The Tennessee Valley Authority: A Study in Policy Formation

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T.V.A.: A STUDY IN POLICY''PORTION

by Sam Um Houston

A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in the Department of Political Science, in the Graduate College of the State University of Iowa July, 1942

ProQuest N um ber: 10984062

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11

ACKNOWLEDGEMENT The writer wishes to acknowledge his indebted­ ness to the entire staff of the Department of Political Science for inspiration, to Professor Kirk H. Porter, head of the Department of Political Science for the opportunity to persevere, and to Professor Ethan P. Allen for a careful reading of the manuscript and inr% 2 valuable suggestions during all stages of the prepare~ tion of the dissertation.

in Tsbl© of Contents Chapter I

Page Introduction . . . . . .

................

I

II

Congressional Formulation of Policy. . .

. 13

III

Administrative Formulation of Policy . .

. 112

IV V

Judicial Formulation of P o l i c y ........ 188 Conclusions. .

.......................... BOS

Notes and References

.........

216

Bibliography

. . . . . . . .

254

Chapter I Introduction Since 1824 there have been persistent attempts to secure congressional authorization for the improvement and development of the Tennessee River•

From 1824, when John

G# Calhoun, then Secretary of War, first reported to Con­ gress upon the Tennessee River as possessing military and commercial possibilities, down to the National Defense Act of 1916, literally scores of proposals were placed before Congress affecting the Tennessee River Basin#

But It was

not until the enactment of the National Defense Act of 1916 that Congress authorized the construction of a nitrate plant, dams, and navigation locks together with the develop­ ment of hydroelectricity.

This grant of power to the Presi­

dent was justified upon the Interstate commerce, navigable streams, and war-power clauses of the Constitution*

An

interesting aspect of this grant of discretionary power to the President is to be found in the fact that such powers could be exercised upon any navigable or non-navigable stream in the United States *3* For ten years previous to the election of Franklin D# Roosevelt, as President of the United States, Senator George W# Norris kept the Issue of governmental control and operation of the Muscle Shoals properties before Congress# nThe entire Tennessee Valley, and Indeed the entire South, owes to George W# Norris a deep debt of gratitude for the wonderful fight that he has made

«*2* for tlie last ten years to keep Muscle Shoals In the hands of the Government to use It for the benefit of the people* Mo man in the Senate could have led the fight more determinedly and ably or more effco*. tlvely than George v?„ Morris, it ha,:; been a fight of the people against the combined power Interests of the country, and the ©lection of Mr* Roosevelt# holding ver^ slmillar views to those of Senator Morris and those of us, who stand with him# makes' Senator Morris's victory complete**1 2 During the time that Franklin l>„ Roosevelt was Governor of Mew York his power policy centered around the belief that a private utility should render its services at a reasonable rate #8

It se med to him that natural

water power sites should be owned by the people and devel** oped by the Government*^1 lower developed therefrom should be distributed to the consumer at the lowest rates com­ patible with a fair and reasonable return on the actual cash Investment*

Govemmentally produced power should be

sold on a contract basis,, this agreement to consider all the steps between the sale at the dam to actual consumptions• Els policy also envisioned the consumption of electricity in rural areas#5 In the Interim between election and assumption of office Mr* Roosevelt had decided that the Tennessee Valley would provide an ideal location for a regional experiment* After a visit to Muscle Shoals he announced a comprehensive developmental program for th© watershed.^

This plan, h© ss&id#

"Fitted in well with the 'splendid' -fight which Senator Morris had been making for the development of power and the manufacture of fertilizer at the Wilson Dam properties which had been erected by th© Government

during th® World War* In enlarging th® original objective so as to make It cover th® whole Tenne©see Valley Senator Morris and I undertook to Include a multitude of human activities and physical devel­ opments* fi,7 According to newspaper accounts President Roosevelt revealed at Warm Springs* Georgia* on February 2* 1933 the contents of MA gigantic experiment designed to provide 200*000 Jobs and herald th© birth of a new America from which th® curs© of unemployment would be lifted was proposed by President -elect Roosevelt* \ a 11Th© rugged highlands and fertile Indus** trial valley of th© Tennessee watershed were chosen by th® next President for this 'most Interesting experiment a government has undertaken* 1 tfSeated before the biasing fireplace of th© 'little whit© house1 he told newspapermen of his dream for a vast internal development encom­ passing reforestation* reclamation* water power* and agricultural rehabilitation* Th© aim isTto balance th© national population anew between cities and th© country*1' "The great Tennessee Valley project, Involving half a dozen States Is to Includes X* 2# 5* 4# 5* 6* 7*

Reforestation Creation of flood-control basins in th© upper valley®, first at Cove Creek in the Clinch River* Water-power development to be availa­ ble for cities* States* and farm homes* Reclamation of th© fertile bottom lands for agricultural use* Elimination of the unprofitable mar­ ginal lands from farm pursuits* Eventual flood control of the great Mississippi River* Eventual improvement of navigation*

JfMr* Roosevelt announced that as soon as he takes office March 4 he will ask the various Government departments Involved to make surveys with a view to putting th® proposition up to Congress at an early date *"

~4—

Following this statement of the program* and after conferences with the President, Congressmen Hill and MeSwain wrote th© original legislative proposal which represented th© basic principles of the Chief Executives program*® Since legislative proposals may be considered as th® raw materials used in the process of lawmaking* we may now turn to the main problem of this thesis* namely: policy formation* variables!

Policy formation involves at least six

(1) legislature; (S) political parties;

(3) pressure groups; (4) an Administrative agency; (5) Exe­ cutive; (6) The courts* discussed briefly*

Each of these variables will be

As the work proceeds th© place and

function of th© legislature and th© pressure groups* which are intimately associated* will be enlarged upon in Chapter XI*

Policy formation is also a dynamic process In that It

is continuous*

Even after a law is enacted it is always

subject to change or amendment*

In Chapter III the work

of an Administrative agency In this ease, th© T*V*A** will be described*

Chapter XV will be concerned with the func­

tion of th© Federal Courts in th© process of policy forma­ tion*

Th© problem of evaluating the weight of each varia­

ble Involves much patience and careful study and will not be attempted until th© descriptive portions of this dis­ sertation are completed*

Government Is one of the social instruments by means of which people "attempt to formulate and achieve common objectives and generally felt wants•

In a

Democracy it is the agency through which collective desires may be formulated and expressed in

l a w *3-3.

In this sense

government responds to problems that are created by society; and service thus becomes Its primary alm*32

*Eho hub or

th© center of this process Is th© legislature* because It Is through the representative policy-determining branch that government formulates and officialises policy by enacting it Into

law

*13

xt would seam that the legislature

reflects th© Idea of conflicting desires which make legis­ lation or policy determination necessary*!^

Thus the

legislature becomes a problem solving place*!5 a process of clearing collective conflicts*!® public matters*^

a way Qf adjusting

Since th© authority of law Is stamped

upon those desires of the-people which have been successfully fostered* it is readily understandable how common objectives become public policies and how these in turn become laws;^ nXaw is an objectification of th© public wili*tf19

There­

fore* policy formulation comes to mean the continuous series of acts by which desires are formulated* enacted into law* administered in daily practice* and conflicting interests thus affected are adjudicated*^G Accordingly th© legislative branch of government becomes a place where the conflicting interests of social*

©oonomie, and political pressure® are composed with, those resulting from administrative execution*

In th© primary

stages of policy formulation varied forces and Instruments play their part*2^

This Is Illustrated by the following

figure adapted from Domieka, M o d e m Politics and Administra^ tlon# p * 131*

VOTER INTEREST GROUP

POLITICAL PARTY

LOBBY

ELECTION

v

LEGISLATURE Z 5 l JUDICIARY ADMINISTRATION

H k

y

From the standpoint of the citizen or the voter desiring to effectively participate, the first thing he 33mst

do In th© process of government Is to make up his mind

what h© wants the government to do for him*

Within the

democratic frame of reference government exists to serve him*

Once he has mad© up his mind and enough other® have

made up their mind® in the same way the next step is to get the desire embodied Into law*

