Pious Hopes

Schoolmarms formerly used yardsticks both for measuring and for smacking. That the New Deal is similarly using its power yardstick was last week apparent in Texas and Tennessee.

In Tennessee, Commonwealth & Southern Corp. is trying to escape TVA's punishing competition by selling out. Commonwealth's President Wendell Willkie wants to sell his integrated properties in one batch; TVA Director David Lilienthal wants to buy them piecemeal, using the threat of municipal competition with lower power rates to get his way. Thus the Electric Power Board of Chattanooga offered to buy the Chattanooga property of Mr. Willkie's Tennessee Electric Power Co., threatened to build its own plant unless he agreed. Last week, in a long letter to the board, Mr. Willkie deftly left the matter hanging, wound up with a pious hope: that the New Deal's "free gift of 45% of the cost of Chattanooga's proposed power system will not be used to force us to take a greatly discounted price for property for which we are trustees."

In Texas the same day, President John W. Carpenter of Texas Power & Light, an affiliate of huge Electric Bond & Share Co., penned a similar letter to the Lower Colorado River Authority, TVA of the Southwest. Allegedly sponsoring flood control, LCRA has urged a number of municipalities along the Colorado River to build their own power plants with PWA aid. Texas Power & Light has 1,277 miles of power line serving 13,200 customers in this Texas area, which is as big as Massachusetts and Connecticut combined. Last week, President Carpenter offered to sell this chunk of his system to LCRA, saying "the difficulties which confront power companies, faced with competition from power projects which are heavily subsidized by gifts of Federal funds, compel us to work out some plan with you to prevent the destruction of our properties. . . ." Mr. Carpenter also wound up with a pious hope: that LCRA would stop urging Texas municipalities to build their own plants--for if Federal competition forced the big utility systems to take heavy losses from competition in some localities, it would be impossible for them to reduce rates elsewhere.

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