"Kick in the Pants"

For ten years the Federal Government has been trying to make up its disjointed official mind what to do with the $150,000,000 power and nitrate plant it built during the War at Muscle Shoals, Ala. on the Tennessee River. Once Henry Ford wanted to take it off the Government's hands. Then Alabama Power Co. offered to lease it. Lately American Cyanamid Co. has been bidding for it. Two years ago Congress passed legislation for the Government to operate its own property, only to have the bill pocket-vetoed by President Coolidge.

Last week the Senate revived the Muscle Shoals question, in three days passed (45 to 23) another bill for Government operation, sent it to the House for concurrence.

Muscle Shoals most sharply points the issue of Government v. private operation of a public utility. Though the production of nitrate as a fertilizer is a big consideration, the plant's 612,000 horse power is the nub of the controversy. For ten years private power companies have been combatting by fair means and foul, the policy of Government operation.

Three factors have made private power companies unpopular with a Senate majority: 1) their extensive anonymous propaganda against Government operation, as revealed by the Federal Trade Commission (TIME, Feb. 27, 1928, et seq.); 2) their stubborn opposition to regulation by the Federal Power Commission (TIME, March 10); 3) the flagrant lobbying against Government operation and in favor of the American Cyanamid bid by the Tennessee River Improvement Association and its onetime head. Claudius Hart Huston, now Republican National Committee Chairman (TIME, March 31). Last week wrote Mark Sullivan, veteran Washington observer: "What it [the Senate's bill] symbolizes and what gives it its political potency, stated in the extremely loose terms of politics, is 'a kick in the pants for the public utilities.' "

The new Senate bill specifically provided for a ''Muscle Shoals Corp. of the U. S.," composed of three members appointed by the President to operate the plant, sell power to States and municipalities, experiment with fertilizer nitrates by using any private process filed with the U. S. Patent Office. A $32,000,000 dam was to be constructed above Muscle Shoals at Cove Creek to stabilize the Tennessee's flow.

Generally predicted last week: a Hoover veto for the new bill. Said President Hoover in his December message to Congress: "I do not favor the operation by the Government of either power or manufacturing business, except as an unavoidable by-product of some other major public enterprise."*

*President Hoover views the power generated at Boulder Dam as an "unavoidable byproduct" of flood relief, irrigation, reclamation.

This file is automatically generated by a robot program, so reader's discretion is required.