• U.S.

UTILITIES: Appomattox Court House

4 minute read

One morning last week Trinity’s churchyard at the head of Wall Street slept humidly under a blazing sun, while some 250 men—public utilitarians, newsmen, drawling politicians from Tennessee—met on the sixth floor of Manhattan’s First National Bank. They were there to witness an epochal surrender; the Appomattox of the six-year fight by Commonwealth & Southern Corp.’s shaggy, barrel-chested President Wendell Lewis Willkie to stave off public ownership of public utilities in the Tennessee River Valley.

Wendell Willkie surrendered with the honors of war. He marched off with $78,425,095 in payment for Commonwealth & Southern’s subsidiary, Tennessee Electric Power Co.—a pretty good price considering that T.E.P. was threatened with slow strangulation by the competition of Government-subsidized Tennessee Valley Authority power. Out of the sale price holders of T.E.P. bonds and preferred stock were paid off at par, about $8,000,000 was left for C. & S., owner of all but a few shares of the common.

As Trinity’s clock was chiming 10, balding, keen-eyed David Eli Lilienthal, of TVA, took Willkie’s surrender. Neat and precise, he stepped forward and handed rumpled Wendell Willkie a check for $44,728,300, TVA’s share of the purchase of T.E.P. Willkie took the check, looked at its thumping figure, looked at Dave Lilienthal, at whom he had glowered in many a meeting over the past six years.

“This is sure a lot of money,” he said, grinning, “for a couple of Indiana farmers to be kicking around.”

For Wendell Willkie, Dave Lilienthal, relentless opponent of public utilities, but no Indiana farmer (he was born in Illinois, educated at Indiana’s De Pauw University), had words of praise now that the war was over. He described Willkie as one of the outstanding proponents of private enterprise, “who has done a real job of selling electricity at low rates.”

Then up to Willkie stepped in succession the representatives of 35 Tennessee cities, towns and cooperatives with checks totaling $33,696,795. First was Mayor Thomas L. Cummings of Nashville, who had been chivied by the Nashville Tennesseean and public opinion into following Tennessee’s move to general public ownership. Said he, unmindful of TVAsters who stood near by: “Tennessee Electric Power always has given us the very best service. We regret that it is leaving the State of Tennessee.”

Up stepped Mayor Edward D. Bass of Chattanooga (“No community was ever served by a finer public utility company”), Chairman L. J. Wilhoite of the Chattanooga Electric Power Board, many another. Trinity’s clock struck 12 before the surrender of the last privately owned utility in Tennessee Valley was finished.

A benediction was pronounced by Mr. Lilienthal before he went back to Washington. Said he: “. . . This would seem to be a good time for the utilities and TVA both to devote all of their energies to the considerable work we each have to do. The TVA now will be able to concentrate upon its main purpose: the development of the Tennessee Valley.” Public utilitarians devoutly hoped these words could be taken as a promise of no more Government competition.

But Willkie fired a final shot. Next day in Manhattan newspapers appeared a full-page advertisement, duplicate of an ad run two days before in Southern papers. Under a print of a church tower with the hands of the clock at 12, Copywriter Wendell Willkie wrote: “Tonight at midnight, we hand over our Tennessee Electric properties and a $2,800,000 tax problem.”

His text: Tennessee was losing T.E.P.’s taxes, was losing a company that had given good service at low prices, was buying T.E.P. “for about four-fifths of its real value.” “Our hope,” he wound up sardonically, “is that they [Tennesseeans] will never be required to defend a business of their own against Government-subsidized competition.”

Before the week’s end it appeared that even Wendell Willkie was convinced the TVA war was over, that there was still Lebensraum for Commonwealth & Southern’s operating chain in ten States. Its Alabama Power Co. announced a project which Wendell Willkie would never have dared to try while the TVA fight was on: a $4,000,000 steam power plant in Mobile. At the same time C. & S. announced that $12,000,000 more would be spent later in plant expansions in Michigan, Indiana, Illinois and Ohio. A day later came another proof that Dave Lilienthal and Wendell Willkie were beginning to work together. TVA and Commonwealth & Southern signed a ten-year contract under which Alabama Power Co. will buy about $100,000 of TVA hydroelectric power a month for distribution over its private transmission lines.

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