Tennessee Valley Authority (TVA)

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The Tennessee Valley Authority (TVA) arose as a World War I footnote. In 1916, as part of war preparedness, Congress authorized President Woodrow Wilson to build munitions-grade nitrate plants and a hydroelectric support facility on the Tennessee River at Muscle Shoals, Alabama. After the war the project sparked a furious national debate over public ownership of productive capacity. The Republican administrations of the 1920s were adamantly opposed to government-run power and nitrate production, now being used for fertilizer instead of explosives. However, two factors kept the project in the public domain: no entity made an acceptable offer to take the facilities private, and progressive legislators, led by the venerable Nebraska senator, George Norris, felt the project was an important symbol of government responsibility. For years, Norris and other members of Congress kept Muscle Shoals from being dismantled while the facilities continued producing fertilizers and electricity for the area surrounding the renamed Wilson Dam.

By the early 1930s the debate began to tilt in favor of public ownership, or at least strong public regulation. During the 1920s, private utilities poisoned their own wells by establishing distant holding companies that drained profits from local companies whose stock they owned. Moreover, the holding companies kept gas, electric, and telephone rates steady or increased them when millions could barely pay the pre-Depression rates. Meanwhile, progressive politicians, including governors Franklin D. Roosevelt in New York and Philip La Follette in Wisconsin, established powerful state utility regulatory commissions. In other areas, especially the northwestern United States and Canada, public power companies were proving that government could produce electricity as efficiently as private companies—and almost always more cheaply.


The 1932 Democratic platform was silent on public ownership, but the party's candidate was not. In September, in Portland, Oregon, Roosevelt insisted that the government was justified in going into the power business when private utilities were inefficient or practiced exorbitant pricing. Furthermore, government utilities could provide a "yardstick," a competitive price comparison, for the private utilities. In Montgomery, Alabama, right before inauguration, the president-elect suggested that Muscle Shoals could provide such a yardstick and serve as an instrument of planning and social development for the economically devastated region.

With little hesitation, Congress approved the Tennessee Valley Authority (TVA) on May 18, 1933. The act established an agency whose purpose was to build hydroelectric dams on the Tennessee River to achieve the unified development of industry, agriculture, flood control, and conservation throughout the entire watershed. As important, at least for President Roosevelt, was the production of lowcost electricity to act as a "yardstick" by which electricity rates could be judged throughout the nation. The president immediately deemed it "a corporation clothed with the power of government, but possessed of the flexibility and initiative of a private enterprise." He set about appointing three men to the governing board, each with special talents related to TVA's multiple mission. First, he asked Arthur E. Morgan, president of Antioch College in Ohio and an experienced dam builder, to assume the chair. At Morgan's suggestion Roosevelt appointed Harcourt Morgan (no relation), president of the University of Tennessee and distinguished agriculturist, and David E. Lilienthal, utilities lawyer and charismatic leader of the Wisconsin Public Service Commission.

In spite of Roosevelt's support and the caliber of his appointments, TVA immediately faced serious problems that threatened its existence. First, the directors had no clearly specified goals—the TVA Act was basically hortatory and thematic, calling for such vague objectives as planning, conservation, and natural resource development. And Roosevelt, typically, issued no clear directives. In late 1933, presidential advisor Rexford Tugwell told the three directors that he had no idea what the president wanted. Roosevelt told a delighted but puzzled Senator Norris that the TVA was "neither fish nor fowl, but, whatever it is, it will taste awfully good to the people of the Tennessee Valley." Second, the act was silent on administrative structure except for a three-person board with a chair nominated by the president. The act said nothing about the chair's powers, which meant that all three directors had equal authority. In other circumstances, a multiple executive might have been feasible. This board, however, had three directors of strong character and very different visions. The third challenge was the hostility of the private utilities. Days after the directors settled in, the powerful Commonwealth & Southern (C&S) holding company, with extensive interests in Tennessee, Georgia, Mississippi, and Alabama, began an assault on TVA's then modest power program.


Wendell Willkie, the energetic president of C&S, suggested that TVA should limit its power program to selling its production to private companies at the source (initially, and until 1936 only at Wilson Dam). Chairman Morgan thought this a reasonable compromise—the utilities would continue to transmit, market their product, and make their profits. Meanwhile, TVA could peacefully proceed with its other programs. Lilienthal saw it very differently, and thus began an acrimonious feud between the two directors until Roosevelt fired Morgan in March 1938.

