Appendix — Tennessee Elec. Power Co. v. TVA

Supreme Court brief1939

Ask Donna

What actually matters in this document.

Text

APPENDIX I

» © -Szcrion

A. Findings of Fact of Trial Court

Conclusions of Lew of Trial Court

Opinion of Trial Court

“ee ewe eee eeeereeeeeneeeee

SECTION A

FINDINGS OF FACT OF TRIAL COURT!

Stratus OF THE PartrEs”

1. Complainants are eighteen privately owned public

utility corporations duly qualified to engage as public utili-

ties in the States of Tennessee, Georgia, Mississippi, Ala-

bama, Kentucky, North Carolina, South Carolina, Virginia,

and West Virginia, and are engaged principally in the

business of generating, transmittimg and distributing and

selling electricity, or distributing and selling electricity, or

transmitting and selling electricity as public utilities in

said States. [Undisputed.]

2. The defendant Tennessee Valley Authority is a body

corporate created by an act of Congress approved May 18,

1933, and has an office in Knoxville, Knox County, Ten-

nessee. [Undisputed.] ,

3. The defendants Arthur E. Morgan, Harcourt A.

Morgan, and David E. Lilienthal are, severally, residents

of Knox County, Tennessee, and are the three chief execu-

tive officers and constitute the Board of Directors of the

Tennessee Valley Authority. {Undisputed.]

4. This is an actionof a civil nature, in equity, orig:

nally filed in the Chancery Court of Knox County, Tennes-

see, and thereafter duly removed by the defendants to this

Court. [Undisputed.]

5. This is a suit in equity and involves questions aris-

ing under the Constitution and laws of the United States,

and the amount in controversy exceeds, exclusive of in-

terest and costs, the sum or value of $3,000. [Undisputed.]

1 Filed February 23, 1938, ordered by the court to be effective as of

January 24, 1938. Reprinted in the record at pages 584-655.

2 ‘Findings 1 to 37, inclusive, are adoptions by the court of suggesteh

findings of appellants (see r. 566). Naturally, appellants do not assign

error on the making of these findings. Therefore, citations to the record

for these findings have been omitted.

FINDINGS OF FACT OF TRIAL COURT

6. The Tennessee Electric Power Company is a public

utility corporation organized under the laws of the State

of Maryland, is duly qualified to carry on ite business as a

public utility in the States of Tennessee and Georgia, and

has its principal place of business in the city of Chattanooga,

Tennessee. For more than twenty years said company and

its predecessors have been engaged in the electric-power

business, and today it is distributing electricity in 66

counties in Tennessee, 4 counties in Georgia, and 455 com-

munities in Tennessee and Georgia, including the cities

of Chattanooga and Nashville, Tennessee. All of the op-

érating territory of the company, with the exception of a

small area north of Nashville, Tennessee, is located within

a 100-mile radius of one or more TVA generating plants

constructed, under construction, or authorized to be con-

structed. Said company owns and operates 1,559 miles

of transmission lines and 5,226 miles of distribution lines,

of which 2,677 are classified as rural distribution lines, in

said States of Tennessee and Georgia. It owns generating

facilities with a total installed capacity of 244,009 kilowatts

and leases generating facilities with a total installed ca-

pacity of 6,500 kw. In addition to these facilities the com-

pany is preparing to begin construction of a steam generat-

ing plant at Bordeaux, Tennessee, with an initial installed _

capacity of 25,000 kw. and provision for future increase to

150,000 kw. The company’s steam plant at Hale’s Bar

was constructed to provide for expansion of its present

capacity of 40,000 kw. to an ultimate capacity of 100,000

kw. Said company also owns hydro sites capable of pro-

ducing, when developed, 76,000 kw. and has interconnec-

tions with other utilities, the total capacity of the inter-

eGnnections being 160,000 kva. Said company als@ owns and

operates transportation systems in the cities of Chatta-

nooga and Nashville, Tennessee, water systems in 11 mt-

nicipalities, ice plants in 7 municipalities, and a telephone

system in one municipality. For a period of years these

SSS... 0... °°

FINDINGS OF FACT OF TRIAL COURT

businesses have been operated under the same management

with the electric operations and as one business, and the

severance of one from the other would have an adverse ef-

fect upon the company.

In the year ending September 30, 1937, the company

served 136,470 customers, of which 38,399 were classified

as rural customers, and, exclusive of sales to other utilities,

sold 767,646,665 kilowatt hours, of which 496,923,761 kwh.,

or 64.7% represented sales to industrial customers. The

company has issued an[d] outstanding $49,313,300 in bonds,

241,296 shares of $100 par value preferred stock, and 425,000

shares of no par common stock, all of which were issued

with the approval of the Railroad and Public Utilities Com-

mission of Tennessee; and it has 3,500 employees. [Un-

disputed. ]

7. Franklin Power & Light Company is a public utility

corporation organized under the laws of the State of Ten-

nessee, is duly authorized to carry on its business as a

public utility therein, and has its principal place of busi-

ness in the city of Franklin, Tennessee. Ever since the

organization of the company in 1929 it has been engaged

in the electric-power business, distributing electricity in

and around the city of Franklin, Tennessee. Its operating

territory lies approximately 80 miles from Wilson Dam.

The company owns and operates a distribution system con-

sisting of 15 miles of line. It also owns a steam generating

plant with an installed capacity of 1,800 kw., which is main-

tained as a standby plant for The Tennessee Electric Power

Company, from which company the Franklin Power &

Light Company purchases its power requirements. In

the year 1936 the company served 901 customers and sold

a total of 3,219,758 kwh. Said company has issued and out-

standing $100,000 in bonds and 1,900 shares of $100 par

value stock, all of which were issued with the approval of

the Railroad & Public Utilities Commission of Tennessee.

(Undisputed. ]

Rl eB CIE

FINDINGS OF FACT OF TRIAL COURT

8. Memphis Power & Light Company is a public utility

corporation organized under the laws of the State of New

Jersey, is duly qualified to carry on its business as a public

utility in the State of Tennessee, and has its principal place

of.business in the city of Memphis, Tennessee. For more

than 20 years said company and its predecessors have been

engaged in the electric-power business, and it is now dis-

tributing electricity in Shelby County, Tennessee, and in

37 towns and. communities therein, including the city of

Memphis. The operating territory of the company is from

74 to 105 miles from Pickwick Dam. Said company owns

and operates 319 miles of transmission lines and 905 miles

of distribution lines. It owns a steam generating plant

_with an installed capacity of 54,000 kw., has interchange

facilities with Arkansas Power & Light Company and Mis-

sissippi Power & Light Company, and owns a site for the

erection of additional generating facilities with an installed

capacity of from 20,000 to 30,000 kw. It owns and operates

a natural-gas distribution system throughout its territory,

from which approximately 37% of the total gross revenues

of the company are derived. The gas and electric proper-

ties are jointly operated under the same management, and

a loss of all or a substantial part of its electric business

would increase the cost of operating the gas department.

In the year ending July 30, 1937, the company served 56,952

_ customers and, exclusive of sales to other utilities, sold

191,888,000 kwh.,of which 61,841,000 kwh., or 32.23%, rep-

resented sales to industrial customers. The company has

issued and outstanding $22,275,000 in bonds, 30,000 shares

,of no par value $7 preferred stock, 32,000 shares of no par

value $6 preferred stock and 7,200 shares of no par com-

mon stcck, all of which were issued with the approval of

the Railroad & Public: Utilities Commission of Tennessee.

[ Undisputed. ]

9. Southern Tennessee Power Company is a public

utility corporation organized under the laws of the State of

FINDINGS OF FACT OF TRIAL COURT

Delaware, is duly qualified to carry on its business as a

public utility in the States of Alabama and Tennessee, and

has its principal place of business in the city of Chatta-

nooga, Tennessee. The company owns and operates a

high-tensiof transmission line from Wilson"Dam, Alabama,

to Iron City, Tennessee, a distance of approximately 15

miles, and is engaged in the business of transmitting elec-

tric energy over said transmission line, which constitutes

a connection between the Alabama Power Company and

the Tennessee Electric Power Company. The company has

outstanding a note amounting to $380,000 and 10 shares of

ro par stock. [Undisputed.]

10. Birmingham Electric Company is a public utility

corporation organized as such under the laws of the State

of Alabama and has its principal place of business in the

city of Birmingham, Alabama. For many years said com-

pany and its predecessors have beén engaged in the electric-

power business, and it is now distributing electricity in the

city of Birmingham, Alabama, and the metropolitan district

thereof, including the towns of Bessemer, Jonesboro,

Brighton, Lipscomb, Fairfield, Irondale, Homewood and

Tarrant City, as well as in Jefferson County, Alabama, all

of which territory was set aside to it by order of the Ala-

bama Public Service Commission. The company’s operat-

ing territory is located approximately 66 miles from Gun-

tersville Dam. Said company owns and operates 1,057.52

miles of distribution pole lines. It purchases at wholesale

from the Alabama Power Company the electricity which it

distributes and owns a steam generating plant with an in-

stalled capacity of 11,300 kw., which is_used as a standby

station, It also owns and operates a transportation system

throughout its territory, which contributes about 33% of

the total gross revenues of the company, and a steam heat-

ing system serving a substantial portion of the business

district of the city of Birmingham, which contributes ap-

proximately 1% of the~company’s total gross revenues.

FINDINGS OF FACT OF TRIAL COURT

These several businesses have for a period of years been

jointly operated. The company served 68,110 customers,

and in 1936, exclusive of interdepartmental sales, sold 208,-

113,400 kwh., of which 116,429,366 kwh., or approximately

56% of its total sales, represented sales to industrial cus-

tomers. [Undisputed.]

11. Mississippi Power Company is a public utility cor-

poration organized under the laws of the State of Maine,

is duly qualified to carry on its business as a public utility

in the State of Mississippi, and has its principal place of

business in the City of Gulfport, Mississippi. For more

than 12 years said company and its predecessors have been

engaged ‘in the electric-power business, and today it is dis-

tributing electricity in 34 counties and in 147 towns and

communities in the State of Mississippi. Most of the

operating territory of the company is located within 250

miles from Pickwick and Guntersville Dams, and much of

the operating territory lies within 100 and 150 miles from

said TVA generating plants. Said company owns and

operates 857.41 pole miles of transmission lines and 1,080.5

pole miles of distribution lines. It owns generating facili-

‘ties with a total installed capacity of 18,702 kw., and it has,

subject to lease or contract, generating facilities with an

installed capacity of 6,450 kw. The company, however,

purchases substantially all its power requirements from ,

the Alabama Power Company at 4 interchange points hav-

ing a combined_capacity of 66,300 kw. As a part of ‘its

business the company owns and operates a transportation

system in the city of Hattiesburg, Mississippi, the total

gross revenues from which in the year 1936 were less than

1% of the total revenues received by the company from

all sourées. In 1936 the company, within a 100-mile radius

of Pickwick Dam, served 1,247 customers, sold 2,102,086

kwh., and derived a revenue therefrom of $88,254.39; with-

in a 150-mile radius of said dam it served 6,068 customers,

sold 14,816,009 kwh., and derived a revenue therefrom of

FINDINGS OF FACT OF TRIAL COURT:

$484,839.85 ; within a 250-mile radius of said dam it served

20,772 customers, sold 87,936,552 kwh., and derived a reve-

nue therefrom of $1,768,553.86. The total kwh. sales to

regular customers in that year amounted to 121,160,760

kwh., of which 64,216,059 kwh., or 53%, represented sales

to industrial customers. The company has issued and out-

standing $10,690,500 in first mortgage bonds, 39,092 shares

of preferred stock, and 450,000 shares of common stock ; and

it has 512 employees. [Undisputed.] a

12. Appalachian Electric Power Company is a public

utility corporation organized under the laws of the state

of Virginia, is duly qualified to carry on its business as a

public utility in the States of Virginia, Tennessee, and

West Virginia, and has its principal place of business in

the city of Roanoke, Virginia. Said company is engaged

in the electric-power business and distributes electricity

in 29 counties in Virginia, 20 counties in West Virginia,

and 522 towns and communities in Virginia and West Vir-

ginia. Most of the operating territory of the company is

located within 250 miles of Norris Dam; much of its terri-

tory is located within 150 miles of said dam, and some of

its territory is located within 100 miles of said dam. Said

company owns and operates 1,767.88 pole miles of trans-

mission lines, 4,663.79 pole miles of distribution lines, of

which 2,527 miles are classified as rural lines, and in addi-

tion, on August 31, 1937, had 452 miles of rural lines under

construction. The company owns generating facilities with

a total installed capacity of 381,390 kw. and has a pur-

chased capacity of 43,500 kw. In 1936 within a 100-mile

radius of Norris Dam the company served 439 customers,

sold 337,500 kwh., and derived a revenue therefrom of

$16,236; within a 150-mile radius of said dam it served

8,171 customers, sold 69,263,102 kwh., and derived a reve-

nue therefrom of $1,312,443; within a 250-mile radius of said

dam it served 126,700 customers, sold 1,283,307,996 kwh.,

and derived a revenue therefrom of $17,690,540. The to-

FINDINGS OF FACT OF TRIAL COURT

tal kwh. sales to regular customers in that year amounted

to 1,351,653,286 kwh., of which 1,153,567,845 kwh., or

85.34%, represented ‘sales to industrial customers. The

company has issued and outstanding $80,774,000 in bonds,

and preferred and common stock aggregating $53,500,167.27,

and has 3,366 employees. [Undisputed.]

13. Carolina Power Co. & Light Company is a public

utility corporation organized under the laws of the State of

North Carolina, is duly qualified to carry on its business 48>

_a public utility in said State andin the State of South Caro-

lina, and has its principal place of business in the city of

Raleigh, North Carolina. For more than 20 years said

company and its predecessors have been engaged in the

electric-power business. It is now distributing electricity

in the States of North and South Carolina and 272 incor-

porated towns and communities therein. A portion of the

eompany’s operating territory is located within a radius of

100 miles of Norris and»Fowler Bend Dams and Fon-

tana Dim site, a part of its territory is located within a

radius of 150 miles of Fowler Bend Dam and Fontana Dam

site, and a part of it is located within a radius of 250-miles

of Fowler Bend Dam and Fontana Dam site. Said company

owns and operates 1,256 pole miles of transmission lines

and 5,921 pole miles of distribution lines. It owns gen-

erating facilities with a total installed capacity of 249,050

kw., which are capable of being enlarged so as to produce

an additional 80,000 kw. It owns a hydro site capable of

producing, when developed, 40;000 kw. and Was intercon-

nections with other utilities, the total capacity of such

interconnections being 384,000 kw. As a part of its busi-

ness the company owns and operates transportation sys-

tems in Raleigh and Asheville, the gross revenues from

which are less than 4% of the total gross revenues of the

company. In 1936 the company served 83,836 customers

and, exelusive of sales to other utilities, sold 536,521,801

kwh. In said year the company, within a radius of 100 miles

7 |

FINDINGS OF FACT OF TRIAL COURT

from Norris and Fowler Bend Dams and Fontana Dam site,

sold, exclusive of sales to other utilities, 115,802,557 kwh.,

of which 83,553,403, or approximately 61%, represented

sales to industrial customers; within a 150-mile radius of

Fowler Bend Dam and Fontana Dam site it sold, exclusive

of sales to other utilities, 118,167,621 kwh., of which 85,-

530,602 kwh., or approximately 72%, represented sales to

industrial customers; and within a 250-mile radius of Fon-

tana Dam site it sold, exclusive of sales to other utilities,

309,197,905 kwh. The company has issued and outstanding

$46,000,000 in bonds, 165,162 shares of no par value pre-

ferred stock entitled to $6 and $7 annual dwidends, and

2,500,000 shares of no par common stock, and had as of

August 1937, 1,434 regular employees’ and 57 temporary

- employees. [Undisputed.]

14. Tennessee Public Service:Company is a public util-

ity corporation organized under the laws of the State of

Maine, is duly qualified to carry on its business as a public

utility in the State of Tennessee, and has its principal place

of business in the city of Knoxville, Tennessee. For many

years said company and its predecessors have been engaged

in the electric-power business, and it is now distributing

electricity in Knox, Jefferson, Cocke, Sevier, Union, and

Grainger Counties, Tennessee, and 37 towns and communi-

ties therein, including the city of Knoxville. The entire

operating territory of the:company is located within a dis-

tance of from 25 to 75 miles of Norris Dam. Said company

owns and operates 180.58 miles of transmission lines and

1,063.77 miles of distribution lines. It purchases practically

all of its power requirements from the complainant Caro-

lina Power & Light Company and also owns generating

facilities with an installed capacity of 3,150 kw. Said com-

pany also owns and operates a transportation system in

the city of Knoxville, Tennessee, which contributes ap-

proximately 2114% of the company’s. total gross revenues.

Both the transportation and electric properties are op-

FINDINGS OF FACT OF TRIAL COURT

erated. under.the same management and as one business.

In the year ending September 30, 1937, the company served

30,074 electric customers and, exclusive of interdepart-

mental sales and sales to other utilities, sold 131,404,000

kwh., of which 73,269,000 kwh., or 55.76%, represented sales

to industrial customers. The company has issued and out-

standing $7,780,000 in bonds, 50,000 shares of no par pre-

ferred stock entitled to a $6 annual cumulative dividend

per share, and 1,000,000 shares of common stock, al! of

which were issued with the approval of the Railroad and

Public Utilities Commission of Tennessee. [Undisputed.]

15. Holston River Electric Company is a public utility

corporation organized as such under the laws of the State

of Tennessee with its principal place of business in the city

of Knoxville, Tennessee. Said company is distributing

electricity in the incorporated town of Rogersville, Ten-

nessee, and 8 communities in Hawkins and Hamblen Coun-

ties, Tennessee, and to rural customers in said counties.

The entire operating territory of the company is located

within 75 miles of Norris Dam. Said company owns and

operates 98.54 miles of distribution lines and purchases at

wholesale power, which it distributes, from the complain-

ant Tennessee Public Service.Company. For the year end-

ing September 30, 1937, the company sold 1,560,000 kwh.

[Undisputed.]}

16. Alabama Power Company is a public utility cor-

poration organized under the laws of the State of Alabama,

is duly authorized to carry on its business as a public utility

therein, and has its principal place of business in the city

of Attalla, Alabama. The company is engaged in the elec-

tric-power business and distributes electricity in 65 of the

67 counties of the State of Alabama and in 594 communities

in the same State. Practically all of the operating territory

of the company is located within 250 miles of Guntersville

and Wilson Dams; most of the operating territory is located

within 150 miles of said dams, and much of the territory is

/ , ER

FINDINGS OF FACT OF TRIAL COURT

located within 100 miles of said dams. Said company owns

and operates 3,435 circuit miles of transmission lines, 2,810

miles of distribution lines within incorporated municipali-

ties, and 4,519 miles of line classified as rural. It owns gen-

erating facilities with a total installed capacity of 571,744

kw. and has made provision forthe expansion of its exist-

ing plants such that their capacities may be increased by

321,500 kw.

In 1936, exclusive of sales to the Birmingham Electric

Company, the company sold within a 100-mile radius of

TVA dams constructed or under construction 711,835,625

kwh. and derived a revenue therefrom: of $7 ,384,969,48 ;

within a 150-mile radius of/said dams it sold 961,720,184

kwh. and derived a revenue therefrom of $11,147,7 68.38 ;

and within a 250-mile radius of said dams it sold 1,018,-

109,064 kwh. and derived a revenue therefrom of $12,346,-

658.72. In that year the total kwh. sales, exclusive of sales

to utilities, amounted to 1,145,267,755 kwh., of which 948,-

565,825, or 82.8%, represented sales to industrial customers.