Citizens, therefore,

express their wants and make provisions for the fulfillment of some of their desires when they go to th© polls and exercise the privilege of voting*22

Thus the desire of

the electorate Is Impressed upon government through execu­ tions • Bine© public opinion Is the crystallization of many individual opinions it Is necessary to provide an agency through which these are brought together*

Political

parties provide one means for building group opinion. 23 They help to organize and. to formulate the mandate of the voter as well as providing a means of transmitting it to the legislature*

Beyond this political parties assume the

responsibility for directing the law-making process through which the citizens wish Is given legi 1 effect*

In this way-

social pressures are translated into public policies*24 While political parties are agencies for the expression and execution of public opinion, in actual practice It often develops that they direct. Influence, and control public opinion and thereby directly effect public policy*2® Consequently political parties perform the essential >ft

tion of policy formulation in Its elementary and advanced stages, as well as presenting such policies for adoption by the legislature*2® Therefore, until recently, the people knew only two mediums by means of which public opinion might exert a direct and open influence upon the governmental policy*

~8«*

On the on© hand was the legislature; on the other political parties#

'Pa these two may be added the emergent# numerous#

organised# non-secret# and potentially powerful specialInterest groups#2*? From political parties and elections it Is only a short step to special interest groups and lobbies of the new type#

since poltics involves the translation of

social pressures into public policies# this translation may be done through pressure groups as well as through political parties#

The two# however# should be distinguished#

5*The difference between party politics and pressure politics is chiefly on© of scope and emphasis# Political parties are mainly# although not exclusively# concerned with who shall exercise power# They represent more or less durable organisations which appeal *to a general electorate for the right to administer th© government of a state# * Pressure groups# on the other hand# are mainly concerned with how power shall be exercised* They are# in a word# more concerned with policy# i*©.# the apportion­ ment of rights and privileges# than with personnel* They rarely put forth candidates of their own# but throw their support to friendly candidates of political parties just as they exert pressure within the party to control the organization and to influence partlsian declarations of policy. Party platforms reflect the interplay of these group pressures and are designed to appeal to a wide public made up of miscellaneous interests# They represent more or less comprehensive# and by th© same token vague# programs of governmental action* Th© platforms of pressure groups# on the other hand# are more specific in character and ar© confined as a rule to a relatively few Issues that most directly concern the special interest of the group in question. Political parties are primarily electoral devices to which matters of policy ar© incidental and secondary; in the case of pressure groups the order of importance is reversed* Cone sequently w© may say that American party politics# so far at least as major parties are concerned# is job or personnel politics; pressure politics* including that of minor parties# Is policy politics.5,&8

Accordingly government “ becomes a tool which may be used to the advantage of any group powerful or influential enough to impress Its demands upon the legislature#

Men vote#

present their interests# and exert powerful pressure through lobbies to force their desires into law*

Pressure groups

supplement th© representative capacity of parties and make a direct impact upon all, th© official governmental agencies# especially the legislature,2® While both political parties and pressure groups exert a high degree of pressure upon th© content© of any policy enacted into law# it seems true that th© party "is rapidly loosing its position as a formulator of policies and a leader of political

thought#^

Even

though they find themselves losing on one front* the party* nevertheless* remains as a unifying force in government* a force which special interest groups must combat#

Poli­

tical parties still put policies into effect and contain© to conduct the government,31

So far as special interest

groups are concerned# in their effect upon policy formulatlon# one "can say with th© greatest confidence that the speeial and unofficial bodies operating at Washington are in good measure responsible for much that becomes law*" Lobbists in Washington are always ready to guarantee almost any result*^2

"They are assuming a place of first

importance in the expression of public sentiment,”^

—10— The ability of this new legislative lobby or special interest group to function so efficiently is due to several reasons*

Their connection with the people a©

Individuals is more immediate than that of political par­ ties or that of the legislature*

Each group sponsors a

definite interest or a definite program which it wishes to obtain at the hands of the legislature*

This gives them

the strength of a unity and cohesion greater than that possessed by political parties*

In relation to their poli­

cies they are determined and ©elfish*

They ar© highly

organized on a national seise# and ar© conducted by shrewd and capable leaders**^

Some of these organizations at

least the powerful and influential bodies* erect magni­ ficent buildings or rent impressive offices In Washington* They hire elaborate and skilled staffs of experts*

They

operate openly and above board In the full light of publicity*

They become the unofficial# respected# and

consulted representatives of special Interests before Congress and Its committees#*55

They are# says one author*

the third hotiee*55 The special Interest group functions as an active dispenser of propaganda and becomes a means of persuasion employed to Influence people# "Since In the TTnlted states,.*public opinion# and not Congress or the President* Is king the man who controls public opinion will easily control th© nation Itself* And in recent years# th© forces of

privilege have aimed at doing precisely this thing* The men who seek special favors of Congress rely almost exclusively upon the manipulation of public sentiment* They do not bribe* or give free passes# or pay election expenses; they attempt to make th© legislators think that the thing they want Is the thing that th© public wants* They do not go for th© congressman except only ©coasslonally; they send his constituents after him* Th© favor see seeking classes apparently remain quiescent them­ selves; the real persuasion is done by newspapers* lettor-wrlters* publicity agents, petition signers# public lecturers* magazines and tel©gram-senders• Th© new lobby has seised upon everything that plays a part In forming what is apparently enlightened and Independent public sentiment#"5” In their relation with government such groups maintain a healthy and helpful contact with favorable members of Congress through capable contact men or lobbyists*55 The American legislative process gives the lobbyist a good opportunity to function*

At Congressional committee

hearings he performs in the interest of his group*

Here

discussions and debates take place# facts and figures are presented* technical questions are explained*5® "Without these public headings and without th© information supplied by these representatives of special interests# th© commlttBe would b© unable to carry on their work*!l^° After the legislative body enacts the various proposal© Into law* the administrative agency (such as th© T*V#A#, In this study) assumes the responsibility of execut­ ing or carrying the policy Into fore© and effect#

Policy

execution involves* by virtu© of th© nature of the adminis­ trative process itself a degree of policy formulation* This is more particularly true in those areas where a

-

12-*

relatively large measure of "discretion”, as against "min­ isterial" delegation of authority occurs,

ill© administrator

by acts of comm!salon and omission determines policy#

In

attempting to Interpret congressional Intent and th© meaning of a rather generalised statute policy formulation Is also Involved#

In this c mention the agency likewise

often finds Itself confronted with th© possibility of violating th© "rights” of Individuals#

Cases are brought

before the courts, and this interpretive branch of govern­ ment accordingly decides th© questions of the constitution­ ality of the policy as well as the problems of rights and duties Involved#

Thus judicial interpretation and set­

tlement of ,frights” and "powers” play a role In policy d© t©rmlna11 on * In summary then our basis for an analysis of the problem of policy formation would approach th© following formula or equations

legislator© plus party lines plus

special interest groups plus administrative agency plus courts equals policy formation#

Chapter II COTORESSIOHAh PORMULATXOM OF POLICY Covernmental policies, particularly within a democracy, are generally developed by suggestion, discus­ sion, and compromise*

As previously noted, th© T*V*A*

proposal was suggested by th© Chief Executive to favor­ able administrative leaders in Congress#

Hearings were

held in which the proposals were discussed with interested pressure groups and opportunity given for th© presentation of information essential to the making of an equitable policy, or one as nearly equitable as the interests of parties concerned made possible#

Finally th® various

desires must be compromised if an effective policy is to be determined# over#

It Is at this point th© legislature takes

Her© political party lines play a part*

Seldom Is

any bill entirely satisfactory to all Interests concerned, even after passage# exception*

The original T.V*A* bill of 1933 Is no

Opinions favorable and unfavorable were ex­

pressed during the debates on th© original proposal#

Later

these opinions were substantiated by the legislative ballot# From these opinions it is possible to gain some insight into th© viewpoint of various Congressmen and, thus to secure a picture of congressional attitude toward the policy as a whole*

It is the purpose of this chapter to describe

th© activities of th© specific pressure groups that lobbied for, as well as those that offered opposition to the T#V,A.