Fresh from three bruising years on the Wisconsin Public Service Commission, Lilienthal was in no mood to compromise with the utilities. In the first place, selling power at the source would deny TVA the ability to provide a "yardstick" that could force private utilities to lower their prices in the face of lower TVA rates. And much like Roosevelt, Lilienthal felt that each community should be free to choose its own power provider. For six years, the battle raged. Three federal suits challenged TVA's constitutional right to produce and distribute electricity. At points, lower courts enjoined TVA from building facilities and distributing power. In each case, however, the U.S. Supreme Court ruled that TVA had a right not only to produce power but also to distribute and market it. In August 1939, in the face of the last Supreme Court decision and overwhelming demand for TVA power, the weary Willkie sold all C&S valley holdings to TVA.

The Morgan-Lilienthal feud was fueled by more than power policies, however. Arthur Morgan was a rigid crusader who disdained political intrigue. He was also a bona fide utopian who believed that TVA could make the Tennessee Valley into a new Jerusalem, a model of social and moral betterment. In his zealotry, he alienated powerful political figures, including the third board member, Harcourt Morgan. Lilienthal, on the other hand, was a consummate pragmatist. For him public power was the key to success, as was the careful accommodation of valley interests. To that end Harcourt Morgan and Lilienthal decided that all TVA agriculture programs—test demonstration farms, erosion control, fertilizer development and distribution—should cooperate with the region's land grant colleges and that Harcourt Morgan should control these programs. Thus, Lilienthal and Harcourt Morgan formed an unshakable alliance; for five years Chairman Morgan was constantly frustrated by two-to-one votes against him. The feud ultimately took a fierce psychological toll: both Arthur Morgan and Lilienthal suffered crushing periods of depression and paranoia. The impact on Morgan was more severe, however, and by 1938, his irrational behavior forced the president to remove him from the board.


It was obvious that TVA was a unique creation, harnessing human and natural resources in search of unified social and economic development. The brilliant rhetoric of Roosevelt, Norris, and especially Lilienthal, only enhanced its aura. As Norman Wengert observed, "TVA differs considerably from most federal agencies in that an explicit body of doctrine—ideology if you will—has developed around its purpose." Historically, this ideology has embraced five principles: unified development, decentralized administration, citizen participation in TVA decisions, social responsibility, and policy making free of political considerations. To be sure, as in all ideologies, reality and rhetoric are part and parcel of each of these tenets.

With its innovative dams combining flood control, navigation, and power production, TVA exemplified unified and coordinated development. Also, dam building and agricultural reform were integrally related: Without containing endemic soil erosion, the reservoirs would silt up and become useless for any purpose. The idea of freeing TVA from Washington political intrigue, allowing authorities in the Tennessee Valley to make fundamental policy, was the heart of decentralized administration. Historically, TVA boards have been highly sensitive to regional concerns. TVA has always affirmed the mantra of citizen participation. Typically, participation has manifested itself in programs like the early demonstration test farm experiments, whereby farmers passed on progressive farming practices to each other. Other examples include citizen involvement in home energy conservation projects or in the development of local utility boards. Rarely, however, has participation manifested itself literally, with citizens actually deciding important policy decisions.

No doubt, the notion of social responsibility has been more than rhetorical. In the 1930s, TVA was staffed by thousands of men and women who believed they could make a profound difference in the midst of the Depression. In a region where labor unions were rare, the first board insisted that the blue-collar work force organize into an independent union. In addition, TVA is well known for its job training, education, and community and economic development efforts. Finally, political neutrality has been a strong tradition. TVA's peerless merit system more than once crossed swords with local politicians who were accustomed to patronage systems of public employment. Moreover, there is nary an instance where dams or other facilities were built because of political pressures.

On the other hand, these principles mask other aspects of TVA reality. Lilienthal's success in expanding the power program and the insatiable demand for power during World War II resulted in a significant erosion of the rest of TVA's programs and the goal of multiple purpose development. One critic noted that after the war, TVA became nothing more than the largest public utility in the country. Moreover, the authority's later massive expansion into nuclear power and the construction of environmentally questionable coal plants and dams was disastrous. These power decisions nearly bankrupted TVA and led to widespread accusations of pollution and environmental abuses.