The total number of customers served in that year was

123,739. The company has issued and outstanding $96,-

771,600 in bonds, 367,178 shares of $5, $6 and $7 preferred

stock at a stated value of $35,751,258, and 3,775,000 shares

of common stock at a stated value of $48,961,300, all of

which securities issued subsequent to the creation of the

Alabama Public Service Commission were issued with its

approval; and it has 2,850 employees. [ Undisputed. ]

17. Kentucky and West Virginia Power Company, Inc.,

is a public utility corporation organized under the laws

of the State of Kentucky, is duly authorized to carry on

its business as a public utility therein, and has its principal

place of business in the city of Ashland, Kentucky. Said

company is engaged in the electric-power business and dis-

tributes electricity in 14 counties and in 100 towns and

communities in the State of Kentucky. All of the operating

territory of the company is located within 250 miles of Nor-

12 ‘

FINDINGS OF FACT OF TRIAL COURT

ris Dam; most of its territory is located within 150 miles

of said dam, and some of its territory is located wi

distribution lines, and in addition, on) August 31, 1937,

had 31 miles of rural distribution lines under construction.

The company owns generating facilities with a total ix

stalled capacity of 19,500 kw. In 1936 within a 100-mile

radius of Norris Dam the company served 3,713 customers,

sold 30,078,589 kwh., and derived a revenue theréfrom of

$685,969; within a 150-mile radius of said dam it served

9,919 customers, sold 87,946,055 kwh., and derived a reve-

nue therefrom of $1,700,159; within a 250-mile radius of

said dam it served 21,170 customers, sold 254,600,861 kwh.,

and derived a revenue therefrom of $3,314,345. The total

kwh. sales to regular customers in ‘that year amounted to

254,600,861, of which 232,243,229 kwh., or 91.32%, repre-

sented sales to industrial customers. The company has

issued and outstanding $8,499,000 in bonds, and preferred

and common stock aggregating $4,147,525, and has 435

employees. [Undisputed.]

18. Kingsport Utilities, Inc., is a public utility corpo-

ration organized under the laws of the State of Virginia,

is duly qualified to carry on its business as a public utility

in the State of Tennessee, and has its principal place of

business in the city of Kingsport, Tennessee. The company

is engaged in the electric-power business and is distribut-

ing electricity in the counties of Sullivan and Hawkins

‘in the State of Tennessee. All of the operating territory

of the company is located within a 100-mile radius of Norris

Dam. Said company owns and operates 5.75 pole miles of

transmission line, 133.53 pole miles of distribution lines, of

whick 49 miles are classified as rural distribution lines, and

in addition, on August 31, 1937, hay 6 miles of rural distri-

bution lines under construction. It also owns generating

Ream

FINDINGS OF FACT OF TRIAL COURT

facilities with a total installed capacity of 11,400 kw. In

the year 1936 the company served 4,358 regular customers

and sold 37,468,385 kwh., of which 30,356,870 kwh., or 81%,

represented sales to industrial customers. The company

has issued and outstanding $1,044,000 in bonds and

$1,000,000 of preferred and common stocks and has a

employees. [Undisputed. |

19. Kentucky-Tennéssee Light & Power Companr is a

public utility corporation organized under the laws of the

State of Kentucky, is duly qualified to carry on its business

as a public utility in said State and in the State of Tennes-

see, and has its principal place of business in the city of

Bowling Green, Kentucky. The company is engaged in

the electric-power business and distributes electricity in

many counties in Tennessee and Kentucky. All of the

operating territory of the company is within a 250-mile

radius, and most of the operating territory is within a

100-mile radius, of one or more TVA generating plants con-

structed, under construction, or authorized to be con-

structed. Said company owns and operates many miles of

transmission and distribution lines in the States of Tennes-

see and Kentucky. [Undisputed.]}

20. West Tennessee Power & Light Company is a pub-

lic utility corporation organized under the laws of the State

of Florida, is duty qualified to carry on its business as a

public utility in the State of Tennessee, and has its princi-

pal place of business in the city of Jackson, Tennessee. For

more than 30 years said company and its predecessors have

been engaged in the electric-power business, and it is now

distributing electricity in 9 counties in west Tennessee and

24 incorporated towns and communities, including the city

of Jackson, Tennessee. All of the operating territory of

the company is from 40 to 75 miles of Pickwick Dam. Said

company owns and operates 90.6 miles of transmission lines

and 193.6 miles of lines classified as rural. It owns. gen-

erating facilities with a total installed capacity of 5,228

FINDINGS’OF FACT OF TRIAL COURT

kw. and also has interconnections with Memphis Power &

Light Company, from whom it purchases power at whole-

sale. It owns and operates natural-gas distribution systems

in 6 municipalities, ice plants in 2 municipalities, water-

works systems in 3 municipalities, and a transportation

system in the eity of Jackson, Tennessee. For a period of

years these businesses have been operated under the same

management with the electric operations and as one busi-

ness and are closely intermingled. For the year ending

July 31, 1937, the company served 10,050 customers and,

exclusive of interdepartmental sales, sold 19,322,248 kwh.,

of which 8,080,659 kwh., or 38.74%, represented sales to

industrial customers. [Undisputed.]

21. Mississippi Power & Light Company is a public

utility corporation organized under the laws of the State

of Florida, is duly qualified to carry on its business as 4

public utility in the State of Mississippi, and has its princi-

pal place-of business in the city of Jackson, Mississippi.

For many years said company has been engaged in the

electric-power business and at present is distributing elec-

tricity in 40 counties in Mississippi and 312 incorporated

towns and communities therein, including the cities of

Vicksburg, Natchez, Jackson, and Greenville. Most of the’

operating territory of the company is located within 230

miles from Pickwick Dam, and a substantial portion of its

operating territory is within 150 miles of Wheeler and

Guntersville Dams. Said company owns and operates

456.8 miles of transmission lines and 2,628.2 miles of distri-

bution lines. ‘The company purchases substantially all of

its power reguirements from the Louisiana Power & Light

Company, and also owns generating facilities with an in-

stalled capacity of 19,146 kw. As a part of its business the

company owns and operates transportation systems in the

cities of Jackson, Greenville, and Vicksburg; natural-gas

distribution systems in 24 municipalities; ice manufactur-

ing systems in 5 municipalities; water systems in 6 munic-

FINDINGS OF FACT OF TRIAL COURT

ipalities; and leases and operates water systems in 4 munic-

ipalities. The total gross revenues from such operations

in 1936 were 29% of the total gross revenues received by

the company from all sources. All properties of the com-

pany are operated together as a unit, and the destruction

of the whole or a substantial part of its electric business

would seriously hamper the company’s ability to efficiently

operate its other properties. In 1936 the company, within

a 150-mile radius of Pickwick Dam, served 7,779 customers,

sold 18,734,247 kwh., and derived revenue therefrom of

$743,744.92; within a 250-mile radius of said dam it served

29,454 customers, sold 117,792,338%wh., and derived reve-

nue therefrom of $3,063,194.36. The total kwh. sales to

regular customers in that year amounted to 157,668,000

kwh., of which 87,673,000 kwh., or 53.6%, represented sales

to industrial customers. The company has issued and out-

standing $16,000,000 in bonds, 69,000 shares of no par value

first preferred stock entitled to a $6 annual cumulative

dividend, 35,000 shares of no par value second preferred

stock entitled to a $6 annual cumulative dividend, and

1,000,000 shares of no par common stock. [ Undisputed. ]

22. East Tennessee Light & Power Company is a pub-

lic utility corporation organized under the laws of the State

of Virginia, is duly qualified to carry on its business as a

public utility in,the States of Virginia, Tennessee, and

North Carolina, and has its principal place of business in

the city of Bristol, Tennessee-Virginia. For many years

said company and its predecessors have been engaged in

the\ electric-power business, and today it is ‘distributing

electricity in Carter, Johnson, Sullivan, Unicoi and Wash-

ington Counties, Tennessee; in Scott and Washington

Counties, Virginia; in Avery County, North Carolina; and

in 32 incorporated towns and communities, including the

city of Bristol, Tennessee-Virginia. All of the operating

territory of the company is within a radius of 135 miles of

Norris Dam, the larger part of it being within a radius of

‘ 16

FINDINGS OF FACT OF TRIAL-COURT

= to 115 miles of said dam. Said company owns and

rates 66.5 miles of transmission lines and 354.4 miles of

ibution lines in said States of Tennessee, Virginia, and

North Carolina. It owns generating facilities with a total

installed capacity 8f 3,828 kw. Said company“also owns

a hydro site near Elizabethton, Tennessee, and has inter-

connections with Appalachian Electric Power Company

and Edmondson Electric Company. The company also

owns and operates a gas distribution system in the city of

Bristol, Tennessee-Virginia, from which operation approxi-

mately 10% of the total gross revenue of the company is

derived. In the year ending July 31, 1937, the company

served 103812 customers; of which 1,572 were classified as

rural customers, and in 1936, sold 22,904,648 kwh., of which

9,243,729 kwh., or 40.4%, represented sales to industrial

customers. The company has issued and outstanding

$2,731,000 in bonds, 2,635 shares of no par preferred stock

entitled to a $6 annual cumulative dividend, and 35,000

shares of no par common stock, all of which were issued

with the approval of the Railroad & Public Utilities Com-

mission of Tennessee; and it has 204 employees. [Undis-

puted. }

23. Tennessee Eastern Electric Company is a public

utility corporation organized under the laws of the State

of Massachusetts, is duly qualified to carry on its business

as a public utility in the States of Virginia, Tennessee, and

North Carolina, and has its principal place of business in

the city of Bristol, Tennessee-Virginia. For many years

said company and its predecessors have been engaged in

the electric-power business, and at present it is distributing

electricity in Carter, Greene, Johnson, Unicoi, and W ash-

ington Counties, Tennessee, and in 57 towns and commun-

ities therein, including the cities Johnson City and

Greenvillé, Tennessee. The operating territory of the com-

pany is located within a radius of from 50 to 100 miles of

Norris Dam. Said company owns and operates 65.7 miles

FINDINGS OF FACT OF TRIAL COURT

of transmission lines and 442.7 miles of distribution lines.

It owns generating facilities with a total installed capacity

of 19,060 kw. and has done preliminary work at hydro sites

which it owns capable of producing, when developed, in

excess of 51,000 kw.; and the capacity of its Watauga steam

plant is capable of being enlarged. In the year ending

July 31, 1937, the company served 8,642 customers, of

which 2,304 were classified as rural customers, and in 1936,

exclusive of sales to other utilities, sold 24,548,569 kwh., of

which 11,049,650 kwh., or 45%, represented sales to indus-

trial customers. The company has issued and outstanding

$2,669,500 in bonds, 6,000 shares of $100 par value pre-

ferred stock entitled to an annual $6 cumulative dividend,

5,105 shares of no par value preferred stock entitled to a

$7 annual cumulative dividend, and 15,000 shares of no

par common stock, all of which were issued with the

approval of the Railroad & Public Utilities Commission of

Tennessee; and it has 125 employees. [Undisputed.]

24. Installed capacity is not a measure of the depend-

able capacity available for electric service. In the case of

hydroelectric plants the limiting factor is the water avail-

able and not the amount of machinery installed. Of the

dependable steam and hydro capacity in a low-water year

@ reserve is required to take care of various contingencies.

[ Undisputed. ]

25. Complainants, and each of them, are subject to a

special tax to which taxpayers genera!ly are not subject,

the tax being upon electrical energy sold for domestic and

commercial consumption, in an amount equal to 3% of the

price for which complainants sell the same, which is im-

posed by section 616 of the Federal Revenue Act of 1932,

amended. Complainants also severally pay large sums

of money in the form of general taxes to the Federal Gov-

ernment, including Social Security taxes and taxes for un-

employment relief imposed by sections 211 to 219 inclu-

sive of the National Industrial Recovery Act. Complain-

FINDINGS OF FACT OF TRIAL COURT

ants severally are subject to and pay specisMPand general

taxes levied upon privately owned utilities by the several

States and their political subdivisions in which complain-

ants severally carry on business or own property.

Following is a table of the taxes paid by each of the

complainant companies, with the exception of Kentucky-

Tennessee Light & Power Company, for the year 1936,

with an estimate of the taxes to be paid by each company

for the year 1937. The taxes paid by complainants for the

year 1936, exclusive of Kentucky-Tennessee Light & Power

Company, averaged in excess of 12.7% of complainants’

gross revenue, and for the year 1937, exclusive of Kené

tucky-Tennessee Light & Power Company, it is estimated

that such taxes will be in excess of 14.4% of the total gross

revenues of the companies.

Name of Company 1936 1937 (Est.)

The Tennessee Electric Power Company.... $2,278,880.60 $2,613,895.00

Franklin Power & Light Company.......... REET vewbiuxaess

Memphis Power & Light Company......... 1,071,794.82 1,321,527.00

Southern Tennessee Power Company....... 5,896.77 5,953.00

Birmingham Electric Company............. 828,953.47 1,009,329.00

Mississippi Power Company................ 396,286.26 437,891.00

Appalachian Electric Power Company...... 2,817,013.07 3,069 047.97

Carolina Power & Light Company.......... 1,607 877.58 2,035,440.00

Tenressee Public Service Company......... 471,335.33 590,733.00

Holston River Electric Company........... 5,414.47 5,611.00

Alabama Power Company.................. 2,380,556.45 3,126,400.50

Kentucky & West Virginia Power Company,

Bars oben ake 66ceucsccsie es ceuds ens 344,104.06 350,919.03

Kingsport Utilities, Incorporated........... 59,697.46 85,437.89

West Tennessee Power & Light Company... 119,670.44 140,122.88

Mississippi Power & Light Company........ 738,463.61 913,832.00

East Tennessee Light & Power Company.... 87,431.38 105,687.57

Tennessee Eastern Electric Company....... 130,419.90 190,390.40

$13,349,477.44 $16,007,217.24

[ Undisputed. ]

FINDINGS OF FACT OF TRIAL COUBT

96. The rates and services of each of the complainant

companies in the States of Alabama, Tennessee, Kentucky,

Virginia, Georgia, West Virginia, North Carolina, and

South Carolina are regulated by State commissions in the

respective States. There is no State commission in Mis-

sissippi. The rates and services of the complainant com-

panies in that State are regulated by municipalities within

their corporate limits. [Undisputed.]

27. The rates charged by the several complainant com-

panies in the States of Alabama, Tennessee, Georgia, Vir-

ginia, North Carolina, and South Carolina are uniform

for the different classes of service throughout their respec-

tive operating territories. As between the complainant

companies operating within a State there is no require-

ment of hniformity of rates. [Undisputed.]

28. The respective complainants have been issued

franchises, licenses, or éasements by most but not all of the

municipalities and by most but not all of the counties in

which they respectively operate electric facilities. Said

franchises, licenses, or easements vary in original term and

iff unexpired term from,a few months to more than 950

years, and many are unlimited in term. Most of the said

franchises, licenses, or easements purport to be nonexclu-

sive. Most of said franchises, licenses, or easements grant

rights not limited within the respective municipalities or

counties, but some are limited to particular streets or

highways or to portions of the respective counties or mu-

nicipalities. Some of the franchises, licenses, or easements

purport to grant the right te construct and occupy the

streets and highways with electrical facilities; some of said

franchises, licenses, or easements purport to grant, for the

purpose of engaging in the business of selling and distribut-

ing electricity, the right to occupy the streets and high-

ways; and some of said franchises, licenses, or easements

purport to grant the right to occupy the streets and high-

ways with electrical facilities and to engage in the business

FINDINGS’ OF FACT OF TRIAL COURT

of selling and distributing electricity within the respective

municipalities and counties. The validity of\ one of the

municipal franchises, licenses, or easements claimed by

complainants is now-being contested in a State court by the

municipality concerned. [Undisputed.]

Sratus oF Proyects oF THE TENNESSEE VALLEY

AUTHORITY

29. On October 3, 1933, TVA began the construction of

Norris Dam and power slant on the Clinch River, a tribu-

tary of the Tennessee River, located 79.8 miles above its

mouth, and completed such construction in March 1936,

at a total cost of $36,310,370, and began-generating power in

July 1936. The dam is 265 feet high; 1,872 feet in length;

has a normal reservoir area of 34,200 acres; a reservoir

shore line of 705 miles; and has an installed generating ca-

pacity of 100,800 kw. [Undisputed.]

30. On November 30, 1933, TVA began construction of

Wheeler Dam and power plant located 15.5 miles above

Wilson Dam on the Tennessee River, and construction was

completed in November 1936, at a total cost of $35,317,964,

exclusive of the cost of the lock built by the War Depart-

ment, at a cost of $1,939,693. Wheeler Dam began to gen-

eraterpower in November 1936. The Corps of Engineers

in 1932 proposed to construct this dam with a lift of 45

feet as an integral part of the low-dam navigation plan.

The estimated cost of said dam in its ultimate stage wilbbe

$42,817,964, exclusive of the lock built by the War De--

partment. The dam is 72 feet in height; 6,335 feet in length;

has a normal reservoir area of 64,300 acres; a reservoir

shore line of 1,063 miles; has an initial installed generating

capacity of 128,000 kw. and an ultimate generating ca-

pacity of 256,000 kw. [Undisputed.]

31. In March 1935 TVA began construction of the Pick-

wick Landing Dam and power plant located on the Ten-

nessee River 52.7 miles below Wilson Dam and 100 miles

FINDINGS OF FACT OF TRIAL COURT

east of Memphis, Tennessee, and the construction will be

completed in June 1938, at an initial cost of $33,199,497

and estimated ultimate cost of $42,431,497. The dam will

be 110 feet in height; 7,715 feet in length; have a normal

reservoir area of 41,600 acres; a reservoir shore line of 496

miles; an initial installed generating capacity of 72,000 kw.

and an ultimate generating capacity of 216,000 kw. [Un-

disputed. ]}

32. On December 4, 1935, TVA began the construction

of Guntersville Dam and power plant located on the Ten-

nessee River above Wheeler Dam, near Guntersville, Ala-

bama, and construction is estimated to be completed in De-

cember 1938, at an estimated initial cost of $34,123,660 and

an estimated ultimate cost of $38,524,860. The dam will

be 89 feet in height; 4,000 feet in length; have a normal

reservoir area of 63,300 acres; a reservoir shore line of

660 miles, with an initial installed generating capacity of

50,000 kw. and an ultimate generating capacity of 100,000

kw. [Undisputed.]

33. On January 13, 1936, TVA began construction of

Chickamauga Dam-and power plant on the Tennessee River

about 6 miles upstream from Chattanooga, Tennessee, and

it is estimated that construction will be completed in De-

cember 1939, at an initial cost of $40,435,645 and an esti-

mated ultimate cost of $45,333,645. The dam will be 104

feet high; 6,025 feet long; have a normal reservoir area

of 32,000 acres; a reservoir shore line of 502 miles; an

initial installed generating capacity of 50,000 kw. and

an ultimate generating capacity of 100,000 kw. [ Undis-

puted. ;

34. On July 15, 1936, TVA began construction of

Fowler Bend Dam and power project located on the Hiwas-

see River in North Carolina about 75.8 miles above the

confluence of said river with the Tennessee River, and it is

estimated that construction will be completed in October

1940, at an initial cost of $17,296,061, and an estimated

FINDINGS OF FACT OF TRIAL COURT

ultimate cost of $22,491,561. The dam will be 292 feet high;

1,250 feet long; have a normal reservoir area of 6,240 acres;

150 miles of reservoir shore line; and an ultimate generat-

ing capacity of 80,000 kw. [Undisputed.]

