of the agreement. The ice companies in the Muscle Shoals area, realizing the predicament in which the Authority was placed, offered to save the Authority harmless, and to pay to the Authority whatever sum was necessary to reimburse O'Kain for his actual expenses. Accordingly the ice companies delivered to the treasurer of the Authority the sum of $1,500 to be used in settlement with O'Kain. A release was obtained for $1,000, and the Authority remitted the balance to the ice companies. It is well to note that none of the funds of the Authority were paid out in this transaction, and that no loss of any kind was suffered by the Authority as a result. In this same discussion in the report, the question is raised as to contract No. TV-461 for furnishing ice to the Wheeler Dam site. It is stated that the bid of the Florence Ice & Coal Co., to whom the award was made, was not dated. This bid was received by telephone prior to the time set for opening of bids, and was subject to confirmation. We are advised by our field office that at the time the telephone quotation was confirmed, the bidder neglected to sign the certificate of compliance, although verbal assurances were given of compliance with the Code of Fair Competition. Considerable time elapsed before the signature on the certificate of compliance was received. With reference to the statement in the report that this bid was based on lots of 600 pounds, we were advised by all dealers that a 600-pound quantity would take a price reduction over a 300-pound quantity, and all bids were considered on a 600-pound basis. With reference to the statement concerning the contract for furnishing ice to the Wheeler Dam Infirmary, the fact is that the advertisement for bids was entirely regular, and since only one bid was received that was accepted. The transaction for furnishing ice to nitrate plants No. 1 and No. 2 was handled in accordance with regular procedure, two bids being received in this instance. This section of the report is subject to the interpretation of suggesting a relationship between the settlement of the O'Kain matter and the granting of the contracts commented upon. The fact is that there is no such relationship as each of said awards was made in accordance with established procedure. Representative WOLVERTON. My question, of course, was not directed to that portion of the reply which you have just read, but that is all right to have that in the record. Mr. TULLOSS. I am sorry, I was unable to know how far to go. Representative WOLVERTON. I was not intending to make any reference to that part of your criticism. Mr. TULLOSs. Yes, sir. Representative WOLVERTON. But merely to the manner under which the T. V. A. had a contract that would have meant $10,000 in revenue as a minimum amount, and then it abrogated the contract after the ice men in that district objected to it. It seems from the statement that you have just read that the T. V. A. made a reference to a code authority in Washington. Under those circumstances it seems rather strange that they would be willing to be bound by a code authority in Washington, when in so many instances they raise the point that they are outside of the regular Government departments and the laws applying to them. Well, that is the explanation at any rate, isn't it, for doing away with a $10,000 contract? Mr. TULLOSS. That is their reply; yes, sir. DISCUSSION OF AUTHORITY'S 1934 REPORT TO CONGRESS Representative WOLVERTON. Now, Mr. Chairman, I will turn to this other question that I told you I would like to take up when I had finished with that portion of the report. This deals with figures that have been presented by the T. V. A. in its reports to Washington. I have made a hard effort over a period of several evenings to get some understanding of figures that seem to be different in different reports. Now, will you turn to page 39 of your 1934 report and tell me whether the total of figures there, which purports to be a balance sheet of the Tennessee Valley Authority as of June 30, 1934, showing assets and liabilities, was taken from the books of the T. V. A. Mr. MATCHETT. With adjustments by the General Accounting Office, these figures were taken from the books of the T. V. A. Mr. BIDDLE. So it is a combination of your adjustments and their figures? Mr. MATCHETT. It is. COMPARISON OF GENERAL ACCOUNTING OFFICE AND AUTHORITY FIGURES Representative WOLVERTON. What does that report, which we will term the general accounting report, which appears on page 39 of your report, show to have been the total assets of T. V. A. as of June 30, 1934? Mr. TULLOSS. I beg