Evening star., 1955-02-19
tennessee Plea
For New Dixon-Ya
Hearing Is Denied
BY the Assoeiossd Press

power contract chalked up an
other round today after the Sc
curities and Exchange commits
sion turned down a plea from
the State Of Tennessee that it
reconsider its approval Of q pro-
posed $512 million stock trans
action to help finance the prof.
ect.
But the argument over the
contract continued with these
developments:
/. Senator Hill. Democrat, Of
Alabama, said yesterday he has
discovered that an officer of a
banking firm which is working
on the financing had also served
as a consultant to the Federal
Bureau of the Budget on the
same matter. He said there were
indications this fact was delib-
erately concealed from the pub
lie.
2. Rowland Hughes, budget
director. said no important facts
have been concealed. He said
the banking officer had sat in on
few discussions Of technical
matters"
8. E. A. Yates, one Of the
utility men sponsoring the power
project. took issue with conten-
tions that the private utilities
which obtained the contract
stand to make big profits with
little risk. He said they assume
the major risks and even If all
goes well the profit will be
modest.
Contract for Plant.
Under a directive from PreSi-
dent Eisenhower. the Atomic
Energy Commission contracted
with group of private utilities
for the construction of a $107-
million generating plant at West
Memphis. Ark, to supply power
to the Tennessee Valley Author
ity. The electricity is to replace
current which iva furnishes
ACC installations.
Democrats contend the con-
tract is a threat to IVA and
public power. The administra-
ton contends 1t Is in the public
interest.
Senator Hill told the Senate: |
"It is essential and necessary
that the Bureau of the Budget |
and the Acc be called upon to |
make a full and complete dis
closure of the part played by |
certain individuals and the cor
porations they represented in the |
development of the Dixon-Yates
arrangements" He suggested |
that the situation be investigated
by the Senate House Atomic |
Energy Committee.
Senator Hill identified the
bank officer who acted as con-
sultant to the Budget Bureau as |
Adolph H. Wenzell, vice president |
of the First Boston Corp. He |
said the corporation had a part |
in arrangements for providing
withssomewhere be-
tween 500 and $120 million"
Later in the day. the BUDGET
Bureau issued a statement by
Mr.. Hughes declaring that
there are no important facts
and circumstances concerning
the Dixon-Yates power contract
which have been concealed.
"The facts of Mr.. Wenzell's
engagement as q consultant to
the director of the Bureau Of the
Budget are as stated in a letter
which I forwarded to Senator
Lister Hill of Alabama on Febru-
ary II Toward the end of
Mr.. Wenzell's service as a con-
sultant on other matters and
after discussions with the Dixon
Yates group were under way, he
sat in with others on a few Of
The early discussions of technical
matters when they related to his
'1eld of finance"
Says Utilities Take Risk.
In New York, Mr.. Yates,
chairman of the board Of the
Southern Co. and another spon-
;or of the project, said the major
'isks under the contract are be-
ng taken by Middle South and
Mr.. Yates, stating he wanted
he public to know the facts,
aid construction costs have al
eady gone up about 5 per cent
ince the proposal was made.
If construction or certain
operating costs exceed esti-
he continued, "the re-
urn on equity capital will be
educed.
Even If all goes well, the
maximum return on the overall
will be less than 4
yer cent"
County Police Cuptuin