The Tennessee Valley Authority: Electricity for All
Editor’s Note: This entry consists of several different articles and reports copied from the New Deal Network http://newdeal.feri.org/tva/tva01.htm. More information is available in the Source note at the end of the entry.
Introduction: TVA was one of the most ambitious projects of the New Deal in its overall conception. Its comprehensive nature encompassed many of FDR’s own interests in conservation, public utility regulation, regional planning, agricultural development, and the social and economic improvement of the “Forgotten Americans.”
TVA encountered many setbacks and failures. It was involved in many controversies. But it brought electricity to thousands of people at an affordable price. It controlled the flood waters of the Tennessee River and improved navigation. It introduced modern agricultural techniques. All of these stories must be told to appreciate the changes TVA brought to the people of the Tennessee Valley.
The Origins of the Tennessee Valley Authority
The TVA story begins at Muscle Shoals, Alabama, where the Tennessee River drops 140 feet in thirty miles. This drop in elevation created the rapids or “shoals” that the area is named for, and made it all but impossible for ships to travel further up the Tennessee River. In 1916 the federal government acquired the site and began plans to construct a dam there. The dam was meant to generate electricity that was needed to produce explosives for the war effort, but World War I ended before the facilities could be used. During the 1920s Congress debated over what was to be done with the property. Some members of Congress wanted to sell the dam to private interests. At one time Henry Ford offered to purchase the site and develop a nitrate plant in the area.
Senator George W. Norris of Nebraska led the fight to retain public control over the property. Senator Norris had tried six times to introduce bills for the federal development of the area, which were all defeated by unsympathetic Republican administrations. With the coming of the Depression, Americans looked more favorably to government economic intervention in the public interest. President Roosevelt–who had a personal interest in regional planning, conservation, the utilities question, and planning–backed Norris’ plan to develop the Tennessee River Valley.
On May 18, 1933 FDR signed the Tennessee Valley Authority Act (TVA). TVA was to improve navigability on the Tennessee River, provide for flood control, plan reforestation and the improvement of marginal farm lands, assist in industrial and agricultural development, and aid the national defense in the creation of government nitrate and phosphorus manufacturing facilities at Muscle Shoals.
The Tennessee River ran through seven states, through some of the most disadvantaged areas of the South. Perhaps the boldest authority given to TVA can be found in Section 23 of the Tennessee Valley Authority Act, where TVA was given a mandate to improve ” the economic and social well-being of the people living in said river basin.”
The Board of Administrators
A three-member board directed TVA: Arthur Morgan, Harcourt Morgan, and David Lilienthal. Each had very different ideas about the direction TVA could and should take. A battle between the three administrators went on from 1933 until March, 1938, when Arthur Morgan was fired.
Arthur Morgan, the former president of Antioch College, was an advocate of social planning who saw in TVA an opportunity to build a cooperative relationship between government and business. He wanted to keep rates at a comparative level to avoid alienating private industry. Morgan believed the higher purpose of TVA was to eliminate poverty in the Tennessee Valley, and to serve as a model for national regional planning. He had strongly-held anticapitalist, communitarian values, but was often accused of holding paternalistic and authoritarian positions.
Harcourt Morgan, the only Southerner on the board, was an advocate for southern commercial farmers and was suspicious of experiments in government planning.
David Lilienthal was an outspoken advocate of public power, who wanted TVA to compete directly with private power interests.
Harcourt Morgan and Lilienthal eventually formed a coalition on the Board against Arthur Morgan. This division led to public conflict between the board members, and in 1938 Roosevelt dismissed Arthur Morgan.
In 1938 Harcourt Morgan became the new head of the Authority, followed in 1941 by Lilienthal. By 1941 TVA had become the largest producer of electrical power in the United States.
Opposition to TVA
The strongest opposition to TVA came from power companies, who resented the cheaper energy available through TVA and saw it as a threat to private development. They charged that the federal government’s involvement in the power business was unconstitutional. The fight against TVA was led by Wendell Willkie, president of the Commonwealth and Southern Company, a large power utility company.
During the 1930s there were many court cases brought against TVA. The Alabama Power Company brought a suit against TVA that was argued before the Supreme Court. They claimed that in entering into the electric utility business, the government had exceeded its Constitutional powers. In February 1936 the Supreme Court ruled that TVA had the authority to generate power at Wilson Dam, to sell the electricity, and to distribute that electricity. In 1939 the Court upheld the constitutionality of the TVA Act.
In 1935 John D. Battle, Executive Secretary of the National Coal Association, testified before a Congressional Hearing on TVA. Battle spoke for many in the utility business who were concerned about the federal government’s entry into the power business:
Statement of John D. Battle, Executive Secretary of the National Coal Association [excerpts], in Hearings before the Committee on Military Affairs, House of Representatives (74th Cong., 1st Sess., 1935).
[…]It is my desire on behalf of the coal industry to register with the committee our opposition to this bill and to express the hope that this committee will be unwilling to give it a favorable report.