Act#

Congressional attitude toward the various proposals

and their enactment into law is also examined*

Since

policy formation Is a continuous and dynamic process It Is appropriate to show how th© original act of 1933 was gradually modified in the 1935, 1939, and 1940 amendments# With this brief explanation it is profitable to turn directly to a description of the activities of specific pressure groups which lobbied for the T#V#A* Act in 1933 as well as of those which offered semblances of opposition* All groups presented volumnlous and persuasive factual documents, and opinions, and each group was represented by able and well respected leaders* RATIONAL FERTILIZER ASSOCIATION The national Fertilizer Association has a member­ ship of 250 fertilizer interests composed of BOO individual firms*

Prominent among firm names are Du Pont and Allied

Chemical and Dye*

The membership roll includes those

Interests which make and market fertilizer, those which supply essential fertilizer ingredients, as well as those which manufacture machinery and bags .^1

Th© various Indi­

vidual Interests composing the association own and operate 835 fertilizer plants in the United States, 482 of which ar© located in the southern states more or less directly affected by th© T*V.A# proposals# Mr# Brand, speaking for th© national Fertiliser Association during th© hearings conducted by the Military

Affair© Committee In 1933, expressed the opinion that his association was definitely opposed to th© fertilizer pro­ visions of th© T«V#A, hill*

This opposition was based on

the fact that the government was being placed In direct competition with an established business *^2

He

said,

"X have always felt that as long as any private business performs its functions it should b© left to perform them with th© least possible interference*"^?

Consequently

extensive and commercial production of concentrated ferti­ lizers and fertilizer Ingredients should be eliminated*^ On the other hand, however, the association would approve and support a governmental policy of experimentation In th© fertilizer field at Muscle Shoals*

Such was th© best

way in which Muscle Shoals could serve American agricul­ ture In support of this viewpoint the association submitted that from 1921 to 1933 th© various fertilizer Interests had sustained a 350 million dollar loss because of th© agricultural depression which followed that World War#^®

In 1930 their volume of business stood at 8,200,000

tons, but dropped to 4,300,000 tons in 1932• 47 th© losses were not the only consideration# a "service to the farmer" that was Important*

However,

There was also Said Brand,

"My association has been engaged for over 20 years In fundamental agricultural educational work, and it has ©pent in the neighborhood of il,600,000 In that period for the purpose of teaching farmers crop rotation, proper conservation of their soil, avoidance of soil erosion through terracing and

-16©v©ry other agricultural practice, including th© us© of caramerclal plant food, that could h© considered under th© term of good farming# W© think we have don© real service for that industry and can perform that service continu­ ally without any encouragement other than a little more purchasing power on the part of th© farmer*"48 In addition to losses and the services rendered to farmers, there was also th© competitive angle to toe considered*

Brand categorically declared that there

was no more competitive business in th© United States than the fertiliser Industry, "and competition has just about ruined u s #"49

in this relation the existing ferti­

liser enterprises In th© United States had a productive capacity of 550,000 tons of chemical nitrogen* capacity was 3,300,000 tons*

The World

In 1932 th© American farmers

consumed 161,650 tons of such fertilisers a drop from 293,650 tons in 1930# tons#

World consumption was 1,800,000

And in 1932 America Imported 65,482 tons of nitrogen*

In other words. In 1932 th© United States imported about thirty-five percent of our nitrogen consumption, despite the fact that th© American fertilizer Interests had a capacity to produce two times as much as was being used# There was no tariff on nitrogen#^0

if the government

proposed to go into competition with the fertiliser interests, those interests suggested in turn, that th© government purchase the existing plants thus preventing th© destruction of the asset value of the existing Industry*5^

~i7~

The fallowing tables relate to nitrate of sodas? mud sulphate of &xmon&tm Import® tmd exports#, toss# tools*#

the eaprlerm from whieh nitrogen is «se&e*®& Table,1 Met Sports of Hitraba of Soda 1030-30

1030 1931 1932

Sasporteo

Kseports

let Imporbs

638,825 610,680 80,468

88,080 TO ,700 165,000

#00*100 S42«9&9 -128*518

Tabla II Met Imports of Sulphate of Mmmniwa 1930-32

1930 1931 1952

Imports

Met Export# Imports

57,838 185,681 544,188

01,461 78,040 10,511

-55*583 fK}*TCX 387,577

The first table illustrate® the £u®t that tho fertiliser industry i» the United States produced nitrate

of soda far in eaeoese of domsstle eonsttmpbl

The eeoomd table shows that foreign

left Inere&sed their shipments of sulphate of

ammonium Into our domestic market and thus have played a part in taking a portion of the dome at f©. out-put away from the American manufacturer#5^ 11X submit*1* said Brand* "that in such cases it is wholly unnecessary to consider further th® manu­ facture of nitrogen -under Government aegis# not only at Muscle Shoals but anywhere* Wo can pro­ duce today easily the entire amount of nitrogen that farmers will be able to buy at anytime in the near future* Our tariff walls on those Items are down* and we have to meet that difficult situation* Therefore# the fertiliser Industry cannot possibly take advantage of the American farmer; because the minute the price is out of line* nitrogen being on the free list flows In freely***55 In discussing the production of phosphoric acid by the electric furnace process* as contemplated at Mh&ele Shoals* Brand was of the opinion that It would cost ap­ proximately $74*58 per ton*

This figure included a low

Cost power# materials# labor* repairs# overhead (including taxes and insurance)* and freight charges*5®

He was also

certain that the proposed electric furnace process could not compete with any other process; nor could cyanamide or phosphoric acid be manufactured at Muscle Shoal® to compete with that made by the regular commercial manu­ facturers*

There was only a strong sentimental— not

economic feeling that the plants at Muscle Shoals should be used*5*? Commercial makers of phosphoric acid have a capacity to produce two and one half times th® maximum consumption*

”Certainly#11 said Brand* f*wlth 106 plants

now available* working at less than one fourth capacity#

there is no need for any further phosphoric acid to be injected into this argument by a Government subsidy#.115® From the foregoing* on© can readily see that the aswoolation was against the government entering the .field of the manufacture and distribution of fertiliser on a commercial scale*

However* it did favor th© use of the

Muscle Shoal® plants by the Government on an experimental basis only#

The following represents th© National Ferti­

lizer Associations final recommendations; ul*

That nitrate plants nos* 1 and 2* except the ammonium oxidation# the nitric acid and the ammonium nitrate sections* be tendered to th® Secretary of Agriculture for selection of such parts thereof as may be useful In assembling a pilot-sis© experimental plant to be operated by the Fixed Nitrogen Research Laboratory of the Department of Agriculture for the manufacture of fertilizers and fertilizer Ingredients for experimental purposes**#*

”2*

That the ammonia oxidation# nitric acid# and ammonium nitrate sections be tendered to th® Secretary of War to be retained for munitions purposes for national defense if the War Department so recommends# If the Secretary of War does not recommend their retention for national defense# that the same be sold in accordance with law governing the disposal of surplus Government property*

113*

In the ©vent that the Secretary of Agriculture decide® that the public interest will be served by th© assembling of a pilot-siz© experimental plant# that th© buildings and power plant of nitrate plant no# 1 be assigned for the assembl­ ing and operation of such experimental plant*

”4*

In the event that the Secretary of Agriculture decide© to assemble and operate a pilot-size experimental plant* all equipment and buildings not set aside for his use through the Fixed Nitrogen Research Laboratory# and the residue of all machinery* apparatus and other facilities shall be sold to the highest responsible bidder*

”5*

In event th® Secretary of Agriculture doe© not act a® authorized in paragraph 1# and th© Secretary of War doe© not act as author­ ized In paragraph 2* nitrate plants 1 and 2 shall he offered for sale and sold in their entirety In accordance with the law govern­ ing th© disposal of surplus Government property#

r,6*

In event no willing purchaser Is found for any part or the whole of said plants and their associated facilities* excluding all of the power plants*, the remaining facilities shall he offered for lease in part or as a whole under direction of *The Tennessee Valley Authority*#### without statutory prescription as to the use to which they shall he put* and without subsidy In any form*

w7*

In event no less© is found* th© nitrate plants the Waco limeston© quarry* the industrial villages and other properties# excluding the railroad facilities that.may be of use In connection with, the power plants shall be sold to the highest bidder as surplus prop** erty*ttbO According to the above recommendations# th®

nitrate plants# and associated properties were to be turned over to the Secretaries of Agriculture and of Wap for expepmental purposes only#

