"NEW DEAL" VICTORY

Otago Daily Times, Issue 22809, 19 February 1936, Page 7

"NEW DEAL" VICTORY

SALE OF SURPLUS POWER SUPREME COURT'S RULING WASHINGTON, February 17. (Received Feb. 18, at 5.5 p.m.) The " New Deal" to-day had an important victory when the Supreme Court declared constitutional the so-called Tennessee Valley authority undertaking to sell surplus power generated at the vast hydro-electric scheme at Muscle Shoals. The decision was reached by eight to one, Mr Justice M'Reynolds alone dis-senting-and bitterly attacking the Tennessee Valley authority as putting the Federal Government into the business of distributing and selling electric power. The court ruled on certain specific questions concerning the powers of the Tennessee Valley authority and gave no opinion with regard to constitutionality as a whole. This may be made an issue in a further test case.

, In the meantime Mr Justice Hughes's, opinion that the Government could build dams and sell power and build transmission lines to transport such power to "a reasonable market" saved from serious disruption one of the most costly and ambitious projects of the "New Deal." The Government is now enabled to sell current from a large variety of hydro-electric schemes not only in Tennessee River Valley but New England and the far west, thus making those projects self-liquidating. An indication of how otherwise costly they would have' been can be gained from the fact that the Tennessee undertaking alone involves an outlay of 386,000,000 dollars. Wall street, which had confidently expected an adverse ruling by the Supreme Court, had seen a boom and ,the market in public utilities stocks this morning was almost hear a panic when the decision was announced. Trading had to be temporarily suspended as the clerical forces were unable to keep track of the transactions. It is believed that large losses will, be suffered by holders of stocks in privately owned electric power companies in regions likely to be affected by Government competition.