Appearing here today as spokesman of the bituminous coal industry of this Nation, I wish to make it clear that the coal industry is not opposed to the Government constructing dams designed to prevent soil erosion; is not opposed to the Government erecting dams to control flood waters; neither is it opposed to construction of dams to improve navigation on the rivers of this country. There is just one phase of this program to which we object most seriously, and that is the Federal Government spending the taxpayers’ money for the erection of power plants which, as we feel, are not needed for the very simple reason that generally, throughout the country, there is an abundance of power capacity, and particularly in the Tennessee Valley region there is already an excess of capacity. We are at a loss to understand how the power generated at Government-built plants can be disposed of except to take the place of privately owned power plants now supplying that community – the great majority of which plants use coal in the creation of that power.
A great deal has been said about the social experiment. We approach this subject from the standpoint first of the employment of our people. There is a human element involved. There are about 400,000 men working in the coal mines of this country. It is their only means of livelihood. The program, as put forward by the Government, is calculated, in our opinion, to destroy the jobs of a number of these men. When the jobs are destroyed there is no sale for the coal, the investment in the property decreases or vanishes. Something like 65 percent of each dollar paid for the cost of producing coal goes to the mine worker; 20 or 25 percent of the dollar goes to the purchase of material and supplies; and there is a considerable portion of that sum that is paid indirectly to the worker employed in those industries supplying the mines.
I wish to call your attention to the fact that we cannot account for those employed by coal mines by the mere number of those directly engaged in mining operations. We have a situation analogous to a soldier in the trenches; to keep a man in the coal mines requires several people behind him; and when we consider those indirectly employed, this industry is directly responsible for several million peoples’ livelihood. There are those who are not only direct dependents of the workers who are involved, but all of those engaged in the distribution of coal throughout the Nation, as well as those engaged in industries that supply the coal mining companies with the materials, who are also vitally affected.
It is our estimate that for each ton of coal displaced by some form of energy or fuel it means a loss of a day’s work to some person either employed directly or indirectly in the bituminous coal-mining industry.[…]
[…]I repeat, we did not come here to go into very great detail, from a technical standpoint, on this proposition. I merely wanted to bring you an idea, an idea that this great industry feels that it is being shoved off to one side by our own Government. We do not believe the Government has ever realized the serious implication of what it is doing. I speak, as I say, in terms of an industry, not just a section. T.V.A. exemplifies what it has been proposed to do throughout the Nation.
There is no disposition on the part of this industry to the electrification of America. We rather feel that there is a need for an extension of electrical current to the rural regions. But we do not feel that it is the function of the Federal Government to use the taxpayers’ money for the promotion of these projects. We feel that the American business man is far more capable of visualizing the needs for electrical power and far more capable of designing ways and means by which it may be furnished to prospective customers than is the Government itself.
Just as there is a demand for power, I think we may well rely upon private industries to meet that demand. I wish it made clear here that we hold no brief whatever for the private power companies or the utilities of this country. Our interest is in the production and sale of bituminous coal. An enormous quantity of this coal is sold to the private utilities. They are among our very good customers.
When power can be produced by hydro on an absolutely business basis, all factors being taken into consideration, more cheaply than by coal, then we are willing to admit the justice of the competition. That is not the case generally today with Government hydro projects. […]
Letters From the Field By Lorena Hickok
In 1933 Harry Hopkins, Director of the Federal Emergency Relief Organization (FERA), asked journalist Lorena Hickok to travel through the United States and report on the state of the nation. Hickok was in the Tennessee Valley during June, 1934, and sent two reports to Hopkins recording her impression of the local scene and the local reaction to TVA.
Hickok also sent a brief personal note to Mrs. Roosevelt concerning TVA during the same period.
TVA and the Federal Theatre Project
In 1937 the Federal Theatre Project, an agency of the Works Progress Administration (WPA) which had been created to provide work for unemployed actors and theater workers, produced the Living Newspaper Power. The Living Newspapers were dramatic productions about contemporary issues. Power dramatized the history of the electric industry, and Scene Fifteen demonstrates why many people felt the Tennessee Valley Authority was so necessary.
The Living Newspapers were not simply “mouthpieces” for New Deal Programs. Their productions sometimes angered members of the Roosevelt Administration. Ethiopia. a Living Newspaper about the invasion of that country by Italy, was censored by the Administration. But Power clearly supported TVA’s objectives. When Harry Hopkins, directory of the WPA, saw Power he went backstage and congratulated the cast:
“I want to tell you that this is a great show. It’s fast and funny, it makes you laugh and it makes you cry and it makes you think–I don’t know what more anyone can ask of a show. I want this play and plays like it done from one end of the country to the other… Now let’s get one thing clear: you will take a lot of criticism on this play. People will say it’s propaganda. Well, I say what of it? If it’s propaganda to educate the consumer who’s paying for power, it’s about time someone had some propaganda for him. The big power companies have spent millions on propaganda for the utilities. It’s about time that the consumer had a mouthpiece. I say more plays like Power and more power to you.”
Source: TVA: Electricity for All, http://newdeal.feri.org/tva/tva01.htm, New Deal Network, http://newdeal.feri.org (April 23, 2014)