Providing neither the

Secretary of Agriculture nor the Secretary of War cared to carry on such experiments# then the association pro­ posed that the government leas© th© nitrate plants5^ d3% scrap them In case a less® or a purchaser could not be found*5® Placing these recommendations beside the T#V*A Act of 1933 it is fair to conclude that the work and testimony of the National Fertilizer Association was mostly in vain*55

Th© thing that seemed to turn the

committee from these recommendations was the fact that the fertilizer interests had charged excessive prices* as much as $50 per ton for their product#6^ and In the words of chairman Me Swain "had pocketed that difference#”55 AMERICA M FARM BUREAU Previous to the passage of the original T#V*A* hill President Roosevelt requested Edward O ’Neil# President of th© American Farm B ureau Federation to submit a state­ ment of the Bureaus1 position on th© Muscle Shoals problem# On April 1, 1933* a memoranda* containing eleven recommenda­ tions was submitted#

This document formed the basis for

Mr* O ’Neil’s position before the House Military Affairs Committee on April 12* 1935*66 In 1933* the American Farm Bureau was anxious to have Muscle Shoals developed as contemplated In the pro­ posed Act*

To them* the rejection of such a policy would

be an error both from the angle of fertilizer production In times of peace* and also "would b© tremedously in error in times of war when nitrogen requirements Increased almost geometrically*”67

In the light of th© present International

conflict the Bureau’s position and statement on the value of Muscle Shoals as an essential*;pat3,ohal .d^fen^e .agppcy, • '*’• •* V •; V was prophetic#55 . if From an agricultural standpoint the .Bureau recognized the value of the Muscle Shoals properties» under government control# as a fertiliser producing* Improving,

and cheapening agency to the farmer #

In relation to

nitrogen material© the Bureau offered statistics to show that the United States was not self-sufficient#

In 1931

the country produced only 60 percent of the requirements of domestic consumption*

The following table illustrates

the relationship existing between domestic production* imports* and home consumption* Table III69 Production* Imports* and Consumption of Nitrogen in United states

Ite m P ro d u ctio n :

1913

1926

1929.

1930

128,235

170,000 I 26,000 255,327

187,600 184,000 236,161

164,000 1 140,000 166,508

122,900 1 60,000 151,550

167,565

451,327

507,761

470,608

334,450

36,000

55.500

33,840

34.200

415,327 47.0

452,261 60.5

436,668 60.6

300,250 60.9

39,330

A p p a re n t co n su m p tio n _______________________ P e rc e n t of to ta l from dom estic p ro d u c tio n ......... ...........

167,565 23.5

■’ 1931

Again the lack of a self-sufficiency may be demonstrated by the volume of fertiliser ingredients imported*

(See Table W

on Next Page)

Table IV70 Imports of Fertilizers and. Fertilizer Materials# 1953

A rticles

Decem ber, 1032

N itrogenous: T ons A m m o n iu m sulphato, free .................._..................._........ IS, 225 C alcium cyanotnide, or lim e nitrogen, free - ........ .. 4,657 C alcium n itra te , f r e e . . . ............................. ............................. 1,050 G uano, free.................... ............................................................. 2,433 D rie d blood, f r e e ... ................................................................... 501 S o d iu m n itra te , tree................ .................................................. 48 U rea a n d calures, free................................................ .............. 215 O th er nitrogenous, fre e ...................—.................................... 3,400 P h o sp h ates: B one ash, d u st, a n d m eal, a n d anim al carbon fertilizers, f r e e . . .............. ........... .............................. ............................. .. 3,480 O th er p hosphates, free................ ........... ............................. .. 1,450 P o ta sh fertilizers: C hloride, cru d e, f r e e . . ......................................................... .. 1,355 K a in ltc, free.......................... ......................................... ........... 720 M a n u re salts, free ................................................ ............. 3,596 S u lp h a te , crude, free .............................. ^__ 1,450 O th er potash-bearing substances, free__________ ____ _ 7 F ertilizers, com pounded o r com bined, containing n itro ­ gen, phosphoric acid, an d po tash , free _______ 387 All other, free________________________ __________ ________ 4,755 T o t a l . . .................... ............................ ........... .........................

45,305

Tw elve m o n th s end­ ing D ecem ber 1932

$240,586 115,406 20,483 44,511 10,035 % 142 20, 160 42,427

Tons 307,311 02,643 6,860 24,231 3,730 50,430 3,820 33,70S

$5,410,160 1,629,100 148,105 480.092 91,512 1,472,004 300,600 820,510

56,013 20,348

30,118 37,163

508,802 432,176

40,827 0,174 47,413 08,701 44

78,358 40,374 100,927 28,071 381

2,794,979 457,318 1,254,720 1,201,671 3,717

20,447 92,212

346 40, 245

184,735 659,142

871,019

860, G34

17,858,162

The Farm Bureau felt that the adoption

the T*V*A* bill#

with it© fertiliser provision© intact# w a l l make the United State© .acXf^sufficient in fertiliser and fertilizer ingredient© #7^ In addition to the lack of ®©lf*©uffi©iency in the commereial area there was an estimated annual soil loss of 9#000#000 tons of nitrogen resulting from growing crops#

Deducting the credit of nitrogen added to the ©oil

by various factor© illustrates the net loss of nitrogen#

(See Table V on Next Page)

**•04** Table V 72 Net Loss of Nitrogen

Manure Legumes B&ebori& Rain Water Nitrogen Applied in Fertilisers Tot&l Nitrogen Returned to Soil Total Annual Net Loss of Nitrogen

1,750,000 1,750,000 1,ooo,ooo 750,ooo 575*000 5,625,000 5,575,000

This estimate of yearly depletion of nitrogen does not consider the losses through soil erosion.

About twenty-

one thnes as much plant food is removed annually from the soil through erosion as Is taken out by cropping.

Conse­

quently, the farmer, facing both an imminent shortage of this essential soil nutrient and the heavy nitrogen losses sustained by the soil through intensive cropping (as well as erosion) favored the fertiliser provisions of the T*V#A* Act« While the Bureau wanted Muscle Shoals operated primarily as a source of cheap fertilisers, It also favored the power aspects of the bill*

So far as “surplus11 energy

was concerned sale at low prices in territory surrounding Muscle Shoals would not be contrary to agricultural ways of thinking,7^ besides it would be a yardstick to measure the cost of power#7^

Indicative of the us© by the farmer® of the United State® of plant foods Is demonstrated In the fol­ lowing table*

The

Bureaus direct Interest in fertiliser

and the fertiliser provisions of the T*V‘*A* bill thus boo erne® apparent* Table Principal Fertiliser Ingredients

Phosphate ® Nitrogenous Potash Filler and Conditioner Total

Tons 4 *100,000 2,100,000 900,000 800,000 7,900,000

A savings on the total amount of fertilizer purchased would be of vital concern to the farmer*

The Farm Bureau was of

the opinion that fertilizer could be manufactured at Muscle Shoals at a material reduction, because the higher the percentage of plant food in fertilizer the lower the cost per pound of plant food to the farmer*

(See Table on next Page)

26**

**

Table VII76 Variation In the Coat of Plant Food to th© Farmer with the Plant Food Content of the Fertilizer

18 14 16 18 20 85 30 35 40 45

percent percent percent percent percent percent percent percent percent percent

cents per pound 15*6 12.6 11 #6 10#6 10#0 9.0 8.9 6*8 6.7 6.4

plantfood plantfood plantfood plantfood plantfood plantfood plantfood plantfood plantfood plantfood

A study of the next table will reveal that American farmers have gravitated gradually toward the use of higher concentrates in fertilisers in relation to specific cropsf such as corn. Table VIII77 jhaount of Fertiliser used per Acre in the Production of Corn in the tr.S.f 1922 and 1927

