matters dealing with negotiations and other things concerning T. V. A.?

Mr. BROWN. No, sir.

Mr. BIDDLE. So he knew absolutely nothing about it?

Mr. BROWN. Absolutely nothing.

Mr. BIDDLE. He knows about it now, doesn't he?

Mr. BROWN. He may, but not to my knowledge. But when that charge came out, Mr. Willkie or no man, woman, or child in New York knew of that card, or anybody out of Nashville, I will say that, no soul knew about it.

Mr. BIDDLE. That is all.

Senator FRAZIER. Under your item B you say "an engineering firm." Was that a reputable engineering firm? Do you know what engineering firm it was?

Mr. BROWN. I don't know the firm, sir. I have seen the name, but I don't recall it.

Senator FRAZIER. Under C you say-B refers to an engineering firm, and C says, "Engineers advise." Was that the same firm?

Mr. BROWN. I couldn't make a positive statement on that. I have in mind that they may have changed the firm down there, but I cannot make a positive statement.

Senator FRAZIER. Under D you say, "The estimates were again raised." You don't say by whom. Was that by engineers or somebody else?

Mr. BROWN. They were raised by the engineering firms, sir.
Senator FRAZIER. What?

Mr. BROWN. They were raised by the engineering firms. That is my impression of it.

Senator FRAZIER. You don't know who the engineering firm was? Mr. BROWN. No, sir. I have known, but I have forgotten.

Representative JENKINS. Did you come here deliberately, did you offer your services or were you subpenaed?

Mr. BROWN. A young man interviewed me in Nashville about as we have talked today. Then I got a letter from Mr. Biddle asking me to come.

Representative JENKINS. That is all. Has the trade been consummated for the Memphis property?

Mr. BROWN. I don't know, sir, whether it has or not.

Mr. BIDDLE. No, no; it has not.

Representative THOMASON. I am sorry, I came in a little late. Just exactly what was your criticism pointed at, on this hike in price from an estimate of $7,800,000 to the price at which the trade is about to be negotiated on, a basis of $13,000,000 plus?

Mr. BROWN. I was making no criticism at all, sir; I was simply stating what had happened in these other cities, the purpose being to get the people of Nashville, who are my people, where I was born and raised and live, to intelligently and fairly and honestly consider the T. V. A. question, as they are beginning to think of it now. That is the sole purpose of the card, sir.

Representative THOMASON. Your property is a C. & S. property? Mr. BROWN. That is right.

Representative THOMASON. The Memphis property is not?
Mr. BROWN. That is a Bond and Share property, sir.

Representative THOMASON. What is your average domestic rate in the city of Nashville?

Mr. BROWN. About 21⁄2 cents.

Representative THOMASON. What is it in Memphis?

Mr. BROWN. About 41⁄2 cents.

Representative THOMASON. What was you average domestic rate in 1932?

Mr. BROWN. I don't know, sir.

Representative THOMASON. Considerably more than it is now? Mr. BROWN. It was more.

Representative THOMASON. Do you buy any T. V. A. "juice" at all? Mr. BROWN. That is handled by another department, what we call the power and transmission department. I myself attend to 50,000 customers in Nashville, which takes all my time.

Representative THOMASON. Do you generate all of your "juice" in Nashville with steam plants?

Mr. BROWN. No, sir. We have a steam plant there and it runs

some.

Representative THOMASON. But you have used some T. V. A. electricity, haven't you?

Mr. BROWN. Not that I know of, sir. We use our own hydro plants and our own steam plants throughout Tennessee.

Representative THOMASON. Where is your hydro plant?

Mr. BROWN. Well, we have two plants at Ocooee, and one at Hales Bar on the Tennessee River.

Representative THOMASON. I knew the C. & S. owned that. You mean you get some of your electric current

Mr. BROWN. That is the Tennessee Electric Power Co.
Representative THOMASON. In Nashville from Hales Bar?

Mr. BROWN. Yes, sir; that is the Tennessee Electric Power Co., sir.
Representative THOMASON. Yes, I knew that.

