company members, and I would like to call the attention of the committee to page 4 of the constitution. In article IV of the constitution you will find this requirement: SECTION 1. The company members shall from time to time, and not less than annually, publish financial statements, including balance sheets and earnings statements showing gross and net income, operating expenses, and surplus accounts, which statements shall be certified to by independent firms of certified public accountants who shall have audited the books of the company. SEC. 2. All statements and data furnished to consumers, stock exchanges, and stockholders, all information designed for public dissemination, and all reports to governmental authorities shall be accurate and clearly indicate their source. SEC. 3. All contracts between any member companies which involve the furnishing of management, supervisory, purchasing, construction, engineering, or financing services to operating electric utility companies shall be so drawn and so operate in practice that the charges to the operating company shall be reasonable and commensurate with the value of the services rendered and the fair cost thereof to the company furnishing the services. SEC. 4. Company members from time to time shall answer such questionnaires relative to their organization, financing, methods of operation, and business practices as may be requested by resolution of the board of trustees. Now, each member company signs an application for membership which contains in the application an agreement to comply with that provision, or those provisions. CONTRAST BETWEEN THE TWO ORGANIZATIONS Mr. BIDDLE. Now, having given the policies and purposes of the organization, will you contrast those purposes with the National Electrict Light Association and point out any differences that you may wish? Or are there, so far as what you have testified to is concerned, any substantial difference? Mr. WEADOCK. Oh, yes; there are many substantial differences. For instance, the institute has no so-called public relations department. It has no publicity man; it is not engaged in any active campaign of any kind anywhere except for the technical advancement of the industry along commercial lines, if you please, engineering lines, statistical lines, things of that type. We are as near a true trade association, supplying members service or facts and information, as can be found. Mr. BIDDLE. Do you have a Washington office? Mr. WEADOCK. No, sir. Mr. BIDDLE. Just the one in New York? Mr. WEADOCK. That is all. Mr. BIDDLE. You have no office here? Mr. WEADOCK. No, sir. Now, let me explain, so you won't be misled. Mr. BIDDLE. All right. Mr. WEADOCK. The institute itself has no office. The institute does employ Mr. Oliphant, who engages in obtaining information for us from committees of Congress and the different departments, and things of that kind. Mr. BIDDLE. Is he permanent in Washington? Mr. WEADOCK. Yes, sir. Mr. BIDDLE. Where is his office? Mr. WEADCK. I think it is in the Securities Building. Mr. BIDDLE. Well, he has an office which is his own and not yours; is that it? Mr. WEADOCK. Yes, sir; he operates on his own. Mr. BIDDLE. Who else shares his office in the Securities Building? Mr. WEADOCK. I think the Committee of the Utility Executives. Mr. BIDDLE. The Committee of the Utility Executives? Mr. BIDDLE. What is that committee, the Committee of the Utility Executives-what is their function? Mr. WEADOCK. Well, I would rather for you to ask them, because it is not a part of my activity. Mr. BIDDLE. Well, do you know? Mr. WEADOCK. I couldn't give you the information you would want to know. Mr. BIDDLE. Well, I don't want any information. Mr. WEADOCK. Well, you want information on that particular subject. Frankly, I don't know the details of it. Mr. BIDDLE. Does it represent the same group of public-utility companies that are a part of your organization? Mr. WEADOCK. I would say "no." Mr. BIDDLE. None of them? Mr. WEADOCK. Well, I would say it did, some of them; yes. Mr. WEADOCK. But not all of them. That is what I say; I don't have the facts. Mr. BIDDLE. Doesn't your organization work pretty closely with that association? Mr. WEADOCK. We supply such information as they may ask for. That is about the extent of our cooperation. Mr. BIDDLE. But in spite of knowing that you supply information, you don't know what they do? Mr. WEADOCK. I wouldn't know in detail, no. Mr. BIDDLE. I didn't ask in detail, I asked in general. Mr. WEADOCK. I wouldn't know in detail sufficiently to give an answer to the equestion. Mr. BIDDLE. Your answer is then you don't know what the Association of Executives does? Mr. WEADOCK. I think that would be a safe answer. general way. I do in a Mr. BIDDLE. But you don't want to say in a general