35. TVA has announced its: intention to construct

Watts Bar Dam and power plant on the Tennessee River,

and Congress has allocated in its appropriations specific

funds for preliminary investigation of a site which has

been selected and which is located approximately 530 miles

above the mouth of said river. Preliminary work has been

done, and construction is scheduled to begin in the near

future. The estimated initial cost of the dam and power

plant is $29,200,000, and the estimated ultimate cost is

$39,800,000. -Tiie dam will be 2,900 feet long and have a

normal reservoir area of 42,600 acres and will have an ulti-

mate installed generating capacity of 150,000 kw. [Undis-

puted.] : :

36. TVA has announced its intention to construct Coul-

ter Shoals Dam and power project on the Tennessee River,

and Congress has allocated in its appropriations specific

funds for preliminary investigation of a site which has been

tentatively sciected approximately 30 miles below Knox-

ville, at which site some preliminary work has been done.

The dam will be 2,070 feet long and will have a norma! reser-

voir area of 11,900 acres, and the estimated initia? cost of

such dam and power plant is $25,000,000, and the esti-

mated ultimate cost is $30,000,000. -The ultimate installed

generating capacity will be 60,000 kw. [Undispute

37. TVA has announced its intention to construct the

Gilbertsville Dam and power plant on the Tennessee River

in Kentucky 22.5 miles above the mouth of said river, and

Congress has allocated in its appropriations specific funds

for preliminary investigation of a site. Preliminary work

has been done at the dam site, and construction is scheduled

to begin within the near future. The dam will be 150 feet

in height; 8,500 feet in length; have a normal reservoir

FINDINGS OF FACT OF TRIAL COURT

area of 160,000 acres; and have an ultimate generating ca-

pacity of 192,000 kw. Its estimated initial cost is $95,-

000,000, and the estimated ultimate cost is $112,000,000. ©

[Undisputed.] /

__, 38. The Tennessee Valley Authority has constructed

or has under construction or has under investigation for

construction a series of high dams and reservoirs, 7 on the

main stream of the Tennessee River and 2 on principal

tributaries of the Tennessee: the Clinch and the Hiwassee

Rivers. [Bowman, r. 1690-1725; see def. exs. 36-38; 40, 44,

49, 50 in volume entitled Reproductions of Certain Original

Exhibits Submitted by Appellees; def. exs. 39, 41-43, 45-48,

51, 52, r. 4064-4074. ]

35. These dams, when completed, will provide a con-

tinuous 9-foot navigable channel with adequate overdepths

for boats of 9-foot draft over the entire distance from the

mouth of the Tennessee at Paducah, Kentucky, to Knox-

ville, Tennessee, a distance of approximately 650 miles

(Barker, r. 1949, 1951; Watkins, r. 1557; Putnam;‘r. 1189;

see def. ex. 98 in Reproductions of Certain Original Ex-

hibits Submitted by Appellees] ; will substantially alleviate

the destructive floods in the Tennessee and Mississippi Val-

leys [Clemens, r. 1650, 1651; Kimball, r. 1837-1839; Floyd,

r. 1890-1891; Watkins, r. 1546]; and will also create a sub-

stantial amount of water power [Wessenauer, r. 2175-2180;

’ Watkins, r. 1545; def. ex. 139, r. 4186]. ;

40. Beginning at the mouth of the Tennessee River at

Paducah, Kentucky, and extending upstream, the dams un-

der control of the ‘Authority already constructed or under

construction or active investigation for construction are as

follows [Bowman, r. 1691-1696; see def. exs. 36, 37 in Re-

productions of Certain Original Exhibits Submitted by Ap-

pellees] :

Gilbertsville Dam, which is located in Kentucky 22.7

miles from the mouth of the river, and on which prelimi-

nary investigations by the Authority are in progress.

FINDINGS OF FACT OF TRIAL COURT

{[Bowman, r. 1696-1701; see def. ex. 38 in Reproductions of

Certain Original Exhibits Submitted by Appellees; def. ex.

39, r. 4064. ]

Pickwick Landing Dam, which is located in Tennessee

206.7 miles from the mouth of the river and which is under

construction by the Authority and almost completed.

[Bowman, r. 1704-1705; see def. ex. 40 in Reproductions of

Certain Original Exhibits anes by Appellees; def. ex.

42, r. 4066.]

Wilson Dam, which is ‘todeal at Muscle Shoals, Ala-

bama, 259.4 miles from the mouth of the river, which was

constructed by the United States Army Engineers and

transferred to the Authority under the Tennessee Valley

Authority Act and which i is now in operation. pba

r. 1693.]

Wheeler Dam, which is located in Alabama 15.5 asin

above Wilson Dam and 274.9 miles from the mouth of the

river, and construction of which was commenced by the

United States Army Engineers, completed by the Ten-

nessee Valley Authority, and which is now in operation.

{Bowman, r. 1705-1708; see def. ex. 40 in Reproductions of

Certain Original Exiibits Submitted by Appellees; def. ex.

43, r. 4067.]

* Guntersville Dam, which is located near Guntersville,

Alabama, 349 miles from the mouth of the river and which

is under construction by the Authority. [Bowman, r. 1709,

1710; see def. ex. 44 in Reproductions of Certain Original

Exhibits Submitted by Appellees; def. ex. 45A, r. 4069.]

Chickamauga Dam, which is located near Chattanooga,

Tennessee, 471 miles from the mouth of the river and which

is under construction by the Authority. [Bowman, r. 1709-

1716; see def. ex. 44 in Reproductions of Certain Original

Exhibits Submitted by Appellees; def. ex. 46A, r. 4071.]

Watts Bar Dam, which is located in Tennessee 529.9

miles from the mouth of the river and on which preliminary

investigations by the“Authority are in progress. [Bowman,.

r. 1716-1719; see def. ex. 47, r. 4072.]

FINDINGS OF FACT OF TRIAL COURT

Coulter Shoals Dam, which is located in Tennessee 602

miles from the mouth of the river and on which preliminary

investigations by the Authority are in progress. [Bowman,

r. 1719-1720; see def. ex. 48, r. 4073-]

The dams constructed or under construction on tribu-

taries are as follows:

Norris Dam, jocated in Tennessee on the Clinch River

| 79.8 miles from the mouth of that river and 647.5 mites

| from the mouth of the Tennessee River, constructed by the

Authority, now completed and in operation. [Bowman, r.

1720-1724; see def. exs. 49, 50 in Reproductions of Certain

Original Exhibits Submitted by Appellees; def. ex. 51, r.

4074.)

-Hiwassee Dam, located in North Carolina on the Hi-

wassee River 75.8 miles from the mouth of that river and

560.3 miles from the mouth of the Tennessee River, under

construction by the Authority. [Bowman, r. 1722-1725;

see def. ex. 50 in Reproductions of Certain Original Ex-

hibits Submitted by Appellees; def. ex. 52, r. 4074.

The Tennessee Valley Authority has also recommended

to the Congress the future construction of a third tributary

project at the Fontana Dam site in North Carolina on the

“Little Tennessee River, but the Congress has appropriated

no funds for this purpose, and neither construction nor pre-

liminary investigation or other work is in progress on this

project. [Bowman, r. 1694.]

41. Each of the dam projects of the Authority is lo-

eated on a site at or near the site selected by the United

States Army Engineers in their comprehensive report on

the Tennessee River system, set forth in House Document

No. 328, Seventy-first Congress, second session. [Watkins,

r. 1548; Bowman, r. 1760-1761; Barker, r. 1949; Crane, r.

1285.] The projects so described in that report were de-

signed primarily for navigation and flood control. [Wat-

kins, r. 1547-1548.] Prior to the passage of the Tennessee

Valley Authority Act the United States Army Engineers

FINDINGS OF FACT OF TRIAL COURT

in fact had plans for .a high dam at the site of the present

Wheeler Dam. Their design made provision for intakes -

for the later installation of power facilities. Prior to the

passage of the Tennessee Valley Authority Act they had

commenced construction of the lock for this project. The

lock and dam as completed by the Authority are substan-

tially similar in design to the project as designed by. the

Army Engineers. [Bowman, r. 1762-1763, 1765-1766; Put-

nam, r. 1172-1173; Crane, r. 1285.]}

42. Each of the projects of the Authority has all ele-

ments of design reasonably required for navigation and

flood control in accordance with accepted engineering stan-

dards. [{Watkins, r. 1545, 1548; Bowman, r. 2238-2243;

cf. Bowman, r. 1695-1696, 1720-1722.] Each of the projects

has been designed to provide storage capacity for a slack-

water pool behind the dam and a substantial additional

storage capacity above the slackwater pool level. [Bow-

man, r. 2237; see def. exs. 38, 40, 44, 50 in Reproductions of

Certain Original Exhibits Submitted by Appellees.) Each

of the main-stream projects is equipped with a lock pre-

scribed and designed by the Corps of Engineers, with space

for an additional parallel lock when commerce warrants.

[Barker, r. 1951, 1968; def. exs. 111, 112, r. 4110, 4111;

Bowman, r. 2243.] The locks which are being installed are

of sufficient size and capacity to accommodate adequately

the traffic which may be expected in the reasonably near

future. [Putnam, r. 1173; def. ex. 112, r. 4111.] To pro-

vide effective means for flood control and stream-flow reg-

ulations, each of he projects is equipped with large spill-

way gates, and in addition, the tributary projects are

equipped with sluiceways of large capacity. [Bowmazn, r.

2239-2241; Sargent, r. 1676.] At each of the projects fa-

cilities have been provided or construction and design are

such that facilities may be provided for the generation of

power. [Bowman, r. 1696, 1721, 1722; comp. ex. 328 (orig-

inal) pp. 57-5¢; def. ex. 141, r. 4188.] Each of the projects

F —_

FINDINGS OF FACT OF TRIAL COURT

of the Authority can be operated to secure substantial

benefits in the improvement of navigation and the control

of destructive floods, and consistently therewith, the pro-

duction of electric energy. [Watkins, r. 1545, 1548; Wood-

ward, r. 1780-1789, 1820-1821, and in connection therewith

Wessenauer, r. 2173-2175, and def. ex. 139, r. 4186; Bow-

man, r. 1738-1739, 1742; Sargent, r. 1679-1681, cf. r. 1687-

1689; Clemens, r. 1654, 1655; cf. Crane, r. 1286.]

43. The following tables set forth the principal engi-

neering features of the projects of the Authority, Lock and

Dam No. 1 constrncted by and under the control of the

War Department, und the privately owned Hales Bar Dam:

[The information shown in thesé tables appears in def. exs.

39, 42, 43, 45, 45A, 46, 46A, 47, 48, 51, 52, 53, 54, r. 4064,

4066-4073, 4074-4076; def. ex. 152, r. 4263; def. exs. 36, 38,

40, 44, 50 in Reproductions of Certain Original Exhibits ~

Submitted by Appellees; def, ex. 153 (original) ; comp. ex.

116 (original) ; comp. ex. 328 (original) ; except for the lock

sill elevations, which appear in Barker, r. 2014, 2015, 2016.]

FINDINGS OF FACT OF TRIAL COURT

{-Cveuy3ya0) gze “xe ‘duce

isesyeddy Aq pezswgns sigtY2ZA PUI “IDI40D fo sucizonposdey uy og ‘FF ‘OF ‘SE ‘OE “8x9 “J9P ‘ENsF “4 “SST “X® “JP *9LOF-FLOD

‘g0¥-990% ‘F008 ‘2 ‘Bo ‘so ‘zo ‘IS ‘8 ‘LE ‘VOF ‘OF ‘VOd ‘St ‘eb ‘ae ‘6g “Sx “Jop Uy SavEdds o[quy syYyF UY UMOYS UOIQBUMIOZUY OYL)

“*SUOTIENZeNG [01},U0 [BlzBjea fq pesnso sq} eAogw 4yooJ OUO Jo oss Arvs0odme, B Ajqissod 103 ydodxKe UOSBEs 109BM-MOT

Uy posTwz oq [[1@ [ood eg} YoTym 07 [240] MINUXEUM O43 Zurugep Ajjesoued joao, ArBsz{quB us By (9) UUINIOD Uy [eAo| jood eumion

*(z) pus (g) summnios ay suO;ZBAIe 10J BOUTNIOA OY} Ul GdUeIegIP OY9 Bt (TT) “19D

"(g) pus (g) suunjoo ut SsUOI;BAL0]@ 107 SOMTNIOA OG} Uy CDUeIEgTP 4} SI (OT) “19D

¢¢ UMOPABIP WINUIXU,, 1O ,, [PAO] WOIZBSTABU wWnuIyUyWM,, IO ,,UOTZBAe|® AMOD

-MBIP WNUIUIU,, SY OF PI1IEZ01 OSV KIMTJOMOS 8] TOIZBAG/O SIV, “G7dep-s9A0 yooy Z YIM “Joos G JO YQdop ofqudjAvu WINUTOTW B Uy Su

-3[nsez ‘mveijsdn Wp 3xeu 04} 4B (g) [OO UY UMOYS UOTZBAGI® OG} OAIT 0} MOY UOSBIS 49M [BVUIIOU G}IM UMOPMBIP O[QUMOT[S [VNsN O44

8} SUIVP W¥01;S-UIVUI Og} 4B ‘puw [01}U0D Poog JOZ UMBIP 2q A[[BNSN [[TM APOAIESIL OF GOIGA OF UOTZBAI[S JHIMO] O43 BT (4) ‘190

o00‘ers’9 000'e1T's “°° aeate UTE

oo0o‘sss’s _ooo'zgs'T “********* Aawynqu,

000‘sz6‘s 000‘rs0'> eeoeeereeree * [BO]

000‘s9¢ 00096 000‘set SIvt 9ZST 9zSI 116 (Slee imetclehe einai etl t a

SSL

oo0'0so's oo0‘oos’t o0o'zos’s ¢s6 0301 PEOL “Od-8S os6's EE SOE SRE TENE A ee

OTL 8°6L

000‘0FT 000'09 0000L5 ¢08 cos ors sts 00g 009°6 O09 TTT epBogg 403/ng)

000'L68 000‘0FT 000‘sst'T OL @ Ov. GhL T3L —T\ an ) Shebbbbbhibbebieeeba bbe GC

000'S3s 000‘'96T 00°69 G19” Slo 0°389 oss9)0=—ss«@ 8S 00808 COTA i eanemeqoygD

; F 000 001 2929 2°629 668 008'IZ Tey LASER AREAS AT ASS SIS ee

000°843 00029 000‘TS6 669 169 ¥6S c6s 28 o0sts «= OeRE TT efypasaezungp

000‘0hF 000‘083 ooo‘oor't ogg 8S cog 9c¢ 24 Bee iei tbe)

000'8> 000+ 000009 60S €0S l'sog 8°S0s gst BS. ihc eebees at ciig tt: te

, : OIF Olt 8'9SZ Bo eee ee ae Oe ‘ON weg » Yeo]

000‘9TF 000‘T6T 000‘%so'r 80% 80F SIF Sit L's 0L8‘se ee abit eet Abb |

000'009'* 000'0Sz o0o‘ost‘9 +98 ose 6S¢ GLE O'FET Cee: _ 2am (Sets tees erences 885) tee

Jorzaog )9=«uONBinFoq «= se7RBH JO «syedQ, mBq] 1), a

pools 10384 MOT doy, 07 [870] mE Ie 48 oog zo doy, be jo Boy JOA1Y qoeloig

[Sms0N "A214 YWuery eBeurssy eaoge

9093-0298 soumjo, sjoasosogq §=—«- | 19d OT soll

(It (or (6) (8) (2) (9) (cs) (+) (g) (3) (1)

FINDINGS OF FACT OF TRIAL COURT

[‘(yeurf0) git “xe ‘duoa {(juursi0) got “xe “Jop

{GL0¥-ZL0F ‘OLOF ‘8906-990% ‘F90F “4 ‘Zo ‘IS ‘gb ‘Lb ‘OF ‘Sh ‘eb ‘cb ‘ce “sxe “sop Uy savodde o[quy 8147 UY DOYS UoTEUZOZUY OGL]

‘sy1un Zuyjesoued OT [Vuoryppe oy, JO UOIZe[[VIsUL 4Oy OPM uorstaoid

pus polrezeur syrun Zuyywsoues g yyim ‘aenoq somod pazajduiod oy} pepnjouy weKqs 4q payeiduios se wep ey “payonsysuvo Aypearsi0

SB WB VOSA UI sivdeUtFug Amy seq87g P2zIUf e4F AQ @PBUl SUM SPUN 9894} [[B JO UO1ZBI[BISU! VBUIZ[N 9G} 40} WOISTACId, 7

MM 000'00-2 = MH 000‘09-T O0O‘OEkT Bt X E8-L 5 Alltel dai ii Retell ae as bate ttan: ooseU att

AM 000'09-2 AM 000‘09-2 000'S0Z GOL X FI-€ EIR Sac Sadia hab adh iliac tala at S1LI0N

MM 000'02-€ o9e X 09 Ov X SZ-02 RE at SSMS REE ee or B{BOYR 103[N0H

AX 00c‘Le¢-4 o9e X 09 0* x oZ-12 rN Sah dite ela talidbs byte ic! tad itg 8238

MM 000°L2-F AMM 0002-€ O09 09 O'f99 S819 000°009 oF X OF-08 Or ee ete wo BANBMBANGO

qaiq “43 ¢

188 X 09 spavoq qeeLs pT reg 9018}

MXM 000'82-F MMH 000'%2-£ O9¢ X 09 O89 O'8ES 000'S39 OF X OF-BT ie tciatetaaba telat sania aca ie O[[}AssezuNs)

MAM 000'%8-8 MM 000'%E-F O09 X09 O'FES O16 000°L89 OF * ST-09 ay eo tithe delta et tet lp se 10/004 A

eM 000'98-F1 MM 000'98-F 008 x 09

eM 000'08-F MH 000'08-F 006 * 09 a 000629 «© 8 X SI-8S ee ee a ee wos! M

cog X 09 M9O0b TEE a TON WV PF OT

MX 000'98-9 MM 0009-2 009 x OIT ORG SBE 000088 OF X OF-8Z Be Sree ee ee Hola HT

Mx 000'38-9 009 x OIT 000'0ss 9s OF «S¥-¥3 Ace i yy aed O1}aez20qID

105 pezjoqyny 999,7 Is Its Ly a 90484) 38019

pepra0ig ae soquuqg yoo) =9yooy «= Arowdep semjpidg svayidg qoofoug

BPIUL) 10M0T POT[szeuy 400] aoddy semOT ("QUIT «=: OZ TG F aequinN *“a0la

oyeatiD syugjsemog) = joesig «4g «(ACI AB mtdg

FINDINGS OF FACT OF TRIAL COURT

44. The engineers of the Authority in responsible

charge have determined, on the basis of a study of all avail-

able records, upon a method of operation for the Author-

ity’s projects which in their opinion is the most effective

method of operation for the improvement of navigation and

the control of destructive floods on the Tennessee and

Mississippi River Valleys. [Woodward, r. 1775; def. ex.

41, r. 4065; r. 1777-1790, 1820-1821; Kimball, r. 1850-1851,

1880-1881.] This is the method of operation which in their

opinion is best adapted for the combined purposes of im-

provement of navigation and the control of destructive

floods without reduction in the effectiveness of the Author-

ity’s projects for either navigation or flood control.

