xt7wwp9t2q46_34 https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/mets.xml https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/59m61.dao.xml American Liberty League 37 linear feet archival material English University of Kentucky This digital resource may be freely searched and displayed.  Permission must be received for subsequent distribution in print or electronically.  Physical rights are retained by the owning repository.  Copyright is retained in accordance with U. S. copyright laws.  For information about permissions to reproduce or publish, contact the Special Collections Research Center. Jouett Shouse Collection (American Liberty League Pamphlets), No. 37 "The TVA Amendments: An Analysis of a Proposal to Increase the Power of an Agency Which Has Shown an Apparent Willingness to Evade the Law and Constitutional Limitations," May 27, 1935 text No. 37 "The TVA Amendments: An Analysis of a Proposal to Increase the Power of an Agency Which Has Shown an Apparent Willingness to Evade the Law and Constitutional Limitations," May 27, 1935 2013 https://exploreuk.uky.edu/dips/xt7wwp9t2q46/data/59m61/59m61_37/Am_Lib_Lg_37_001/Am_Lib_Lg_37_001.pdf section false xt7wwp9t2q46_34 xt7wwp9t2q46 Constitutional Principles
The entire program of the TVA represents an * *
effort to undermine constitutional provisions.
The record of the TVA to date bears this out.
The sponsors for the scheme are interested pri-  
marily in building up a Socialistic State. The
attempt to circumvent court decisions through
the enactment of the pending legislation is in- T V A
dicative of a disregard for the principles upon
which our Government was founded. The bill,
S. 2357, proposes by adroit means to keep within _  
the letter while violating the spirit of the Con- "
stitution.
Already the TVA has arrogated to itself
powers in excess of those granted either by the
law or by the Constitution. The pending bill
seeks to legalize some of these unlawful acts and * * * "
to bestow even greater powers upon a bureau-
cratic menace. It has no warrant in law, no
justification in practice.
An Analysis of a Proposal to Increase
the Power of an Agency Which
Has Shown an Apparent
Willingness to Evade the
  Law and Constitu·
tional Limitations
E c
I  QJ; v..v  
I    
  —.}§‘~ cg
1 l?7'y LE,}
AMERICAN LIBERTY LEAGUE
National Headquarters
NATIONAL PRESS BUILDING
WASHINGTON, D. C.
16 * *
Document No. 37 V
{ May. mss

 The TVA Ammdmcms §i`§m°2ZZ?E"€?f Etetheréawifad ¥°t§”“f¥ mf? ·“‘tk€
p VIS O B C . IS B-
* V lieved that this bill will accomplish that result."
The Senate Committee thus disposed of a bill
Pending legislation amending the Tennessee which actually is of very great importance.
Valley Authority Act of 1933 reflects a de- Those in charge of the measure refused to delay
termination to brush aside constitutional action long enough to obtain a transcript 0-f
provisions which stand in the way of a vast A hearings held before the House Committee on
experiment in State Socialism. The bill, S. 2357, Military Affairs. These hearings took place on
passed by the Senate on May 14, 1935, should March 28, 29 and 30 and April 2, 3, 9 and 10.
be rejected by the House of Representatives. Although nearly five weeks had elapsed be-
Objectionable features include the following: tween conclusion of the House hearings and
1. It seeks to circumvent lower court decisions passage of the bill by the Senate, the usual
on constitutional éssues which should be decided printed transcript was not available. Senators
by the Supreme ourt. urging speedy passage of the bill evinced no
2. It gives greater power to an agency which interest when informed that the House Com-
has shown an apparent willingnessto evade the mittee hearings contained information relative
law and constitutional limitations in its zeal to to a severely critical audit by the Comptroller
promote a social experiment. _ _ General and much additional data tending to
3. It facilitates a merciless competition by the establish the objectionable character of the bill.
Government with private industry.
