Mr. BIDDLE. Yes.

Representative JENKINS. What does the Ashwander case have to do with any of these things we are required to investigate?

Mr. BIDDLE. The resolution has something like six clauses, directing us to go into all of the litigation, specifically that against T. V. A., its results, and so forth. We have done it at some length from the T. V. A. side, and to couple with it, I think we ought to do it from the other side. It is a direct requirement of the resolution.

Representative JENKINS. In all fairness, though, don't the Ashwander case sit on its own bottom, except of course if there is anything-doesn't a reading of that case develop all of the facts you need? Do you know what the issues were, and what the decision was? What purpose could you have except to find out if it was financed? Of course if it is financed by any of these companies, and they have hidden their participation in the financing, I think that would be perfectly proper to bring out, but if it is all open and aboveboard, I don't see the purpose.

Mr. BIDDLE. It is above board, but nobody knows anything about it yet. It will be known when the evidence is produced.

Moreover, this is one of the essential things. The Alabama Power Co., an operating company of the Commonwealth and Southern, was one of those companies which under the contract of January 4 contracted to sell properties to T. V. A., and to purchase power from T. V. A.

Now, although Mr. Willkie steadily took the position that he was not engaged in the litigation, the Alabama Power Co. nevertheless filed a brief in opposition to the T. V. A., the Alabama Power Co. being one of the defendants as well as T. V. A. in the injunction proceedings, a completely inconsistent position.

Representative JENKINS. Who was Ashwander, in the case, Mr.

Biddle?

Mr. BIDDLE. Ashwander was a preferred stockholder of the Alabama Power Co., and I want to show the whole interrelation of counsel.

Representative JENKINS. Did he bring the case because the Alabama Power Co. wouldn't bring it?

Mr. BIDDLE. Alabama Power Co. and the Commonwealth and Southern executed a contract, and somewhat later, a few months after the State commission had approved the contract, which was considerably after the contract was signed, I think it was sometime in the autumn of 1934, a preferred stockholder of the Alabama Power Co. brings a test suit to enjoin the contract which his own company was a party to.

Now, to refer you to a specific copy of the resolution:

What activities there have been, if any, on the part of any private power company or other private interests in attempting by the expenditure of money or otherwise the institution of legal proceedings.

We are specifically directed to do that, and therefore I am simply going to ask the witness under that section of the resolution what was done.

Representative JENKINS. I have no objection to your going into it, as I said.

Mr. BIDDLE. It will be very brief. There is not a great deal. In fact I think if anybody is in the room who might convey the message,

Mr. Willkie will probably be needed in a half hour. I don't know if he is here or not, but I suggest that. I should think in a half hour or a little more Mr. Willkie might be ready.

Now, I forgot what question I asked, but tell me what your dues are, and how it is apportioned?

Mr. WEADOCK. Well, now, Mr. Biddle, may I call your attention to this, first, when your investigators were there they asked for specific things?

Mr. BIDDLE. Yes.

Mr. WEADOCK. I gave them full access to everything I had and gave them copies of all that.

Mr. BIDDLE. You were very courteous.

Mr. WEADOCK. Since that time, due to this memorandum which you asked for, you have given a subpena which varies quite a bit from the original understanding.

Mr. BIDDLE. Well, I didn't know there was any understanding. I had no understanding with anyone.

Mr. WEADOCK. No; I am not questioning that. What I mean is this, the memorandum indicates precisely what was wanted. Now, you have subsequently amended that to enlarge it, and I have the information here.

ASSESSMENT OF DUES

Mr. BIDDLE. Mr. Weadock, we would get on much faster if you would answer the questions, I think. Some of that material I may not even know about. So the first question is what your dues are and how they are assessed.

Mr. WEADOCK. You mean the dues of the Edison Electric Institute? Mr. BIDDLE. Yes; what were they last year?

Mr. WEADOCK. The dues are based upon the rate of one twentyfifth of 1 percent of electric gross, and for 1937 totaled $600,558.15. Mr. BIDDLE. How is that assessed?

Mr. WEADOCK. One twenty-fifth of 1 percent of the gross.

Mr. BIDDLE. The Electric Bond & Share and Commonwealth and Southern are both members?

Mr. WEADOCK. Yes.

Mr. BIDDLE. Is Mr. Willkie a director?

Mr. WEADOCK. Yes, sir; he is not a director, a trustee.

Mr. BIDDLE. And Mr. Groesbeck is also a trustee?