[ Woodward, r. 1777-1790, 1820-1821; Kimball, r. 1850-1851,

1880-1881.] The general method of operation is set forth

in the report of the Board of Directors of the Tennessee

Valley Authority entitled, ‘‘The Unified Development of

the Tennessee River System,’’ pages 18-19, which is com-

plainants’ exhibit 328 in this case. Some details of oper-

ation have been changed in the past, and according to the

Authority’s engineers in responsible charge, other changes

may be necessary in the future as further investigations

and experience may require. [Woodward, r. 1779, 1780,

‘y 1781, 1783, 1784, 1792; Wessenauer, r. 2173.]

~~ 45. «‘The engineers of the Tennessee Valley Authority

in responsible charge operate the projects of the Authority

substantially as follows: The reservoir levels of the main-

stream dams below Chattanooga are held somewhat above

low pool level during the flood season and drawn down to

or below such level in advance of a flood; those above.Chat-

tanooga are to be held at about low pool level during flood

season. [ Woodward, r. 1783-1784; Kimball, r. 1850-1851;

Wessenauer, r. 2175.] As the flood season draws to a close,

about the beginning of April, reservoir levels on the main

stream are allowed to rise. [Woodward, r. 1784; Kimball,

r. 1851.] The reservoir levels of the tributary projects

FINDINGS OF FACT OF TRIAL COURT

are maintained at about low pool level at the beginning of

the flood season, and a substantial portion of the storage

capacity below so-called normal pool level is gradually

filled during and after the flood season. A sufficient ca-

pacity is held available at the close of the flood season to

control the largest run-off that may be expected at that

time. [Woodward, r. 1784-1785, 1786-1790; Kimball, r.

1851.] The water stored in the reservoirs on the tribu-

taries and the main stream is released during the low-water

season to augment the low-water flow. [Woodward, r.

1780-1782 ; Barker, r. 1954-1956; def. ex. 142, r. 4189; Karr,

r, 2195-2199. ]

46. The general method of operation set forth in find-

ing 45 conforms to the method of operation for navigation

and for flood control contemplated in House Document No.

328 and House Document No. 259 [see comp. ex. 105 (origi-

nal) pp. 63-64 (par. 31), p. 71 (par. 41), p. 74 (par. 46),

p. 78 (par. 52), p. 95 (par. 77); cf. Clemens, r. 1658-1660, in

regard to def. ex. 32 (original)] and is reasonably calcu-

lated to provide most effectively for the improvement of

navigation and the control of destructive floods in the Ten-

nessee and Mississippi River Valleys without reduction in

the effectiveness of the Authority’s projects for either flood

control or navigation [Woodward, r. 1779-1780, 1788-1790,

1821; Kimball, r. 1850-1851, 1880-1881; Clemens, r. 1658-

1660, 1665-1666, cf. r. 1654-1655, 1658-1659; Floyd, r. 1894;

Sargent, r. 1678-1681, 1687; Bowman, r. 1738-1739, 1742;

Barker, r. 1958; Watkins, r. 1543-1545, 1548].

47. While dams and reservoirs of limited capacity

designed for local flood protection only should, according

to some engineering opinion, be kept empty in advance of

floods and emptied immediately after floods, those princi-

ples govern the design and method of operation of dams and

reservoirs established for local protection alone and do

not apply to the projects of the Tennessee Valley Authority,

which are designed and operated for the protection of points

‘ ‘

FINDINGS OF FACT OF TRIAL COURT

on the Tennessee, the lower Ohio, and the lower Mississippi,

and for navigation, as well as for local flood protection.

[Watkins, r. 1543-1544, 1633-1634; Kimball, r. 1880-1881;

Woodward, r. 1786-1787, 1790; Kelly, r. 1386-1387; Floyd, r.

1894. ]

Sratus oF NAVIGATION ON THE TENNESSEE RIVER

48. The Tennessee River, a navigable river approxi-

mately 652 miles long, is formed by the junction of the

French Broad River and the Holston River at Knoxville,

Tennessee, and enters the Ohio River near Paducah, Ken-

tucky. In its unimproved state there were numerous ob-

stacles to commercial navigation, including shoals and -

bars, steep slopes, high velocities, and floods in many

months of the year, and inadequate depths in a great pro-

portion of the rfver. [Watkins, r. 1549-1550; Barker, r.

1942-1943; see def. exs. 93, 97 in Reproductions of Certain

Original Exhibits Submitted by Appellees; def. ex. 9, r.

4100.]

49. The problem of improving navigation on the Ten-

nessee River has been a matter of national concern for

more than a hundred years. From 1852 to 1933 Congress

authorized avd made appropriations for numerous navi-

gation surveys and navigation projects covering all por-

tions of the Tennessee River and certain of its tributaries,

at a total expenditure of approximately $18,000,000, ex-

clusive of Wilson Dam. [See def. ex. 95 in Reproductions

of Certain Original Exhibits Submitted by Appellees;

Barker, r. 1943.]

50. Prior to the passage of the Tennessee Valley Au-

thority Act the Tennessee River was not adequately im-

proved for modern commercial navigation except for short

stretches behind the Government-owned Dam No. 1 and

Wilson Dam, and the privately owned Hales Bar Dam.

The controlling depth of the river at that time ranged from

FINDINGS OF FACT OF TRIAL COURT

4% feet in the lower part of the river to 1 foot in the upper

section. [See def. ex. 97 in Reproductions of Certain Orig-

inal Exhibits Submitted by Appellees; Barker, r. 1949;

Watkins, r. 1549-1550; Putnam, r. 1152.]

51. The Tennessee River, as a tributary of the Ohio

River, is interconnected with the inland waterway system

of the Mississippi River, which connects the Gulf and the

Great Lakes and taps the territory of about 15 States, in-

cluding many important traffie-producing industrial, com-

mercial, and agricultural centers, and extends as far east

as Pittsburgh, Pennsylvania, as far west as Kansas City,

Missouri, and as far north as Minneapolis and St. Paul,

Minnesota. [See def. exs. 116, 118, 123 in Reproductions of

Certain Original Exhibits Submitted by Appellees; All-

dredge, r. 2044-2045.] Interstate railroads and highways

interconnect with the waterway at numerous points, per-

mitting joint land and water transportation. [See def. ex.

66 in Reproductions of Certain Original Exhibits Submitted

by Appellees.] There are Vari substantial agricul-

tural, mineral, and forest resources located in the Tennes-

see Valley within reach of the waterways [Alldredge, r.

2046-2051; def. exs. 120, 121, 122 in Reproductions of Cer-

tain Original Exhibits Submitted by Appellees; comp. ex.

105 (original) pp. 512-514.) About 18.2% of the popula-

tion of the United States, based on the 1930 census, is lo-

cated within 25 miles of the banks of this interconnected

waterway. [Alldredge, r. 2045-2046; see def. ex. 119 in

Reproductions of Certain Original Exhibits Submitted by

Appellees.] This inland waterway system includes 5,700

miles of improved waterway of 9-foot depth or over, an

additional 3,200 miles of 6- to 9-foot depth, and an addi-

tional 1,000 miles of 4- to 6-foot depth. [See def. exs. 116,

118 in Reproductions of Certain Original Exhibits Sub-

mitted by Appellees.]

52. The dams constructed, under construction, or au-

thorized for constructicn or investigation by the Tennes-

—

a an |

.FINDINGS OF FACT OF TRIAL COURT

see Valley Authority will provide a navigation channel

throughout the length of the Tennessee River substantially

superior to that which could be provided by any alterna-

tive method of navigation improvement. [Watkins, r

1536-1539, 1541-1542, 1547-1548, 1556, 1581-1582, 1620; Bar-

ker, r. 1958, 1958-1973; Brodie, r. 2024-2031; comp. ex. 10

(original) pp. 12-13 (sée appendix A at r. 4272); def. exs.

104, 109, 110 in Reproductions of Certain Original Exhibits

Submitted by Appellees; def. exs. 106, 107 (original) ; def.

exs. 105, 108, 115, r. 4108, 4109, 4133.] They will also pro-

vide substantial navigation improvement on a number of

the tributaries of the Tennessee River [Barker, r. 1963-

1964; def. ex. 109 in Reproductions of Certain Original

Exhibits Submitted by Appellees] and will provide an in-

ereased water supply, which will substantially improve

navigation on the Mississippi River in the low-water season

[Barker, r, 1955-1956; Watkins, r. 1545, 1634; Brodie, r.

2027-2029].

53. Each of the dams constructed, under construction,

or authorized for construction or investigation by the Ten-

nessee Valley Authority will result in a substantial im-

provement for navigation. [Barker, r. 1949, 1950-1951,

1955-1956 ; def. ex. 98 in Reproductions of Certain Original

Exhibits Submitted by Appellees; Watkins, r. 1539, 1545,

1557; Putnam, r. 1183-1185; Bowman, r. 1693-1694, 1699,

1704-1706, 1709-1710; def. exs. 47, 48, r. 4072, 4073; def. exs.

38, 40, 44 in Reproductions of Certain Original Exhbits_

Submitted by Appellees. ]

54. The high-dam projects of the Authority will pro-

vide a navigation improvement substantially superior to

that which could be provided by the system of low dams

_ set forth in House Document No. 328. [See references in

support of fdg. 52.] The superiority of high dams for

navigation was recognized by the Board of Engineers for

Rivers and Harbors in House Document No. 328. [Comp.

ex. 105 (original) pp. 11-13 (see appendix A at r. 4272);

FINDINGS OF FACT OF TRIAL COURT

Watkins, r. 1581-1582, 1620.] The Authority’s projects™

will provide superior channel depths and widths [Wat-

kins, r. 1536-1537; Barker, r. 1958, 1974; def. ex. 108, r.

4109; r. 1961, 1968-1970], substantially fewer lockages

[ Watkins, r. 1536; Barker, r. 1958, 1959 (see def. ex. 105, r.

4108) ; def. ex. 115, r. 4133; def. ex. 104 in Resroductions

of Certain Original Exhibits Submitted by. Appellees; Put-

nam, r. 1177], substantially less current velocities [Barker,

r. 1958, 1959-1961; def. ex. 106 (original); Watkins, r.

1537], pool fluctuations [Barker, r. 1955, 1958, 1965-1966 ;

def. ex. 110 in Reproductions of Certain Original Exhibits

Submitted by Appellees; Watkins, r. 1537], and interrup-

tions from floods [ Watkins, r. 1537; Barker, r. 1955, 1961].

The elimination of lockages will substantially reduce the

time consumed in lockages [Brodie, r. 2024-2025; Barker,

r. 1958, 1959 (see def. ex. 105, r. 4108) ; def. ex. 115, r. 4133;

Watkins, r. 1536]; the superiority of channel depths and

reduction of current velocities will substantially increase

the speed of movement and reduce the amount of motive

power required [Barker, r. 1958, 1959-1963, 1968-1970; def.

ex. 108, r. 4109; def. ex. 106 (original) ; def. ex. 115, r. 4135;

def. ex. 107 (original) ; Watkins, r. 1536-1538, 1556; Brodie,

r. 2025, 2026-2027]; and the wider and longer pools of the

high dams are preferred by the ie es narrow,

crooked pools of the low dams [Brodie, r Barker, r.

. 1967, 1970; Watkins, r. 1537- 1538). The reduction in pool

fluctuations will greatly encourage the development of

términal facilities necessary to the development of commer-

cial navigation. [Brodie, r. 2025-2026; Barker, r. 1965-

1966; Watkins, r. 1537.] The advantages ‘of the Author-

ity’s projects in these respects will insure a substantially —

greater efficiency of the navigation channel, substantially

greater dependability of service, and may reasonably be

expected to attract a substantially greater volume of traffic

on {fe improved river. [Watkins, r. 1556; Brodie, r. 2029-

2031.] The high dams will also provide substantial im-

FINDINGS OF FACT OF TRIAL COURT -i

provement of navigation on the trioutaries which would

not be provided by the low-dam projects. [Barker, r. 1963;

def. ex. 109 in Reproductions of Certain Original Exhibits

Submitted by Appellees.] The advantages of high dams

cannot be accurately measured in monetary terms. [Brodie,

r. 2037-2038; Putnam, r. 1182, 1183.] The boats and barges

which are now in general use on the interconnected inland

. waterways of the Mississippi River system will be able, to

navigate the Tennessee River where improved by the pro}-

ects of the Authority without change of design or extent of

loading. [Brodie, r. 2023-2024; Barker, r. 1976-1977.]

55. On other tributaries of the Mississippi the United

States Army Engineers are now replacing certain-low dams

with high dams, with provision for the development of

power [Putnam, r. 1174-1175; Watkins, r. 1538; Barker, r.

1974], and at the time of the creation of the Tennessee

Valley Authority they were engaged in the construction of

a lock for a high navigation dam at the Wheeler Dam site,

with provision in their design for the development of

power [Bowman, r. 1762-1763, 1765-1766 ; Putnam, r, 1172-

1173; Crane, r. 1285].

56. The improved navigation channel provided by the

projects of the Authority will cause a very substantial in-

crease and development in waterway traffic between the

Tennessee Valley region and other regions of the United

States connected by water, rail, and highway. [Watkins, r.

1550-1556; Alldredge, r. 2053-2056; def. ex. 126, r. 4136; r.

2063-2064; Barker, r. 1977; Brodie, r. 2029.] Despite the

numerous obstacles in the past to commercial navigation on

the Tennessee River, the traffic_\on the river over the last

40 years has been between 1,000,000 and 2,000,000 tons an-

nually, but due to lack of adequate depths the traffic has

consisted largely of short hauls. [Def. ex. 96 in Reproduc-

tions of Certain Original Exhibits Submitted by Appellees;

comp. ex, 105 (original)\ pp. 205-233; Watkins, r. 1549-

1550; Barker, r. 1944-1946.] It was estimated by the Army *

FINDINGS OF FACT OF TRIAL COURT

Engineers in House Document No. 328 that there would be

an increase of traffic of approximately 7,000,000 tons per

annum at a saving of about $10,000,000 annually (or a sav-

ing of approximately 25% of the present freight charges;

if the Tennessee River were adequately improved for tom-

mercial navigation. [Watkins, r. 1552, 1550-1556; comp.

ex. 105 (original) p. 497.] Subsequent studies since the

creation of the Tennessee Valley Authority have confirmed

the reasonableness and conservative character of this esti-

mate. [Def. ex:-126;r. 4136; Alldredge, r. 2053-2054, 2055-

2061, 2063-2064.] On the basis of the growth of traffic ex-

perienced on the comparable improved waterways of the

interconnected Mississippi River system it is reasonable to

expect an ever increasing growth in the volume of traffic

on the river. [Alldredge, r. 2061-2064; def. ex. 130 in

Reproductions of Certain Original Exhibits Submitted by

Appellees; Watkins, r. 1549, 1554; def. ex. 30 (original).]

57. The value of the improvement to navigation pro-

vided by the projects of the Authority is not limited to the

reduction in the cost of transportation to shippers, but in-

- eludes substantial intangible values, such as the stimula-

tion of the growth of industry and business and the promo-

tion of the general prosperity of the region within the’ in-

fluence of the improved waterway. [Putnam, r. 1182-1183;

Watkins, r. 1553-1554; Alldredge, r. 2063.]

Tar FLoop PRoBLEM ON THE TENNESSEE

AND MISSISSIPPI RIVERS

58.-.The recurrent great floods on the Tennessee and

Mississippi Rivers have long presented a grave flood menace

of national importance. Thousands of miles of interstate

railways and highways, and 20,000,000 acres of the richest

cotton lands in the United States, the products of which are

normally marketed in interstate and foreigm commerce,

lie within the flood plain of the Mississippi Valley. Lo-

FINDINGS OF FACT OF TRIAL COURT

cafed in the path of Mississippi floods also are the impor-

tant commercial cities of Memphis, Cairo, and New Orleans,

and other smaller communities, in which are located large

cotton warehousing, compressing, and processing plants,

and woodworking plants, engaged in the production, proc-

essing, and distribution of goods normally marketed in

interstate and foreign commerce. [Okey, r. 1905- 1913,

1920-1922; def. ex. 91 in Reproductions of Certain Origenal

Exhibits Submitted by Appellees.) The city of Chatta-

nooga, which is the principal point of danger on the Ten-

nessee River, is an important center of interstate railways

and highways and manufacturing plants, and is a’principal

center for the distribution throughout the southeastern

region of commodities produced in other States. [Kimball,

r. 1824; see def. ex. 66 in Reproductions of Certain Original

Exhibits Submitted by Appellees; Alldredge, r. 2063; Kutz.

r. 1194-1198; comp. ex. 349, r. 3084B.]

59. The great floods of the past on the Tennessee

and Mississippi Rivers have caused and unless con-

trolled in the future will cause complete interrupticn of

transportation on the Mississippi and Tennessee Rivers,

and complete interruption of interstate commerce on the

railroads and highways, as well as interruption in the pro-

duction, manufacture, and distribution of products nor-

mally marketed in interstate and foreign commerce, and

eubstantial daniage to the facilities and properties employed

for these purposes. [Clemens, r. 1636-1642; Okey, r. 1905-

1913, 1920-1922; Kimball, r. 1824-1834; def. exs. 72, 73, 81 in

Reproductions of Certain Original Exhibits Submitted by

Appellees; def. exs. 74-80, r. 4084-4096; Kurtz, r. 1194-1198;

comp. ex. 349, r. 3084B; Watkins, r. 1537, 1556-1557 ; comp.

ex. 105 (original) pp. 16-17, 730-734 (see appendix A, r.

4272-4273) ; Barker, r. 1955.]

60. For the most effective control of destructive floods

in the Tennessee River basin, particularly in the critical

area at Chattanooga, Tennessee, it is desirable to provide

—)

FINDINGS OF FACT OF TRIAL COURT

high dams with controlled storage (such as the projects of

the Authority) on the main stream of thé Tennessee and on

the principal tributaries above Chattanooga, including the

Clinch and Hiwassee Rivers, in order to supplement local

protective works. [Kimball, r. 1834-1836, 1850-1852, 1867-

1869; def. exs. 68, 82, r. 4080, 4097; Watkins, r. 1539-1540,

1544-1546; comp. ex. 105 (original) p. 17 (see appendix A

at r. 4273); def. ex. 152, r. 4263; Floyd, r. 1891.]

61. The Ohio River and its tributaries, including the »

Tennessee River, are the largest contributor to all Mis-

sissippi floods, contributing from 52% to 90% of the floods

between Cairo, Illinois, and Helena, Arkansas. The Ten-

nessee River has always made a substantial contribution

to all Mississippi floods. [Clemens, r. 1637, 1649; Kimball,

r, 1825-1826; def. exs. 69, 70, r. 4081, 4082. ]}

62. The existing flood-protection works on the lower

Mississippi River, consisting of levees supplemented ‘y

floodways and cut-offs, are inadequate to pass a flood such

as is now estimated to be reasonably probable in the future

without disastrous overtopping of the existing levees.

(Kelly, r. 1379-1380; Clemens, r. 1645-1646, 1650; Okey, r.

