Broader Than Dixon-Yates

When they were finally sure that the voters had given them control of Congress, Democrats on Capitol Hill set out to force the Atomic Energy Commission to do their bidding. Their target was the Dixon-Yates power contract (TIME, Nov. 8), up for consideration before the Joint Congressional Atomic Energy Committee. They could not prevent the signing of the contract, but they did threaten to nullify it next year. Announced Senate Democratic Leader Lyndon Johnson: "We expect that . . . the Dixon-Yates thing can be given a quiet burial."

Feet to the Fire. The best support Democrats had for their argument was the testimony of Atomic Energy Commissioner Thomas Murray, the AEC's lone remaining Truman appointee. He told the Joint Committee that some features of the contract did not serve the best interests of the U.S. AEChairman Lewis Strauss decided to negotiate for contract changes which Murray wanted, knowing he needed Murray's approval to take some of the steam out of the Democratic attack.

The AEC's representatives held the Dixon-Yates attorneys' feet to the political fire, and came away with several important concessions. Among them: 1) the U.S. will have the right (e.g., in the event that the Democratic Congress so orders) to "recapture" the Dixon-Yates facilities during the contract's first three years; 2) the company will be limited to (but not assured of) annual earnings of $600,000 (equivalent to a 10.9% return on investment). In return, the Dixon-Yates group won the right to cancel the contract after next Feb. 15 if it fails to get Securities and Exchange Commission authority to float the necessary stock issue.

Deciding that the contract was now "in the public interest," Democratic Commissioner Murray voted to go ahead with the signing. By a 10-8 party-line vote, the Joint Committee then waived a 30-day layover period required for such contracts. But the Democrats were by no means ready to admit defeat. Lyndon Johnson had cried that the next Congress, with New Mexico Democrat Clinton Anderson as Joint Committee chairman, would "expose Dixon-Yates, written in the dark of the moon, to some good New Mexican sunlight."

Inside the Question. Amid the furor on Capitol Hill, Dwight Eisenhower threw his weight more firmly than ever behind the Dixon-Yates plan for building a $107 million private power plant at West Memphis, Ark., and against the alternative of making a Government outlay of about that much for additional Tennessee Valley Authority steam-generating capacity. The question involved, the President pointed out, is broader than Dixon-Yates. It is: Should the Federal Government perpetually expand its role in the power industry? In a letter to Chairman "Stub" Cole of the Joint Committee, the President wrote: "If the Federal Government assumes responsibility in perpetuity for providing the TVA area with all the power it can accept, generated by any means whatsoever, it has a similar responsibility with respect to every other area and region and corner of the U.S."

At his press conference, the President related that he had asked the TVA expansion advocates, "Well, now, are you ready to support this kind of development for the Upper Mississippi?" They just looked at him and said, "That is outside the question." But it wasn't outside the question to him, said Ike. Nothing in the Dixon-Yates contract could raise by a single cent the prices that TVA charges its customers, the President added, so if there is anything political in it, someone is making it that way.

Hardly noticed in the Dixon-Yates political battle are the two public utility executives whose names it bears. Who is Dixon, and who Yates? Edgar H. Dixon, 49, president of Middle South Utilities, Inc., and Eugene Adams Yates, 74, chairman of The Southern Co., joined forces to set up the Mississippi Valley Generating Co. (Dixon, president) which will operate the new West Memphis plant. Both men were born in New Jersey; both are Episcopalians, Republicans, members of Washington's Metropolitan Club, directors of several Southern power companies and amateur gardeners.

Dixon, who lives in Tenafly, N.J., has been in the utility business since he became a clerk for the Electric Bond & Share Co. after his graduation from high school in 1922. Among other business connections, he is a vice president of Electric Energy, Inc., which is building a steam plant to supply the AEC's Paducah, Ky., installation. Yates, an engineer (Rutgers '02), worked for five years on two railroad tunnels under New York's East River, since 1911 has spent much of his time in the South. As vice president of Wendell Willkie's Commonwealth & Southern, he helped Willkie with the fight against TVA. As for the Dixon-Yates project, he points out that it is a small part of his company's business and one which may yield no profit. Says he: "The whole thing's a pain in the neck."

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