4. It gives further support to a faulty "yard- .
stick" for measuring private utility rates. Terms Of BIH
5- It sanctions an 0YsI“sXPa¤si0H Ot POWGY The bill, described by the Senate Committee
Capacity 111 an arsa Whlsh Was amPlY sulaphsd as unimportant, consists of 13 printed pages.
before tha srsatmn Of tha TVA- The vital provisions are designed to allow the
Q. It increases the Government’s financial TVA to go forward m A program mrorrrmtod
gl;lgia;pt1;§;»t;§naé Pmlsst that Was suplasssd to grr ézomplicatecd byriwladmerfidecésionign thedgowier
‘ _· _ _ e era cour s. e 1 roa ens e au ori y
7. It helps bu1ld up a bureaucracg which will of tho TVA Vrrohr respect tp the Solo pf power
2·§;t5c1£l;tOg‘?%hgY¥?·§gp1;hZf 1;V‘i’;rgaé¤;1€aus1n€ss ac' and _ghe zglqmsiglon of ezirsting ffacélities. I3
A · rov1 es a
8- It glV€‘s a more sssurs status t0 an sXPs1`i' iieservoirs shaall beq pitilfrlarillygnfor? the agdrpcislies
I{1€¤t which m_aY_ be a PYsCs€ts¤t_f0I` tha sstab" of promoting navigation and controlling floods
lishment of similar authorities in other river but that power may be morkorod m ordor to
Vallsys at tha sXP€¤ss Of tha taxpayers of tha avoid its waste and to assist in liquidating the
€¤t11°€ 00¤¤t1'Y· cost and in the maintenance _of the TVA. More
complete control is conferred over conditions
Histgyy of Bill surrounding the resale of power.
Authority is given to acquire existing dis-
The Senate passed the bill on the recom- ( tribution facilities, generating plants and other
mendation of its Committee on Agriculture ’ incidental works, together with interconnecting
which held no hearings and submitted a 13-line transmission lines or any interest in them, and
report. _ _ _ _ to dispose of them to states, counties, munici-
All the information officially made available to · palities and non-profit organizations. To
the Senate by the Committee is contained in the finance these purchases bonds up to $100,000,000
following paragraph: ‘ may be issued. The bond provision is a sub-
<tt¤i1933r N0¤€b0£tlri€am€(1rdm€i1)§>S are 0f Vary struction of dams, steam plants or other
YB HI1 OI' ELDCG, `ll ELI' ' ° ' O, ‘
§)I1ta'tl1€ lll)1lD€Dli Bild pUI']?OS€S         fapllltlcs to be uged for the berleraltlon Or. trains-
found in practical operation that these amendments HHSSIOH Of elcctmc power- Bgsld-_€S doublmg the
are necessary in order to clear up any doubt as to 2l.mOuI1t of the autllorlzed bond 1SSue. and mak-
2 3

 ing it possible to use the funds to purchase ig; €pi1;??r€i];€Iii;rI;‘i Cfgiam the facts bofgri hi?
existing facilities, the substitute provision con- scid b the TVA Ba G tgowor primoso d nh $3
tains an unconditional guaranty by the United the O oémncns TW S gm no img) FS as o
States as to both principal and interest. The Sntutimai OWBYB G as o oo G o any ooo'
present law contains no provision for such a in an O igion {Gnd d N b 28 1934
guamnty‘ · . in denyinlfg a Goverfiifiieiftl miitlitornl to di ° 7
As part of the effort to establish a legal basis Jud 6 Grubb .d_ Sm1SS>
for the power program, the bill amends the g _So1 ‘
section of the present law giving authority to “Th€ Umtsd States is a Government of enumer-
construct dams and reservoirs by providing that gi; ¥iI‘;1";ii`;n&‘;‘;f°;‘;;’di;“§;‘P§i? t5;I;*gt§J;gig’n¤s°§,sg
l»n€ PUYPOSB Shall be to maintain to 9'fooo power is conferred on it to engage in any private
channel 1n the Tennessee RIVGT from KnoXV1lle business, unless incidental to some power specifically
to its mouth and to pyomgtg navigation and granted. The power to produce, distribute, and sell
