The Law and the Valley

In the spring of 1787 George Washington, Benjamin Franklin, Alexander Hamilton and 52 other distinguished revolutionists gathered in Philadelphia to found a more perfect Union. Out of that long, sultry summer's work there was evolved a notable document scrupulously delimiting the powers and prerogatives of a proposed Federal Government. To Congress was granted right to tax, to provide for the common defense, "to regulate commerce with foreign nations and among the several states and with the Indian tribes," to coin money, issue patents, hang pirates. Subsequently attached to the original Constitution was a Bill of Rights which ended thus: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

Except for the power to establish post offices and post roads, nothing was said about the possibility of the Government's going into the field of private business. And it certainly never occurred to the Constitution-makers that the manufacture and sale of electric power in the seven States of the Tennessee Valley would be very dear to the heart of the 32nd President of the U. S.

Of course, the Government was in business long before two college presidents and a young lawyer held the first directors meeting of the Tennessee Valley Authority. The Government ran stores in army posts that sold goods to civilians; it ran barge lines on its waterways; it ran steamship lines; it sold water from its irrigation projects; it sold surplus war materials; it speculated in cotton and grains. Yet most of these government excursions into private enterprise were pretty clearly either emergency measures or operations incidental to some other Federal function.

TVA Director David Lilienthal would be the last to claim that his doings are primarily emergency measures. And last week a Federal Judge in Birmingham, Ala. seriously questioned whether TVA's vast power schemes were really incidental to the development of waterways. If they were not incidental, then they were obviously unconstitutional and the heart of the Tennessee Valley experiment was null & void.

William Irwin Grubb was appointed Federal Judge 25 years ago by William Howard Taft after that fun-loving President received the following telegram from a group of Birmingham lawyers: NORTH ALABAMA IS STARVING FOR JUSTICE STOP FOR GOD'S SAKE GIVE US GRUBB. Now 72, slight, wiry and a Democrat, Judge Grubb runs his courtroom smartly, shames attorneys who waste his time. Born & bred in Cincinnati, he went to Yale with a brother of President Taft. His opinion last week was handed down in denying a TVA motion to dismiss an injunction petition filed by a group of Alabama Power Co. stockholders who are trying to block the sale of $2,200,000 of property to TVA.

Judge Grubb did not declare TVA unconstitutional but he did raise a major constitutional question which first he and later the Supreme Court will have to answer. Citing the enumerated powers of Congress he declared: "If the program of the Tennessee Valley Authority involves only the salvaging of excess or unused electric power, produced in aid of its operations in improving the navigation of the Tennessee River, or in relation to its operations at the Wilson Dam, or the Nitrate plants, there located for the National defense, or for the benefit of lands owned by it in the government reservations, at or in the vicinity of Muscle Shoals, its right to dispose of such excess electric power cannot be questioned.

"If this program is more extensive, and amounts to an engaging in and carrying on, independent of the question of surplus power and without relation to a granted power, the general business of producing and selling electric power within the limits of Alabama, it is ultra vires of the power, actually conferred or that could have been conferred by Congress or the Tennessee Valley Authority by its act of incorporation."

Both sides hailed this Grubb opinion as a victory. Lowly utility shares rallied briskly on the stockmarket. Director Lilienlhal rejoiced: "It is upon this very basis that the Authority has been administering the law as it pertains to power." Donald Richbcrg jeered: "The opinion of Judge Grubb must be a sad blow to the highly-paid lawyers recently employed by the Edison Electric Institute to demonstrate that the entire grant of power to the TVA was unconstitutional."

The "highly-paid lawyers" of the utility industry's trade association are none other than Democrat Newton Diehl Baker and Republican James Montgomery Beck. Soon after the Grubb ruling last week Edison Electric Institute released a 57-page opinion on TVA constitutionality by Messrs. Baker and Beck. Following Judge Grubb's reasoning, Attorneys Baker & Beck concluded: "Neither the power to regulate interstate commerce (including specifically powers over navigation and flood control), nor any of the war powers, nor the power to dispose of government property, sustain the authority of the Congress to enact the Tennessee Valley Act of 1933 and to create the TVA thereunder."

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