1914.] Even in lesser floods the existing projects provide

adequate protection for only 60% of»the alluvial valley

[Okey, r. 1914], and then only with the use of the floodways,

the use of which it is desirable to eliminate whenever pos-

sible [Okey, r. 1931-1932; Clemens, r. 1645, 1650; def. ex. 32

(original) p. 8]. The levees on the lower Mississippi have

reached the practical limits of height. [Kelly, r. 1330;

Clemens, r. 1646; Okey, r. 1932-1933.] Any additional pro-

tection against lower-Mississippi floods must be found in

part in the provision of reservoirs on the tributaries of the

Mississippi to reduce their contribution to Mississippi

floods. [Kelly, r. 1379-1382; Clemens, r. 1646-1650.] For

the most effective flood-control use, reservoirs should be

located close to Cairo, which is at the junction of the Ohio

FINDINGS OF PACT OF TRIAL COURT

and the Mississippi Rivers. [Clemens, r. 1649-1650; Kelly,

r. 1381-1382; def. ex. 32 (original) p. 18 (par. 22).]

63. The Tennessee River, being the largest tributary

of the Ohio and closer to Cairo and the lower Mississippi

than any other major tributary of the Ohio system, is one

of the best rivers for reservoirs for flood control on the

lower Mississippi. [Clemens, r. 1650; Floyd, r. 1890-1891.]

For the most effective reduction of the contribution of the

Tennessee River system to Mississippi floods it is necessary

to provide high dams with controlled storage (such as the

projects of the Authority) on the main stream and storage

dams on the tributaries, including the Clinch and Hiwassee

Rivers. [Clemens, r. 1651-1652, 1654-1655; Watkins, r. 1557,

1539-1540, 1544-1547; Kimball, r. 1834, 1850-1851; Floyd, r.

1891.]

64. The season of major floods in the Tennessee River

basin is limited to the period from approximately the mid-

dle of December to about the first of April. [Woodward, r. .

1786-1787; Kurtz, r. 1235; Kimball, r. 1828.] No major

flood of record has occurred in the Tennessee basin outside

this period; floods oecurring outside this flood season are

of limited volume and duration, and are local in effect.

{ Woodward, r. 1787; Kurtz, r. 1235; Bowman, r. 1738; Jus-

tin, r. 2388.] The season of major floods on the lower Ohio

and lower Mississippi iasts about a month later than the

flood season on the Tennessee [Clemens, r. 1665; Kelly, r.

1386-1387], but as the end of the Tennessee flood season ap-

proaches, the need for storage capacity to control the con-

tribution uf the Tennessee to Ohio and Mississippi floods

diminishes [Kimball, r. 1850-1851; Woodward, r. 1786-1788].

' 65. Each of the projects of the Authority is of substan-

tial value for the reduction of destructive flood heights in

the Tennessee and Mississippi River basins. [Def. ex. 151,

r. 4263; Bowman, r. 1725, 1751, 1752; Woodward, r. 1784-

1785, 1820-1821, 1786-1788, 1807-1808; Kimball, r. 1835-1836,

1838-1839, 1852; def. exs. 82, 152, r. 4097, 4263; Okey, r.

FINDINGS OF FACT OF TRIAL COURT

—

1914-1919, 1922; Clemens, r. 1650-1651, 1656; Watkins, r.

1539-1540, 1545-1546; Floyd, r. 1890-1891; Kurtz, r. 1235;

Kelly, r. 1384-1385.] |

66. The controlled-storage projects of the Authority

are the only types of engineering works on the Tennessee

River system which will afford effective flood control in

both the Tennessee and Mississippi River basins. [Clem-

ens, r. 1651-1652, 1654-1654; Kimball, r. 1845, 1850; Watkins,

r. 1547.] Automatic, uncontrolled detention reservoirs are

of uncertain value for local Tennessee flood control [Kim-

ball, r. 1842-1850; Watkins, r. 1547, 1583-1590] and would

be of no value for the control of floods on the lower Mis-

sissippi [Kurtz, r. 1222-1223; Clemens, r. 1654-1655; Kelly,

r. 1372; Watkins, r. 1547; Kimball, r. 1845]. The so-called

natural valley storage in the Tennessee River basin is the

space occupied by the flood itself, and the retarding effect

ef such uncontrolled valley storage may increase the danger

of Mississippi floods. [Clemens, r. 1652-1653; Kimball, _r.

1840-1841; Kelly, r. 1388-1389; Watkins, r. 1540; def. ex.

152, r. 4263.] The low dams set forth in House Document

No. 328 would be of no value in the control of destructive

floods either in the Tennessee or Mississippi River basins,

as was recognized in House Document No. 328. [Clemens,

r. 1652; comp. ex. 105 (original) p. 64 (see appendix A at

r. 4274); Watkins, r. 1547.]

67. Pursuant to congressional authorization a com-

prehensive survey of the Tennessee River system with re-

spect to navigation, flood control, and conservation of power

resources was undertaken by the Corps of Engineers of the

War Department and completed in 1930. This report is

contained in House Document No. 328, Seventy-first Con-

gress, second session. [Comp. ex. 105 (original).] The

recommendations contained in this report were adopted by

Congress in the Rivers and Harbors Act of 1930 and pro-

vided for the creation of a 9-foot navigation channel

throughout the length of the Tennessee River by a series of

FINDINGS OF FACT OF TRIAL COURT ,

movable low dams to be constructed by the Federal Gov-

ernment or a series of high dams to be constructed by pri-

vate interests in cooperation with the Federal Government.

[Comp. ex. 105 (original) p. 5; Watkins, r. 1535-1536, 1547-

1548, 1581-1582.] The preliminary estimate of cost of the

low dams was approximately $75,000,000. In 1935 the Mis-

sissippi River Commission, in a comprehensive report on

reservoir projects for Mississippi flood control, set forth

in House Document No. 259, Seventy-fourth Congress, first

session, recommended that the Federal Government adopt

a policy of encouraging the construction of reservoirs on

the tributaries of the Mississippi River for increased flood

protection on the lower Mississippi. [Def. ex. 32 (original)

p. 33; Clemens, r. 1647-1650, 1671-1672, 1656-1657; Kelly,

r. 1384-1386.] In April 1937 the Chief of Engineers, in a

report set forth in Committee Document No. 1, Seventy-fifth

Congress, first session, recommended the construction by

the Federal Government of storage reservoirs on the tribu-

taries of the Mississippi as essential for the control of

floods on the lower Mississippi. [Kelly, r. 1380-1382; Okey,

r. 1932-1933.] Neither at the time of the enactment of the

Tennessee_Valley Authority Act‘nor since has there been

any reasonable prospect that a comprehensive development

of the Tennessee River and its tributaries for the combined

purpose of navigation and flood control in the Tennessee

and Mississippi River basins could be obtained in any other

way except by the construction of high dams by the United

States Government or some agency thereof. [Longley, r.

974; Watkins, r. 1540-1542, 1558.]

ComBINED BEeneErits To NaviGaTION AND FLoop ContTroL From

, THE TENNESSEE VALLEY AuUTHORITY PRoJEcTS

68. The projects of the Authority will permit the main-

tenance at all times of the 9-foot channel on the main

stream of the Tennessee with sufficient overdepths to ac-

FINDINGS OF FACT OF TRIAL COURT

commodate boats of 9-foot draft. [Barker, r. 1951, 1949;

def. ex. 98 in Reproductions of Certain Original Exhibits

Submitted by Appellees; Watkins, r. 1557; Putnam, r.

1189.] The tributary projects on the Clinch and Hiwassee

Rivers will also permit the maintenance of slackwater pools

in the lower portions of the reservoirs, which is necessary —

on the Clinch, a navigable tributary, in order to preserve

existing navigation and to avoid foreclosing future im-

provement for navigation [Watkins, r. 1542; Barker, r.

1956-1957], and is valuable on both tributaries in order to

preserve the life of the projects by affording capacity for

the deposit of silt [Barker, r. 1955; Watkins, r. 1543].

The projects of the Authority will also provideasubstan-

tial storage space above slackwater pool level control

in whole or in part the run-off from the drainage area

above the dams during the flood season. [Bowman, r.

2237; Watkins, r. 1631-1632, 1545, 1539.] Such projects are

the only engineering works which can provide effective

flood control in conjunction with the continuous mainte-

nance of the 9-foot channel for navigation. [Watkins, r.

1539, 1544, 1546-1547, 1557; Clemens, r. 1651-1652, 1654,

1095; Bowman, r. 1759; Barker, r. 1977-1978; Kimball, r.

1852, 1834-1835, 1838-1850; Kurtz, r. 1219.]

69. The tributary projects of the Authority, by reduc-

ing flood flows and increasing low flows, will substantially

increase the effectiveness of the high dams on the main

stream for the reduction of flood heights on the Mississippi

and Tennessee Rivers in combination with the maintenance

of a 9-foot navigation channel. [Clemens, r. 1651-1652;

Watkins, r. 1545-1547; Floyd, r. 1891, 1892-1894; Kimball,

r. 1838, 1850.] These tributary reservoirs will also serve

to increase materially the navigable depths in the unim-

proved portions of the main stream for navigation, will

substantially increase the navigable depths in the upper

ends of the navigation pools created by the main-stream

projects, and will substantially increase the navigable

FINDINGS OF FACT OF TRIAL COURT

depths on the lower Mississippi River, which increases will

be of material benefit to navigation. [Watkins, r. 1545;

Barker, r. 1954-1956. ]

70. The low-dam plan recommended in House Docn-

ment No. 328 as an alternative navigation project would

have no flood-control value. [Comp. ex. 105 (original) p.

64 (see appendix A at r. 4274); Watkins, r. 1537, 1547;

Clemens, r. 1652.] The low-dam plan in conjunction with

detention reservoirs on the tributaries might together ac-

complish navigation improvement and flood control on the

Tennessee River, but this combination would contribute

nothing to flood control in the Mississippi River [Kurtz,

r. 1222-1223], might aggravate fiood conditions there

[Clemens, r. 1654-1655; Kimball, r. 1845, 1843-1850; def.

exs. 89, 90 in Reproductions of Certain Original Exhibits

Submitted by Appellees], and would provide navigation im-

provement inferior to that provided by the projects of the

Authority [Watkins, r. 1536-1539, 1556; Brodie, r. 2024-

2031; Barker, r. 1958, 1958-1973; comp. ex. 105 (original)

pp. 12-13 (see appendix A at r. 4272); def. exs. 106, 107

(original) ; def. exs. 104, 199, 110 in Reproductions of Cer-

tain Original Exhibits Submitted by Appellees; def. exs.

105, 108, 111, 115, r. 4108, 4109, 4110, 4133].

71. Upon the completion of the construction of the

Pickwick Landing project and the Guntersville project,

these two projects, in conjunction with the already-con-

pleted Wheeler Dam and the previously existing Wilson

Dam, will provide u 9-foot channel from Pickwick Landing

to the vicinity of Chattanooga, a distance of approximately

257 miles. !Barker, r. 1950-1951; def. ex. 98 in Reproduc-

tions of Certain Original Exhibits Submitted by Appel-

lees.] The completed Norris Dam is being operated to pro-

vide-a navigation channel of 7-foot minimum depth in the

207-mile stretch between Pickwick Landing and the mouth

of the Tennessee River. [Barker, r. 1950-1951, 1954-1955,

cf. r. 1994.] This 7-foot depth below Pickwick will be in-

FINDINGS OF FACT OF TRIAL COURT

creased to 71% feet upon completion of Hiwassee. [Barker,

r. 1951.] These projects together will provide a commer-

cially feasible navigation channel between Chattanooga,

Tennessee, and the inland waterway system. [Barker, r.

1951.] For the larger part of each year there will be a

through navigation channel of 9-foot depth from Chatta-

nooga to the mouth of the river [Barker, r. 1951, 1994], and

even prior to construction of Gilbertsville, by means of a

moderate amount of dredging and releases from other

projects of the Authority, it is feasible to provide a perma-

nent 9-foot channel below Pickwick Dam [Putnam, r. 2312-

9313]. Until the Gilbertsville project is constructed, which

may not be for many years, it is necessary to store a sub-

stantial amount of water in the tributary reservoirs during

the high-water season to provide the low-water releases

required for this improvement to navigation. [Barker, r.

1992-1993. ]

72. The increase of the low-water flow by means of the

storage of water during the high-water season at Norris

Dam and the release of such water during the low-water

period has increased and will substantially increase the

continuous water power available at Wilson Dam and will

increase the value of Wilson Dam for all purposes. [Bow-

man, r. 1738, 2251; Thomas, r. 2106-2107; Wessenauer, r.

9181-2182; def. ex. 139, r. 4186; Woodward, r. 1815; Kurtz,

r, 1217.)

73. Since completion, Norris Dam has been success-

fully operated to improve substantially the navigation chan-

nel of the Tennessee River between Wilson Dam and its

mouth (Barker, r. 1954-1955; Woodward, r. 1780-1782], to

prevent a probable flood at Chattanooza in the year 1936,

and to hold off from the peak of the Mississippi River flood

of 1937 approximately 28,000 c.f.s., the Norris Dam stor-

ing the entire flow of the Clinch River for 6 weeks during

the 1937 Mississippi flood [Woodward, r. 1788, 1807-1810;

FINDINGS OF FACT OF TRIAL COURT

Kimball, r. 1881-1882; cf. aef. ex. 82, r. 4097; Kimball, r.

1835}.

74, The operation of Norris Dam since its completion

has also increased the amount of water power available

in the low-flow season at the existing Government-owned

Wilson Dam [def. ex. 142, r. 4189, 4191, columns 5 and 6;

Karr, r. 2198; Bowman, r. 2251], but the operation of hold-

ing and releasing waters has been directed primarily to

navigation and flood control and the protection of construc-

tion works below [Woodward, r. 1779-1780, 1784, 1805;

Kimball, r. 1881-1882; Karr, r. 2197; def. ex. 41, r. 4065;

Woodward, r. 1775]. The same is true of Wheeler Dan,

which has been operated since its completion in 1936 to

maintain a 9-foot navigation channel 74 miles to the site of

the Guntersville project and to reduce flood waters and pro-

tect construciion works at the Pickwick project. [Wood-

ward, r. 1783, 1780, 1808; Bowman, r. 1706; Barker, r. 1971-

1972.] Approximately 85% of the water released from

Norris during the year 1937 was of benefit only to naviga-

tion and flood control, and was not required or useful for

production of power. [Karr, r. 2198; def. ex. 142, r. 4189,

4190, column 3, 4191, column 6.] The temporary storage

and releases of water for power-peaking purposes have been

at all times svbordinated to the requirements of naviga-

tion and flood control, and have never been permitted to

interfere with or affect the continued maintenance of the

stream flow required for navigation or the-storage required

for flood control. [Woodward, r. 1779-1780, 1784, 1805;

Karr, r. 2197-2199; Barker, r. 1955.] Temporary abnormal

conditions, such as the necessity of operating for the pro-

tection of the Authority’s construction works, have ma-

terially affected the operation of the Norris and Wheeler

projects. [Woodward, r. 1780, 1808, 1820; Kimball, r. 1881-

—— 1882.]

75. The projects of the Authority are designed pri-

marily for the improvement of\ navigation and the control

FINDINGS OF FACT OF TRIAL COURT

of destructive flood waters. [Bowman, r. 2237-2243; cf.

def. ex. 37 in Reproductions of Certain Original Exhibits

Submitted by Appellees, and Bowman, r. 1695-1696; cf.

def. ex. 49 in Reproductions of Certain Original Exhibits

Submitted by Appellees, and Bowman, r. 1720-1721; r. 1760-

1761, 1757-1758 ;. Watkins, r. 1547-1548, 1631-1632.] The

sequence of development has been determined according to

the requirements of navigation [. . .1]. [Bowman, r. 1758,

2944-2247 ; Barker, r. 1950-1951.)

76. The projects of the Authority which are completed

and in operation have been and are operated primarily for

navigation and flood control, and the responsible officers

of the Authority charged with the operation of such proj-

ects are required by instructions from the board of direc-

tors to operate them primarily for such purposes. [ Def.

ex, 41, r. 4065; Woodward, r. 1775, 1779-1780, 1805 ; Karr, r.

2193-2194, 2197;-2199; Barker, r. 1955; Kimball, r. 1881-

1882; comp/ exs. 923, 924, 957, r. 3955, 3961, 4004.] These

instructioua Have been un[i]formly obeyed. [Woodward, r.

1775, 1779-1780, 1805, 1820; Karr, r. 2193-2194, 2197, 2199.]

77. The approximate length and maximum width of

the pools upon the Tennessee River created by the TVA

unified plan will be [def. exs. 55-64 in Reproductions of

Certain Original Exhibits Submitted by Appellants] :

Dams Length of Pool Maximum Width

Gilbertuville . .....-ccccscccccceccececes 184.2 miles 6 miles

Pickwick Landing ......++-+++++sseeees 50.1 miles 1% miles

0 Ae eer ee eee nt 74.1 miles 3% miles

Guntersville . . occ cece cece cece eceeees 82.1 miles 3 miles

Chickamauga . . ..---ee sees sere reece 59.9 miles 2% miles

Rs ys rnkaananersesnees esas 73.4 miles 1% miles

Coulter Shoals ........-ccccecccsecccece 48.8 miles 1% mile

78. Commerce upon the Tennessee River between 1927

and 1934 averaged 1,750,000 tons per year, for which the

( on remainder of this finding is incorrectly printed in the record

.. ).

FINDINGS OF FACT OF TRIAL COURT”

average haul was 23 miles, which consisted 82% in the

transportation of sand and gravel, 9% in the transportation

of various forest products, and 9% in the transportation

of iron, steel, lime and cement. Since the creation of TVA

Government traffic has constituted a substantial portion of

the total traffic, amounting to 52% in1935 and 54% in

1936 of the total traffic. The average annual value of such

cargoes was $11,000,000, on which the average annual

savings of water transportation over land transportation

was $2,000,000. There have been no significant or substan-

tial movements of commerce upon the tributaries of the

Tennessee River. [Putnam, r. 1161-1163; Barker, r. 1985-

1986, 1983-1984, 2005-2006; Alldredge, r. 2071; def. ex. 153

(original) pp. 938, 1064.}

79. There is no advantage accruing to navigation upon ,

the Tennessee River by shutting off the flow from Norris

Dam entirely on Sundays and Labor Days as was done

during August and September 1936. This method of opera-

tion is entirely consistent with the operation of dams pri-

marily for navigation and flood control. [Barker, r. 1994

1995.]

80. It would not be practical or feasible to construct

a belt coal conveyor to pass coal from barges on the reser-

voir at Norris Dam to other barges below Norris Dam to

be transported upon the Tennessee River. [Barker, r. 1995-

1999; comp. ex. 933 in Reproductions of Certain Original

Exhibits Submitted by Appellants.]

81. Practically all of the property damage from floods

in the Tennessee Valley occurs at and aboye Chattanooga,

Tennessee. [Kurtz, r. 1197; comp. ex. 349, r. 3084B; Wat-

kins, r. 1582; comp. ex. 105 (original) p. 734.]

82. Flood damages in the Tennessee River below Chat-

tanooga are relatively small in amount and, while inc.uding

some damage to highways and railroads (easily eliminated

by relocation), consist largely of damages to farm crops re-

FINDINGS OF FACT OF TRIAL COURT a

sulting from the overflow of rich valley lands. The con-

struction of the TVA unified plan will overflow permanently

thousands of acres more of such valley farm land than is -

now occasionally overflowed by floods. At the present time

such occasional overflows generally take place before the

crop season and their results are beneficial to the land.

(Kurtz, r. 1197, 1209, 1195, 1205; comp. exs. 353, 395, r.

3086, 3088; comp. ex. 105 (original) p. 734; def. ex. 153

(original) pp. 919, 947; comp. ex. 116 (original) p. 403.]