your pardon, sir; do you refer to page 39? Mr. TULLOSs. What are the total assets of the corporation? Representative WOLVERTON. What are the total assets of the T. V. A. as appear by the balance sheet of June 30, 1934, appearing on page 39 of the General Accounting Office report for 1934? Mr. TULLOSss. $104,244,124.86. Mr. BIDDLE. Does that include items not shown on the books of the T. V. A.? Mr. MATCHETT. The only item on here, other than minor adjustments, not shown on the books of the T. V. A. at this time were the General Accounting Office audit exceptions of $2,000,000 plus. Representative WOLVERTON. The item which appears under General Accounting Office audit exceptions $2,013,326.51, which appears as item No. 7 among assets, and a similar item appears as No. 7 under liabilities-is that right? Mr. MATCHETT. They were not on T. V. A. books. Representative WOLVERTON. So that so far as that item is concerned one cancels the other? Mr. MATCHETT. That is true. Representative WOLVERTON. So that if you wish to eliminate that $2,013,326.51, the total assets would be how much, as appears by the books of the T. V. A.? Mr. TULLOSS. It would be $102,231,000, approximately. Representative WOLVERTON. Now, I will ask you to look at the annual report of the Tennessee Valley Authority submitted to Congress, giving the financial balance sheet of the T. V. A. for the fiscal year ended June 30, 1934. And I direct your attention particularly to page 56. I ask you to read from that report submitted by the T. V. A. to Congress under the date of December 22, 1934. What are the total assets as reported to Congress? Mr. TULLOSS. $13,714,416.29. Representative WOLVERTON. That then is a difference of approximately $90,000,000 between what appeared on the books and what appeared in the report that was submitted to Congress? Mr. TULLOSS. Yes, sir. EXPLANATION OF DIFFERENCE IN FIGURES Representative WOLVERTON. Now, I find that there may be some explanation for a portion of that under the notation which the report contains, which states: Do not include properties received from War Department on which the valuation has not yet been established. Mr. TULLOSS. Yes, sir; that footnote is carried. Representative WOLVERTON. Now, that amount had been carried that same year in the books as $51,000,000, had it not? Mr. TULLOSS. Yes, sir. Representative WOLVERTON. I mean in the books of the T. V. A.; so that I assume that when you gave $102,000,000-odd as the total assets appearing on the books of the T. V. A. that it included that $51,000,000. Mr. TULLOSS. Yes, sir. Representative WOLVERTON. What explanation, if there is any, was there for reporting to Congress $13,714,416.29, plus this notation of $51,000,000 instead of using what appeared on the books of the T. V. A. amounting to $102,000,000 plus? Mr. MATCHETT. There is a difference of approximately $37,000,000 in the amount of cash shown. Representative WOLVERTON. What is that item of $37,000,000 of cash that is not shown on the report to Congress, but which appears on the report or on the books of the T. V. A.? Mr. MATCHETT. The amount shown on the balance sheet submitted by the General Accounting Office includes all cash available to the Tennessee Valley Authority, both in the United States Treasury and in various banks in the valley. Representative WOLVERTON. So that amounted at that time to $37,900,000 now, did it not? Mr. MATCHETT. Without verification that is close to the actual figure. Representative WOLVERTON. I think that is correct. Mr. BIDDLE. You mean amounts in the United States Treasury which have not been drawn out yet by the T. V. A. and redeposited to its account? Mr. MATCHETT. That is true. Representative WOLVERTON. Was there any notice given to Congress at the time this report was submitted by the statement on page 56 of the annual report of the T. V. A. that would have apprised any Member of Congress that there was $37,900,000 already available to the T. V. A. unused? Mr. MATCHETT. No. Representative WOLVERTON. What is it? Mr. MATCHETT. The answer is "no", there is nothing there to indicate that. Representative WOLVERTON. So that any Member of Congress looking at the financial statement submitted by the T. V. A. in its report of 1934 would not have been apprised of the fact that the T. V. A. at that time, seeking additional appropriations, had an unexpended balance of $37,900,000? Mr. MATCHETT. No, sir. Representative BARDEN. May I ask a question? Representative WOLVERTON. Yes. Representative BARDEN. Have you a report of the hearings before the Appropriations Committee when they were requesting additional