DIXON-YATES CONTRACT

Press, Volume XCII, Issue 27709, 13 July 1955, Page 13

DIXON-YATES CONTRACT

President Orders Cancellation (N.Z. Press Association—Copyright)

(Rec. 10 p.m.) WASHINGTON, July 11. President Eisenhower today ordered the cancellation of a contract for the construction of an electric power station at West Memphis, Arkansas, which has been a hot political issue. Cancellation of the Dixon-Yates contract for 107.000,000 dollars was ordered after the Mayor of Memphis, Tennessee, personally assured Mr Eisenhower that Memphis would build a generating unit of its own to furnish the electric power the Federal Government had contracted for from the Dixon-Yates interests.

The Attorney-General (Mr Herbert Brownell) announced the President’s action at a press conference.

The public versus private power fight boiling around the Dixon-Yates contract was an issue in the Congressional elections last year, and the Democrats had threatened to take it into the Presidential campaign of 1956. Opponents of the project contended that it posed a grave threat to the public power system built up over the years by the Tennessee Valley Authority. The President defended it repeatedly as private enterprise in the public interest.

The Dixon-Yates interests were given a contract by the Atomic Energy Commission to build the station at West Memphis. Power from this station was to have been fed into T.V.A. lines to replace electricity being furnished by T.V.A. to the commission’s installations.