way? Mr. WEADOCK. I can't say definitely and fully, so I thought it would be better not to say at all. Acting Chairman SCHWARTZ. Are the individual members in that association also members of the Edison Electric Institute? Mr. WEADOCK. Some of them are, Mr. Chairman, and some are not, but so far as we are concerned there is no connection between the two, except as we supply information that they might request, which is not very often. Mr. BIDDLE. And which presumably they use, having received it? Mr. WEACOCK. I hope they do. Mr. BIDDLE. I say you don't know how they use it? Mr. WEADOCK. No, sir; I don't. I hope they do. Mr. BIDDLE. I started this question but withdrew it. On July 26 you sent a telegram to Senator Donahey as follows: The testimony of Tennesee Valley Authority as given at yesterday's hearings— That was Mr. Lilienthal's testimony before your committee is so incomplete and misleading that in fairness to the entire electric-power industry an opportunity for correction should be given. The Tennessee Valley Authority power rates are not based upon the legitimate costs which have to be met by private utility companies. The Tennessee Valley Authority sells power at less than cost and the loss must be met out of the taxpayers' money. An accurate analysis of this question of power cost is so important to the American people generally that we respectfully request an opportunity to present testimony on this question at your hearings. Bernard F. Weadock, managing director, Edison Electric Institute. Would you now like to present the testimony that you requested an opportunity to present in the telegram? Mr. WEADOCK. I think Mr. Kellogg did such a good job yesterday that I wouldn't try. Besides, I am not an engineer, and not qualified. I sent the request in the absence of Mr. Kellogg from the city. If I attempted it I know I couldn't do it, because I haven't a slide rule, nor am I an engineer. Mr. BIDDLE. After hearing Mr. Kellogg, you prefer not to present the testimony that you requested? Mr. WEADOCK. The two are the same; instead of my presenting it, Mr. Kellogg did it. EDISON ELECTRIC INSTITUTE'S ALLOCATION REPORT Mr. BIDDLE. You did prepare I understand a so-called "Allocation report?" Mr. WEADOCK. Yes, sir. Mr. BIDDLE. Do you have that with you? I asked you to bring it it. Mr. WEADOCK. May I ask are you through cross-examining? I think we could save time if you would let me follow my procedure here in answering your request. Mr. BIDDLE. I prefer to have you answer that. Mr. WEADOCK. Yes, sir. Mr. BIDDLE. Have you got it with you? Mr. WEADOCK. Yes, sir. Mr. BIDDLE. Will you let me have it? Mr. WEADOCK. Yes, sir. Mr. BIDDLE. Please. Mr. WEADOCK. But with this statement for the benefit of the committee. At the time that this subject was up before the committee, the question of the yardstick, and subsequent to my request for a hearing, I asked our engineering and research department to go into the matter thoroughly, with the idea of presenting a memorandum which could be used as a trial brief, if you please, or as an assistance to the witness in submitting testimony before this committee. That document was completed and was sent to our individual member companies. There was no publication of the document whatever. The T. V. A. learned of its existence and requested a copy and I as politely as possible advised them that it was not a public document, and it was not available to them. Subsequent to that, they sent a representative to our office in New York and sought to get a copy there, and when informed that it was not a public document and not for publication, they expressed rather keen disappointment. Following that I think, Mr. Biddle, you requested a copy of it, and I told you in substance what I am now stating, I thought that it constituted a memorandum for our own use, and consequently in keeping with our own policy should be preserved for our use at this committee hearing. I believe that as a result of that refusal, or declination rather, I don't like to refuse anything, and I have not to your people, I am here by virtue of a subpena. Mr. BIDDLE. Well, the subpena was issued because you refused to bring in your so-called allocation study, and it seemed to me that if an allocation study had been made with respect to T. V. A. it might be interesting for the committee to see it, so as to get the point of view of your association. Mr. WEADOCK. Now, you will agree that my refusal was not a matter of obstinacy. Mr. BIDDLE. I hadn't suggested that; oh, I hadn't suggested that at all, Mr. Weadock. Mr. WEADOCK. I believe we should be entitled to present our facts to the committee in the orderly way, which we are trying to do. Mr. BIDDLE. Yes. Now, let me ask you Mr. WEADOCK. Do you want this now? Mr. BIDDLE. Just