Mr. WILLKIE. About 6 months ago, after the P. W. A. had made hundreds of grants, free gifts of 45 percent Mr. BIDDLE. Hundreds of grants? Mr. WILLKIE. Yes; I think throughout the country. GRANTS IN THE TENNESSEE VALLEY Mr. BIDDLE. How many in the Valley, if you know? Mr. BIDDLE. How many of the 40 allocated grants were used? Ithink that there were only 2 or 3 that have actually been used, aren't there? Mr. WILLKIE. They have granted to Chattanooga-I will get a list of them, so that we won't delay. Mr. BIDDLE. I mean the money paid when I said grants used. Mr. WILLKIE. I will go back to your original question. About 6months ago the P. W. A. adopted a rule by which they would not make grants unless the city had first offered to buy the distribution system not the part of the generation system which could be allocatad-at what Mr. Ickes determined to be a fair price. Well, the utility-the city saying to it, "We will pay you $50,000 for this property Mr. BIDDLE. Who would you expect to be chosen to determine, who would determine what the fair price would be? Mr. WILLKIE. I should think some fair tribunal. Mr. BIDDLE. You think that the rule should have been that Mr. Ickes would not give the grant until some outside tribunal Mr. WILLKIE. Some disinterested tribunal, for instance, Mr. Biddle, let me give you an illustration. A city comes along here, and you can't criticize a city for trying to buy a distribution system as cheaply as possible; that is what we all try to do. And it says to us, "We will give you $50,000 for your distribution system.' And we say, "It cost us $200,000, and we think that we ought to have $200,000." We are perfectly willing for any fair tribunal, whatever that tribunal may be, to determine this price, a court, or a commission, or anybody else, where we can go in and have a hearing. Mr. BIDDLE. How about the Federal Power Commission? Mr. WILLKIE. No. Mr. BIDDLE. You wouldn't do that? Mr. WILLKIE. No. Mr. BIDDLE. You don't consider they are a fair commission. Mr. WILLKIE. That is not the point; I think that the Federal Power Commission has been many times required to work in close cooperation with the T. V. A. Mr. BIDDLE. And therefore is biased? Mr. WILLKIE. Yes; I think it is affected with that interest. Mr. BIDDLE. So that isn't one of the arbitrators that you would have? Mr. WILLKIE. No; I wouldn't think that that would be, and I assume that you are just like me, having been trained as a lawyer, you want to make any tribunal fair, and where neither party thinks that their interests are going to be affected. Mr. BIDDLE. I should think an arbitrator should be fair, yes. EFFECT OF PUBLIC WORKS ADMINISTRATION GRANTS ON PRIVATE COMPANIES Mr. WILLKIE. Now let me explain to you. I say that we have a property, and the city says to us, "We will give you $50,000 for that property," and we say, "It cost us $200,000," and we are perfectly willing for any fair tribunal, court, or otherwise, to fix this value, and we have to go to Mr. Ickes, and Mr. Ickes passes upon it, not in hearing, he will let us file some papers with him, and he says, "No; I don't think that what you ask is fair, and I think that what the city offers is fair, and since you won't take what the city offers, we give them 45 percent with which to duplicate you." Mr. BIDDLE. He just follows what the city offers, you think, always? Mr. WILLKIE. I don't know about whether he follows what the city offers, but I don't think you or I or anybody else with that dual powerI don't think that any man with dual power, that has an interest both ways can be fair. I am not speaking of individuals; it would be true of you or me. Representative WOLVERTON. Right on that point, the T. V. A. Act provides a procedure for the United States court to appoint commissioners, to determine the value of lands to be taken for T. V. A. purposes. Do you consider that a fair method? Mr. WILLKIE. Why, I think for a United States court to appoint commissioners, that is a fair method, if the commissioners are appointed by a United States court, but Mr. Wolverton, let me say this to you. I have sat with this problem for 5 years, of this kind of a situation, where the P. W. A. comes along and offers to give a city 45 percent, absolutely free, and loan them the balance, at very low rates of interest and on long-term money, and that city says to you, "Now, we will buy your distribution system rather than duplicate it," although saying to you all the time, "You have got to sell it cheap because we can get 45 percent free." It is one of the most cruel, and one of the most brutal, and one of the most un-American doctrines ever adopted by any