Mr. WEADOCK. Yes.

Mr. BIDDLE. You have prepared a statement of the payments with respect to the litigation, have you that with you?

Mr. WEADOCK. Yes, sir.

Mr. BIDDLE. Does that cover counsel fee or does it cover counsel fee and other matters?

Acting Chairman SCHWARTZ. Any of these matters that he is referring to are going in the record, these papers?

Mr. BIDDLE. Well, I think some of them are. I think it is not necessary to encumber the record with the figures; I think that I can get what I need from the witness by referring to the exhibit.

Acting Chairman SCHWARTZ. Has this general lengthy statement here been subjected to cross-examination or test?

Mr. BIDDLE. The witness said that he was not a qualified engineer or expert to answer the material in that study, but I think that the committee should have the advantage of the study anyway, and I

115943-39-pt. 10—8

would be very glad to receive it subject to our being permitted to call anyone else, but it seems to me, in view of Mr. Moreland's and Mr. Kellogg's testimony yesterday that we can deal with that material with our engineers, if you think that that is proper.

Will you refer to that statement which was prepared from your books? What was the total paid in connection with the Ashwander suit?

Mr. WEADOCK. May I suggest, Mr. Biddle, that you asked for the dues of the institute for the 5-year period, and now do you want that or don't you?

Mr. BIDDLE. I think the 1 year was enough. I just-a lot of this material we can summarize briefly.

Mr. WEADOCK. You see I have them all arranged in nice order. Mr. BIDDLE. I am sorry to interrupt your order, but it will shorten all of our time.

Mr. WEADOCK. What do you want to know now?

AMOUNT SPENT ON LITIGATION AGAINST TENNESSEE VALLEY

AUTHORITY

Mr. BIDDLE. The amount paid by the Edison Electric Institute in connection with legal matters relating to the T. V. A. litigation. What was the total amount paid in connection with the Ashwander suit? I think that you will find that there.

Mr. WEADOCK. Yes, sir; now, if there is no objection I would like to make a short preliminary statement, before I give you the information.

Mr. BIDDLE. Certainly.

Mr. WEADOCK. If there is no objection to that.

Mr. BIDDLE. No.

Mr. WEADOCK. The facts in that case are that the Edison Electric Institute employed counsel to advise the Institute, and to assist or participate in litigation involving the constitutionality of the T. V. A. and the P. W. A. legislation, because the Federal Government was engaged in the preparation and execution of plans for power development at many locations throughout the United States, on a new policy and program which threatened the complete destruction of the electric light and power industry in the United States. Huge sums of money were to be spent in the development of enormous amounts of power, in locations where the existing private installations had capacity in excess of the demand and I have here a map which will show the location, the capacity, and the estimated cost of 51 power projects financed or to be financed by the Federal Treasury, and I would like to present to the committee a copy of that map, together with a list of locations, and attached to it there is a summary of the P. W. A. allotments as of April 29, 1935.

The information was obtained from the special assistant for the Administrator, and is reported in the Congressional Record of April 29. Mr. BIDDLE. That is Mr. Graham?

Mr. WEADOCK. Yes; and it shows as of that date, 85 projects, and total allotments of $39,265,446.

Mr. BIDDLE. What territory does that cover?

Mr. WEADOCK. That covers the entire United States, and we have here a break-down as requested, showing the number of projects in Alabama, Georgia, Mississippi, and Tennessee, which at that time totaled six projects, at a cost or allotments of $4,996,000.

Seven percent of these projects were therefore in the States here, and 12.7 percent in the allotments

Mr. BIDDLE. Does that cover loans and allotments both?

Mr. WEADOCK. That includes the non-Federal.

Mr. BIDDLE. Loans and grants, both?

Mr. WEADOCK. Yes.

Mr. BIDDLE. Have you any idea how much of those allotments were actually used?

Mr. WEADOCK. Well, I have figures later on that will show that. Mr. BIDDLE. The money-actually showing the actual payment of the allotments?

Mr. WEADOCK. As near as we can gather it; yes.

Mr. BIDDLE. I should think that it would be either correct or not correct.

Mr. WEADOCK. If you can get anything out of that Department that is correct I would like to have it. The difficulty-perhaps you can supply it—but the difficulty is that they cancel or enlarge or differ the situation, you see. I can give you these figures, which are accurate as of the dates that I state.