control of destructive Hood waters. The Wilson, goggioigoygrlngr imyt Ocihtr (‘i°mm<;dil’gY· Ss¤s¤‘aUY»
Norris, Wheeler and; Pickwick Landing Dame with a granted poégzii Ein’oiiiier lgouzxisté connected
are specifically ment1oned._ "In this case, it is sought to be connected with
One very broad section instructs the TVA to the POVYBY to lmprove navlsable rivers, the power
construe liberally the purposes of the Congress e 2*; ¥;;`1‘;'i’{1d€ fefnttie national defense s? the POWBY
in making provision rei the nenenei defense, m€m-O,$¤e‘2i€€pr§p€r‘L?“ ’?`rt‘L“So§$2f·§‘I`£;?it Enveffg
lmprovement of navlgation, control of destruc- right to create electric power to aid its operations,
tive Hoods and promotion of interstate com- under any one or a11_of these granted powers. It
meme and the general welfare. ifiigiaiOEh$St’§p}$idrtLg1?e§§°e.iiSpif °f “?y S“"°l“E
pll OSGS, O PGV I1
S   omondmono ogdogi Ogllivltiglet HO? ,0f   waste.   l'13»S 110 POVVGY to pI'OCll1C€ 8.11Cl sell I3El€C5I‘lC
ena e g1V€S power .0 e o a VISB an power, except as incidental to a granted power, as
cooperate in the readgustment of the population ln oaoe of the disposition of such a surplus. This is
displaced as a result of the construction of dams %§P$G°¥itl§; true, Within the hmlts of a State of the
and the acquisition of reservoir areas. Another m G 3 €S‘
amendment similarly adopted extends the Juris- In the suing Opinion Judge Grubb Said:
diction of the TVA over the Cumberland River ,,A plan for the dc 1 t f th T
. . I VB OpII1€I1 O E GDDESSGB
b9iS1n, which €mbI`&o€S an area of 17,860 square River Valley, as a social experiment, is in no sense
miles. related to the improvement of navigation of the
C R   Tennessee _River or to the national defense or to
Ollft 11 11‘1gS the regulation of Government-owned lands, and the
_ _ _ _ _ _ production and sale of electrical power in aid of
i The pending. bill is intended primarily _to such development and experiment would not be in-
circumvent decisions by United States District Cldsntal ,0* rtlstsd to the exerslse of any of the
Judge W. I. Grubb. He issued permanent injunc- ¤¤¤S¤t¤t1¤¤a1 powfrf gapgdi
tions I`oSJ“`oiolo_g tho oonoummotioo of the ooo" "The official declarations of the directors can be
tract under which the TVA proposed to acquire J read oniy with_ this result. They show that the
electric dlstrlbutlng properties from the Ala- pro_]_ect_1s not 11m1ted _to the improvement of river
bama Pgwgy Qompany, yostpaining various nayigation, to the national defense, or to the pro-
Alabama muaieiratties fm burma rarer = tt‘€°t"¥;Et?§§i§°e€i2i*;i‘?§”Si‘§§2“i}ti§g‘t?n2Z’§dLii“°tS’
. . , O
fI'0IT1 tht? TVA and from n€g0t1&l»1ng loans from create an ideal_community, as a social experiment,
any Government agency to finance constructlon and to give 1t_a1d by supplying cheap electric power, .
of electric plants as outlets for TVA power, and Produced by it for that purpose?
reitralaigaathg ¢;Ii;~bar;ia,,{;¤riii€fgiirci In his rmi decision on February 22, 1935,
ggrgig Authgrngr 130 Judge Grubb said that he did not find it neces-
‘ . t th 7 i
Judge Grubb held that while the Government Ziliiytng ggssuggntine (%b1€Sii%t1A3'S to Whethmi sr
. . . . . . g — e was unconstitu-
might distribute and sell electricity wh1ch was no i- i H · i- d d b - -
more than an incidental surplus arising from dom" G Imp 16 a Ou you thm pomti Stat`
. mg that he had not looked into the question of
and attached to the exercise of some clearly the den, anon Of O r b d h ,0 . i .
