1t would give the State at the
outset new revenues amounting to
over 100000 of the more than
$l,000,000 a year in taxes which
would be lost under the T. v. A.
plan.
Control in State Hands.
2. 1t would retain considerable
control over the vast development
of Tennessee Valley power in the
hands of the State rather than in
the T. V. "A Federal agency.
3. 1t would prevent duplication by
the municipalities of existing power
facilities in the event either that
Congress does not sanction the
T. V. A.-C. e. S. agreement at this
session, or T. V. A., c. e. S. and
the municipalities cannot agree on
an extension of the expired agree
ment.
Mr.. Cummings was said to have
made his tentative proposal to Wen
dell L. Willkie, president of c. & S..
and Wall Street bankers during his
visit here this week. Mr.. Willkie.
asked about the report said any
comment would have to come from
the Mayor.
Investment banking sources said,
however. that tentative questions
had been asked about the market
ability of a s45 100000 issue of two
per cent State bonds to finance the
State purchase proposal.
Reduction of $500
An issue of two per cent bonds
would reduce present fixed charges
of C. e. S. Tennessee properties by
about s68000G annually it was ex-
planned, and added to current esti-
mated net earnings of those proper
ties the immediate net earnings
visualized would be about 1882 900 a
year.
Conferences in Washington over
the long holiday week end. some
cOulCcS IIlOuSllb, WOulu eIIlpIldSlZc
the possibility of reaching agreement
by the REIMBURSEMENT of the geo.
graphical limitations on future
T, V. A. expansion hitherto asked
by opponents of T. V. A. policy, in
return for definite earmarking of
funds needed to put the deal
through
Power May Be Invoked.
NASHVILLE, Tenn, July lP.-
Tennessee has the legal machinery
to purchase indirectly Tennessee
Electric Power Co., a Capitol source
said today. and this power may be
invoked if Congress fails to enact
legislation enabling the Tennessee
Valley Authority to carry out it's
purchase contract with the utility.
The State could proceed under
power of 1885 legislative act which
authorizes a State rural electrical
ton board to create power districts
for distribution of T. V. A. power.
Such districts can issue revenue
bonds, not an obligation of the State,
and purchase or construct facilities
for distribution of T. v. A. power.