1922

1927 S ta te

A v e rag e pounds p e r ac re 300 300 366 241 208 160

113

A v era g e T o ta l p la n t to ta l food p e r a n a ly s is a c re 16,0 15.0 17.6 17.0 15.7 15.7 14.5 16.3 16.8 15.3 17.9 18.9 25. 3 14.3

A v era g e pounds p e r ac re

49.4 45.1 62.3 4 1.2 40.4 32.9 41.7 29.6 24.9

374 260 333 223 224 184 224 200 136

29.0 22.3 28.9 20.7

-145 112 130

A v e ra g e to ta l a n a ly s is 16.0 13.1 17.1 15.6 14.7 15.6 14.1 14.5 15.6 IS. 6 16.1 16.2 28.5 16.9

T o ta l p la n t food p e r ac re 61.0 34.2 57.7 35.1 34.7 2 9.0 35.1 28.7 21.6 18.4 23.3 18.0 31,0 22.4

-37-*

Again* proof of the trend toward the use of concentrates by states may be illustrated by the following table* Table XXm Average Plant Food Content of Mixed Fertilisers used in the States Typical of Various Sections of the Country

1900 M a in e _________ M ass a c h u s e tts .. N e w Y ork _____ P e n n s y lv a n ia ... N o r th C arolina. G eorgia ...... IiO tiisiana . I n d i a n a _______ C a lifo rn ia_____

14.8 10.4 15.9 13.4 13.7 13.8 14.2 11.6

16. £

1910 16.5 16.3 16.1 14.2 14.2 14.6 14.4 13.8 16.6

1920 16.0 14.3 13.7 14.6 13.3 14.2 14.3 13.2

14.4

1930 22.0 16.2 20.4 18.4 14.9 17.1 19.2 21.6 16.8

22.8 1 6.3

20.8 18.6

15.0 16.8 19.2

2 1 .5

19.6

Further evidence in support of a project like Muscle Shoals to Bmnufaetur© and sell highly concentrated fertilisers at materially lower prices is demonstrated by the enormous removal of nitrogen from the soil by a variety of crops*

(See Table X on Next Page)

Table X79 Plant Food Constituents Removed by an Average Crop Grown on X Acre

P o ta s h (K sO ) (p o u n d s)

N itro g e n

K in d of crop

(pounds)

Corn. . 1,500 pounds. 27,6 (22.9 K )

16.6 (7.3 P )

O ats.

21.0 (17. B K ) 4.8 (4 .0 16.6 (13.0

0. 0 (4. 0 P )

20.4 (17.0 K )

1,7 (2.I P )

18.8 (16. 6 K )

A p p le s (30 trees per a c re ). 1,000 p o u n d s. 100 p o u n d s ..

1.4 K )

J.0 P ) 2,000 p o u n d s. 24.0 (10.6 P ) P e ach es (100 trees p e r ac re).

45. 5 (37.7 K ) 5,300 p o u n d s . 1,500 p o u n d s.

42. 0 (36.0 K ) 2 .5 (2 .0 K ) 90. 0 (74.7 K )

T u r n ip s .

Another strong argument for developing the fertilizer phases of Muscle Shoals was found in the low percentages of nitrogen contained in the soils of various sections of the country#

(See Table XI on Next Fag®}

■*»00w Table XX80 Nitrogen Content in Soil© in United States

Region

T y p e of soils

N ew E n g lan d (except C o n n ec tic u t a n d sm all p a r t of R h o d e Is la n d .)1 N o rth e a sto rn se ctio n (southw est tw o th ird s of N ew Y ork, m o st of C o n n ecticu t, Now Je r­ sey, D elaw are, P e n n sy lv a n ia , V irginia, W est V irginia, K en tu ck y , Ohio, so u th ern th ird of Illinois, so u th e rn th ird of M issouri, all of In d ia n a , so u th ern h alf of M ichigan, tw o th ird s of so u th e rn W isconsin untl e ast h a lf of M in n eso ta). Sou th e aste rn section (m ost of N o rth C nrollnn, S o u th C arolina, Ooorgla, A labam a, Flori­ da, so u th e rn h alf of T ennessee, Louisiana, M ississippi, m o st of A rkansas a n d one eig h th of Texas). of Iow a, n o rth w est tw o th ird s of M issouri, n o rth tw o th ird s of Illinois, w est th ird of N obraskn, w est h alf of O klahom a, tw o fifths of Texas). F ifth section (east tw o th ird s of N o rth D a k o ta , oast th ird of S o u th D akota; cast h alf of N e b rask a , half of center of K ansas a n d O klahom a, a s trip in ce nter ol Texas). S ixth section (cast fifth of M o n tan a ; south w est tw o fifths of N o rth D a k o ta , w est th ree fifths of S o u th D ak o ta, w est half of N obr&ska, e a st q u a rte r of W yom ing, oast eig h th of Colorado, c ast eig h th of K ansas, sm a ll section in p a n handlo of O klahom a, h alf of P a n h a n d le of Texas, ono e ig h th of N ow M exico). S ev en th section (strip th ro u g h center of M o n ta n a , d ow n th ro u g h W yom ing, com ­ p risin g ab o u t throe q u a rte rs of th e S tate, a n arrow s tr ip th ro u g h tm stern Colorado, ap p ro x im ately half of Now Mexico, a n d one e ig h th of w est Texas).

Average T o tal acreage nitrogen co n ten t

Percent

A m ount nor acre (to dentil of 40 Inehes)

Pound*

150, 000,000

16,000

123,000,000

C h e stn u t b ro w n soils.

102,000,000

Drow n grassland soils.

52, 000,000

. 12

16,000

10,700

.06

8,000

J Dsitsi nnt avnilubln.

Fertilizers assume significance when the amounts necessary to plant consumption are given consideration# Table XIX81 Fertilizer Consumption by Crops in the United States, 1930 Cotton Cow Vegetables and Fruit Wheat Potatoes Tobacco Oats Hay Miscellaneous Total

Percent 35 81 10 9 9 7 4 8 3

Ids

Th© :.Bureau felt that Increasing yields obtained by the use of fertilisers was an excellent argument In favor of the. T*T*4# M i l and its proposed fertilizer provisions.

Yields# tof the us© of commercial fertiliser^

are shorn for various •■state© In the accompanying tables fable XIIIB2 \' Farmers Intimate© of Increased Yield Obtained by use of fertiliser

W ith ­ out fer­ tilizer

W ith ferti­ lizer

W ith ­ ou t for' tilizer

W ith ­ o u t fer­ tilizer

W ith ferti­ lizer

W ith ­ o u t fer­ tilizer

W ith ferti­ lizer

Bushels B u sh e ls ____ M a in e N ew H a m pshire. V erm ont .... M assachusetts__ C onnecticut_____ N ew Y ork ______ N ew Jersey _____ P en n sy lv an ia___ D elaw are_______ M ary la n d . V irginia________ W est V irginia___ N o rth C arolina. _ S outh C aro lin a... Georgia_________ K e n t u c k y ......._ Tennessee _ A l a b a m a ......... M ississippi........... Ohio....................... In d ia n a .......... Illinois_______ . . . M ic h ig a n .._____ W isconsin____ . . . M is s o u ri... . . . . . . _ A rk an sas.. L ouisiana. ____ T e x a s .. .