dn d nt ,6. 1 .t id ,0 d _ g p wes eyon w a is egis-
6 ne Coos to looo, loowolh 1 ooo oo oo er latively proper or constitutional He reiterated
the Constitution go into the power business as 5 `
4

 thee the evieeeee ehewed thee the pewee in- nishes a striking example of what is being done
tended ee ee eeeheeed ef Wee eee e eurP1ue·e‘ed b executive order This a enc is a subsidiar
was not attributable to any constitutional Y ‘ g Y . . Y
authcrit of the Tennessee Valley Authority, 1tS directors
y' _ _ _ being the three members of the Board of the
C·0H$t1tUt10H&l1tY TVA. However, the EHFA does not owe its
The constitutionality of the Tennessee Valley Qxitgncgulg telly Apléovlilhli tg the Thhhesshi
Authority Act has been questioned in an opinion u On ya GX tguliy C   hs e&d> l 3 phwetf lets
given to the Edison Electric Institute by James ` Ol) the ltihtignal l§]§1;,Deh lshige hh GTA? Ott Y
M. Beck and Newton D. Baker, two eminent The Certificate Oftin E1? Or (xover}; the ‘EHFA
leeel e“utheIeeee‘ · - - · in Delaware states that)   ‘tis(fh1rii1ed eursuant
The high points of the Joint opinion of the · to gmdm accordance with a X t. p d f
Meeeee- Beek me Bekee eee eemmeemee me the President er the ueie§e€°§e§l§e°ie“§r§e
them ee l°ll°WS* A Deeember 19 1933 Number come Executive
‘;)Ai¤e1ye§e ef ehebfeeeieeee Valley Auihéeriey Ace Order Number 6514 quotes from the section of
is e ieve to esta is t at its provisions 0 not, in · · - ·
whole or in part, constitute a regulation of inter-   Neelenel Induetmel Reepvehy Act lh Whlch
state commerce or a provision for national defense, lt IS declttlhd to be tht? POllCY of tht? Congress
but merely present a project for the Federal Gov- "to provide for the general welfare by promot-
§§2§'§§‘lte°£eriE“£§·tl?ert§’ tit? fr°l22”pl?E$l‘§fSE; ESS ll me the Ofginlmtlqn el lndustry l°l the PMPOSB
part be deemed to have some relation to the exer- ef eeeeememe eetmh amllllg trade ghhhpse · · ·
cise of those powers, such relationship at most ex- ee promote the tllll€St POSSQlbl€ U·tll1Z&t·10H of l3h€
tends only to an insignificant and not controlling present p1‘Oduot1Ve Capacity of industries, to
franr1g>f the proyfislivns Xudhpurpoies of the Age- avoid undue restriction of production , to
" e ennessee a ey ut ority ct can not e · · · `· ` `
sustained as an exercise of the power to regulate meeeeie the eeneumptleh ef lnduetmel and
interstate commerce. The Tennessee Valley Au- ttglllctl tural products bY_lllCl`€&Smg Purchasmg
thority Act can not be sustained as an exercise of pOWe1‘, to reduce and relieve unemployment, to
agseof %i1~e€p%v;e1r§€;;€prp7;ld§yf0Q0»0OO from the
and Farm Authority, InC_ Public Works fund for the capital stock of the
' Corporation. Further funds were provided by a
The EHFA loan of $10,000,QOO from the Reconstruction
The Electric Home and Farm Authority, a Flgxellcele (gerl)e,;elt1Oh‘ th . .
Delaware Corporation created for the purpose the G tl eau eyme,;eNemieym1eW eehee than
of financing retail sales of approved electrical covgyhegit eoliltglslglectgc Itl‘It;°§·€a&l1llidti§;llal lie`
lia ces ` the Tennessee Valle ar a fu - . ’ . . ml ll'
epp H m 6 Y e ’ It thority, Inc., becomes a subsidiary of the TVA,
7

 which is created through specific congressional Q. What is the Tennessee Valley Asso-
act containing no authority for such subsidiary. ciated Cooperatives?
Moreover, it is permitted under its charter to do A. A corporation formed to aid coopera-
an amazing number of things. It may finance tives in the Tennessee Valley Authority area.
the purchase of electrical appliances and equip- Q. What are its objects?
ment by advancing money, extending credit or A. To promote, organize, establish, man-
guaranteeing the obligations of individuals, firms age, finance, coordinate and assist in any
and corporations. It may manufacture, buy and , way whatsoever in the development of such
sell electrical appliances and equipment and   cooperative enterprises.
goods, wares and merchandise of every class and A Q. What is its life?
description necessary or useful for its operations. ‘lS _ A- It wee Otyenleed fer perpetual eit-
It may buy, discount and sell notes, warehouse zstence. _
receipts, bills of lading, mortgages, conditional Q. Has it any funds?
sales contracts and other similar evidences of A- A fund bf $300,000 wee dlleedled to ll
debt. It may borrow money and issue notes, by the Fedefdl Emelgeeey Rellef Ad’”'ll’l’l8·
bonds and debentures secured by mortgage, tration. _ _ _
pledge or otherwise, without limit as to amount. Q- Wnnb del1V1l1e_S ere under Well?
