POWER: TV A Clear

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By three o'clock one afternoon last week the small, highceilinged, brown-paneled U. S. District courtroom on the third floor of Chattanooga's new Federal building was so crowded that even the jury box had filled with spectators. At 3:05 a door opened behind the bench. Out strode the black-robed members of the first of the new three-judge Federal tribunals authorized under the Federal Court Reform Act of 1937 to hear cases involving the constitutionality of an act of Congress. Serious, bespectacled Judge Florence Allen of the Circuit Court of Appeals came first.* Stocky, white-haired District Judge John J. Gore and earnest District Judge John D. Martin followed. Since November 15 they had been hearing the plea of 18 Southern utility companies that the Tennessee Valley Authority be enjoined from the sale of electric power and the TVA Act be declared unconstitutional.

At 3:08 the courtroom fell into a hush as, in a clear, well modulated voice Judge Allen began to read the decision. No sooner had she paused for a first swallow of water than TVA's General Counsel James Lawrence Fly broke into a broad grin. At the utilities counsel table gloom slowly spread over the face of the late Newton D. Baker's Cleveland law partner, William H. Bemis. For by the time Florence Allen, several gulps of water and 70 minutes later, had finished reading it was clear that TVA had scored a monumental legal victory.

Damage Without Injury. Immediate aim of the suit, which Commonwealth & Southern's Wendell P. Willkie and his associates had planned as a last stand in the three-year-old legal fight against TVA, was to stop the sale of electricity generated by the three TVA darns already built (including Wilson Dam started during the War and transferred from the War Department to TVA in 1933); to restrict de-velopment of four dams now under construction and a fifth authorized but not yet begun; to prevent TVA from getting Congressional funds for four more dams. TVA attorneys maintained that the dams were designed primarily for flood-control, improvement of navigation, and national defense. The company attorneys maintained that they were designed primarily to generate and sell electric power and to drive their private competitors out of the utility business.

As expected, the court accepted the wording of the TVA Act and the testimony of TVA experts as proof that the TVA is an all-round waterway development project. The judges then proceeded to inspect TVA's record as a utility business. Since 1934 TVA has made a total net income of $2,087,497 by selling power to 17 municipalities and 15 co-operatives in four States—Alabama, Tennessee, Mississippi and Georgia. Many localities have been helped to buy or build their distributing systems by PWA loans-and-grants of which up to 45% may be outright gifts. This month when the Supreme Court upheld the legality of such PWA assistance, the way was cleared for releasing $146,917,803 in approved grants which had been held up for three years, and a good share of the money went to localities in the TVA area.