83. ¢ fOe 8% of the total population in towns and

cities*upon the Tennessee River its tributaries, which’

in 1930 was 341,522, is below Chatfanooga. (Kurtz, r. 1195-

1196; comp. ex. 348, r. 3084A.]

84. The estimated average annual damage from all

floods to all classes of property on the Tennessee River and

its tributaries is $1,441,208, of which $1,356,053 occurs at

and above Chattanooga. [Comp. ex. 349, r. 3084B; Wat-

kins, r. 1582.)

85. A flood-control program to achieve the maximum

practical protection upon the Tennessee River and its tribu-

taries should be directed primarily for)protection at and

above Chattanooga. [Kurtz, r. 1197.] |

86. The greatest flood to be anticipated upon the Ten-

ness¢e River and its tributaries would-result in a stage at

Knoxville of 68.3 feet, with a maximum flow of approxi-

mately 620,000 second-feet; in a stage at Loudon of 71.5

feet, with a maximum flow of approximately 605,000 second-

feet; in a stage at Chattanooga of 73 feet, with a maximum

flow of approximately 680,000 second-feet. The previous

maximum recorded stage was at Knoxville 44.4 feet; at

Loudon 47.0 feet ; and at Chatta a 57.9 feet. [Kurtz, r.

1200; comp. ex. 350 in Reprofecti of Certain Original

Exhibits Submitted by Appellants. :

FINDINGS OF FACT OF TRIAL COURT

Tue CoNSERVATION OF WATER PowER

87. The development of firm power by hydroelectric

project is controlled by the amount of power that can be

produced by the project both at extreme low water and

extreme high water. [Kurtz, r. 1211.]

88. The load factor of a public utility system is the

ratio of the average demand for power on that system ex-

pressed in kw. to the maximum demand for power on that

system, and in the Tennessee basin area is about 60%.

[Kurtz, r. 1211.]

89. At 100% load factor the firm capacity of Wilson

Dam, excluding United States Nitrate Steam Plant No. 2,

before the capacity of Wilson Dam was increased by the

TVA dams upon the Tennessee River and its tributaries,

was approximately 28,000 kw., and the firm energy was

242,600,000 kwh. per year. At 60% load factor 145,600,000

kwh. per year of firm energy would be produced by Wilson

Dam power plant. The operation of the tributary reser-

voirs under the TVA high-dam program solely for regula-

tion of the river will increase the firm-power capacity of

Wilson Dam at 60% load factor by 151,300 kw. per year

and the firm energy by 795,200,000 kwh. per vear. rage

r. 1217; Putnam, r. 1167.]

90. At 100% load factor the operation of the easel

reservoirs solely for regulation of the river would increase

the firm-power capacity of Wilson Dam by 79,700 kw. and

the firm energy by 698,200,000 kwh. per year. [Kaurtz, r.

1217; Bowman, ry. 2251, 1738.]

91. The operation of Norris Dam in June of 1936, by

increasing the low-water flow of the Tennessee River and

by the generation of power, was sufficient to double the firm-

power capacity of the TVA system as it existed at that

time. [Woodward, r. 1815-1816; comp. ex. 909 in Repro-

ductions of Certain Original Exhibits Submitted by Appel-

FINDINGS OF FACT OF TRIAL COURT

lants; comp. ex. 116 (original) p. 515 (see excerpt at r.

2726A).]

92. The tributary reservoirs under the TVA unified

plan will greatly increase the firm power produced by the

projects upon the Tennessee River. [Kelly, r. 1375.]

$3. The projects of the Tennessee Valley Authority

are the only type of dams which will conserve the water

resources of the Tennessee River system for navigation,

Tennessee and Mississippi flood control, water power, and

otter beneficial uses. (Watkins, r. 1545, 1557, 1547, 1631-

1632; Bowman, r. 2235-2236; Kurtz, r. 1213, 1219, 1227-1228. ]

The available sites on the Tennessee River system for the

constructiow*of dams and reservoirs are strictly limited in

number, and those available for flood control coincide in

many instances with those required for the regulation of

the river for other purposes. The utilization of such sites

exclusively for local flood protection would preclude the

development of the watef resources for any other pirposes.

The construction of low dams on the main stream of the

Tennessee River for navigation would waste the resources

of the river for any other purpose. It would be physically

impossible to provide the high dams on the mai» stream

necessary for the development of flood control and power

without the wasteful removal or duplication of ‘such low

dams. [Bowman, r. 2235-2237; Watkins, r. 1547; comp.

ex. 105 (original) pp. 12-13, 21, 64 (see appendix A at r.

4272, 4274).]

94. The construction and operation of the projects of

the Authority for navigation and flood control will pro-

vide a head for power by concentrating the fall of the river

at certain points on the Tennessee River system and will —

substantially augment the minimum flow in low-water sea-

son. *“fWatkins, r. 1545.] Water power is a function of

head and stream flow. [Wessenauer, r. 2189-2190.] The

amount of continuous power is determined by the available

head and the minimum flow in low-water season. Continu-

FINDINGS OF FACT OF TRIAL COURT

ous power is power-available 24 hours a day, every day of

the year, in every year. [Wessenauer, r. 2179-2180.] When

operated for the improvement of navigation and the con.

trol of destructive floods the dams constructed, under con-

struction, or under investigation for construction by the

Tennessee Valley Authority will provide, in addition to

the benefits to navigation and flood control set forth in pre-

vious findings and without reduction in the effectiveness of

these projects for navigation and flood control, a large *

amcunt of continuous power. [Wessenaner, r. 2175; Wat-

kins, r. 1545; Clemens, r. 1654, 1658; Sargent, r. 1681; Bow-

' man, r. 1738-1741; Woodward, r. 1788-1790.]

The firm-power capacity, as distinguished from the

continuous power, is the maximum demand which the sys-

tem can reliably supply, having regard to the energy avail-

able, the generating units installed, the load factor, and

other charag¢teristics of the system. [Wessenauer, r. 2179-

2180. ] ith the complete generating units which have

already been installed or are under contract for installa-

tion at Norrie Wheeler, Guntersville, Wilson and Pickwick

Landing Dams [def. ex. 140, r. 4187], the dams constructed

or under construction by the Tennessee Valley Authority

will have a firm-power capacity of 395,000 kw. [def. ex.

141, r. 4188; Wessenauer, r. 2175, 2175-2180]. Together

with the additional generating units at these dams and at

Hiwassee and Chickrmauga Dams which have been au-

thorized by the Board of the Ternessee Valley Authority

and for which appropriations have either been made or

requested, the dams constructed or under construction by

the Tennessee Valley Authority will have a firm-power ca-

pacity of 570,000 kw. [See def. ex. 141, r. 4188; Wesse-

nauer, r. 2175, 2175-2180.]

P FINDINGS OF FACT OF TRIAL COURT

;

Stock OwnersHip, Business, FrancHIsEs AND

PRopPERTIES OF COMPLAINANTS

95. The National Power & Light Company, 46.56%

of whose outstanding voting stock is owned by the Electric

Bond & Share Company, owns the following percentages of

the total outstanding voting stock of the following com-

plainants [def. ex. 135, r. 4171]:

Birmingham Electric Company................ 100.00%

Carolina Power & Light Company............. 93.53%

Holston River Electric Company............... 100.00%

Memphia Power & Light Company............. 86.75%

Tennessee Public Service*Company............ 99.31%

West Tennessee Power & Light Company....... ~100,00%

| 96. The Electric Power & Light Corporation, 46.20%

of whose outstanding voting stock is owned by the Electric

_ Bond & Share Company, owns 94.03% of the voting stock

of the complainant Mississippi Power & Light Company.

(Def. ex. 135, r. 4171.]

97. The American Gas & Electric Company, 17.51% of

_ whose outstanding voting stock is owned by the Electric

Bond & Share Company, owns 100% of the voting stock of

the complainant Appalachian Electric Power Company,

which in turn owns 100% of the voting stock of complain-

‘nts Kingsport Utilities, Inc., and Kentucky & West Vir-

ginia Power Company. [Def. ex. 135, r. 4171.]

98. During the past 5 years the Electric Bond & Share

Company has voted the following approximate percentages

of the total number of shares of voting stock represented at

stockholders’ moetings:

National Pow r & Light Company.............--- 62%

Electric Power & Light Corporation...........-..- 77%

American Gas & Electric Company......... peteees 25 Ye

Throughout the history of these companies there has been

no instance in which theré has been any contest over proxies

or in which any interests hostile to the managements have

- ae

FINDINGS OF FACT OF TRIAL COURT

organized opposition to the programs or pol.cies of the

respective managements or to the election of directors voted

for by proxies designated by such managements. [Def. ex.

135, r. 4171.]

99. The Commonwealth & Southern Corporation owns

91.40% of the outstanding voting securities of the Ala-

bama Power Company; 100% of the outstanding voting

securities of the Georgia Power Company, Mississippi

Power Company, and Southern Tennessee Power Company;

and 64.43% of the outstanding securities of The Tennessee

Electric Power Company. [Def. ex. 135, r. 4171.]

100. All of the common and preferred stocks of the

complainrnt Hast Tennessee Light & Power Company are

owned by the Cities Service Power & Light Company. All

of the common stock ef the complainant Tennessee Eastern

Electric Company is owned by the Hast Tennessee Light &

Power Company. [Ide, r. 857-858.]

101. All of the complainants are engaged in the busi-

ness of generating, transmitting, distributing, and selling

electricity as public utility companies, except that the Bir-

mingham Electric Company [Pevear, r. 805], the Tennessee

Public Service Company [Lamar, r. 800], the Holston River

Eleciric Company [Canaday, r. 803], the Franklin Power

& Light Company [Howard, x. 797], the Mississippi Power

Company [Sweatt, r. 787], ana the Mississippi Power &

Light Company [Sargent, r. 884] purchase practically all

of their electrical requirements, and except that the South-

ern Tennessee Power Company neither generates nor sells

power but 1s engaged exclusively in the business of trens-

mitting electric energy [Nelson, r. 861].

102. The complainant Mississippi Power Company

owns no franchises or electrical facilities in 10 counties

in northeastern Mississippi. The properties in these coun-

ties were sold to the Tennessee Valley Authority under the

contract of January 4, 1934, and the area is the ceded area

referred to in that contract. [Sweatt, r. 790-793; def. ex.

=a el

55 ’

FINDINGS OF FACT OF TRIAL COURT

143A, r. 4195, 4196; cf. comp. ex. 12 in Reproductions of

Certain Original Exhibits Submitted by Appellants.)

103. The complainant Alabama Power Company does

not own any electrical facilities in 6 counties in northwest-

ern Alabama except 9 municipal distribution systems and

a high-tension 110-kv. line which crosses the territory.

(Barry, r. 870, 871; Henkle, r. 1055; cf. def. ex. 143A, r.

4195,.4196; cf. comp. ex. 326 in Reproductions of Certain

Original Exhibits Submitted by Appellants.) - Under the

contract of January 4, 1934, the complainant Alabama

Power Company transferred to the Authority all the high-

voltage transmission lines leading from Wilson Dam to the

municipalities in the area with the exception of a single

line leading to Decatur, the substations, and all rural lines

in the area. [Barry, r. 870, 871; Henkle, r. 1055.]

104. Section 5 in the contract of January 4, 1934, pro-

vides that:

Alabama Company covenants and agrees to convey its

urban distribution systems in the above named counties in

Alabama, said distribution systems being listed in_ Exhibit

B, to the respective municipalities in or adjacent to which

such systems afte located, together with all franchises, con-

tract rights, and going business thereto appertaining, when

it has agreed with any such municipality on the price to be

paid for the same. Alabama Company agrees to make

every reasonable effort to come to an early agreement with

said municipalities for such sales. In the event that any

such municipality is unable to arrive at a satisfactory price

after three months of bona fide negotiation with Alabama

Company, or if for some other reason the sale of any such

system cannot be consummated, Authcrity shall have the

right to serve such municipality or municipalities irrespec-

tive of whether such muni¢ipalities have purchased the

distribution svstems from Alabama Company. [Def. ex.

143A, r. 4195 at 4198.]

FINDINGS OF FACT OF TRIAL COURT

105. A part of section 4 further provides with reference

to the Alabama properties that:

Any conveyance of property shall include not only the

physical property, easements and rights-of-way, but shall

also include all machinery, equipment, tools and working

supplies set forth in the respective exhibits, and all fran-

chises, contracts and going business relating to the use of

any of said properties, without extra charge. ([Def. ex.

143A, r. 4195 at 4198.]}

106. With a few minor exceptions (a few small in-

dustrial customers inthe so-called ceded area in Alabama

and approximately 3,000 employees on Government reser-

vations and rural customers in the vicinity of Norris Dam

and Wilson Dam), all of the Authority’s sales are either

at wholesale to municipalities, rural cooperatives, and

utilities, or to very large industrial customers purchasing

both firm and secondary power in large bulk lots for op-

erations not previously served by any of the complain-

ants. [Def. exs. 143, 147, r. 4192-4193, 4242-4943; Karr, r.

2199-2202. }

107. During the period of the contract of January

4 the Authority sold power under the first proviso of section

7 of the contract to the following municipalities:

Dayton, Tennessee.

Dickson, Tennessee.

Pulaski, Tennessee.

Amory, Mississippi.

Okolona, Mississippi.

[Karr r. 2203-2204; def. ex. 143A, p-4299, 4200.]

108. Under the third proviso of section 7 of the con-

tract of January 4 the Authority contracted to sell and

has sold electricity in substantial amounts to the Meigs

County Eiectric Membership Corporation, the Monroe

County Electric Power Association, and a number of rural

customers served directly by the Authority in Roane

FINDINGS OF FACT OF TRIAL COURT

County, Tennessee, near Norris Dam. [Karr, r. 2204; def.

ex. 143A, r. 4199, 4200.] ;

109. Under the last proviso of section 7 of the con-

tract of January 4 the Authority contracted to sell and has

sold electricity in substantial amounts to Cullman County

Electric Membership Corporation, Duck River Electric

Membership Corporation, Middle Tennessee Electric Mem-

bership Corporation, North Georgia Electric Membership

Corporation, Pickwick Electric Membership Corporation,

and in Lincoln County, Tennessee. The total load of these

customers during the period of the contract was within the

2.500-kw maximum amount stipulated in the said proviso.

(Karr, r. 2205; def. ex. 143A, r. 4199, 4200. }

110. Under the interchange provision of the contract

of Jariuary 4 the Alabama Power Company supplied power

to the Authority for the construction of Guntersville Dam,

and the Tennessee Electric Power Company supplied power

to the Authority for the construction of Norris and Chicka-

mauga Dams. [Karr, r. 2223.]

111. The Tennessee Valley Autho: ‘ty is not now con-

structing and has not authorized the construction of any

transmission line, has not sold or authorized the sale of

any electricity, and has not entered into or authorized any

contracts for the sale of electricity in any part of the terri-

tory claimed by the complainants Franklin Power & Light

Company [Howard, r. 798], Appalachian Electrie Power

Company [Argabrite, r. 834], Carolina Power & Light Com-

pany [Yoder, r. 824], Holston River Electric Company

[Canaday, r. 804], Kingsport Utilities, Inc. { Argabrite, r.

834], Kentucky & West Virginia Power Company [Arga-

brite, r. 834], Tennessee Eastern Electric Company [Ide,

r, 858], Birmingham Electric Company [Pevear, r. 807 ; cf.

def. ex. 143, r. 4192], East Tennessee Power & Light Com-

pany [Ide, r. 858], and Mississippi Power & Light Com-

pany, except that it has constructed a transmission line at

the expense of the War Department connecting the Author-

FINDINGS OF FACT OF TRIAL COURT

ity’s lines to the site of Sardis Dam in the claimed territory

of the Mississippi Power & Light Company. [Sargent, r.

887 ; cf. def. ex. 143, r. 4192.]

112. The complainant Southern Tennessee Power tee

pany is engaged only as a transmission company trans-

mitting electric energy from Wilson Dam to the Alabama-

Tennessee line, thereby connecting Wilson Dam and the

transmission system of The Tennessee Electric Power Com-

pany. It is not presently engaged either in the generation

or distribution and sale of electric energy. [Nelson, r. 861:]

113. Adequacy of facilities means the availability in

sufficient quantity of distribution, transmission, and gen-

eration facilities at all times to assure ability to take care

of immediate loads and any reasonable expectant increase

in load with a sufficient margin so as to assure the supply-

ing of proper service. [Sporn, r. 1252.]

114. Prudent utility management requires that a utility

shall provide enough surplus capacity to take care of its

actual and potential demands in the period. of time during

which new facilities can be added and that too great a

surpius. resulting in nonproductive facilities and higher

operating costs, Mas avoided. [Sporn, r. 1252-1253; More-

land, r. 1459.] ¢

115. The generating facilities of ‘athe of the following

groups of companies are interconnected and integrated into

. a single coordinated system or power pool, and such facil-

ities of each group are operated as a unit:

(2) The Appalachian Electric Power Company, Ken-

tucky and West Virginia Power Company, and the Kings-

port Utilities, Inc., are integrated into a single system

{Sporn, r. 1253] and are also interconnected with a group

of affiliated companies in Ohio, Indiana, and Michigan and

with nonaffiliated companies in Tennessee and North Caro-

lina (Sporn, r. 1254]. x

59 ‘

~“ynrpnras OF FACT OF TRIAL COURT ~

r, b) The complainants Alabama Power Company, Mis- .

sissippi Power Company, The Tennessee Electric Power

Company and the’ noncomplainants Georgia Power Com-

pany, Gulf Power Company, and South Carolina Power

Company together form the integrated system of Common-

wealth & Southern €orporation in the South [Middlemiss,

r. 1268-1269] and also have interconnections with the Caro-

lina Power & Light Company, the Florida Power Corpora-

tion, the South Carolina.Electric & Gas Company, the Duke

; Power Company, and the Aluminum Company of America

{Middlemiss, r. 1269-12706].

_. (ec) The Carolina Power & Light Company, the Tennes-

see Public Service Company, and the Holston River Elec-

tric Company. [Rankin, r. 1293.] =

(d) The complainants Memphis Power & Light Com-

pany, West Tennessee Power & Light Company, Mississippi

Power & Light Company and noncomplainants Louisiana

Power & Light Company and Arkansas Power & Light Com-

pany. [Rankin, r. 1293.]

(e) The East Tennessee Light & Power Company and

Tennessee Eastern Electric Company. [lde, r. 854.]-

116. None of the complainant companies shas ever

failed to meet the load requirements of their customers

[Middlemiss, r. 1274; comp. ex. 372 in Reproductions of

Certain Original Exhibits Submitted by Appellants; comp.

ex. 375, r. 3139], nor have they ever refused additional busi-

ness due to lack of facilities [Sporn, r. 1257].

117. The complainant companies serve the electric

power requirements of substantially all industrial enter-

prises doing business in the territor.es served by them

[Argabrite, r. 832-833; Ford, r. 809; Sargent, r. 886; Oster-

mueller, r. 990; Lamar, r. 802; Canaday, r. 803; Pevear,

r. 805; Yoder, -r. 821; Ide, r. 855; Stanley, r. 939; Street, r.