It may improve, manage, sell, lease, mortgage, A- Nlne eeepefdllbee lldbe been ldlmelled
or otherwise dispose of any part of the property and fell? T”'eJeeled· These embfdee flllllr
of the Corporation. It may apply for, acquire beet"}! and vegetable _canning; seed potato
and use licenses or territorial rights in respect °“ll“{“lwn> llnl"` 9’"l"l‘lln9> d‘l"`?!lnQ» end
' to copyrights, trade marks, trade names, brands handeemle text/"leS·
and labels, and inventions. It may own, sell or The annual report of the TVA for the fiscal
lease real estate. It may deal in stocks and bonds year 1934 sheds additional light on the activities
or other obligations of any person, firm, associa- ef lee TVAU It is stated that the $300,000 WaS
tion, trust Oy sOI·pOmr,jOH_ furn1shed_ by the Federal Emergency Relief Ad-
AS     Were not enough, the charter Says IHlH1SllI`ailE~IOH   t:h€ undelzsllaillding     would
that the Corporation may "do all and everything be nsed In eldlng ebbpemllwee te I`el1eVe 0I` pre-
HGCBSSMY, Suitable and propel. for the accOm_ · vent distress and that activities up to the end of
plishment of any of the purposes or the attain- ehe eseel reef ,1934 were deS1s¤ed Plnmnlnly Pe
ment of any of the objects or the furtherance of lmpgeve the. Ymeer dlee. ef as many persons In
any of the powers herein set forth." The charter nee e . re le ee. peeelble The nnnnclng Of
. . . cooperatives was linked legally to relief through
states that the Corporation is to exist for seven a ur OSB to mmote the Q f
years from the date of incorporation notwith— mlglgg and dgir T d gee eminem green Vege`
tandin the fact that the National Industrial A - Y pm uc TS'. e prevelenee ef
s g _ tuberculosis and pellagra, it was stated, had
Recovery Act was enacted for a two-year period. Shown the HGCBSSNY for a more Correct diet.
The TVAC Comptroller General’s Audit
Another of the extra-legal activities of the The present law requires the Comptroller Gen-
TVA is ths Tsmlsssss Valley Assssjgtsd (jo-   eral of the United States to audit the transactions
operatives, Inc. This agency was incorporated A el the TVA at leeee once eaeh fiscal year. The
on January 23, 1934, under the laws of Tennes—   nnends Of lne TVA defeated eff01"¤S by Sena-
see, Its board of directors is the same as that of ter Igerbeur Of New Jersey and Olnere _lb
the TVA. It engages in activities for which nlsasd gn emendmergt to the pendlng bill which
there is no specific sanction in the Tennessee gee eveglven V B (51°InPn`nll_‘n` General the
Valley Authority Act} Or in any other law. hame supervision over. a expenditures which he
. . . . . as over those of ordinary Government depart-
Some facts concerning lt are g1ven·1n question ments and boards
end answer form In the pmfner ef 1;nf§Iece‘e1eI§ The Cemptroller General’s report, discloses an
1SSl1ed fe? the general pubhe by l e nl lone astonishing list of irregularities and disregard for
Emergency Ceunell as fellewei law in the financial operations of the TVA.

 Ar adder sdm this 1"€P°’”°> as added td the iin$l§$iiiQ€“‘ii§Z€§a1§§rE1€’r ?§i3t°§a$§l‘§,p3?3 ntl
Senate by Senator Austin of Vermont, follows: Wish ea San but fan Obnaad to aaraa ,00 do SO
"The nature of exceptions established consastg of by mason of Compgtition thyoatonod by at
purchases without competition, in violation o ec- · · ,- - ·
tion 3709 of the Revised Statutes; emergency pur- mumclpal Gnterpuse Whlch propospdh to get lt?
