| Show IT I V A OFFICERS PLAN TO FIGHT BAN ON SALES Federal Judge Declares Private Private vate Disposal of Surplus Electricity Illegal By United Press WASHINGTON Feb 23 P 23 P W A Awill Awill Awill will join with ith T V A In appealing appealing- an Injunction against federal al al- for distribution of power from the hu huge c Tennessee valley alley project Henry T. T Hunt P W A general counsel said toda today BIRMINGHAM Ala Feb 23 23 At Attorneys for the Tennessee valley authority authority au thorit President Roosevelt's first yardstick power project prepared an immediate appeal today from a federal district court injunction prohibiting prohibiting pro pro- government power competition tion with private companies Federal Judge W W. I. I Grubb granted grant grant- ed preferred stockholders of or the Alabama Alabama Alabama Ala Ala- bama Power company compan a permanent injunction nullifying a contract between between be be- tween the company and T V A for forthe the tho sale of its transmission lines and distribution plants He He granted a permanent injunction prohibiting 14 Alabama municipalities ties tics from froni accepting or using federal public works administration loans Joans tc to build transmission lines or distributing ing plants competing with those of private companies Surprised b by Rulings T V A attorneys were surprised by bythe bythe bythe the drastic nature of the rulings and refused to comment T V A officials said privately how however ver that unless the decision was reversed by bv the federal fed eral cral court of appeals or the thc thc- U. U S. S supreme su suo preme court they would seriously cripple the governments government's project of establishing a power cost yardstick in th the Tennessee valley to determine the fair cost of electrical energy to the consumer James Lawrence Fl Fly chief of the theT T T. V V. A. A legal staff said there was wasa a possibility that T T. V. V A. A would seek seck seeka a short cut in its us appeal to the supreme su suo su- su preme court by applying to the high tribunal for a writ o of certiorari immediately immediately immediately im im- im- im mediately upon filing formal appeal with the circuit court ot of appeals at New Orleans We are considering this step but have made no decision yet Fly said It is an extraordinary procedure in such cases Judge Grubb b basing lin his on the tenth amendment of the constitution constitution constitution said the government had no right to conduct a 3 business in competition competition com corn petition with private industry He restrained restrained restrained re re- strained P W A loans for power plant building on the grounds that they would be used to assist the T V A commit commil nn an illegal act He d did d not rule on the constitutionality of the Tennessee see valley act which created the power authority In invalidating the specific contract he held that under the tenth amendment amendment amend amend- ment the United States has hos no right Continued on Pate PUt Two To TVA TV A SETS FIGHT i ON POWER BAN Continued from Pare One Ont the limits of a state tate to conduct con eon duct duct an any proprietary budness un un- tied Lo 0 o some constitutional grant of ot power and l if 11 the grant ot of power existed isted it carried with it the right todo to todo todo do business Declared Not Surplus Government attorneys contended the authority was selling a surplus of Cf power The power was generated d they said as a part of the governments govern ments ment's navigation and flood control contro project Judge Grubb ruled that the power T TVA V A proposed to sell sellin In Alabama Alabama Ala AlaS bama was not riot surplus but was wu gen gen- crated rated for lor the primary purpose o oJust of sale Just before the case ended W. W HMitchell H H. Mitchell representing Florence Sheffield Sheffield Sher- Sher field reId Tuscumbia and Decatur asked ked Judge Grubb to dissolve the t hon on re restraining the dUe cities from pro with efforts to build municipal municipal municipal mu mu- p power poyer plants with P W A funds The Judge replied that T TVA V A had bad hado no no o more privilege to sell power to municipalities than to others and that to utilize P W V A funds In dis distributing clis- clis T TVA V A power could be to aid in an sn unlawful act Because there arc are generators at Wilson dam darn doesn't give the T TVA V IT A or the United States the right to sell ell power as a private te agency in the state of Alabama said Judge Grubb I dont don't believe you could take the small amount of ot power needed to operate the locks lock and the large amount generated and call it a surplus sur sur- plus I dont don't th think it Is the plan of oi the T V A to confine the surplus to the amount that would be produced incidental to a constitutional tunc tion tion I think the evidence shows clearly that T TVA V A intended to pro duce power and sell it and to buy the facilities of ot the Alabama Power company to do it with Would Extend Arguments Mitchell sought to extend his arguments ar ar- ar- ar as u. u asto to the rights of ot cities to purchase power from the government govern government ment If you want a rehearing said uld Judge Grubb tartly you may apply for it Even plaintiffs plaintiffs' attorneys were surprised surprised sur sur- by bythe the suddenness of ot the courts court's ruling A bench decision was Wa unexpected Aa As I 1 1 read the case the judge stated i if there Is a bona fide surplus sur plus there Is an art Implied right to sell the surplus legitimately created to carry carryon on its constitutional powers I got the Idea from the proof not nol necessarily that the act says sas so but bul that the directors tors have not arranged to dispose dispose- of ot any surplus of at that kind but have treated all power as Db surplus either cither to show by example how cheap power can cart be made by the government or In connection with i its for tor other purposes pur pur- poses in jet the valley Judge Grubb said It was not necessary nee nee- essary for him to pass pus upon the con con- of ol the T V A act itself but that the T V A directors had assumed powers not riot granted ranted by the act act ct and that these assumed were unconstitutional t The directors' directors idea he ne continued contin contin- ned is 15 that anything Is a surplus over and above what they use we I Ic c consider it essential to show this power was Incidental to a 1 function JunctIon or an excess created in good faith Declared Illegal lIt It seems ms that the evidence shows it t is not a. a surP surplus s that can be at tri to any power Therefore Its Hs doing so o is Js ultra vires and arid illegal al It puts the T TV V A in the utility husi ness and L is 13 ultra vires of or its author author- ily During DurIn the T V As A's summation yes yes- es Judge Grubb Interrupted Wil WH liam Ham C. C Fitts Jr of oC the T TVA V A legal staff daft and a sharp exchange of ot views occurred Fit Fitts contended the g government Was as as privileged to utilize all the na tural resources of the Tenn Tennessee ee nver rive riv er and to dispose of ot power created in the uses usa That said aid the judge would be benevolent dictatorship ls is j there any difference 1 Flits Fitts asked between the Alabama Power company selling the power and the T r TVA y V A selling it iU Yes replied Judge Grubb The Alabama Power company compan is subject to regulation If the government cannot cannot can can- not tell sell power without violating the law Jaw It Is better to w waste waite te it H. U If U the power I Is created to sell jell you cant can't claim you are selling a surplus Competition f Is only one ele elc ment of engaging In business busness I HI have never be been n able to bring myself to believe the United States could go Into a permanent business within the limits of or the states W WASHINGTON Feb 23 Dele TV gates to the ninth biennial conference of ot the Public Ownership League of oC America departed from their fixed program today to express s amazement at the United States district court ruling at Birmingham Ala which held the T V. V A. A had no legal right t to sell current to municipalities r R. R E. E McDonnell Kan Kansas as City en en- who has been working on the Knoxville Tenn municipal I tion system said This is the most peculiar decision I ever heard of of He Re added It U seems almost ridiculous to think that such obstacles would be placed in the way of the people ople who arc are seeking to obtain benefits from the T. T V V. A. A McDonnell said the court decision will result in stopping the work of ot people in the T. T V. V A. A area York Work on the Knoxville distribution system will be stopped today he be said sai |
