"Brutal Doctrine"

Since 1934 the $15,000,000,000 U. S. public utility industry, rightly or wrongly convinced that the present U. S. Government is bent on sending it to the death house, has been fighting a rear-guard legal action with about as little success as Convict Tom Mooney. It has lost two major appeals in the Supreme Court. Last fortnight utility lawyers concluded a last-ditch attempt to get the currently New Dealish Supreme Court to reverse the "brutal doctrine of Chattanooga"--the opinion of a three-judge Federal Court this year that since TVA power sales are legal, utilities have no legal relief even from ruinous TVA competition. Last week from the death-house came a highly articulate croak.

The croaker was President Wendell Lewis Willkie of $1,000,000,000 Commonwealth & Southern Corp. A shaggy lawyer with a sharp tongue, Wendell Willkie has not only shepherded his colleagues through their court battles but has maintained a spectacular standing offer to sell vast C. & S. outright to the Government before it is destroyed piecemeal. Last week Mr. Willkie was again yanked to Washington by a House & Senate committee. Nominally he went to explain what was holding up the negotiations for TVA's purchase of Tennessee Electric Power Co., one of four C. & S. operating subsidiaries in the Tennessee Valley. But, well aware that the committee was winding up its labors on a report that will have the attentive ear of Congress when it convenes next month, Utilitarian Willkie took full advantage of his first good opportunity to shift the Power fight from the courts to the people's forum.

To the committee, Mr. Willkie gave a vivid picture of what utilities, and utility investors, are up against. If subsidized low TVA rates and the "brutal doctrine of Chattanooga" forced utilities to sell out to the Government, their troubles only began. Mr. Willkie, for instance, thought Tennessee Electric Power Co. was worth $120,000,000; TVA was offering $65,000,000. If any public purchaser disliked the utilities' price, bitterly protested Wendell Willkie, it could set up a duplicating system with PWA funds, getting 45% of the money as a gift and borrowing the rest at low interest. Pointing out that PWAdministrator Harold Ickes was the only judge of the fairness of the utilities' offer, Mr. Willkie snapped: "Utility properties without a market are valueless except as junk. ... In effect, the Government holds a gun to the head of the utility and says 'Sell at our price or we duplicate.' . . . This is one of the most cruel, brutal, and unAmerican doctrines ever adopted. . . ."

Sadly detailing his own experiences with TVA, Mr. Willkie claimed that every time his negotiations with TVA Director David Eli Lilienthal reached a crucial point, "there has been an interesting coincidence in threats of duplication, either from the PWA or the Chattanooga Power Board."

"Who should determine a fair price?" inquired Committee Counsel Francis Biddle.

"Any fair and disinterested third party," replied Mr. Willkie. He suggested the SEC. Mr. Willkie said Mr. Lilienthal had vetoed a suggestion that both sides name an arbitrator and the Supreme Court nominate a third.

"Whose idea was that," Counsel Biddle asked.

"I think Mr. Thomas Corcoran or Mr. Jerome Frank suggested that," chuckled Wendell Willkie.

Same day Mr. Willkie began his testimony in Washington, it was illustrated in Memphis. There the negotiations between the city power commission and National Power & Light Co. for the city's purchase of Memphis Power & Light Co., for which Mayor Watkins Overton has offered $13,500,000, were taken out of the mayor's hands by an intransigent bloc of commissioners steered by Democratic Boss Ed Crump. Unless M. P. & L. cut its price for the electric system and agreed to cut gas rates as well, ultimatumed Boss Crump's men, "we are going to build a new one."

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