chases unsupported by showing of emergency; POWGY from the TVA and dh eutrrs it grant 0
modifications of specifications; awards on basis of $600,000 and a loan of $2,000,000 from the
PE1'S0¤9~1 Pfefiifendeib duel Gdgdpfefgddtiqei exeessive Government to finance the construction of its
8. OWBIICGS 3,11 I'€l1'I1 UI‘S€ID.BI1 O I'3iV€ lllg €Xp€D.S€S Q · ' '
to pI'OSp€C~l3lV€ €H1plOy€€SQ p&yDC1€I1lG of p€I'   Srl) p%alnlb` Thehsalg did Q01}   as It was
designated posts of duty; allowance of overtime to b eeked lh h 9 Courts; Y stee O mis- _
annual employees; allowance of charge for per- Oflglllailly the TVA, Whleh used 1I1d€f€1'1S1blG
sonally-owned motor vehicles without prior author- 8. mgthgdg in promoting Sontjmont, favgygblg to
ization? Overpaymept Ou pay reds; payment Of pay ublic ownership and adverse to the company
rolls without administrative approval; subscription pn. f h . 1 tl I ’
to newspapers and periodicals in excess of statutory O ered OY t 9 PYOPGYUBS EL Sum hqud O Ph Y
limitations; payment for rented office equipment about one-fifth of the outstanding S€CUI'1J01€—S.
lest er steien; payment fer pewer plants. transrnis Even the final offer fell far short of an amount
sion lines, and real estate acquired without having Snineient ree eeven annual eneh investment
clear title thereto; rent for land occupied by Civil- . .1 h d d b th TVA h ' b
ian Conservation Corps camps paid at rates higher _S1m1 ar rnet O S USB Y B av? een
than for land purchased outright; lump-sum pay- disclosed 1n a number of other cases 1n the
ments under cost-plus contracts and fees without gguytg of Tonnosgoo and A1g,ba,mn_
original invoic.es and in excess of reported progress
of work; claims paid for loss and damage to prop- _
Gflly; 3,pp3iI‘€I1l] overpayments OI]. €l€Cl)I'lC €q\llpII1€I1li The   Ya,rdSt1Ck
under annual agreements; cost of reconditioning
plant agreed by} conatragt to be Tor paymcsnt account The pYOgra)m ef the TVA has been given n
of losses; rent or uil ings wit iout evi ence show- · ·
ing that payments are not in excess of 15 per cent popular appeal py r€aS°p Of the mtenpmn td
of fair market value; pre-audited certified vouchers PI'OVld€‘ ti Y8»Y`dShlCk_ by Which the I`€&SOhdb1€h€SS
increased and payments made to vendors in excess of rates for eleotrlolty throughout the United
L’£t2§“S2“§§EO3*2fE§’?Oftt$$`§t1&ii”€i?i£tt211§§Z?§€§téE idtdddd may bd iddedd A°““"*Hy dr rdrddddd
books tat tat used; nas to cooperative   is d·.fd“lJ°Y ere- It falls stert ef a full 36 rashes
oiations without security; hire of special convey- Wh11€_hh€ dH`€Ch0I`S ef l?h€l TVA PI`Of€SS te have
ances, such as busses   airplanes, for visitors and established rates Whleh do not compete url-
students; and nen-eernphanee Wrth eentraetuai pre- fairly with private industry their claims do not
visions for insurance protection covering personal baaa analysis ’
1n_]ury." . ‘ . .