let me ask you this. Do you or do you not wish to have the committee have the benefit of this report? If you think it is not accurate or it does not fairly represent your views, I don't believe the committee would want it. But if on the other hand you think it would be helpful to express your views in this situation and you would like the committee to have it, I think they would enjoy seeing it very much. Mr. WEADOCK. Mr. Biddle, I can modestly say this memorandum is the most complete, thorough, and accurate that has been prepared on the subject. Mr. BIDDLE. Fine. Mr. WEADOCK. I will say you caused me a little difficulty yesterday because not being for public distribution and having in mind our constitutional provision, it was necessary for me to buy hurriedly a rubber stamp to indicate its source. Mr. BIDDLE. Well, I am sorry the association should have been put to the expense of a rubber stamp. Mr. WEADOCK. It didn't cost us a nickel. Mr. BIDDLE. Please mark this "Exhibit No. 473", entitled "Comments on T. V. A.'s allocation of investment of Norris, Wheeler, and Wilson Dams, submitted June 9, 1938." (Whereupon, the document above referred to was received in evidence and marked "Exhibit No. 473.") Mr. WEADOCK. In connection with that, I would like to call your attention to one thing, and that is that yesterday you requested from Mr. Kellogg, upon the completion of his testimony, some tables. Mr. BIDDLE. Yes. Mr. WEADOCK. The tables are in the rear of that exhibit. Mr. BIDDLE. That's fine. May I just glance at them and see? Mr. WEADOCK. Yes. You understand, Mr. Biddle, that this represents the work of our engineering and research department, and that I am not expert upon either. Mr. BIDDLE. Oh, I understand perfectly. What tables did you refer to as having been requested from Mr. Kellogg? Mr. WEADOCK. I think you gave Mr. Kellogg a memorandum of what you wanted. Mr. BIDDLE. Oh, I have it, yes. The table referred to is exhibit D, which is a breakdown of the costs of the various dams for each year, which I asked Mr. Kellogg for. You don't want to testify in detail about this, do you? Mr. WEADOCK. Frankly I am not qualified. Mr. BIDDLE. No, and I didn't want to press you on that. Now, have you finished or completed any testimony which you wanted to present on your own behalf or on behalf of the association? Mr. WEADOCK. In compliance with your request, in regard to the request, I think that has been fully covered. Mr. BIDDLE. Well, then, there is nothing left, is there, Mr. Weadock, except for you to testify with respect to certain information that I requested from you? Mr. WEADOCK. That is my whole purpose. Mr. BIDDLE. You wouldn't mind, would you, since it is information that I requested, my asking you questions to develop that information? Mr. WEADOCK. Well, with due regard to your ability as a crossexaminer, I still feel that we would save time if I would just run along in an orderly way. Mr. BIDDLE. I will be glad to have you make any statement you wish for your association. But for that information which I want, with the approval of the committee, I am going to ask my own questions to develop it. Mr. WEADOCK. Is that agreeable to the committee? INFORMATION REQUESTED BY COMMITTEE Representative JENKINS. Mr Chairman, let me ask first: what did you request? Mr. BIDDLE. I am going to ask him now. Representative JENKINS. Well, tell me. Mr. BIDDLE. Well, I requested his annual dues and the basis of their payment, and I requested what fees and amounts were paid in the Ashwander case by the Edison Electric Institute, and I requested to be furnished with any statements that were put out with respect to T. V. A., it being the duty of this committee specifically under the resolution to investigate any methods used by the public utility companies with respect to T. V. A. operation. I think that pretty nearly covers it. I requested certified copies of minutes in order to show specifically what fees and payments were authorized to be made by the Edison Electric Institute. Representative JENKINS. For what purpose? Mr. BIDDLE. With respect to the Ashwander and other suits, if there were any others. Particularly, I will of course ask the witness under what provisions of the constitution those payments were made. I shall wish to know who his directors were, and what action the directors, particularly Mr. Willkie and Mr. Groesbeck took with respect to those resolutions. The committee will of course remember that Mr. Willkie's companies were at that time under contract with the T. V. A. Mr. Willkie as a matter of record, and I think it is fair to show that, objected to the payments of these amounts, or at least voted against them. That covers in a general way the information. Representative JENKINS. Let me ask you this, Mr. Biddle? |