Mr. BIDDLE. This gentleman is vice president of the T. E. P. One more question. Did you ever build that steam plant at Nashville that you applied for permission to the Commission to build? Mr. BROWN. No, sir: it is not yet built.

Mr. BIDDLE. It has not yet been built? What was the engineer's mistake that you referred to. I forgot to ask you that on the card. You said the purpose of the card was to point out an engineer's mistake. Would you show on the card the engineer's mistake that you have?

Mr. BROWN. I would say the engineers show that themselves, Mr. Biddle, when they one time estimate $7,800,000, then they built it on up to the top figures here.

Mr. BIDDLE. You mean the negotiations having started at $7,800,000, and gone up to $13,000,000 whatever it was, there must be an engineering mistake?

Mr. BROWN. It was not negotiations; the engineers changed their figures.

Mr. BIDDLE. The same engineer estimated once at seven, and then later at 13 million?

Mr. BROWN. I am not sure they are the same engineers, but the engineers.

Mr. BIDDLE. Might not engineers differ as to value?

Mr. BROWN. They would differ. I would say the one that was near the right price was right, and the ones who were far off were wrong. That would be my opinion of it.

Mr. BIDDLE. So what you mean by a mistake is that an estimate was made that you don't agree with, is that right?

Mr. BROWN. That estimate which nobody agreed with.

Senator SCHWARTZ. Did I understand you to say in your judgment the original estimate was the right estimate, the low estimate?

Mr. BROWN. No, sir; I have no possible judgment or thought or estimate of what Memphis is worth. It may be worth $25,000,000 for all I know.

Senator SCHWARTZ. You didn't wish to indicate where the mistake was?

Mr. BROWN. No, sir.

Senator SCHWARTZ. If there was a mistake?

Mr. BROWN. I just say that they started figuring on one price, and they kept changing it, and changing it, and changing it.

Senator SCHWARTZ. What did that indicate to you?

Mr. BROWN. That indicated to me the engineers didn't agree, and if people in Nashville are going to consider it, they had better think thoroughly about what they are doing.

Senator SCHWARTZ. Either the first engineers or the last engineers, if they were different engineers, might have been right?

Mr. BROWN. Well, they were different, that is all I can say about it, sir.

Mr. BIDDLE. You don't know which was right and which was wrong?

Mr. BROWN. That is true.

Mr. BIDDLE. So you don't know whether the mistake lay in going too high or going too low?

Mr. BROWN. I don't know.

Mr. BIDDLE. The voters are going to take a look at that.

Mr. BROWN. I want my people in Nashville to take a look at it too; yes, sir.

Senator SCHWARTZ. Would it be your thought then if your company engineers arrived at one value we will say at Nashville, and T. V. A. engineers arrived at another value, is it your thought then that they are both wrong, or one might be right, or the price might be some place between?

Mr. BROWN. I wouldn't know that, sir.

Senator SCHWARTZ. Well, the purpose of your card, in any event, the effect of it, is that you desire to file a drastic criticism of the T. V. A.?

Mr. BROWN. Absolutely not, sir.

Senator SCHWARTZ. That is what it says, doesn't it?

Mr. BROWN. It does not, absolutely not. The purpose of the card, as I have stated

Senator SCHWARTZ. How do engineers arrive at their estimates as a general proposition; they are dealing with facts, aren't they?

Mr. BROWN. They ought to.

Senator SCHWARTZ. And when you say down there at the bottom, "What a difference it makes when you deal with facts instead of estimates".

Mr. BROWN. That is right.

Senator SCHWARTZ. What is the purpose of that?

Mr. BROWN. Engineers ought to deal with facts.

Senator SCHWARTZ. Then you have no knowledge that they were not dealing with facts?

Mr. BROWN. My belief would be that if one firm estimated $7,800,000, and one $13,000,000, one of them was not dealing with facts, that would be my belief.

Senator SCHWARTZ. That would be dealing with the same facts, wouldn't it, but putting a different value on it?

Mr. BROWN. If they did that, sir, if they did.

Representative THOMASON. Whose engineers were these, who employed them?