appropriations? Mr. TULLOSS. No, sir. Representative BARDEN. You don't know whether or not that was covered in their hearing before the Appropriations Committee? Mr. TULLOSs. I have not read them; no, sir. Representative BARDEN. It is the usual custom that those matters are discussed when they come in before the Appropriations Committee for additional money, isn't it? Representative WOLVERTON. I think that is probably true. Representative BARDEN. I was asking the witness, if you will excuse me. Representative WOLVERTON. Sure, I'll excuse you any time. Representative WOLVERTON. Well, now, with that $51,000,000, and even with the $37,900,000 appropriation unused, and eliminating the $2,013, 000 plus of accounts, does it still balance, would it balance then? Mr. MATCHETT. Approximately; yes. Representative WOLVERTON. Just tell me how near it would come? Mr. MATCHETT. That will come within a few thousand dollars of balancing. Representative WOLVERTON. Within how many thousand? Mr. MATCHETT. I will have to do a little more figuring for you. Representative WOLVERTON. It is easy; just take the $102,000,000 plus that you had Mr. BIDDLE. He is figuring his own adjustments I think, Mr. Wolverton. Mr. MATCHETT. What I am doing is I am figuring $104,000,000 shown on our balance sheet less the $2,000,000 of exceptions put on there by us, which will be offset by the items appearing on the T. V. A. balance sheet totaling $13,700,000 plus items left off as the cash of $37,000,000 plus, and the property acquired of $50,969,000 plus. Representative WOLVERTON. So even after you have given allowance to all of those, there is still some kind of adjustment that has got to be made? Mr. MATCHETT. Yes. Representative WOLVERTON. Before you could make it balance with the figures submitted by the T. V. A., either on its books or to Congress? Mr. MATCHETT. That is true; but the adjustments come not only in amounts left off but adjustments within classification. Representative WOLVERTON. That is true. I am having in mind. any kind of adjustments-there still would have to be adjustments made. Mr. MATCHETT. Yes, sir. Representative WOLVERTON. Beyond what you have referred to here before you could make it balance? Mr. MATCHETT. That is true. Representative WOLVERTON. Now, turn to report of the T. V. A. to Congress. Mr. BIDDLE. Before you finish with this, may I ask some questions on these particular items? Representative WOLVERTON. I don't want to interfere, Mr. Biddle, with any questioning at any time. However, I will state to you what I have in mind, and you can see whether it will fit in better now or wait until I ask this further question. Mr. BIDDLE. All right. Representative WOLVERTON. I have already shown what it was in the general auditing account with respect to the total assets, and then I have shown what T. V. A. reported it to be to Congress. Now, I wanted to show that in 1935 when the T. V. A. submitted its report to Congress and gave the figures for 1934 as a basis of comparison, it did not even use the same figures then as it had previously used in its report of 1934. QUESTION OF UNDISTRIBUTED DISBURSEMENTS Mr. BIDDLE. Before you get to that there are some items on the exhibits that have just been referred to which I would like to ask about, because I am not very clear on them. I notice in deferred charges, which is part of the total I presume, is it not? Mr. MATCHETT. Yes. Mr. BIDDLE. An item of undistributed C. W. A. disbursements. Was that item taken from balance sheet or operating accounts of the T. V. A.? Mr. MATCHETT. Taken from the records of the treasurer of the T. V. A. Mr. BIDDLE. Was it carried on their books as an item? Mr. MATCHETT. In the records of the treasurer of the Tennessee Valley Authority, yes. Mr. BIDDLE. What record? Is it taken from the balance sheet, operating statement, or what book of entry is it taken from? Mr. MATCHETT. The treasurer maintains a set of records entirely separate from that of the Tennessee Valley Authority. Mr. BIDDLE. Of the treasurer of whom? Mr. MATCHETT. The treasurer of the Tennessee Valley Authority. Mr. BIDDLE. How is it carried? Is it carried as an asset on one of his books? Mr. MATCHETT. It is carried as a cash receipt, and a record of the disbursement shown. Mr. BIDDLE. Is it carried as an asset? Mr. MATCHETT. The treasurer does not maintain, or did not maintain, her records in the manner that the other records of the Tennessee Valley Authority are shown. Mr. BIDDLE. Was it carried in any way as an asset on the books of the T. V. A.? Mr. MATCHETT. Is it now or was it then? Mr. BIDDLE. No; was it then? |