114,7 135.0 129.3

155.3

288.0 2 53.2 234.6 733.0

94.7 95.4 311.4 274.0 283.4

155.2 152.4

128.2

877.7 975.4 1, 016. 4 1,162 2

37.9 35.4 36.1 32.1 24.7 31.2 14. 0 9 .2

10.0 25.3 24.8 11.8 12.2 35.7

30.2 15.8 12.7 13.4

04.1 48.2 47.9 4 4 .0 35.4 48.9 28.7

256.4 210.4 202.9 212,2 199.9 175.2 224.7 223.8 151.5

23.1 19.1

34.8 32.2 23.6 2 4.8 48.8 44.5 4L7 47.5 52.0 3 7.9 27.5

22.8 22.6

According to the Bureau wit must be realised that Musol© Shoals* as a fertiliser project, is of the keenest interest not only in the fixation of atmospheric nitrogen but in regard to the production of phosphates also#*83

This phase was Important because more

phosphates are consumed annually in the making of

-31fertllizer than any other single Ingredient*

In 7,900,000

tons of fertiliser there are 4,100,000 tons of phosphate and 2,100,000 tons of nitrogeneous materials*

Then, too,

th© Muscle Shoals project lies in the heart of a great phosphate rook hearing region of Tennessee, this rock being a basic ingredient to phosphatlc plant foods*

Phosphatlc

fertilisers are made by the electric furnac© process* , Muscle Shoals was equipped for this method, and under th© proposed T*V#A* bill th© Authority would furnish th© necessary energy to operate these furnaces*®^ Since th© Tennessee River with its proposed nine foot navigation channel was to become a part of the great Ohi o -Mias I ssipp I-Mi ssouri inland waterway system, large savings might be affected to the farmers by a reduction In transportation rates necessary if fertilizers were made at and distributed from Muscle Shoals*

This

inland waterway system would connect with ocean transport through th© Gulf of Mexico thus .making it possible to ship fertilizers Into every portion of the country at a material saving#

It was shown that concentrated fertilizer could be

shipped 600 miles as cheaply per dollar of freight as low grad© fertilizers could be shipped 100 miles#

In this light

the farmer would save three fourths of the cost of trans­ portation, handling, and bags which they now pay for low grade fertilizer if they could purchase this concentrated fertilizer produced on a quantity basis*

In addition a savings could be made through the manufacture of concentrated fertilizers at Muscle Shoals# wXt Is estimated that this concentrated fertilizer could be manufactured at Muscle Shoals and sold to the farmers at no more than $2*20 per loo pounds, or #44 per ton f#o*b# Muscle Shoals# One hundred pounds of such fertilizer would have the same amount of plant food as 1,200 pounds of 8-4-4 commercial fertilizer, which In 1951 cost approximately $1*20 per 100 pounds or $24 per ton# Since 100 pounds of this con­ centrated fertilizer, costing $44 would be equivalent In plant food value to 4 tons of the low grad© fertiliser costing a total of $96, or a net saving of #52 on th© first cost alone# In addition, th© farmers would save 75 percent of th© freight charges and hauling charges and 75 percent of the cost of bags because it would only require one fourth th© tonnage and one fourth the number of bags to haul th© same quantity of plant food In the concentrated fertilizer as would be required in the case of low grad© fertilizer« Another study, relative to this problem of costs show a greater savings than the study just cited#

This

conclusion pointed to the fact **that concentrated ferti­ lizer (578 pounds of plant food per ton) could be prodttced at Muscle Shoals and delivered to the farmer at an average total cost of #20*75, of which th© production cost at Muscle Shoals was $16*96, th© average freight charges $5*36, the average selling cost by cooperatives, 43 cents* Gompared with this cost, the actual average cost per ton of the average mixed fertilizers us©d in all the States studied was $36*77 per ton# Thus, a saving of #16*02 per ton was shown*”86 Large savings could accrue by using as much as would b© necessary of flood power at Muscle Shoals# The fertilizer business is a seasonal on© and great quanltles could b© made during flood heights on the Tennessee*

A double savings thus could be made by using

33-

-*

s©aondary power for manufacturing concentrated fertilisers and utilising lesser quanitles of the high priced f i m power for which there is a constant consumer demand.*®? Th© benefits to be derived from such a plan were set forth in the following table for the five years 1928 to 1932 inclusive # Table O T S0 Estimated Amount of Concentrated Phosphate Which Could be Manufacture d from Surplus Power at Muscle Shoals

A m o u n t of su rp lu s power Y ear A m o u n t du rin g en tire year 1

A m ount du rin g peak period, e s tim a te d 3

A m ount durin g entire yea r

Tons 283,500 276.700 170.700 174,000 236,100

A m ount durin g peak period

Tons 164,200 179,500 171,800 158.400 196.400

E q u iv a le n t a m o u n t ot 16 p ercent acid phos­ p h a te 4

A m ount during en tire y ea r

Tons 1.701.000 1.054.000 1.024.000 1.044.000 1.416.000

A m ount du rin g peak period

m u sO gi © t 'O s® s sr-1

K ilow atthours K ilow att-hours 1.559.340.000 * 903,000,000 1, 510,411,000 e 987t 000,000 638.931.000 7 045,000,000 957.069.000 s 871,000,000 1.298.680.000 «1,080,000,000

A m o u n t of concen­ tra te d phosphoric acid (95 percent) w hich could b e m an ­ ufa ctu re d w ith s u r­ p lus p o w e r3

i F ro m d a ta su p p lie d b y Office of C hief of EnfinsB rs, U .S . A rm y . ,. , . 3 Excess p ow er ava ila b le d u rin g “ flood p erio d " above a m o u n t used, estim ated from d a ta su p p lie d by ^ ? B y ° a ^ m p a r a ? I ° e i y e?ew ^ ro cess™ U Is estim ated on reliable a u th o rity , th a t 5,500 kilo w att-h o u rs of energy are re q u ired to m a n u fa c tu re 1 to n of phosphoric acid or 95 percent concentration * P h o sp h o ric acid of 95 p ercen t con c en tra tio n is eq u iv a le n t to app ro x im a te ly 6 tim es th e stre n g th neces* s a ry to m ak e th e u su a l fertilizer used b y farm ers. * 7 m o n th s, M a y - J u n e 1928. * 7 m o n th s, J a n u a ry -J u ly 1929. 7 7 m o n th s, N o v e m b e r 1629-M ay 1930, 6 7 m o n th s, N o v e m b e r 1930-M ay 1931. * 8 m o n th s, D e cem ber 1931-July 1932.

Xu view of sush statistics, the American Farm Bureau was of the opinion that the proposed Authority could materially reduce the cost of plant foods to the farmer# first# because of the low priced power? second, because of water transportation; third, because of high concentrate materials; fourth# because of distribution

-

34-

largely through farmera cooperative purchasing agencies; and fifth# because of low cost raw materials in th© Valley* Accordingly# then# eleven recommendation© were mad© regarding the disposal of the T#V#A* bill*

They are

as followss f,l*

Th© Muscle Shoals project is of both agricultural and military significance as authorised in the national Defense Act of 1916*

”2*

The United States is not self-sufficient either in peace or war in its nitrate supply*

M5*

Th© soils of our nation are depleting both by crop production and erosion many time© faster than they are being replenished* This is especially true of the nitrogen content*

rchange# or abolish the m'mounced policy#

This seems to be but a reflection of the

continuous group struggle for power and for dominance in policy determination#

It is appropriate, therefore# to

turn to th© attempts at alteration which were made sub­ sequent to the creation of the T#V#A*

& l e drive for

amendment was given Impetus by judicial action# Early in 1955 a District Court annoitncecl that the extent of the Authorityfs power to generate and sell electricity was determined by governmental needs#

To

manufacture and dispose of surplus, energy over and above such needs was to exceed the power granted In the statute* All contracts with municipalities for electricity were held to be ultra vires and hence void#

The court also

enjoined the Author!tys purchase of transmission llnee#***^ Tills decision throw light upon T*V.*A#ts activities in two respects# namely:

that the Board apparently had exceeded

its po er granted in the law, and, secondly# that the area of the Authorityfs activity should bo narrowly restricted to protect private enterprise*

Immediately

proposals to amend the original act were Introduced In Congress#

Following legislative practice* these proposals wore sent to appropriate committee® which told public hearings*

The pressure groups again fkppe&red to present

their cases and to aid la policy determination*

At these

hearings * however* a new ^vested interest11 appear® in the' Tennessee Valley Authority Itself*

And we turn directly to

these A* controlt

it would put the

T*V*A* in a position to crush out private poiver competition* In th© light of the Ashwandsr decision, the pur­ pose of the proposed amendments seemed to be of a corrective or clarifying nature*

Subsequent to the hearings on the

proposals, however, th© Military Affairs Committee saw fit to alter th© content of th© amendments*