government. Representative WOLVERTON. I think that you said that your statement is illustrated by the holding of a gun. Mr. WILLKIE. It isn't anything else, and you nor I can't be fair, and no man can be fair under those circumstances. If, for instance, I was going to buy a piece of property from you, and I could duplicate it with public money, why of course I wouldn't pay you as much as otherwise, that is human nature; you can't expect to function otherwise, and it won't function otherwise as a matter of fact, as members of the power board in Chattanooga have said to me, "Why, Mr. Willkie, there is a question whether we are not subject to criticism for not spending this free Government money, and duplicating you rather than buying you. You had better sell out cheap." Mr. BIDDLE. Wasn't the criticism that he suggested a criticism of the fact that he might pay far more to you than it would actually cost him to put the lines in, that is what he meant? Mr. WILLKIE. No, Mr. Biddle; now you put it that way- Mr. WILLKIE. Right from the very beginning, right from the very beginning, here is the situation. Here is the T. V. A. that generates wholesale requirements of power, and it builds the dams and then it builds the transmission lines to the principal markets, and take for instance the city of Chattanooga, they built their dams, and then they built transmission lines right to the gates of Chattanooga. Mr. BIDDLE. That was after you had held them up for 3 years. Mr. WILLKIE. No, no; they started right in and I never held them up. Mr. BIDDLE. I wouldn't say you, but the power companies. Mr. WILLKIE. They built the transmission lines right up to the city, and then the P. W. A. comes along and says to the city of Chattanooga, "We will give you absolutely free 45 percent with which to duplicate this transmission system," and then they say to us, "You take the Tennessee Electric Power Co. and break it into pieces, and sell us this piece, or that piece, or we will duplicate you." I say it is cruel, and brutal, and unfair. Mr. BIDDLE. Well, now, Mr. Willkie, before we finish that question of buying your properties, we want to be specific; you know, don't you, as a fact, that the Tennessee Valley has no power to condemn these properties under the act? Mr. WILLKIE. Well, Mr. Biddle, I have heard that argued, and I have heard all of these questions Mr. BIDDLE. Can you point to the section in the act where it has such power? Mr. WILLKIE. No. Mr. BIDDLE. Then can't we assume that it has no power under the act? Mr. WILLKIE. Yes; but just a minute, Mr. Biddle. Three years ago, more than 3 years ago I appeared before the Military Affairs Committee of the House of Congress, and I recommended that Congress adopt an amendment to the T. V. A. Act, authorizing the T. V. A. to condemn our properties, and I also asked that the T. V. A. be required to keep its accounts in accordance with the same methods of accounts of the utilities, in its power operations. That it be required to pay taxes on the same basis as power companies, and the T. V. A. lobbied against its adoption, and presented to the Congressman who was most instrumental in defeating it on the floor, a pen in a public ceremony Mr. BIDDLE. Now, let us get Mr. WILLKIE. The pen with which the President signed the resolution. Mr. BIDDLE. Now, have you finished your speech? Mr. WILLKIE. I wasn't making a speech. Mr. BIDDLE. So that we can get back to the question. The question was, don't you know as a fact that the present act Mr. WILLKIE. It is hard to speak of these things without indignation. Mr. BIDDLE. Oh, no; very natural. But if you will think of the question first, and then make your speeches afterward. Mr. WILLKIE. If you will just ask the question, we will get along all right. You quit making speeches, too. Mr. BIDDLE. I will try to confine my end of the table to questions. Mr. WILLKIE. So will I mine to answers, now go ahead. Mr. BIDDLE. Are you ready? Mr. WILLKIE. Yes, I am ready; will you proceed? CONDEMNATION OF PROPERTIES Mr. BIDDLE. Will you point to that portion of the act which allows T. V. A. to condemn your properties? Mr. WILLKIE. I never said that, you said that. Mr. BIDDLE. Well, you surely can say Mr. WILLKIE. I said Mr. BIDDLE. I know what you said, but does it or does it not allow condemnation? Mr. WILLKIE. I think that there is a provision, let me have that statute, it has been some time since I looked at it, I think it is as to transmission lines. Mr. BIDDLE. I have been definitely advised by the Authority that it certainly would not permit condemnation of your system, and you would like to have the whole system condemned, and