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FEBEBAh BKBBGSfiCY ADMIEISTBAfOB OF FOBLIO arCRKS S A S H U G f O I I une 18, 1935. Hoa, Key Pittman, U n i t e d S t a t e s S e n a t e , Washington, B, C, M y dear Senator Pittman: I have your letter of Jane ?, 1935 inquiring whe ther the Public Works Administration will make loans and grants to marsicipallties for fee purpose of aequir-tig or entering into competition with am existing privately corned electric power or wator system which is satisfactorily serving the cousaunity, Phe Public A arks Administration will not make loans or grants for the sole purpose of purchasing or other­wise acquiring existing utility ays terns, the puspoaes of the Emergency Belief App*opeiation Act of 1935 are to pro­vide relief, work relief and to increase employment b y pro­viding for useful projects, lone of these purposes would be directly served b y aiding municipalities in the acquisi­tion of existing systems and we would not be authorized to finance projects which have such acquisition as their sole objective. the Administration will, however, make loans for the construction of municipally owned power and water systems when such projects are sound from a social, economic and engineering point of view, the question of public policy is for the municipality to pass upon, % e r y such project will be judged on its erits just as any other project would be, Whether a proposed municipal utility would enter Into competition with an existing plant is a factor to be taken into account, but the circumstance of possible competition would not of itself prevent a loan or grant being made. Sincerely yours, (Sgd) BABOLD L. IGKES, Administrator• fc o p y )