In th© words of a

Congressman they were "proposed for the purpose***to remind (sic) these gentlemen of the responsibility which rests on them, to check their unwarranted usurpation of powers not delegated to the^, and to make impossible a further extension of their improper use of authority which is delegated under the act*" QOHGBESSlOhAh ATTITOTB During the debates in Congress the issue seemed to be drawn between those who wished to restrict the

—64—

activities of th© T*V#A# and those who wished It to possess Corporate freedom*

Most of the opposition was found In the

House and especially in the ranks of the Republican Party# In a minority report on the proposals, it was said, "We do not now, nor have w© ever, subscribed to th© philosophers of Government upon which the act now sought to be amended was based, and, therefore, would be opposed to the passage of the original measure were It before the House of Representatives today, 11IS®

The Senate backed by the

Democratic Party leader© favored the philosophy of th© T*V*A* and corporate freedom, and desired to see It have wide discretion and power to carry on Its activities In the interest of the common people* In lieu of the T*V#A* Board Amendments the House Commit tee proposed six basic changes in th© original act all of which would curb the activities of th© T#ir*A# alterations were as follows :

Th©

(1) The Authority should make

a unified development report to Congress embodying future construction plans and recommendations * While the original bill provided only for the construction of Norris Dam, it was found that the Authority had exceeded Its power by having others under way without consulting Congress concerning th© necessary appropriations# surplus land#

(f£)

Permit the conveyance of

In this light It was found that the T.V#A*

had purchased land adjoining the banks of the Lit to Tennessee to prevent th© Aluminum Company of America from

building other dam© and thereby flooding government property#

(3) Required the establishment of an accounting

procedure, and limited the time at which power might b© sold at cost*

This system of accounting should be Identical

with the uniform procedures used by other Industries engaged in th© utility business*

(4) Put the Authority

under th© supervision of th© Comptroller General# and required an annual audit of expenditures*

This provision

was prompted by a report of the Comptroller General showing exceptions concerning T.V.A* disbursements.

(5)

Provide

for th© condemnation of existing transmission lines rather than duplication by the Authority if Its efforts to acquire th© existing facilities were successful, and (6 ) no experimentation In chemicals*

The House bill also contained

other provisions of relative importance*

The proposal

failed to Include a provision permitting the T.V.A* to include the Cumberland River project within its unified plan# which meant a limitation of geographical area for operation; and refused to Increase the Authority1© bond Issue by §50#000#000#

T.V.A* financial aid might also be

granted to States* Counties# and cooperatives in th© purchase of local distribution systems *3-57 While the House px^oj^osod drastic restriction# upon# the Senate proposed considerable increase In th© authority possessed by th© T.V.A*

The Senate proposal

would give th© T.V.A* an opportunity to proceed with Its

work in an orderly way and to accomplish Its ultimate objectives*.

The Senate hill favored an extension of

geographical area# as a means of obtaining a market for energy# and this would permit the T*V*A# to Include the Cumberland River project#

In this relation the proposal

also permitted the Authority to purchase any existing generating* distribution# and interconnecting facility within transmission distance* and to resell the same to States* counties* and rural cooperatives*

In case of

inability to purchase existing transmission systems then the Authority might build duplicate lines* demnation procedure® were also included*

Broader con­ In order to

render the project self-liquidating and self-supporting* permission was given to coll surplus energy*

The bonding

provisions of the original bill were increased from $50*000,000 to $100*000*000*

Concerning the Comptroller

General requirements of the House bill* the Senate pro­ vided that all purchases and contract® made by the cor­ poration should be made subsequent to proper advertising or in advance of opening bid® to insure opportunity for competitive bidding#

However* the advertisement should

not be required in the case of an emergency# or for repairs*: or when the amount does not exceed

In

accepting a bid. the Authority might take Into consideration such factors as the bidders financial responsibility# skill, experience* and record of Integrity*

An annual audit*

**67-

however, was mad© a requirement* '.Ail future construction development on the Tennessee and its tributaries,, by inter*©ste other than the Authority, must obtain T.V.A* approval for contemplated activity,

'This clause would prevent any

blocking of T.V.A. water control program*

A unified

development report was Included as a requirement; and all "surplus land could b© sold except that on which there was a permanent structure*

The Authority could also experi­

ment la the production of chemicals «

A complete account­

ing of the total cost of generating, and transmission facilities was to be maintained. Upon these two partially divergent amendments Congressmen proceeded to express their opinions during debates on the proposals* the Authority*

Many charges were hurled against

To some Congressmen the T.V.A* would spell

ruin to many families who had invested in the stocks and bonds of the private utilities operating in the Tennessee Valley,158 While the original bill .was passed as an emer­ gency measure to relieve distress and unemployment, it was now viewed as retarding business recovery, especially in the mining Industry*

In 1935 it was shown that th©

United States used over 100,000,000 tons of coal less than in any previous year, and 25,000 more miners were unemployed than in 1934*

At the same time th® government

would force private industry to pay heavy taxes, such

taxes to be used to cover the "wasteful extravagance" of the T.V.A* Through the T.V.A. philosophy, the government was being placed Into competition with private business* Such was a "deplorable socialistic trend”, made for a " wasteful duplication” of existing plants and facilities at the expense of the taxpayers. Perhaps the greatest congressional Indictment of the Authority was the fact that it had exceeded its statutory power#

Th© original Intent and objectives of

th© bill as passed was for the improvement of navigation, flood control, reforestation, prevention of soil erosion, and national defense • incidental.

Power development was only

How its chief purpose seemed to be the deve­

lopment, distribution, and sal© of hydroelectric power which was viewed as a flagrant violation of the original Intent.

Its power program was now fundamental, and not

Inc Idental "The Board lias gone ahead to commit th© Government to th© expenditure of many millions for many pro­ jects, irrespective of cost anti without the sub­ mission of plans to Congress as is required by the law* It Is their program, the Boards, covering navigation, flood control, soil erosion, town planning and building, reforestation, the con­ struction of dams and all necessary incidentals for electrical power production, and the sal© and distribution thereof, that they, hav® followed, not that approved by Congress. ” **^0 Again the T.V.A. had exceeded its appropriations by dipping into emergency relief funds; had constructed

.

09**

mor© dams than it was authorised to do. It being only authorised to operate Muscle Shoals and to construct Norris ham*

In fact it had disregarded the recommendations

of the United States Army Engineers relative to low navi­ gation dam®, and now proposed to construct high navigation dam® Increasing th© cost 75 percent*

It had failed to

make reports to Congress on Its plans, programs, and acti­ vities; and had conceived th© idea that it had been appoint­ ed for the primary purpose of promoting public ownership 'Cf electric utilities#

It had determined on a path of

destructive competition to obtain a market because of th© fact that It® power development activity was to big for its outlet*

It had neglected the fertiliser provisions of

the bill* In short T.V.A* was going beyond the power granted to it, "It has gone into th© poultry— business paid #500 for a .roaster**# It paid $1,500 for a jack, and sold the jack for #500* It bought 25 head of milk cows and paid on an average of more than #550 per head* It built a park and spent about a million dollars of the taxpayer® money* It has built a lot of tourist cabins at a cost of about $5 , 0 0 0 a piece to rent to tourists. It lias built a city ©osting„,$3,500,00*. It has constructed a number of big, fine highways costing millions of dollars,**#Congress has no authority to delegate the power to anyone to engage in the poultry, the dairy, tourist camps, and other like businesses, and to be paid out of the pocket® of the taxpayers of this country# The T.V.A* ought to be confined to Its legitimate and legal purposes #u

T.V.A* had not established a yardstick but a mammoth government owned property for the generation of electric power with which private companies could not compete.

In general its yardstick was not a true yard­

stick becausei (1)

It has refused to permit a proper system of bookkeeping to be place in operation.

(2 ) It omits the overhead expense of government in the rates* (5)

It lias no financing expenses*

(4)

It has no Interest charges except 5-# percent on bonds.

(5)

It has no insurance charges since th© govern­ ment bears the risk.

(6 )

It has no State or Federal Workmans Compensa­ tion to pay#

(7)

It pays no real estate taxes.

(S)

It pay©:, no automobile taxes.