Mr. BIDDLE. Do the figures show actual payments? You see a great many of these allotments and grants were not used, and the cities found it cheaper in many instances to issue their own bonds. Mr. WEADOCK. I am confining myself to allotments.

Mr. BIDDLE. So that that has no relation to the cash actually used. Mr. WEADOCK. That would be true.

Mr. BIDDLE. That is what I want.

Mr. WEADOCK. Now, then, I am giving a summary of the applications for allotments through the April 20, 1935, period. They totaled throughout the United States, 375 projects, with a total amount applied for, $595,198,300.

Mr. BIDDLE. This is only on electrical

Mr. WEADOCK. Excuse me just a moment. I have broken that down pursuant to your request.

Mr. BIDDLE. I didn't make any request about it.

Mr. WEADOCK. Your men did.

Mr. BIDDLE. The request made by me was how much money was paid in litigation involving P. W. A. grants.

Mr. WEADOCK. Right, but they wanted also the number in the so-called T. V. A. territory, and the number outside.

Representative JENKINS. How many men were there requesting this information?

Mr. WEADOCK. Two.

Representative JENKINS. Do you know who they were?

Mr. WEADOCK. Yes, sir; Mr. Espinosa and Mr. Kennemer.

Mr. BIDDLE. The same gentlemen that you saw in Chattanooga. Representative JENKINS. There are so many of them I can't keep track of them.

Mr. WEADOCK. The percentage in the T. V. A. area of allotments or applications, was 11.3 percent, and the total amount allotted was 2.1 percent.

Now, Mr. Biddle, I have here figures as of October 1, 1938, which show a total of over 470 projects, and a total of $192,507,679. Mr. BIDDLE. Those are allotments or applications?

Mr. WEADOCK. New competitive municipal plants, or enlarged district-power projects.

Mr. BIDDLE. Did you want this to go in also?
Mr. WEADOCK. Yes.

Mr. BIDDLE. There seems to be some figuring on it.

Acting Chairman SCHWARTZ. When do you get to the answer tothe question of how much was spent?

Mr. BIDDLE. There is a slight difference of opinion between Mr. Weadock and myself as to whether or not the money spent was really T. V. A., because that is what we are interested in. May I distribute copies of these?

(Whereupon the document above referred to was received in evidence and marked "Exhibit No. 474.")

Mr. BIDDLE. You haven't given me the figure in the Ashwander case, have you?

Mr. WEADOCK. No, sir; I am coming to that right now. By some error the subpena omitted the checks for the Ashwander case.

Mr. BIDDLE. I didn't care about those.

Mr. WEADOCK. Why do you ask about them now?

Mr. BIDDLE. You will see in a moment why I wanted the others, if you just wait a minute you will find out.

Mr. WEADOCK. The amount paid in that case,-

Mr. BIDDLE. You needn't break it down unless you wish to.

Mr. WEADOCK. I think it is necessary for the full information to be broken down.

Mr. BIDDLE. I have no objection at all.

"THE ASHWANDER CASE"

Mr. WEADOCK. In that connection, and following the action of the Board, Messrs. James M. Beck, and the late Newton D. Baker, were retained to deliver an opinion upon the constitutionality of the Tennessee Valley Authority Act, and having obtained that opinion, which held that it was in excess of the constitutional powers of the Federal Government, we then contributed to the pending case, I believe it was the Ashwander case, the total for the opinions, was $25,197.97.

For Cabaniss and Johnston, the counsel in the Ashwander case, $78,033.97.

Mr. BIDDLE. I make it according to the figures that you have furnished me

Mr. WEADOCK. I have a correction there. Just a minute. The retainer fees, in the Ashwander case, was the $25,000 that I mentioned, and they went to Mr. Beck, who participated in the argument; on the opinion of Messrs. Newton D. Baker, and Beck, $35,272.13.

Mr. BIDDLE. That opinion was given before the Ashwander case, was it not?

Mr. WEADOCK. No; I believe it was rendered after the Ashwander case was instituted.

Mr. BIDDLE. All right.

Mr. WEADOCK. Now, these figures were released to the public at the time by the Institute.

Mr. BIDDLE. Which figure?

Mr. WEADOCK. Both. All of them.

Mr. BIDDLE. Well, your total paid in the Ashwander case was then $103,000, including counsel fees.

Mr. WEADOCK. Right.

Mr. BIDDLE. Now, just under what portion of your charter are you. authorized to make payments in litigation?