976-977 ; Barry, r. 876; Bonner, r. 1005-1006; Jacobs, r. 1015-

1016; Perkins, r. 1020; Watson, r. 1026; Shacklett, r. 1029-

om,

FINDINGS OF FACT OF TEIAL COURT,

1030; Winkler, r. 1033-1034; Henkle, r. 1051-1052], with the

following exceptions:

(a) Those industries now being served by TVA [Stan-

ley, r. 955-956 ;"Shacklett, r,_ 1031-1032] ;

(b). Those industries which require steam in processing

operation and are thus able to produce their own power as

a byproduct [Ford, r. 809; Argabrite, r. 832; Street, r. 977;

Ostermueller, r. 990; Bonner, r. 1005; J. ecobe, x. 1015-1016:

Perkins, r. 1020; Watson, r. 1026; Shacklett, r. 1029-1030;

Winkler, r. 1034; Henkle, r. 1051-1052];

ing plants, which have waste fuel products and can produce

power without fuel cost [Street, r. 977; Ostermueller, r.

990; Bonner, 'r. 1005-1006 ; Jacobs, r. 1015; Perkins, r. 1020;

Shacklett, r. 1029-1030; Winkler, r. 1034; Henkle, r. 1052];

(d) Small and scattered enterprises, such as cotton

gins, ice plants, and flour and feed mills, which operate

seasonally and which depend upon steam or other mechani-

cal power [Street, r. 977; Ostermueller, r. 990; Bonner, r.

-- 1006; Jacobs, r. 1015; Perkins, r. 1020; Watson, r. 1026;

- Winkler, r. 1034; Henkle, r. 1052].

All of these businesses except those being served by TVA

have their own power units, which would have to be

abandoned in order to take central power service. [Oster-

mueller, r. 990; Bonner, r. 1006; Perkins, r. 1020; Watson,

r, 1026; Winkler, r. 1034; Henkle, r. 1052.]

118. The complainant companies serve the electric

power requirements of substantially all commercial enter-

prises doing business in the territory served by them, with

the exception of a very few scattered rural stores which do

not stay open at night. [Street, r. 977; Ostermueller, r. 990;

“Bonner, r. 1006; Jacobs, r. 1016; Perkins, r. 1021; Watson,

r. 1026; Winkler, r. 1034; Henkle, r. 1052; Ford, r. 809-810;

\ _ FINDINGS OF FACT OF TRIAL COURT

Lamar, r. 802; Yoder, r. 821; Sargent, r. 886; Ide, r. 857;

Argabrite, r. 832-833; Pevesr, r. 805.]

119. The complainant companies are now serving, vwen

diréctly or indirectly, substantially all of the domestic

demand within the territory served by them accessible to

existing company facilities. [Street, r. 977-978; Oster-

mueller, r. 990-991; Bonner, r. 1006-1007; Jacobs, r. 1016;

Perkins, r. 1021; Watson, r. 1026-1027; Shacklett, r. 1029-

1030; Winkler, r. 1034; Henkle, r. 1052-1053; Argabrite,

r. 842; Sargent, r. 886; Lamar, r. 802; Canaday, r. 803;

Pevear, r. 805; Ford, r. 809-810; Yoder, r. 821; Ide, r. 855.]

120. The wholesale rates of the Tennessee Valley Au-

thority are substantially lower than the wholesale rates

of any of the complainants. [R. 943 (conceded by coun-

sel). ’

121. The retail rates for every class of service pre-

scribed by TVA and charged by the municipalities and

cooperatives purchasing power from the Tennessee Valley

Authority are substantially lower‘than the retail rates of

any of the complainants. [R. 943-944 (conceded by coun-

sel).]

122. The rates charged by the Tennessee Valley Au-

thority in all classes of service, including rural customers,

domestic customers, and commercial customers, which it

serves, are substantially lower than the rates for the same

classes of service of any of the complainants. [R. 943-944

(conceded by counsel).]

123. The industrial rates charged.by the Tennessee

Valley Authority are substantially lower than the pub-

lished rates of any of the complainants. [R. 946 (conceded

by counsel). ]

124. Tennessee Valley Authority nas published these

rates generally, and they afe well known throughout the

Tennessee Valley area. ([R. 2130, 1134 (conceded by

counsel). ] '

FINDINGS OF FACT OF TRIAL COURT

125. Substantial future damage to complaifiants will

result from competition with TVA. This record does not,

establish that complainants, or any of them, will have their

businesses destroyed by, or will become bankrupt because

of, such competition. [See order regarding submitted find-

ings of fact and conclusions of law, r. 566 at 568.] _

Power Customers aND Power ConTRACTS

OF THE AUTHORITY

126. The Authority as of December 15, 1937, had con-

tracts to sell power to 9 municipalities located in the ceded

area covered by the contract of January 4 with the com-

plainants Alabama Power Company and Mississippi Power

Company. Seven of these municipalities are located in the

ceded area in Alabama. [Def. ex. 143, r. 4192-4193; cf.

Karr, r. 2199-2200. ]

127. As of December 15, 1937, the Authority had con-

tracts for the sale of power with 7 rural cooperative cor-

porations and 8 industrial customers located in the ceded

area covered by the contract of January 4 with complain-

ants Alabama Power Company and Mississippi Power Com-

pany. [Def. ex. 143, r. 4192-4193; cf. Karr, r. 2199-2200.]

128. The Authority has a contract to sell and is deliv-

ering power in bulk lots to the complainant Alabama Power

Company on the low side of several substations acquired

by the Authority under the January 4 contract, by means

of transmission lines also acquired by the Authority under

the contract, for service to several urban distribution sys-

tems of the company in the area covered by the contract.

[Barry, r. 870; Henkle, r. 1055.] ae

129. In addition to the contracts for the sale of power

in the ceded area, as of December 15, 1937, the Authority

had contracts ‘to sell power to J7 municipalities, 12 co-

operatives, 3 industrial customers, and one utility com-

pany, and the requirements of the War Department for the

FINDINGS OF FACT OF TRIAL COURT

construction of Sardis Dam. [Def. ex. 143, r. 4192-4193;

Karr, r. 2199-2200. ]

130. The contracts with municipalities and coopera-

tives provide for the wholesale delivery of power in bulk

lots at a substation at the city gates in the case of munici-

palities and at a substation or metering point near the loca-

tion of their respective operations in the case of coopera-

tives, the substations and metering equipment to be owned

by the Authority. [See def. ex. 143, r. 4192-4193, column 3;

Karr, r. 2201; see sections entitled ‘‘Point of Delivery’’ in

contracts reprinted in comp. ex. 117, r. 2729, 2730; comp.

ex118, r.2771, 2773; comp. ex. 119, r. 2846, 2848; comp. ex.

134, r. 2879, 2882; comp. exs. 135-145, r. 2885-2888; comp.

ex. 196, r. 3004; comp. ex. 224, r. 3026.]

131. The contracts with municipalities and coopera-

tives provide that all lines and substations from the point

of delivery and all electrical equipment except the metering

equipment of the Authority located on the municipality’s

or cooperative’s side of such point of delivery shall be

furnished and maintained by the municipality or coupera-

tive. [See ‘‘Terms and Conditions’’ section of contracts

usually entitled ‘‘Corporation’s Lines and Equipment—

Ownership’’ as on pp. 144, 162, 176, 188, 207, 219} 235, 247,

259 of def. ex. 154, sent up in original form; or see comp.

2846-2885, 2885-2889, 3004, 3026. ]

132. Rural cooperative associations have been organ-

ized in the States of Alabama, Tennessee, Georgia, and Mis-

sissippi for the purposes of distributing TVA power.

Seven such corporations have been organized in Alabama

[comp. exs. 267-274, fF. 3040-3049], 14 in Tennessee [r. 1520-

1521], one in Georgia [comp. exs. 381, 382, r. 3155, 3156],

and 11 in Mississippi [comp. exs. 943-953, r. 3996-4002].

All snech cooperative associations have been incorporated

since May 18, 1933, and have procured franchises in 10

counties in Alabama and 45 counties in Tennessee for the

Fis . Vea ig BP TT Senet? ee

‘ RIL TAIL RS ATT;

FINDINGS OF FACT OF TRIAL COURT

purposes of erecting, constructing, operating, and main-

taining lines, and distributing and selling electricity there-

in. [Comp. exs. 214-223, r. 3022-3026; comp. exs. *275-319,

r. 3049-3065. } |

133. TVA has financed for municipalities and coop-

eratives a large number of rural distribution lines [{def. ex.

136, r. 4175, 4184] and has also loaned funds to cooperatives

with which to purchase urban distribution systems, includ-

ing the distribution systems in the towns of Bruce, Calede-

nia, and Smithville, Mississippi. and Gibson, Tennessee

{[comp. exs. 181, 592, 595, r. 2950, 3433, 3441]. The indebt-

edness owed to TVA on this account amounted to $1,424,

665.70 as of June 30, 1936 [comp. ex. 116 (original) p. 486],

and this.indebtedness had increased by June 30,-1937, to

the of $1,582,412.66 [def. ex. 154 (original) p. 110).

TVA intends to continue this policy. [Def. ex. 153 (origi- °

nal) p. 978.] .

134. The TVA in some instances has constructed dis-

tribution systems in advance of the organization of any

cooperatives. (Comp. exs. 530-531, 534, 535, 553, r. 3360-

3361, 3363, 3364, 3374; Watson, r. 2397-2398.] In a num-

ber of other instances TVA has constructed lines pending

their purchase by the cooperatives, agreeing to collect

membership fees, to connect service to prospective custo-

mers, to render and collect bills, and perform other like

services, including the furnishing of clerical and steno-

graphic service. [Comp. exs. 176, 177, 178, 179, 180, r.

2938, 2941, 2943, 2947 ; comp. exs. 588, 596, 599, 601, 610, 626,

r. 3430, 3451, 3457, 3459, 3476.] In a number of instances

TVA has transferred to cooperatives distribution lines and

other equipment and has financed and constructed rural

lines to be paid for over a 20-year period, and in some iu-

stances an utlimited period, at 344% interest, out of the

income from the property. [Comp. exs. 577, 583, 584, 587,

599, r. 3395, 3426, 3427, 3430, 8441; comp. ex. 170, r. 2916;

comp. exs. 607, 622, r. 3459, 3468; comp. exs. 117, 181, 175,

FINDINGS OF FACT OF TEIAL -°OUET

173, r. 2729, 2950, 2937, 2926; comp. exs. 618, 605, 609, r.

3461, 3458, 3459; comp: exs. 593, 592, r. 3439, 3433; comp.

ex. 163, r. 2909. ]

’ 135. The municipalities purchasing power at whole-

sale from the Authority own and operate their own dis- -

tribution systems and sell the power which they purchase

from the Authority to the ultimate consumers, and the con-

tracts with municipalities not yet purchasing power con-

template the same type of operation. [See def. ex. 147, r.

4237, 4251-4253 ; Karr, r. 2205-2208; see contracts describ-

ing this arrangement in comp. exs. 117, 118, 119-134, 135-

145, r. 2729, 2771, 2846-2885, 2885-2888. }

136. The cooperatives purchasing power at wholesale

from the Authority own and operate their own raral dis-

tribution systems and sell the power which they purcbase

from the Authority to the ultimate consumers, and the con-

tracts with cooperatives not yet purchasing power con-

template the same type of operation. [See def. ex. 147, r.

4237, 4251-4253; Karr, r. 2205-2208; see contracts describ-

ing this arrangement in comp. exs. 117, 118, 119-134, 135-

145, r. 2729, 2771, 2846-2885, 2885-2888. ]

137. All of the Authority’s contracts with said mu-

nicipalities and cooperatives provide for the delivery of

power at a voltage of from 2,300 volts upwards. Voltages

of this mhagnitude are not suitable for delivery to the ulti-

mate consumer, except for a few industrial consumers, and

-the municipality or cooperative which serves those consum-

ers directly steps down this voltage one or more times

after receiving it from the Authority at the point of de-

livery before actual delivery to the customer at the usual

customer voltages of 115 and 230 volts.. [See section.en-

titled ‘‘Power Supply’’ in contracts, examples of which are

reprinted in comp. ex. 117, r. 2729, 2730, 2743, 2762; comp.

ex. 118, r. 2771, 2773, 2803, 2811, 2820; comp. ex. 119, r. 2846,

2848 ; comp. exs. 120-129, r. 2852-2860; comp. ex. 130, r. 2860,

2862; comp. ex. 132, r. 2867, 2868; comp. ex. 133, r. 2873,

FINDINGS OF FACT OF TRIAL COURT

2875; comp. ex. 134, r. 2879, 2881; comp. exs. 135-145, r.

2885-2888; cf. Moreland, r. 1486.]

138. All of the Authority’s contracts with municipal-

ities and cooperatives for the sale of power provide an

arrangement whereby the Authority performs fhe function

of a wholesaler generating and transmitting the power in

bulk lots to the purchasing municipality and cooperative,

which in turn sells the power to the ultimate consumers;~

performing all the functions of the distributor. [For re-

prints of contracts, see comp. exs. 117, 118, 119-134, 135-145,

r. 2729; 2771, 2846-2885, 2885-2888. ]

‘139. The contracts with municipalities and coopera-

tives provide only for the sale of firm power. [See refer-

ences for fdg. 138.]

140. Municipalities and cooperatives under contract

to purchase and purchasing power from the Authority

assume responsibility for the power at the point of delivery

and sell and distribute the power from that point over

their own facilities and with their own operating staffs,

without any assistance or direction from the Authority.

The only as¢istance rendered by the Authority has been

in time of emergency, and in such case the Authority has

been paid its full cost, including its usual overhead. [Karr,

r. 2223-2224, 2229-2230; cf. reprints of contracts, comp. exs.

117, 118, 119-134, 135-145, r. 2729, 2771, 2846-2885, 2885-

2888; Hutchinson, r. 2272, 2274; Pittman, r. 1346-1347. ]

141. The cooperatives to whom the Authority is under

contract to sell power have certificates of incorporation

from the authorized officials of the respective States in

which they operate showing them to be organized under

special acts of the several States in which they operate.

These charters show that the corporations are organized

by citizens of the respective localities in which the oper-

ations of the corporations shall be conducted who were

desirous of procuring electric service, and the charter sets

67 . .

FINDINGS OF FACT OF TRIAL COURT

out the form of organization, location of the principal office,

terms of membership, purposes, powers, and the names of

the board of directors for the first year. [See comp. exs.

267-274, r. 3040-3049, for Alabama charters; comp. exs. 943-

953, 1-3296-4002, for Mississippi charters; r. 1520-1521.] .

142. These organizations were brought about upon the

initiative of the residents of the various communities who

were desirous of procuring electric service, without any

solicitation on the part of the Authority or any of its rep-

resentatives. { Hutchinson, r. 2271-2278; vs r. 2263-

2269; Pittman, r. 1342-1347.]

143. Upon the request of the citizens of the verad areas

in which the respective cooperatives are located, the Au-

thority has given advice and assistance to such coopera-

_ tives on pf@blems of organization and has given technical

advice on methods of conducting surveys and determining

the financial feasibility of proposed operations. ~ [Hutchin-

son, r. 2274-2275; Pittman, r. 1344, 1349.]

144. The Authority, in advising on the financial feasi-

bility of proposed lines, has not substituted its judgment

for that of the respective cooperatives. The cooperatives

have made‘all decisions on line extensions, customers to be

served, and all other matters relating to the conduct of

their operations. [Hutchinson, r. 2274; Carmack, r. 1355;

Pittman, r. 1345-1347.]

145. All contracts between the Authority and the

several cooperatives relating either to the construction of

lines or to the sale of power have been submitted to and

approved by counsel for the respective cooperatives and.

then considered and finally approved by the board of direc-

tors of the respective cooperatives. [Pittman, r. 1346,

1347; Carmack, r. 1354, 1355.]

146. While the Authority has in a few instances tem-

porarily operated directly the lines of certain cooperatives

under agreements with such cooperatives providing for

ge |

FINDINGS OF FACT OF TRIAL COURT

such operation by the Authority, all of such, operating

agreements had expired by December 15, 1937, and ail lines

constructed for cooperatives had been transferred to such

cooperatives. [Karr, r. 2202-2203; see def. ex. 143, r. 4192,

showing dates of power contracts and initial purchases. ]

147. Upon the transfer of any lines constructed by

the Atthority for cooperatives or temporarily operated by

the Authority for such cooperatives, the Authority has

. withdrawn completely from any participation in the con-

duct of the affairs of such cooperatives, except as it has

continued to supply power at wholesale and except as to

the enforcement of its rights as a contractor of such of the

cooperatives whose lines were financed in whole or in part

by the Authority. [Hutchinson; r. 2274-2275; Carmack,

r. 1354, 1355.]

148. e power contracts with industrial customers

provide in some cases for the delivery of power on the low-

tension side of a substation to be owned by the Authority,

and in other cases on the high-tension side of a substation

to be owned by the industrial customer. In the case’ of

the Electric Metallurgical Company the contract provides

that delivery shall be made at the boundary of the Wilson

Dam reservation at a high transmission voltage. All the

contracts are for sales in bulk lots for use in various indus-

trial processes. [See comp.”exs. 118, 151, 152, 160, 161,

r. 2771, 2890, 2895; def. exs. 145, 146, r. 4235-4236 (for con-

venience see reprints of industrial contracts in comp. ex.

118, r. 2771, 2828, and def. ex. 154 (original) ).]

149. These industrial contracts provide for the delivery

of power at voltages comparable to or higher than the

voltagés at which delivery is made to municipalities or

cooperatives. [See comp. exs..118, 151, 152, 160, 161, r.

2771, 2890, 2895; def. exs. 145, 146, r. 4235-4236; for refer-

ences regarding voltage for-delivery to municipalities see

fdg. 137.] These delivery voltages range as high as 154,000

volts, which is specified for the delivery to the Aluminum

69 *

ah FINDINGS OF FACT OF TRIAL COURT

Company of America. [Cf. def. ex. 154 (original) pp. 150,

151, sec. 2 of Aluminum Company contract.]

150. Except for the industrial customers located in the

ceded area covered by the contract of January 4, all of the

industrial customers with whom the Authority is under

contract to sell power are large electro-chemical and

electro-metallurgical companies. [See contract with Victor

Chemical rks, def. ex. 154 (original).and particularly

/ the 2d ‘‘Whereas”’ clause on p. 303 and sec. 11, p. 306; con-

tract with Monsanto Chemical Co., comp. ex. 118, r. 2771,

2828; Karr, r. 2209.] The Electro Metallurgical Company,

which is locating a new-plant in the ceded area, is also of

this type.. [See contract in def. ex. 154 (original) p. 315,

and particularly the 3d ‘‘Wheréas”’ clause and sec. 11.]

151. All of said industrial customers outside the ceded

area and the Electro Metallurgical Company constitute new

loads in the territory. The loads contracted for have not

‘been previously served by any of the complainant com-

patiies. "[Def. ex. 143, r. 4193, 2d column; Karr,*r. 2200.]

Under the contracts with the Victor Chemical Works, the

Monsanto Chemical Company, and the Electro Metallurg-

ical Company (in the ceded area) these companies under-

take to construct new plants and purchase power from the

Authority for service to thése plants. [See def. ex. 154

(original) pp. 309, 315; comp. ex. 118, r. 2771, 2828-2829. ]

The contract with the Aluminum Company of America

shows that that company was about to enlarge its facilities

and needed additional power to supplement its own gen-

eration. [Def. ex. 154 (original) p. 309.] ;

152. Complainant companies do not maintain excess

capacity and facilities for service to loads of such large

and unusual size as that of these electro-chemical and

_ electro-métallurgical customers of the Authority, but con-

structed fatilities for service to these companies as needed.

