Constructive Work

When the citizens of Knoxville. Tenn., tired of the city manager form of government, City Manager Walter Mynatt ran for mayor. He had a simple platform: Bring TVA to Knoxville, and was elected. Since then he has been preoccupied with two things besides running the city: higgling with National Power & Light Co. over a reasonable price for its Knoxville properties, and trying to persuade Knoxville's citizens to return to the city manager form of government.

As long ago as 1934. National Power, an Electric Bond & Share affiliate, agreed to sell its Knoxville subsidiary, Tennessee Public Service Co. But fixing the price was no simple matter. Mr. Mynatt's first offer was $5,250,000; National Power turned it down. But Mr. Mynatt meant business. With a $3,225,000 bond issue and a PWTA loan, he started building a municipal power plant. National Power accepted the next offer--$6,000,000; Mr. Mynatt promptly stopped work on his plant. This time National Power's preferred stockholders thought the price was too low. Mr. Mynatt went on higgling and resumed work on the plant. Fortnight ago his price was $7,500,000. Last week he went to Washington to confer with Paul Sawyer of National Power and David Lilienthal of TVA. raised his bid $400,000. At last they called it a deal. TVA puts up a third of the price, gets all T. P. S. lines outside of Knox County.

Just in case the preferred stockholders are still stubborn, Mr. Mynatt is not going to stop work on his plant. He pointed out to the City Council that T. P. S. had spent $800,000 improving its property since his original offer, and the city's savings (from lower rates, etc.) would amount to $1,000,000. He will charge regular TVA rates: 75-c- for 25 kilowatt hours a month for residential use (T. P. S. rates: $1 for 15 kilowatt hours). City poles and wires already strung can be used to replace worn out poles and wires in the T. P. S. system when Mr. Mynatt takes it over.

"Chairman Harcourt Morgan and I are gratified at the outcome of this negotiation," said David Lilienthal. "This contract encourages me to believe that in the near future in other pending situations in the Tennessee Valley region, contracts of this character may likewise take the place of litigation and conflict, so that all of us can devote ourselves wholly to constructive work."

Largest private holdings in TVA territory are those of $110,000,000 Tennessee Electric Power Co. But the next situation likely to develop is further down the river at Memphis. Month ago Paul Sawyer said that National Power would be happy to sell Memphis Power & Light at a fair price. Memphis replied that it would be happy to buy at a fair price.

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