New River Case

Momentous to the electric power industry, momentous also to the Roosevelt Administration in the fulfillment of its promised power policy, is a case that has been before the Federal Power Commission for several years, a case apparently destined to go through the Federal courts to the highest. Its name is the New River Case, and last week there was reached in it, in the U. S. court at Norfolk, Va., what bushy-haired Chairman George Otis Smith hailed for his F. P. C. as "A major victory!"

The Case. Appalachian Electric Power Co. wants to build an $11,000,000 dam and plant on the New River near Radford, Va. The Federal Power Commission offered it a standard license whereunder its plant investment would be strictly scrutinized, its rates regulated, its property recaptured by the U. S. after 50 years. Such a license Appalachian declined, on the ground that the New River is non-navigable, therefore beyond F. P. C.'s jurisdiction.

The Issue. Has F. P. C. authority over plants to be built on non-navigable streams under the interstate commerce powers of the Federal Government? Onetime Secretary of War Newton Diehl Baker, as attorney for Appalachian, argued it had no such power while Huston Thompson, onetime Federal Trade Commissioner, as F. P. C. attorney, argued that it had.

The Decision. Attorney Thompson won, Attorney Baker lost. Federal Judge Luther Way decided that the Appalachian project came under F. P. C. jurisdiction because the New River, though not navigable itself, flows into the navigable Kanawha which in turn flows into the navigable Ohio. A power dam on the New River could affect downstream navigability and hence interstate commerce. The effect of the decision was to compel Appalachian to accept F. P. C.'s authority in the form of a standard license instead of getting a "minor part" license which involves no Government regulation, no recapture. If sustained by higher courts the Way Decision would give the U. S. control over 75% of the streams east of the Rockies.

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