Mr. BIDDLE. For the convenience of the press and the committee, I will announce that the first witness on Monday morning will be Mr. Elliott, and he will be followed by Mr. Parker, the chief engineer of T. V. A., and Mr. Woodward the hydraulic engineer, and Mr. Alldredge, the navigation control officer, and thereafter we will take up power and other witnesses of T. V. Á. Acting Chairman SCHWARTZ. We will recess until 10 o'clock Monday morning. (Whereupon, at 5:15 p. m. the hearing was recessed until 10 a. m. Monday, November 28, 1938.) INVESTIGATION OF TENNESSEE VALLEY AUTHORITY MONDAY, NOVEMBER 28, 1938 CONGRESS OF THE UNITED STATES, OF THE TENNESSEE VALLEY AUTHORITY, Senate Office Building, Washington, D. C. The committee met pursuant to adjournment in room 318, Senate Office Building, at 10 a. m. Present: Senator Vic Donahey (chairman), Representative James M. Mead (vice chairman), Senators Schwartz and Frazier, Representatives Thomason, Wolverton, and Jenkins. Chairman DONAHEY. You may proceed. Mr. BIDDLE. Mr. Brown, please. TESTIMONY OF J. P. W. BROWN Chairman DONAHEY. You may be seated, and give the reporter your full name, address, and position. Mr. BROWN. J. P. W. Brown, Nashville, Tenn. OFFICIAL POSITION OF WITNESS Mr. BIDDLE. Mr. Brown, are you the vice president of the Tennessee Electric Power Co. at Nashville? Mr. BROWN. Yes, sir. Mr. BIDDLE. And conduct the operations, I presume, of the corporation in that district. Mr. BROWN. Yes; that is right, sir. Mr. BIDDLE. Will you mark this? (Whereupon, the document above referred to was received in evidence and marked "Exhibit No. 488.") CIRCULATION OF CARD Mr. BIDDLE. Mr. Brown, I show you an exhibit which has been marked for identification purposes, No. 488, and which is headed "Bare-face Facts v. Loose Talk and Estimates," and ask you if you recognize it? Mr. BROWN. I do, sir. Mr. BIDDLE. Was that card issued under your direction as vice president of the Tennessee Electric Power Co.? Mr. BROWN. Yes, sir. Mr. BIDDLE. When was it issued, approximately? Mr. BROWN. My thought is the 13th of October. Mr. BIDDLE. The 13th of October. That was subsequent to the time when the Electric Bond & Share Co. had announced the completion of their negotiations with the city of Memphis, was it not? Mr. BROWN. I would think it was, sir. Mr. BIDDLE. Where was this card distributed under your directions? Mr. BROWN. That card was put into our streetcars in some little boxes that we have on the side of the streetcars, inside, and put into our bills, sent to our customers in our bills, and given out in the office by a few clerks who meet the public. Mr. BIDDLE. Was it also distributed with your bills? Mr. BROWN. Yes, sir. Mr. BIDDLE. How many cards were distributed? Mr. BROWN. I would say 30,000 were put in the streetcars, approximate figures and approximately 40,000 went out in the bills. Mr. BIDDLE. Now, referring to the exhibit, will you turn to the portion of the exhibit headed "Nothing Counts But Facts," and read that to the committee? Mr. BROWN (reading): Why would all of this not have been made plain to the people? Another example (taken from newspaper accounts) will convince you that the public is not told "enough of the story." (a) Memphis people voted a Tennessee Valley Authority bond issue of $9,000,000 after (b) An engineering firm estimated that $7,800,000 would build a complete electric system. (c) Next, the engineers revised their estimate to $10,000,000. (d) Then in July, this year, the estimates were again raised to $12,988,322. (e) And now you read in the papers a week ago-that Memphis city officials have bought the Memphis Power & Light Co.'s system for $13,500,000 (after having spent $4,000,000 for construction of a competing plant). It's a "far cry" from the original estimate of $7,800,000 up to $13,500,000 plus $4,000,000 or a final actual investment of $17,500,000. And that's not all—the people of Memphis voted for Tennessee Valley Authority rates but they are paying a 15 percent surcharge added on. What a difference it makes when you deal with facts instead of estimates. Mr. BIDDLE. Did you write this? Mr. BROWN. My assistant wrote it, sir. Mr. BIDDLE. Your assistant wrote it? Mr. BROWN. Yes. Mr. BIDDLE. Was the difference indicated there that you were trying to show that Memphis was paying far too much for the purchase of the Electric Bond & Share Co. system? Mr. BROWN. It was not intended in any way to have any effect, possible effect in Memphis. Mr. BIDDLE. I didn't say that. Mr. BROWN. I'm just telling you. You asked me. Mr. BIDDLE. No; I didn't ask you the effect. What I said was this, let me quote from your card and see if I can find out its meaning. You say: It is a far cry from the original estimate of $7,800,000 up to $13,500,000 plus $4,000,000 or a final actual in heavy print investment of $17,500,000. Do I take it from that that you mean any person reading it would conclude that the city of Memphis was paying far too much for their purchase of the Electric Bond & Share property? Mr. BROWN. Not at all, sir; not at all. You would take it from that that the engineers who first estimated it at $7,800,000 must have made a mistake. Mr. BIDDLE. You mean the card was issued to show they had made an engineering mistake? Mr. BROWN. The card was issued to show the people of Nashville that engineers can make mistakes and do make them, as a firm in Nashville made 5 years ago, good old friends of mine, when they estimated that Nashville could be rebuilt for $4,000,000. PURPOSE OF THE CARD Mr. BIDDLE. I take it then the sole purpose of the card was to point out to the city of Nashville an engineering mistake in the city of Memphis. Mr. BROWN. No, sir. Mr. BIDDLE. What was the purpose then? Mr. BROWN. The sole purpose-if you will let me explain. Mr. BIDDLE. Of course. Mr. BROWN. Nashville is a very conservative city. I was born and raised in Nashville, I have worked there 40 years. It is a very conservative city and they had shown no interest in the T. V. A. until suddenly last fall there began to be scattered through Nashville loose talk among the people, among our customers. The card was simply intended, gotten out to cause the people of Nashville and our customers to intelligently think the thing through. That is the sole purpose of the card. Mr. BIDDLE. Where were your facts gleaned from on the card, were they taken from the newspapers? see. Mr. BROWN. Every fact was taken from the newspapers of Tennes Mr. BIDDLE. Newspapers of Tennessee? Mr. BROWN. Every fact was taken from the newspapers of Ten nessee. Mr. BIDDLE. I see. Who was the engineer whose mistake you pointed out on this card? Mr. BROWN. I don't know, sir. If you understand Tennessee, it is in three grand divisions, Memphis is 320 miles from Nashville and it is like three States. I just don't know what goes on in Memphis. Mr. BIDDLE. Well, how, you spoke of loose talk. So you mean talk in favor of the city of Nashville acquiring T. V. A. power? Mr. BROWN. I mean talk of power cheap-how much Nashville would save, before Nashville had adopted any rate, before Nashville had said "We will do as Memphis has done and add 15 percent," or "We will do as Knoxville has done and not add any percent, but subject to a surcharge in Knoxville." Mr. BIDDLE. Fifteen percent of what? Mr. BROWN. To the T. V. A. rate. Mr. BIDDLE. Oh, I didn't know if you meant the price of the system or the rate. Mr. BROWN. Oh, no, no, no. Mr. BIDDLE. Fifteen percent to the rate? Mr. BROWN. That is right. |