{Miller, r. 1115.] *

—"

— A PPS AE FR FF I LE RR Pa

FINDINGS OF FACT OF TRIAL COURT

153. All of said large industrial customers have con-

tracted to purchase large amounts of secondary power as

well as firm power. [See def. ex. 154 (original) pp. 302,

309, 315, 316; comp. ex. 118, r. 2771, 2828.]

154. Secondary power is that class of power the de-

livery of which the seller may interrupt during periods

which are variously specified in the contract of sale.

{ Moreland, r. 1449-1450.}] All of the industrial customers

outside of the «-ded area have contracted to purchase large

amounts of this secondary power of which the Authority

may, under the contracts, susperd delivery for specified

periods of time, such as in event of low-water flow. [Karr, »

r. 2209; cf. def. ex. 154 (original) p. 309, sec. 2 (Aluminum

Co.); pp. 302, 304, sec. 5(d) (Victor Chemical Works);

pp. 315, 316, sec. 4 (Electro-Metallurgical Co.); comp. ex.

118, r. 2771, 2828, sec. 4.] These sales of secondary power

materially increase the Authority’s sales of energy during

the period that such power-is available. [Karr, r. 2210,

2212.] These sales of secondary power to large industrial

customers will increase the load factor of the Authority’s

operations during these periods when the power is de-

livered. [Karr, r. 2212.]

155. It is not feasible to sell this secondary power to

such large industrial customers through a retailer or an

intermediary. [Karr, r. 2209-2210.]

156. These large manufacturing plants and utility

companies, such as the Arkansas Power & Light Compary,

with whom the Authority also has a contract providing for

the sale of secondary power, are the type of customers

whose operations are adapted to the use of that type of

power. [Karr, r. 2209, 2210; Moreland, r. 1449-1450. ]

157, The following contracts provide for the sale of

both firm and secondary power for the period of years

noted: “~

FINDINGS OF FACT OF TRIAL COURT

(a) Contract between Tennessee Valley Authori and

Monsanto Chemical Company, dated May 15, 1936, for 20

years. [Comp. ex. 118, r. 2771, 2828.]

(b) Contract between Tennessee Valley Authority and

Aluminum Company of America, dated July 17, 1936 (def.

ex. 154 (original) p. 150], as amended by agreement of July

20, 1937, for 10 years [def. ex. 154 (original) p. 313).

(ce) Conrract [sic] between Tennessee Valley Authority

and Arkansas Power & Light Company, dated June 16,

1937, for 5 years, but continuing in effect until cancelled

by either party on 30 months’ notice. [Def. ex. 154 (orig-

inal) p. 294.]

(d) Contract between Tennessee Valley Authority and

Victor Chemical Works, dated July 2, 1937, for 20 years.

(Def. ex. 154 (original) p. 302.]

(e) Contract between Tennessee Valley Authority and

Aluminum Company of America, dated July 20, 1937, tor

20 years, but cancellable by either party at the end of 10

_ years on 5 years’ notice. [Def. ex. 154 (original) p. 309.)

(f) Contract between Tennessee Valley Authority and

Electro Metallurgical Company, dated August 17, 1937, for

20 years. [Def. ex. 154 (original) p. 315.)

158. The maximum amounts of secondary power which

the Authority has contracted to sell are as follows:

Monsanto Chemical Company...........--.-se0-eeeeeee 32,500 kw.

Aluminum Company of America (July 17, 1936)........ 40,000 kw.

Arkansas Power & Light Company............-- 5,000 to 20,000 kw.

(prior to 6-30-38..........- 10,000 kw.

year ending 6-30-39....... 15,000 kw.

year ending 6-30-40....... 20,000 kw

year ending 6-30-41....... 15,000 kw.

year ending 6-30-42....... 10,000 kw.

thereafter .. ........++-- 5,000 kw.)

Vietor Chemical Works. .......---++-seesseeeeeeeeeees 16,000 kw.

Aluminum Company of America (July 20, 1937) ........ 30,000 kw.

Electro Metallurgical Company . ....----+-+++++eeeeees 16,000 kw.

—

[See references to contracts in fdg. 157 above. ]

72 |

FINDINGS OF FACT OF TRIAL COURT

159. The periods in which the Authority is obligated

to supply such secondary power and the required notices

before interrupting and resuming secondary power de-

liveries are as follows for the respective contracts above

mentioned:

Notice re-

fae Authorit quired before —_ Notice required

igated to supply interruption before resumption

Contract secondary power of delivery of delivery

Mensanto Chemical Co. 300 days annually 14 days 14 days

Aluminum Co. of Not iess than 90 days 15 days 15 days

America (July 17,1936) when and if available

in judgment of Au-

thority

Arkansas P, & L. Co.

Prior to 7-1-42 300 days annually 15 days 7 days

Beginning 7-1-42 75% of the time Sdays “Reasonable” time

Victor Chemical Works 9 months annually 14 days 7 days

Aluminum Co. of 75% of the time in 21 days 7 days

Ameries (July 20, ten years

1937)

Electro Met. Co. 9 months 14 days 7 days

[See references to contracts in fdg. 157 above.]

160. All of the Authority’s eontracts contain a force

majeure clause which relieves the Authority of any obliga-

tion to supply power when prevented by injunctions, strike,

riot, invasion, fire, accident, breakdown, act of God, or any

other causes beyond the Authority’s control. In addition

the force majeure clause in each of the contracts with 4he

4 large industrial contractors and the Arkansas Power &

Light Company, except the force majeure clauses in the

contract with the Aluminum Company dated July 17, 1936,

as amended, and in the contract with the Monsanto Chemi-

cal Company, relieves the Authority of obligation to sup-

ply power when service is interrupted or suspended by rea-

son of floods or backwater catséd by floods. The force

majeure clauses apply to both firm and secondary power.

[See references to contracts in fdg. 157 above.] ~~

161. The Authority’s contracts with the Aluminum

Company and the Arkanses Power & Light Company pro-

the

FINDINGS OF PACT OF TRIAL COURT

vide that if an émergency or breakdown should occur on

the system of either contracting party, the other party

shall stand by and supply the power needed in the emer-

gency to the full extent its facilities enable it to do so.

[See def. ex. 154 (original) p. 294 (Arkansas P. & L. Co.) ;

def. ex. 154 (original) p. 313 (Aluminum Co.).]

162. All contracts between the Authority and munici-

palities or cooperatives are for a period of 20 years from

the respective dates of execution thereof, except that the

contracts with the cities of Florence, Sheffield, and Tus-

cumbia, Alabama, all of which purchase power at the Wil-

son Dam reservation, are for a period of 30 years from the

respective dates of execution thereof. [See contracts re-

printed in comp. ex. 117, r..2729; comp. ex. 118, r. 2771;

def. ex. 154 (ouiginal).]

163. With the exception of small industrials in the

“eeded areas,’’ all power contracts except one contain -

either the following provision immediately after the reci-

tals; % A

Now Therefore, subject to the provisions of the Ten-

nessee Valley Authority Act of 1933, as amended, the par-

ties hereto agree as follows:

or an identical provision except that the word ‘‘pursuant”’

is used in the first line above quoted instead of the word

“subject.’? [See contracts reprinted in comp. ex. 117, r.

2729; comp. ex. 118, r..2771; def. ex. 154 (original).}

164. The following provision:

* * * should [the contracting municipality or coop-

erative] desire to increase its purchases in excess of

kilewatts, Authority shall deliver such excess upon written

demand and after reasonable notice, provided that the re-

quirements of Authority and/or the United States rea-

sonably enable it to do so. °

\ a

FINDINGS OF FACT OF TRIAL COURT

is contained in each of the contracts specified below, with

the number after the name >f each purchaser indicating the

number of kw entered in the blank in the clause above.

Municipality or cooperative kw. [Comp. Ex. No.

North Georgia Ele¢trie Membership Corporation.... 300 118

Pickwick Electric Membership Corporation........ 300 139

Pontotoc County Electric Membership Corporation.. 1,000 118

Joe Wheeler Electric Membership Corporation...... 1,000 142

Gibson County Electric Membership Corporation... 300 137

Duck River Electric Membership Corporation...... 300 140

Cullman County Electric Membership Corporation. . 300 136

Middle Tennessee Electric Membership Corporation. 300 138

City of Jackson, Tennessee................0.eeeee 480 133

City of Tuscumbia, Alabama.................-.00: 3,000 124

CR OE HUGO, TORMIRONR. 5.5 cs cee cee cccnvcn 1,500 132

City ot Gietietd, BIMBOMS. ooo. cc ccc ccccccvcccesee 4,500 118

Gity Gf Woowames, AMBOMA. 2... cccccccccseccqeses 7,500 123

Northeast Mississippi Electric Membership Corpora-

Mb ab aC uawamongseakanciscssadiecewsvedsane 750 144

Tippah County Electric Membership Corporation. ... 750 224

a IIS 6 cdicccdicgecvsccceccces 6,000 119

City of Middlesboro, Kentucky.................... 3,000 130

City of Knoxville, Tennessee...............eeceees 35,000 125

City of Guntersville, Alabama..................... 3,000 128]

The maximum amount of power each industrial or utility

customer may purchase from the Authority is definitely

specified in the contract with such customer.

165. The Authority has contracts with municipalities

now purchasing power calling for the availability of 38,380

kw. [Comp. exs. 119, 123, 133, 120, r. 2846, 2856, 2873, 2852;

comp. ex. 118, r. 2771, 2799, 2800, 2801, 2802; ‘comp. ex. 117,

r. 2729, 2740, 2741, 2742, 2760.]

166. The Authority has contracts with municipalities

not yet purchasing power calling for the availability of

135,000 kw. [Comp. exs. 126, 127, 128, 129, 130, 132, 134, r.

2857-2873, 2879; comp. ex. 118, r. 2771, 2807, 2808. ]

167. The Authority has contracts with rural coopera-

tives now purchasing power calling for the availability of

75 ~

FINDINGS OF FACT OF TRIAL COURT

9,300 kw. -[Comp. exs. 135-142, r. 2885-2887; comp. ex.

118, r. 2771, 2809, 2816, 2817; comp. ex. 117, r. 2729, 2770;

comp. ex. 196, r. 3004.]

168. The Authority has contracts with industrial com-

panies by which it contracts to sell 127,850 kw. of firm

power. [Comp. exs. 146-152, 153-156, 159-161, r. 2889-2890,

9891, 2894-2895; comp. ex. 118, r. 2771, 2828; def. exs. 145,

146, r. 4235-4236; def. ex. 154 (original) pp. 302, 309, 315.]

169. The Authority has contracts with industrial com-

panies and utilitiess»by which it contracts to sell 139,500 kw.

of secondary or interruptible power. [Comp. ex. 118, r.

2771, 2828; def. exs. 145-146, r. 4235-4236; def. ex. 154

(original) pp. 302, 309, 315.] ie

Power Facuitres Usep or To BE Usep

is Meetine THESE CoNTRACTS

170. The transfer of the Muscle Shoals properties

from the War Department to the Tennessee Valley Author-

ity after the passage of the Tennessee Valley Authority

Act included the Wilson Dam and power plant, with 8 gen-

erators having a total installed capacity of 184,000 kw., and

the Sheffield steam plant, with an installed capacity of

60,000 kw. [comp. ex. 113 (original) p: 24]; also 7.8 miles

of high-voltage transmission lines leading from Wilson

Dam to various points on the Government reservation, in-

cluding Nitrate Plant No. 2 [def. ex. 136, r. 4175, 4177].

171. A single generator at Norris Dam, constructed by

the Authority, was put in operation on July 28, 1936; a

second generator was put in operation on September 30,

1936. Each of these generators are of 50,000-kw. capacity.

A single generating unit at the Wheeler project, con-

structed by the Authority, was put in operation on Novem-

ber 9, 1936; a second unit was put in operation on April 14,

1937. Each of these units is of 32,000-kw. capacity. [Def.

ex. 149, r. 4255. ]

a |

FINDINGS OF PACT OF TRIAL COURT

172. The failure to generate and sell power available

at the Wilson, Norris, and Wheeler Dams not needed for

governmental uses would result in its complete waste.

Substantial amounts of such power have been wasted be-

cause of lack of markets in every year since the construe-

tion of Wilson Dam. [Def. ex. 149, r. 4255; Karr, r. 2211-

2212.)

173. Pursuant to the contract of January 4, with the

complainants Alabama Power Company and Mississippi

Power Company the Tennessee Valley Authority pur-

chased certain transmi8sion lines extending from Wilson

Dam to the nearby area in northwest Alabama and nortb-

east Mississippi. [Def. ex. 143A, r. 4195, and particularly

exhibits ‘‘A’’ and ‘‘B,’’ r. 4209 et seq.] The lines, which

included auxiliary electrical properties, such as substations

and rural lines in the area, were located in 10 counties in

Mississippi and 6 counties in Alabama. [Def. ex. 143A, r.

4195, and particularly exhibits ‘‘A’’ and ‘‘B,’’ r. 4209 et

seq.] These 16 counties are hereinafter referred to as the

‘‘ceded area’’ covered by the contract of January 4. At

the time of the transfer of the properties there were ap-

proximately 14,200 electric customers in the ceded area.

[Sweatt, r. 793; Barry, r. 876.] These customers and all

additional customers in the area are now being served by

municipalities, cooperatives, and the Alabama Power Com-

pany, to whom the Authority sells and delivers power at

wholesale for resale in the area [def. ex. 143,\r. 4192-4193;

Barry, r. 870, 871], except for a few industrial customers

and the fifgal customers, relatively small in number, in the

vicinity of Wilson Dam, being served by the Authority

{def. ex. 143, r. 4192; Karr, r. 2202].

174. The properties in Alabama purchased from the

Alabama Power Company, a complainant in this case, in-

cluded 128 miles of high-voltage transmission lines [def.

ex. 136, r. 4175, 4177], 24 substations located along these

lines [def. ex. 136, r. 4175, 4181, 4182], and 203 miles of

FINDINGS OF FACT OF TRIAL COURT

rural lines [Barry, r. 871; Henkle, r. 1055; def. ex. 136, r.

4184A]. All of the municipal distribution systems belong-

ing to the Alebama Power Company in these 6 counties,

some 12 in number, were served from these transmission

lines. [Def. ex. 143A, r. 4195, and particularly r. 4218;

Barry, r. 870; Henkle, r. 1095.] They were retained by

the Alabama Power Company. Approximatc!y 1,000 rural

customers were served from the rural lines at the time of

transfer. [Henkle, r. 1055.] The industrial customers

being served from these properties at the time of transfer

were 48 in number, with a load of approximately 5,000 kw.

[Henkle, r. 1054.}

175. The properties Jocated in Mississippi were pur-

chased frofh the Mississippi Power Company, a complain-

ant in this case, and consisted of 87.3 miles of high-voltage

trarismission lines [def. ex. 136, r. 4175, 4178], 7 substa-

tions [def. ex. 136, r. 4175, 4181], and 167 miles of rural

lines [Sweatt, r. 791]. Certain municipal distribution sys-

tems and steam and oil generating plants were included in

the purchase from the Mississippi Power Company. [Def.

ex. 143A, r. 4210, 4211.] Subsequent to the conveyance of

the municipal distribution systems to the Authority in May

1934, these distribution systems were sold to municipali-

ties or cooperative organizations of citizens and farmers

formed under the laws of Mississippi. [See contracts for

power purchase with certain rural associations, reciting

that certain distribution properties were transferred—

comp. ex. 117, r. 2729, 2760, 2761; comp. ex. 118, r. 2771,

2816, 2817 ; cf. Karr, r. 2202; def. ex. 143, r. 4192.]

176. All of the properties purchased from the Mis-

sissippi Power Company were actually transferred to the

Authority on approximately June 1, 1934. [Comp. ex. 113

(original) p. 25.) All of the properties purchased from the

Alabama Power Company were transferred to the Au-

thority in May 1936. [Karr, r. 2229.]

yy \ /*

FINDINGS OF FACT OF TRIAL COURT

177. The only transmission lines, other than those pur-

chased or constructed by the Tennessee Valley Authority,

connected with any dam of the Authority are owned by

the Alabama Power Company, The Tennessee Electric

Power Company, and the Southern Tennessee Power Com-

pany, all subsidiaries of the Commonwealth & Southern

Corporation. [Hapgood, r. 2139-2140; def. ex. 138 in Re-

productions of Certain Original Exhibits Submitted by

Appellees.| Subsidiaries of the Commonwealth & South-

ern Corporation and companies affiliated with the Electric

Bund & Share Company own substantially all of the trans-

mission lines and serve substantially all of the existing load

centers in the area within a radius of 100 miles from each

of the dams now under construction or completed. [Hap-

good, r. 2139-2141; def. ex. 138 in Reproductions of Certaiw

Original Exhibits Submitted by Appellees; Miller, r. 1111-

1112.)

178. Unless the Authority built transmission lines

leading from Wilson Dam and the dams it has constructed

or has under construction, it could sell power only to utility

companies, except for industrial customers that might lo-

cate at the dams and such municipalities and cooperatives

as are located in the immediate neighborhood of the proj-

ects. Such sales to customers other than utility companies

would be very limited. [Thomas, r. 2105, 2107; Miller, r.

1114. ]

179. The Authority has constructed 407.6 miles of

high-voltage transmission lines interconnecting the power

plants at Wilson Dam and the other dams constructed or

under construction. [Def. ex. 136, r. 4175, 4178.]

180. Such plant tie lines can be used to transfer power

from one project to another and increase the availability

and amourt of power at Wilson Dam and on the resulting

hydroelectric system. [Hapgood, r. 2142, 2161; Miller, r.

1102; Thomas, r. 2107.]

FINDINGS OF FACT OF TRIAL COURT

181. The most economical use of the Authority’s dams

for power supply requires interconnecting transmission

lines similar to those constructed, under construction, .or

authorized for construction by the! Authority. [Hapgood,

r. 2142, 2161; Miller, r. 1102, 1115.]

182. Unless these lines had been constructed, the Au-

thority would have been forced to rely for the interconnec-

tion of its various projects upon lines belonging to com-

panies in the Commonwealth and Southern system, more

particularly the lines of the Alabama Power Company and

The Tennessee Electric Power Company. These existing

lines of the complainant power companies were inadequate

to perform these functions, and there was no existing line

connecting Wilson Dam with Pickwick Landing Dam.

[Hapgood, r. 2142.]

183. In addition to the plant tie lines and the 216 miles

of high-tension lines purchased under the contract of Janu-

ary 4, the Authority has constructed, 611.6 miles of trans-

mission lines of a voltage of 22 kw. or over; it was con-

structing on October 15, 1937, an additional 79.1 miles of

such lines; and on that date it had authorized for construc-

tion an additional 176.9 miles of such lines. [Def. ex. 136,

r. 4175, 4178, 4179.]

184. These miles of high-voltage transmission lines

constructed, under construction, and authorized by the

Authority do not constitute duplication of existing trans- .«

mission facilities in the area, but are useful and valuable

additions to those facilities. [Hapgood, r. 2142-2146.]

185. In addition to the 31 substations purchased under

the contract of January 4 from the complainants, the Au-

thority is constructing, has constructed, or has authorized

the construction of some 33 substations along or at the end

of the transmission lines it has purchased or constructed,

and has constructed or is constructing five additional sub-

stations at the dams. [Def. ex. 136, r. 4175, 4180.] The

substations at the dams are used in stepping up the current

FINDINGS OF PACT OF TRIAL CQURT

generated to higher voltages for transmission, and those

along the lines are used in

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.