Senator SCHWARTZ. He says he doesn't know.
Mr. BROWN. I don't know.

Representative THOMASON. You don't know whether they were representing the city of Memphis or T. V. A., or who they were?

Mr. BROWN. I don't know that, sir. That is 320 miles from Memphis to where I live.

Mr. BIDDLE. Nor do you know if the newspapers reported them correctly, do you?

Mr. BROWN. I wouldn't say I did.

Senator SCHWARTZ. You just saw some newspaper reports, and you thought "Here's a chance to take a slap at the T. V. A.," didn't you? Mr. BROWN. No, sir.

Senator SCHWARTZ. That is what the card does.

Mr. BROWN. I didn't say that at all. My only thought was to cause the people of Nashville to carefully think. That is my one sole thought on this card.

Senator SCHWARTZ. You wanted them to think, if they ever came to purchase Nashville, that there would probably be a difference between the engineers of the company and the engineers of the T. V. A.? Mr. BROWN. No, sir; I wanted them to know the absolute truth, as far as they can get it.

Senator SCHWARTZ. You don't know whether these different values are by different engineers or not?

Mr. BROWN. No, sir; I don't.

Senator SCHWARTZ. And you don't know whether part of them represented T. V. A. and part of them represented the company's? Mr. BROWN. No, sir.

Senator SCHWARTZ. You got out a card without much knowledge of your own?

Mr. BIDDLE. By the way, have you found it cheaper to generate power by steam or buy it from T. V. A.?

Mr. BROWN. It has been so long since I have been in that department, the development in processes have been so much, that I would not want to hazard an answer. It is a different department of the company, that I have nothing to do with.

Mr. BIDDLE. All right.

Representative THOMASON. I believe you did not answer the

question as to whether or not your company was using T. V. A. power in Nashville.

Mr. BROWN. As far as my knowledge goes they are not using it, sir.

Representative JENKINS. Nobody ever accused you of committing any crime by putting out this little card, has there?

Mr. BROWN. No, sir; there has been no criticism in Nashville where the card was intended to go.

Representative JENKINS. I don't think you did anything wrong, so far as I am concerned.

Mr. BIDDLE. All right, I think we are finished.

Thank you very much. I am sorry you had to come all the way from Nashville.

TESTIMONY OF STUART B. TULLOSS

Chairman DONAHEY. Be seated, and give your name and address to the reporter.

Mr. TULLOSS. Stuart B. Tulloss, Vienna, Va.

OFFICIAL POSITION OF WITNESS

Mr. BIDDLE. Mr. Tulloss, what is your position with the Comptroller General, with the Office of the Comptroller General of the United States, the General Accounting Office?

Mr. TULLOSS. I am designated as chief of investigation.

Mr. BIDDLE. I think you are a lawyer, are you not?

Mr. TULLOss. I am a member of the bar.

Mr. BIDDLE. And in response to Senator Donahey's suggestion, that the Acting Comptroller General, Mr. Elliott, have someone testify before us, you are now taking the stand for that purpose? Mr. TULLOSS. That is right.

Representative THOMASON. Mr. Elliott is here if anyone wants to interrogate him.

LAW GOVERNING RELATIONS WITH GENERAL ACCOUNTING OFFICE

Mr. BIDDLE. Mr. Elliott is also here, and Mr. Tulloss, I understand, is particularly familiar with the relation of T. V. A. to the General Accounting Office, and for that reason it was thought desirable by Mr. Elliott that he should testify.

Mr. BIDDLE. Mr. Tulloss, the resolution under which this committee is operating provides in subsection (n) as follows:

Whether the Authority

and "the Authority" means the T. V. A., Tennessee Valley Authority— Whether the Authority has interfered with the Comptroller General's audit of the Authority

that should be "audits of the Authority"—

required to be submitted annually to Congress, under section 14 of the act as amended.

We have therefore asked you to testify in connection with that direction to our committee.

Before beginning your testimony, it might be clearer for us if you would read section 14 of the act as amended, since the subsection of our resolution is directed to that. I have copies of the act here, and