Arbitrary basic calculations have been made
D1"- Afthuf   MOFEM1, Chdhmali ef the TVA, by the TVA in determining the investment for
offered a peouhar defense of some of the 11"regu- rate-making purposes. Because of this, the as-
lar transactions in testimony before the House sertion by the TVA that account has been taken
Cernnnttee en Mrhtary Affarrs en May 20. He of factors which affect private industry means
said that many of the points never would have nothing
been 1“6iS€d if the C0HiPt1“0h€1` _G€H€1‘3l had The Comptroller General’s report shows that
designated an "ab1e" field representative te leek the properties transferred to the TVA at the
over the TVA operat1ons at. the Author1ty’s " time of its establishment represented a net cost
expense. He shewed an nnpatrenee because the of $132,792,2%.03, without any addition for in-
audit was based on legal requirements rather tere—st on investment over a period ’of more
than upon a comprehensive understanding of the tr than a dozen years. This amount was scaled
objectives of the TVA. down on the books of the TVA to $51,000,000,
_ _ _ _ _ _ _ or 38 per cent of the property cost. Even this
, C·Omp6t1t1OI1 Wlth P1‘1V&iZ6 Uf1l1t1€S total does not_figure in the determination of
The. ruthless. competition of the TVA with gicggaepgrtiaof   b€m§ eigmlnatgdtby milsog Of
the private utility industry has severely injured n Od 1; 1 O der d,g.r¤11dg Em O navlga 101]*
E investors 1n securities. An example of the OI (nm? YO dg 1}5l11O1,F{,A €h€nS€‘ ,0. ,0 d th
methods used 1S furnished by the proposed pur- H tXmg1~ m GF the W.1 ig GS miie t 9
i chase of the electric light and power property pmsgn Va dd 0 Q 1 Son am an S Gam
10 11

 I plant for power purposes to be only about $20,- . . h _
000,000, although the actual investment for gegerermiggel glellgllleéiggleggaeglecgeggeoeerguglgfggl
power purposes ie Shown by its Owe eeureeew etl lar e ed F lieral overnments is reduced This
have been about $30,000,000 and the actual in- S a e ein e g h ' 1
reduction must be made good by t e very peop e
Vtttmttt tt ttl tttttttt ttttt tt°»°°°»‘?°°- Whh   hh hhhh hh have hhhehhhh through hwhh
The Comptroller General’s report describes as ,0.1.13 the
"entirely inadequate" the depreciation reserves U 1 1 Y Ye ee'
set up in pursuance of the announced purpose ·
to keep the bookslof the TVA on a basis com- 5 Surlolus Pewer Caloaolty
oololllo ee eeeee ef lmveee leeeeery In its determination to develop water power
Oh llhls heme the reperll ee‘ye‘ the present administration, both in the Tennessee
“D€SPlt€ the ttPPtt1‘€¤tlY €X<>€¤SiVe depreciated t Valley and in other regions, has been indifferent
Valllo al Wllloll llllo Mllsolo Shoals olooolly was to existing power capacities sufficient to meet all
taken over on the books, the Authority is not using d d f I, ears to como
the valuation basis for depreciation but instead is Emem S O y , ‘ h l t. f th
basing depreciation on the earnings from the sale of ID 1933, at the tlme of. 13 6 crea .1OIl O G
Power by <>hefsi¤s 10 per Gent ef the gross revenue Tennessee Valley Authority, existing power
lo opololloos las lllooloolalloll aool aooolallllallog lllo plants in the Tennessee basin, including that at
BJIIOIIDUO UC C I`g€S &S3·I’€.’S€1`V€ OI` €pI'€Cl3.l3lOI1. ' _
"Such reserve agpears to be entirely inadequate, Musolo Shoals: had ah EXCESS lllapaelty SVI? dt
The· properties in question are deprec.iating in value mands of 105 per cent. The W GQ er an 0I‘l‘1S
and if the return from operations is to be properly Dams ef the TVA Wlll 1‘a1SB U18 BXCGSS 0&P8»CIl3Y
determined, the reasonable value of_all things con- to 160 por oont, While under its pygjeeiged five-
‘ff§f,§§‘lt;“t°Q§j,Q“§,,&€l§§;l§‘(f;§§ti‘gl,oogmal lovoslmeol year construction program involving additional
“Assuming a very conservative rate of valuation dams, the GXCBSS capacity WOl.1ld bf-) I‘a1S€d to
consumption for example, two per cent, the amount Over 7()() per cent,
ol llooloolalloot loosoll llooo lllo Vollllodallj Whlltlt lllllo The overexpansion of facilities, already in
ro erties in uestion were ca ita ize t e u- · -
lehogty, woulg be approximaetely $1,0050,000 per Pl`ogl`sss ahol te _hE glVEh a HEW lmpeeue lmeer
annum. the pending legislation, represents a shocking
"A larger revenue will proportionately increase Waste ef the taxpayers} IIIOHBY.