There was also many a slip twixt cup and lip in the commitment to decentralized administration and citizen participation, the grassroots administration and democracy articulated by Lilienthal in his rhetorical masterpiece, TVA: Democracy on the March (1944). Without a doubt, TVA enjoyed an independence unmatched by other agencies; its merit and auditing systems, for example, were autonomous from Washington, as were the labor relations programs. Nevertheless, it was still bound to congressional purse strings, and often obligated to play partisan political games. Furthermore, there is no intrinsic virtue in decentralized authority—one only has to look at what decentralized authority meant for African-American citizens in the South before the 1960s. Likewise, grassroots participation never meant that valley citizens actually shaped public policy. Indeed, TVA's comprehensive power and flood control system belied meaningful citizen participation. Dams had to be built according to system requirements regardless of the feelings of individual communities along the river. Likewise, thousands of valley citizens had little chance to participate in decisions that resulted in the flooding of their rich river bottom farms and their relocation to less desirable sites. In the 1970s the decision to build the Tellico Dam on the Little Tennessee River drew enormous public opposition, but to no avail.

TVA's reputation for social responsibility has also been suspect. The early policy of hiring black workers in proportion to their numbers in the population was overshadowed by the fact that only one African American was appointed to a managerialtechnical position in the 1930s. Likewise, the agriculture programs favored medium and large farmers and ignored small or tenant farmers and black agriculturists. Finally, by the 1970s TVA had a welldeserved reputation for environmental arrogance as it threatened endangered species and created serious air pollution. It is ironic that these lapses are functions of TVA's peculiar conceptualization of political neutrality as the avoidance of partisan influence in the form of, for example, patronage hiring or dam building because of political pressure. What TVA has failed to acknowledge is that acceding ing to the racial biases of the valley or serving only the more powerful elements of the agricultural community were just as political as bending to party influences. So, too, was proceeding with projects justified by intra-authority rationale but bereft of public approval.


TVA's history has been marred by questionable and wrongheaded policies and programs of the sort discussed above. Too often, the rhetoric of the TVA idea masked the reality of actions taken by the authority in spite of constituent interests. Furthermore, William Chandler in The Myth of TVA (1983) makes a strong case that TVA's economic impact has been less than the rhetoric suggests. Certainly TVA was very different in later decades from what was envisioned in 1933; the multipurpose vision had given way to a clear central focus on power.

Nevertheless, on the whole TVA has had a positive impact in American life. It was an important symbol of constructive government action and of the idea that the public weal should vigorously challenge a negligent private will. TVA quickly provided universal electrification to the least electrified region of the country. It sold electricity as cheaply as anywhere in the United States and provided an effective "yardstick" for utilities across the nation. Taming the Tennessee River stopped the devastating floods that hindered economic development and provided the means for eliminating the scourge of malaria in the valley. Also, the dams, and later the coal-fired plants, were significant in enabling the development of one of the largest aluminum production facilities in the world in Alcoa, Tennessee, and for providing crucial power needs both during and after World War II for the atomic energy industry in and around Oak Ridge, Tennessee. Finally, TVA reservoirs stimulated the development of a strong recreational industry throughout the region.

TVA's other great legacy was the example it set for others. True, no other showcase authorities arose in the United States. Lilienthal argued for a Colombia River Authority, but the Department of the Interior controlled most of the power production in the Northwest and resisted the establishment of a new agency. Other efforts to establish authorities in the Arkansas and Missouri river basins were thwarted by President Roosevelt's waning support because of war concerns, private utility resistance, and fear in the states that independent authorities would reduce state power. Nevertheless, TVA provided other inspirations. TVA's success in rural electrification was a model for the Rural Electrification Administration, which had a national mandate. In addition, the TVA model was important in the development of smaller authorities, such as the Lower Colorado River Authority, which provides power, flood control, and agricultural support for hundreds of thousands of people in central Texas.

Perhaps as important, TVA has been a worldwide inspiration. In TVA: Democracy on the March, Lilienthal quotes the late U.S. Supreme Court justice, William O. Douglas, who reported after travels abroad, "Everywhere I went, people asked, 'Why can't we have a TVA?'" For more than seventy years, thousands of foreign visitors have come to the Tennessee Valley to learn about river development. And over the years, TVA has inspired unified river development in several nations including the Cauca River Valley in Columbia, the Papaloapan Basin in Mexico, the Khuzistan region in Iran, and the Damodar Valley in India.

For all the controversy and for all the times TVA's policies seemed to run counter to its high flown principles, it has remained a great example of public service for the Tennessee Valley, the nation, and the world. George Will perhaps expressed it best in Newsweek (April 25, 1988) where he talked about the value of public works: "The Tennessee Valley Authority and the Interstate Highway System were not just good in themselves. They were good for the morale of government, which periodically needs some inspiring successes."



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Steven M. Neuse

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