where is the authority for that? Mr. WILLKIE. I say that I think it is the transmission lines. Mr. BIDDLE. You don't want just the transmission lines condemned? Mr. WILLKIE. No. Mr. BIDDLE. As a matter of fact, you don't know of any such proposition, or any such provision allowing condemnation of transmission lines? Mr. WILLKIE. I thought it was in the original provision. Mr. BIDDLE. But anyway, there is nothing under the act which would permit condemnation of your system as you would like it condemned? Mr. WILLKIE. No. Mr. BIDDLE. We are clear on that? Mr. WILLKIE. But we are not clear on this. If Congress has the authority to authorize the T. V. A. to do what it is doing, then Congress has the power to amend the act so as to provide for condemnation. Mr. BIDDLE. Congress may be at fault, I am trying to get at what the T. V. A. has done. Mr. WILLKIE. I presume that the committee wants information, and Representative JENKINS. Did the amendment that you propose, would that have granted the permission to condemn? Mr. WILLKIE. Yes. Representative JENKINS. All of your properties? Mr. WILLKIE. Yes. Provided they should not duplicate until they first went in and condemned, but gave them authority to condemn. Mr. BIDDLE. Have you had any actual experience in condemnation proceedings? Mr. WILLKIE. Very minor ones. Mr. BIDDLE. Do you know that condemnation verdicts and results. run about 10 to 15 percent ahead of the usually accepted market value of the property? Mr. WILLKIE. I didn't know that, I have always assumed-— Mr. WILLKIE. No, I have always assumed that the courts of America were fair. Mr. BIDDLE. It is not the courts of America, it is the particular commission that would condemn the property, isn't it recognized by all lawyers, that condemnation results are more expensive, and the T. V. A. has found that by buying land, they can buy it Mr. WILLKIE. Certainly, under pressure Mr. BIDDLE. A man can insist upon the condemning of his land Mr. WILLKIE. And they flood it in the meantime. Mr. BIDDLE. What difference does that make? Mr. WILLKIE. Well, I think that it would make some difference to me, it may not to you. Mr. BIDDLE. You can put the values on it just the same whether it is flooded or not. Mr. WILLKIE. You can, and wait, and so forth, but my judgment is that condemnation proceedings like most court proceedings are usually fair. Mr. BIDDLE. You can go ahead and take land for your poles, can't you, by filing a bond? Mr. WILLKIE. By filing a bond, yes. Mr. BIDDLE. Do you think that the T. V. A. ought to or that the Government should file a bond? Mr. WILLKIE. Is the T. V. A. the United States Government? I have heard you refer to it Mr. BIDDLE. It is a portion of the Government. Mr. WILLKIE. It certainly acts like it. Mr. BIDDLE. It acts like the Government? Mr. WILLKIE. Yes. Mr. BIDDLE. In what way, Mr. Willkie, that is an interesting Mr. WILLKIE. Just riding over everybody's rights. Mr. BIDDLE. The way the Government does? Mr. WILLKIE. Yes, and for instance you wanted to make it a tax collector a moment ago. Mr. BIDDLE. A tax collector? DEPRECIATION Mr. WILLKIE. You thought in fixing value, that it should get some advantage of the depreciation Mr. BIDDLE. I thought if I was going to buy your stuff, that I would like to take a look at the depreciation on the returns. Mr. WILLKIE. They did, they got a subpena Mr. BIDDLE. I thought that you told Lybrand, Ross Bros. that they shouldn't see the returns? Mr. WILLKIE. The T. V. A. went to the Treasury Department-to show you how it functions as a part of the Government, without ever consulting us, or without the Treasury Department ever notifying us, the Treasury Department turned over these very tax returns that you are talking about now Mr. BIDDLE. You told them that you wouldn't let them see them. Mr. WILLKIE. They saw them before that. Mr. BIDDLE. You told them that they had nothing to do with it, and they wouldn't let the auditors look at that. Mr. WILLKIE. You are mistaken about that, let me have the letter. Mr. BIDDLE. You say to Lybrand, Ross Bros., that the tax returns had nothing to do with it and therefore that they shouldn't see it, on any of these companies, not only the T. E. P., but others. Mr. WILLKIE. Mr. Lilienthal told me that the Treasury Department, courteously had permitted him to look at our tax returns without consulting us, and that he thought that that question was involved in these valuations. Mr. BIDDLE. You thought it wasn't. Mr. WILLKIE. Yes, and I so told him, but when you say that there was a refusal to let them have tax returns, why, heavens! they already had them. Mr. BIDDLE. I didn't say that. |