Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-06-26
The Political Mill /.
Order to Acc in Line
With Eisenhower Policy
New Steom Power Plant
Declared Case in Point
The PoliticolMN
Bv Gould Lincoln

Declared Case in Point
By Gould Lincoln
President Eisenhower's order to the
Atomic Energy Commission to sign
contract with the sO-called Dixon-Yates
syndicate, which proposes to construct
q steam power plant with which to
supply iva with SOC, 900 to 10000 XIV
for similar power which the Acc will
be receiving from iva, Is in line with
the Eisenhower policy to have private
concerns and private capital where
possible. instead Of Government owner
ship and operation.
The order has aroused the resentment
Of both the politicians from the Ten
nessee River Valley and the supporters
of public ownership and operation OF
hydro-electric power and every other
kind Of utility. They see in the Presi-
dents order an attempt to stick knife
in the back Of iva; an effort to hand
the private utilities people big melon
at the expense Of the consumers OF
power and light and heat. It's nothing
of the sort.
It is in line, however. with the PreSi-
dents year-ago warning against Creep
ing socialism" warning in which he
pointed out that iva might be used in
just such a creeping process. Here, in
deed, is q case in point. For the public
power boosters are demanding that the
new steam plant be constructed by the
iva, with Government funds. The IVA
plant proposal is to locate the steam
power plant at Fulton, Tenn, 80 miles
above Memphis and on the Mississippi
River. The Dixon-Yates syndicate,
which represents Middle South Utilities,
Inc, and the Southern Company, pro-
poses to construct the plant at West
Memphis, Ark, on the west side Of
the Mississippi River, at an estimated
cost Of $107. ESQ., 900.
Arguments of Both Sides.
The argument Of the public power
advocates is that the power produced
oy the private concern is going to cost
more than had the power been produced
by a iva owned and operated plant.
The argument Of the proponents of the
contract with the Dixon-Yates outfit is
that in the end the Federal Government
and the local government will get back
in taxes what may be lost in power
costs, and so the taxpayers will be re-
lieved of the burden of other additional
taxes.
One Of the chief arguments, aside.
from the demand that we stick to the
capitalistic system rather than go social
iStic. on behalf of the contract, is that
the Government hasn't $107,25O, 900 to
build the steam plant. It would have to
borrow the money. The Government is
already in the business of borrowing
money. But the cost of the plant would
be just another burden. The private
syndicate, with the Acc contract back
of it, will provide the capital for con-
Struction out of private sources.
The contract has been challenged by
Representative Chef Holifield, Califor-
mia Democrat, on the ground that it
cannot be legally entered into by the
Acc. But an amendment to the law last
year appears to grant that authority.
So the Acc is expected to go ahead,
with the Presidents backing, and put
it through. There seems to be nothing
that Congress can or will do about the
matter at this juncture. Two bids were
submitted, that of the Dixon-Yates
syndicate and a second bid by a group
4 of investment bankers, attorneys and
financial conSultantS, headed by/VNalter
Won Tresckow, a financial conSultant.
The Bureau of the Budget analysed
both bids, in consultation with the iva
and the Acc, and held that the Won
Tresckow bid was less advantageous.
Primary Purposes of Act.
The act setting up the iva specified
it was for the development of hydro
electric power and navigation and flood
control in the Tennessee Valley. Those
were the primary purposes. Permission
was granted for supplementary steam
power plants. and the iva was author
lied to purchase supplementary power
from private concerns when necessary
to I'LL its own contracts. It has done
both. But this proposal to build big
steam plant in the Mississippi Valley
goes, it is argued. far beyond the con-
cept of the iva. The iva came for
ward with the Fulton plant proposal q
couple Of years ago, but Congress was
not ready to approve it. Last year it
was included in the Truman budget,
which was submitted by the former
President just before Eisenhower took
Office In rewriting that budget, the
Eisenhower administration omitted the
Fulton plant. This year the budget
made no mention of it.
The Eisenhower administration is in
favor Of the development Of hydro
electric power by the Government,
through the construction of dams,
where private and local agencies are
unable to carry out the development.
It's not an enemy of public power. But
it believes firmly that where private
capital is willing and able to do the
job, it should. Further, with public
VfilifU 1aVraiccinV1e IN tho SfofA0
local governments in full operation,
rates to the public can be fairly i'm
posed.
Ouesfions and Answere