Evening star., 1939-08-15
Forced 10 Sell
Utility VA,
.i||kie Says
Tennessee Power
Properties Bring
$78,425,0e5
BACKGROUND

Tennessee Electric Po,per deal
has been under discussion for fue
years. Proponents OF publclv
and privately o1Dned utilities long
engaged in pickering, but Wen
dell Whlkie, Commonwealth e.
Southern Corp. president, and
Tennessee Valley Authority enqi-
neer reached tentative agreement
last February. Negotiations Uere
punctuated By congressional in
Uestigation OF T. ".
By the Associated Press.
NEW YORK, Aug. 15.-Wendell L.
Willkie, president of the Common
wealth & Southern Corp, asserted
today his company had been
forced" to sell the Tennessee Elec-
trio Power Co. because we could
not stay in business against this
subsidized Government COMPETE
ton"
His assertion was embodied in a
statement issued as the Federal
owned Tennessee Valley Authority
and Tennessee paid Mr.. Wilkes
company s78.425 ,09501 for the Ten
nessee Electric, of which Common
wealth & Southern owns SO per cent
of the common stock.
Mr.. Willkie declared the Govern
ment was acquiring the electric
property "at about 80 per cent of
its real value"
Il sincerely hope" he said, that
our former customers in the State
of Tennessee will continue to enjoy
the benefits which the Tennessee
Electric Power Co. originally made
possible.
Too Much Competition.
Whether or not the quality of
service is maintained, these Gus
toners will, of course, enjoy the
lower rates made possible by Gov
ernment subsidy-but they and all
the people in the United States will
pay the higher taxes which tax ex-
empt and heavily subsidized Gov
eminent operations inevitably re-
quire. .
This transaction has demon
strated that no business, however
we'll run, can endure against the
competition of the Federal Govern
ment with its vast financial re-
sources"
Lilienthars Statement.
David E. Lilienthal, T. v. A. di-
rector, said
This would seem to be a good
time for the utilities and the T. v.
A. both to devote all of their ener-
gles to the considerable work we
each have to do. The T. V. A. will
now be able to concentrate on its
main purpose: The development of
the great Tennessee Valley region.
With the growing demand for the
benefits of electricity, the future of
electricity supply in this country
looks very bright for both private
and publicly operated agencies"
SO T. V. A. has made good on
It's assurances to the Congress and
the Federal taxpayers that the
project is -liquidating. Todays
transaction increases the T. V. AS
revenues from power operation by
more than s4.50O,O0O a year to a
total of more than $4,000 900 and
puts T. v. A. on a profit-making
basis.
The greatest transfer of a going
privately owned electric power prop
erty to Government ownership in
the history of the United States took
place in a big, bare white room oc-
cupying half floor in the Wall
Street skyscraper of the First Ma
tional Bank.
More than 200 men, representing
the T. V. A., Tennessee municipal-
ties and power co-operatives, and
commonwealth & Southern loungeG
at scores of card tables. Mr.. Willkie
presided
Thirty-five checks, ranging in size
from $44, ,728, 300. made out by the
T. v. A., to s31,75526. from the City
OF Lawrenceburg, Tenn, changed
hands to settle the deal
In the main. the plan of operation
calls for ownership and operation of
generating facilities and high-ten-
sion, cross-country power lines by
L. V. A. This system will bring power
to the cities, where T. V. A. will sell
1t to municipal power boards. These
boards will operate publicly owned
distribution systems within the
cities. which will carry the power to
the manufacturer and householder,
send out monthly bills and make
collections.
During the long negotiations Mr.,
Willkie had been demanding what
he called fair price" When the
battle started, the Governments Of
fer was $65 100000.
T. v. A. Probed by Congress. !
Mr.. Willkie and j. A. Krug, T. v.
A. chief power engineer, finally got
togther last February 5 in a tenta-
tive agreement. r.
Many dramatic events interposed
before the agreement was complete.
One of the high lights was a con-
gressional investigation of T. v. A.
after rift between DR.. Arthur E.
Morgan, T. V. A. chairman, and the
two other directors, Harcourt A.
Morgan and David E. Lilienthal.
President Roosevelt ousted DR..
Morgan on charges of "contumacy"
and appointed former Senator
James P. Pope of Idaho in his place.
Then the Supreme Court dis.
missed a suit brought by Common
wealth & Southern to test cnnstitl1.