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Record Page 494. TVA 1_"Department for Water Control in the River Channel” 34 4698 495. TVA – Classification of Annual Employees, Engineering and Construction Departments.

4704 496. H. K. Barrows—"Head and Cost Per Kilowatt for Hydroelectric Plants”.

4754 497. Tennessee Valley Authority, engineering and construction depart

ments, project planning division-"Report on the Chickamauga
Projects on the Tennessee River".

4756 498. Tennessee Valley Authority, engineering and construction depart

ments, designing department-"Pickwick Landing Project: General
and Power House Equipment Drawings”.

4760 499. Tennessee Valley Authority, engineering and construction depart

ments——"Summary of Cost Reports and Budget Studies, Pickwick

Landing, Guntersville, Chickamauga, and Hiwassee Projects”. 4765 500. Tennessee Valley Authority, engineering and construction depart

ments—"Outline of General Engineering and Construction Pro-

4767 501. TVA L-"A Technical Review of the Norris Project”.

4767 ! This exhibit was secured from the Tennessee Valley Authority files. 3 See Committee Report. • Only 6 charts used.





Senate Office Building, Washington, D. C. The committee met pursuant to adjournment in room 357, Senate Office Building, at 10 a. m.

Present: Senator Vic Donahey, chairman; Representative James M. Mead, vice chairman; Senators Frazier and Schwartz; Representatives Thomason, Barden, Jenkins, and Wolverton.

Chairman DONAHEY. Are you ready to proceed?

Mr. BIDDLE. Mr. Chairman, I might announce this while we are Waiting, that Mr. McCarl telephoned my office last night that he was not quite prepared to come before the committee as it involved going over a good many letters, and he wanted to be thoroughly familiar with it, and asked if it could be postponed. He thought toward the end of the week, or certainly next week, he would be prepared, and I felt certain the committee would want to indulge him. I told him as soon as he was ready we would like to have him come, but we wanted to give him an opportunity to prepare himself.

Chairman DonaHEY. That is entirely satisfactory.

Mr. Tulloss. Mr. Chairman, my assistant, Mr. Bruk, is ill this morning and could not be present and I have brought with me Mr. Francis Matchett, and Mr. William A. Owen.

I would like if possible to have them answer some of these accounting questions. I don't feel qualified to answer as to the details carried on this 1934 report, and I would like for you to call them as witnesses in that connection.

Mr. BIDDLE. Excuse me just a moment, sir. (Conference held off the record.)

Mr. BIDDLE. It is suggested, Mr. Chairman, that, since each one of these witnesses covered different angles of the accounting, we might swear both of them; then we might, somewhat like a panel, direct the questions to Mr. Tulloss, and, if he is unable to answer, allow whichever witness is better qualified to answer it, because of these complicated details.

Chairman DONAHEY. Is there objection? It is so ordered.

You may be seated, and each of you give your name and address to the reporters.




Mr. Owen. My name is William A. Owen, address 5518 Conduit Road NW., Washington. I am an assistant investigator in the General Accounting Office.

Mr. MATCHETT. My name is Francis T. Matchett, address 215 Emerson Street NW., Washington. I am an assistant investigator in the General Accounting Office.

Chairman DONAHEY. You may proceed with your examination of the witness.

Representative WOLVERTON. Mr. Tulloss, will you turn to page 80 of the 1934 report?

Mr. Tulloss. Yes, sir.
Representative WOLVERTON. Of the General Accounting Office?
Mr. Tulloss. Yes, sir.

Representative WOLVERTON. Under accounts receivable, it seen as if a contract had been entered into with the Alabama Power Co. on November 17, 1921, which was finally terminated December 31, 1933. Under the terms of the lease the company agreed, at its own expense from and after taking possession under the lease, to operate and maintain said plant and all of its facilities, equipment, and so forth in good order and condition, and upon the expiration of the lease to deliver the same to the United States in like good order and condition as when received.



According to the report of the General Accounting Office, it seems as if the Tennessee Valley Authority expended, to June 30, 1934, in reconditioning the plant $50,159.96, which amount has been set up as an account receivable for recovery from the Alabama Power Co. under the terms of the lease. Has that amount been received?

Mr. Tulloss. I will ask Mr. Owen to answer that.
Mr. OWEN. No, sir.

Representative WOLVERTON. Have any steps been taken by the Tennessee Valley Authority to collect it?

Mr. Owen. There have been, to this extent. There were counterclaims by each, the Alabama Power Co. and the Authority. There was a coal pile left by the Alabama Power Co. which amounted to some $28,000, roughly, which they claimed as an offset against this amount of damages to the plant.

Well, they have never paid anything as yet for the damages to the steam plant.

Representative WOLVERTON. The lease was terminated December 31, 1933, and we are now at December 1938.

Mr. OWEN. Yes, sir.

Representative WOLVERTON. During the intervening time there has been no collection of that amount?

Mr. OWEN. No, sir.

Representative WOLVERTON. No suit instituted?

Mr. OWEN. Well, there was no suit instituted. There have been letters, a controversy between the two.

Representative WOLVERTON. Is it still carried on the books as accounts receivable?

Mr. OWEN. We set it up in our audit. It was written off, they had written it off. In other words, they had allowed, we wilí, say this $28,000 for the coal pile, allowed them to have that credit, and wrote the rest of the amount off. We set it up again as an account receivable.

Representative WOLVERTON. Was there any explanation given for having written it off?

Mr. Owen. I wouldn't say that there was any direct explanation given. Now, I don't remember the reply of the Authority to the exception.

Mr. BIDDLE. It is on page 325.

Representative WOLVERTON. So the fact remains, so far as the General Accounting Office is concerned, that the T. V. A. had acknowledged or claimed an indebtedness of some $50,000 from the Alabama Power Co. for expenses incurred in rehabilitating the property, and after making an allowance of $28,000 for coal belonging to the Alabama Power Co., the balance was written off without any suit being brought for collection.

Mr. Tulloss. Yes. There is, however, a reply of T. V. A., in this reply to the report for 1934, which was forwarded to the Comptroller General on December 12, 1935. There is some comment in this reply on that item.

Representative WOLVERTON. When was it written off?

Mr. OWEN. The account was written off as of the beginning of this fiscal year. It had been carried in a work order by the electric division, and that was where I was picking it up from, and set it up as an account receivable. And when I went to pick it up on this year's audit, I found it had been written off, so I restored it.

Representative THOMASON. Do you object, Mr. Wolverton, to having offered at this time what their reply was to that letter?

Representative WOLVERTON. I have no objection to the witness giving any information that he wishes to.

Representative Thomason. I understood you to say you had a reply or explanation from the T. V. A. there. Mr. Tulloss. I will read this reply into the record if it is desired.

Representative THOMASON. I don't want to consume a lot of time. You can read it or state the substance of it.

Mr. Owen. The substance of it is in the last paragraph—"Negotiations are still under way looking toward a possible settlement, and litigation may be necessary."

Now, that was in 1935 this reply was made.

Mr. BIDDLE. Mr. Chairman, that does not seem to me at least to be the substance of the reply, and I would prefer, having read that paragraph, that the reply be read. It is not particularly long.

Representative THOMASON. Just so we can know their position, that is what I had in mind.

Mr. BIDDLE. It is pretty hard to summarize quickly without reading it.

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