TV Advance

Last week Chairman Arthur E. Morgan and Director David E. Lilienthal of Tennessee Valley Authority sat in the same House of Representatives gallery seats so lately vacated by "Power Trust" lobbyists, eagerly watching an experiment in child psychology. Fortnight ago the House, in bold defiance of President Roosevelt, flatly refused to vote a "death sentence" upon utility .holding companies. Now Dr. Morgan and Mr. Lilienthal were particularly interested to see whether it would cap one defiance with another, or whether the President was justified in his confidence that, frightened by its previous temerity, the House would return to its normal obedience. TVA's Morgan and Lilienthal fairly gurgled with satisfaction to find how completely right Papa Roosevelt, experienced in training children, was in his forecast.

The issue at stake was the passage of a bill designed to enlarge, improve and advance the powers of Tennessee Valley Authority. The Senate passed the measure last May. The House Military Affairs Committee, having heard many grievous charges against TVA by Comptroller General McCarl (TIME, June 3), first tabled the bill, then by a slim margin reported it out in a revised version. As they came before the House, these TVAmendments, instead of enlarging, considerably restricted TVAuthority by :

1) Forbidding TVA to sell electricity or chemicals below cost after July 1, 1937.

2) Requiring TVA to get the approval of Comptroller General McCarl before spending any money.

3) Denying TVA the right to construct power transmission lines parallel to existing private lines.

4) Refusing TVA's request for legalized control over all dam building in the Tennessee basin, a power which under existing law it had exercised merely by the "land shark" practice of buying up little parcels of land where Aluminum Co. of America was trying to purchase reservoir sites.

What set Messrs. Morgan and Lilienthal to gurgling with joy was a series of votes by which the members of the House, once more on their good behavior, with substantial and unexpectedly large majorities, in short order allowed what its committee had forbidden, waived what had been required, permitted what had been denied, granted what had been refused. The House then signed & sealed its grant of power by a vote of 278-to-99.

Significance. Only important restriction left by the House on TVA's authority was a refusal to enlarge its borrowing power from $50,000,000 to $100,000,000 and to use its funds to buy private utilities for resale to municipalities and States. Regardless of how this difference between House and Senate bills may be ironed out in conference, TVA had got most of what it wanted:

P: Legal authorization for acts that Federal Judge W'illiam Irwin ("Unconstitutional") Grubb of Alabama had declared illegal under the original TV Act.

P: The right to dictate to Aluminum Co. or any other private corporation that may want to develop water power in the Tennessee basin.

P: The right to spend its money as it likes without what it calls "red tape" and what Comptroller General McCarl calls "statutory limitations."

P: The right to fight private power companies by duplicating their distribution systems and, for an indefinite period of time, to cut electric rates regardless of any so-called yardstick of costs.

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