the reserve for depreciation at the present 10 per
cent method of amortization, but to accumulate a ,
reserve on the 10 per cent plan equivalent to the EXp€I1C11Cl1I'€S of  
amount that would be charged to depreciation on _
h a valuation basis at 2 per cent, the gross revenues The Tennessee Valley Au’0l1OI'1lJY 3»lI'€8»dY has
avnolxlnglieoalgzualoallooggolllloalnpiioalgrllltlolfl lllo plosolll spent a sum far in excess of what wa? clontlem-
"There is very little, basis for assuming that plal*Ell at the lame tf the eneeemene e be e dgvlg
revenues will ever reach such a figure? Enormous adllitionalc amocuntlghare to e af e
. to the capita inves men . e revenues rom
The epereeeee ef the TVA thee fee eeer .ee the sale of power are only an insignificant sum
proof that the rates for power as fixed furnish in Comparison with tho amount that is being
a proper yardstick for comparison with those expended
of private industry. In fact, there is reason to The TVA originally had an allotmghnt of $50,-
believe that if private industry were subsidized ooo ooo from the Pulollo Works fundu snbee-
tt ttt tty tttt tht TVA tt Wttt ltwtt tttttttt ” hhhhhh hh Whh allotted $25 oooooo by hhh rhhhh-
charges, apreferred status as to taxation and a gent nam Emergency lundol The Eleetl-le Henle `
heel ef melee oololllsllos eeee ee the ttttttte and Farm Authority, Inc., has had $11,000,000,
zi hIil~Z$h§’§`iI’§Zh fhhhillléiliihhlhilhlhe§§h§§i§§liii   Whitt ttt Ttnnttggll })’gltt>l·Atttttttlt.fttgltgl;
. I ‘ . 19 o 1 s a 1 1
assistance, rates lower than those now offered ,E’:)Vei)g;le;;1]eal&e)(£lmintS’ from glmeérggzncy funde the
tt t ytttttttt Wtttt tt tttttttttt- Gm rvh hhh hhh used hhh hhhhhhhy hh hhhhh hhnooo,-
similar conditions, private industry invariably ooo in bonds Thcl pending bill doubles the
will perform business functions more efficiently mount Of bands which may be i,SSu€d•
and more cheaply than a governmental bureau- e B the and Of nvo yoato if tho TVA Calyyigg
Oracle lFurllher’ it must be Considered lleet when out yits program for constrluction of dams, the
e prwete Company le fegeed out ef buemeee by Government’s investment, including the original
l is t

 Muscle Shoals costs, will be upwards of $500,- Unless the courts intervene the TVA may be-
000,000. This is not a large enough sum to make Como mo? o potent onan ono government of anY of
much of an impression in this era of frenzied the seven states in which it exerts its influence.
spending, but it is very much more than the oost It will tolerate the Congress which created it
of the Panama Canal, only to the extent that it must turn to it for new
In view of the manner in which the TVA has fun-do-
proceeded with the construction of dams which The laoooo ngnroo Show, onao ono TVA hee
Were not authorized in the original aot and has , nearly 14,000 employees, whose compensation
extended its activities in many other ways, it is " amounts to anono $1,300000 mononlY· Tnlo now
appropriate to refer to the report of the House and Powofnn bm'oanoI`aoY nao noon Poomanonoly
Committee on Military Affairs in 1933 prior to ensrefted opon ono soveromeotel oI`gan1Zao1on·
the enactment of the aero *4 The TVA is not an emergency agency. While
~rhe Authority cannot proceed upou a vision- moor ofthe 14e0_0Q employeee ere eoeesed in
ary and irnpraetieal program ef eeeetme»den,¤ construction activities, their services will be re-
said the Committee in the report. "In addition olonoo for eo tnoeomee PoI`iod· Tno Poooono oon‘
to the limitations of law there will be limitations Somoolon Pfogram na? noon malolood out on a
of fact, The $50,000,000 te bg dgyivgd fygm thg five-year basis and lt is expected that additional
sale of bonds will hardly go further than build dome will be bunt onoroaooon
Cove Creek Dam and Dam No. 3, and make the
ntzcessary alterations to modernize the nitrate A Prcccdcnt
p ant, to install the necessary fertilizer equip- . . . .
ment, and to provide adequate working capital. It IS 3* Slgilllficant and fan alampmg fist that
For every other dollar that the Authority may members ef or o