Evening star., 1955-07-01
Opponents See Victory
In Dixon Yotes Restudy
Continued FROM First PAGE

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Continued From First Page
Of the city Of Memphis to build
its own power plant.
He called cancellation "a
graceful way out Of a very un-
pleasant situation"
He said the. contract was ap-
proved by Congress reluctantly,
and IF the President can take
another look. we can take an
other look also"
Hits Late Move
He said it was strange that it
took the administration so long
TO recognize that Memphis was
determined to build its own
plant. He chided the White
House for waiting until "after
the sun had gone down the night
before the committee was to act" !"
He said each passing day viii
increase the cost Of cancellation.
Senator Bender, Republican Of
Ohio, one of a few Republicans
on the floor at the time, arose
to defend the President. He said
Mr.. Eisenhower Is not interested
In special privileges for anyone
and wants local agencies, public
or private, to develop as much
power as possible. He said the
administration is not going to
sell IVA, but favors the part
nership principal between Gov
erninent and private agencies on
projects too big for private de-
yelopment.,
Representative Holifield, DEM
ocrat, Of California. and Repre-
sentative Hinshaw, Republican.
OF California. estimated the con-
tract cancellation cost would be
relatively small. Both are mem
berS Of the Senate House Atomic
Energy Committee. Less than
one million dollars" was the way
Mr.. Holifield put It,.
Need Called improbable
President Eisenhower. late yes
terday instructed Mr.. Hughes to
study the feasibility of going
ahead with the $107 million deal,
Mr.. Hughes said a probable
result" is that the plant may
not be needed.
Dixon Yates foes in the Ten
nessee Valley Authority area
hailed the administrations ac-
tion as the probable forerunner
OF q decisive victory in their
year-long fight to keep the Dix
on-Yates Combine Mississippi
Valley generating company
from cutting into their territory.
On the. contrary. w. K. In
gram, president of the West
Memphis Chamber Of Commerce,
said the plant would be built
because it would cost the Gov
ernment too much to cancel the
contract. Ground already has
been broken. Mr.. Hughes was
reported to believe the cancel
lation costs won't be much"
Report Expected Soon
White House Press Secretary
James c. Hagerty said Mr.,
Hughes told him that he expect
ed to complete his review ef the
Dixon-Yates contract and make
a report to Mr.. Eisenhower early
next week. Mr.. Hughes started
his review of the contract late
last night, Mr.. Hagerty reported,
and would talk over the week
end with Attorney General
Brownell and officials of IVA
and the Atomic Energy Comnis-
sion. n
The Dixon-Yates arrangement,
involving Middle South Utilities
and the Southern Co.-headed
respectively by Edgar H. Dixon
and Eugene Yates--was devised
more than a year ago after MIR
Eisenhower had rejected a iva
proposal to build a generating
plant at Fulton. Tenn. to meet
growing needs of the Atomic En-
ergy Commission and other de-
Tense setups, as well as the ex-
panding demands of Nome and
industrial users.
The President instructed the
Atomic Energy Commission to
contract with Dixon Yates fof
the plant which would send pow.
er into the iva lines at Mem
phis to compensate for power
used elsewhere in the system by
the Acc
Angered by what was de.
rlounced as an effort to wreck
iva, public power forces. spear.
headed by the State Of Tennes-
see, launched counterattack ir
Congress, the courts and thu
Securities Exchange Commission
which was called on to pass or
the Dixon Yates financing.
The issue finally was brought
TO q head a few days ago when
Memphis announced plans te
build its own municipal plan
and notified the iva that II
would take no more of its powel
after the present contract ex.
pires in June, 1858.
Explains Move
Yesterday Chairman Herbert
d. Vogel of the iva board mott
fed the Budget Bureau of tn,
Memphis decision and said:
Because Of the decision o
the city it will no longer b,
necessary for IVA to plan ca
pacity installations to meet tn,
load requirements Of the Mem
phis area. Since the Dixon-Yate
plant was proposed as a sorlrc,
Of supply for the Memphis load
the city's action eliminates thu
possibility Of using its outpu
In the Memphis area, and tn
! transmission costs involved ant
other factors would make it i'm
practicable for iva to utiliz
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