(9)

It does not pay the 3 percent utility tax imposed on private corporations#

(10)

It does not figure in Its rates a capital stock tax which private utilities pay.

(11)

It does not figure in Its rates an income tax.

(12)

It obtains rebates on freight and express.

(13)

It obtains free postage.

(14)

It obtains free consultation and advice from government department s .1 ^ 2

Objection® were also raised against the Ir­ regularities concerning disbursement® In the Comptroller General® Office. "‘The nature of except Ion® established consisted of purchase© without competition In violation of section 5709 Revised Statute®; emergency purchase© unsupported by showing of emergency; modification of specifications j award® on basis of personal preference; dual compensation! ex­ cessive allowance© and reinbixrsement of traveling expense® to prospective employee©; payment of per diem at designated post® of duty; allowance of overtime to annual employee®; allowance of charge for personally owned motor vehicle® without prior authorisation! over payment on pay rolls; payment of pay rolls without administrative approval; subscription to newspapers and peri­ odicals in excess of statutory limitations; payment for rented office equipment lost or stolen; payment for power plants, transmission line® and real estate acquired without having clear title thereto; rent for land occupied by Civilian Conservation Corps camps paid at rates higher than for land purchased outfight; lump sum payments under Cost- plus contract© and fees without original invoices and in excess of re­ ported progress of work; claims paid for loss and damage to property; apparent overpayments on electric equipment under annual agreement; cost of reconditioning plant agreed by contract to be for payment account of losses; rent for buildings without evidence showing that payments are not in excess of 15 percent of fair market value; pre-audited certified vouchers increased and payment© made to vendors In excess of amount© shown in Invoices; allowances in expense account© for bridge toll ticket book© before such books have been used; loan© to cooperative association© without security; hire of special conveyances such as buses and aeroplanes for visitors and student©; and now compliance with contractual provision© for Insurance protection covering personal injury. "163 With this evidence at hand In proof of th© allegation that the T.V.A* had exceeded Its statutory powers there appeared a final plea to support the House bill

"becaua® It modifies and restricts the further unauthorised proposed extension of the power® hereto for© usurped by the Board and curbs; regulates, and control® Its activities beyond shadow of doubt, as Congress originally Intended should be done* !lTh© T*V*A* should be required to put Its financing on the same open, aboveboard basis as is now required of public utilities generally; be prohibited from the sal© of surplus power and chemi­ cals below production cost; be required to account for its expenditures; b© subject to a rigid system of auditing such as it will have under the control of the Comptroller General# Then and only then its yardstick friends know It as well as do 1 # The Board should ren&©x> a full account of its steward­ ship; take Congress into its confidence with respect to Its plans; cease to arrogate to Itself a nondelegated power and authority; lay all these things before Congress for its consideration in order that Congress may ©xerClse* as it reserved;to Itself the power to do, the right to regulate, guide and control the extent, sequence, and nature of development that was to be advanced by this 304 Authority through the expenditure of public funas«M Through the opposition cited volumnious evidence In support of restricting the T.V#A# those who believed in the objectives of the Authority supported it from the yardstick viewpoint which seemed to have a tremendous public appeal in itself#

To them the T*V#A# meant th©

creation of a yardstick by which the cost of production, distribution, and consumption of electric energy might be measured for th© benefit of the people who lived in the Valley, and ultimately for those of the entire Button* in 1935 th© basic T*V*A* rat© was 3^f per kilowatt hour which included depreciation, Interest on investment, tax©®, and all other Items that rate making bodies us© as & basis for setting, rate® except amortisation*

The latter

**y3— w

taken care of by a $l.*oo charge per month on each con­

sumer#

Hates charged cover all operating costs, and will

amortise all Investments In a period of 43 years* Ccsmsuttltles, municipalities and cooperatives, using T*VYA,« ©norgy were making ‘ money from the sale of power at low rate©*,

In addition to a 50 percent saving in

power cost, these communities were making a profit of 38 cents out of every dollar taken in*

In Athens for example

"Previously the average domestic rate in the city of Athens,**#, was about cents a kilowatt-hour, which Is about the national average for such service* On June 1, 1934, the rate© were cut 45 percent* Immediately the consumption of electricity began to increase * People began to buy and enjoy electric-using equipment* Today Athens use© three time© th© amount of electricity for residential purpose© as was used at the time th© rat© cut was put into effect a year ago *w 11The

average residential cost per kilowatt-hour In Athens .is now 2 cents, as compared to th© — cent rate that prevailed before T*V*A* entered the picture*"!^ In 1954 the Tennessee Bloc trie Power Goiapany entered into a contract with the T#V*A*. in which its rates were to be reduced 20 percent*

Practically th© entire loss

In its revenues accruing as a result of the duction In rates were recovered In on© year# consumption followed as a result# to

200

20

percent re­ Increased

The Increase amounted

kilowatt-hoUBa per customer compared to the national

average■Increase of 35 kilowatt-hours* «H©r© again in the case of a private utility you have the same principle of the T*v,A* yardstick at work, and while- th© rates of the company are not

74

as low as th© T.V.A. rates, you have in a consider­ able measure th© same kind of benefits— benefits to consumers in greatly increased use of electricity and electrical equipment, benefits in the stimula­ tion of industry in a remarkable demand for those durable goods; and, finally, benefit, to the utility in maintaining its gross revenues and broadening the base of its business by developing greater use by a greater number of consumers.*. The test of th© T.V.A, principle is a test of results. And th© results prove that the T.V.A. plan works." 167 While those favorable to the T.V.A. stressed th© value of its yardstick provisions, they also viewed it as a great American experiment.

This viewpoint is well

summed up in the words of Representative Maverick of Texas, who said, "It is the greatest project in America, comparable to many others, but on the whole I believe the greatest. It will become, if we give it sym­ pathetic consideration, self-liquidating and will hurt no individual and no business. It will help in national defense— I mean in peace as well as for the war that I hope will never come; it will provide a higher standard of liv­ ing for th© people of six or seven States direct­ ly, known as the "Tennessee Valley"--probably 6,000,000 people— and indirectly, by example, and directly later by similar projects, to all thep3ople of th© United Statesf It will improve the condition directly of 26,000,000 acres of farm lands; it will dam our rivers, save millions of dollars each year on flood control, and numberless human lives; have ordinary agricultural conserva­ tion of resources and fertilization of lands for better crops. It will provide cheap hydroelectric power, giving a return to the Government and some leisure to millions of overburdened people." 168 At the close of the debates the T.V.A., was, for all practical purposes, free to proceed as usual.

The

following comparisons and observations seem to bear out this viewpoint!

It is quite apparent that the liberal,

somewhat non-limiting proposals of the Senate group were written into law*

The House, for all practical purposes

had failed in Its first serious attempt to limit and restrict the T.V.A. See Table XVIIX on page 75a. It remains to show what effect if any the various pressure groups had upon the final enactments.

The

National Coal Association desired to limit the expansion of the T.V .A. hydro power project in order to prevent the Authority from either buying up or crushing out the steam generation

or coal consuming plants owned by private

utilities.

In this purpose It seems possible to state

that the legislation enacted was uninfluenced by this viewpoint. Most of the suggestions offered by the T.V.A. Board of Directors to strengthen the constitutionality of the act, In the face of Judge Grubbs decision in the Ashwander Case, were granted.

While this decision said

that theextent of the Authority’s power sell electricity was governmental

to generate and

needs, the legislation

permitted the sale of surplus energy.

The court also

©njojned the Authority’s acquisition of transmission lines, while the amendments provided for such purchase, meaning of course a territorial or market expansion.

Th© T.V.A.

asked for and received such authorization as the right to sell surplus real estate; the right to condemn property

Table AVI II A C o ^ a r i s o n o f Le ■ isl.& iive P ro p o s a ls v;i.tb S t a t u t o r y E n a c t.••*••-t , T .V .A . 19 S5 A asendaents

U n ifie d d e v e lo p Risnt r e p o r t Surol us la n d Jniform. Ac couating P ro ced u re

P ro p o se d C onveyance S y stem "lo f i T T ^ e a H c a i wjLi&i' th o s e u se d ’ey p r i v a t e u t i l i ­ t i e s — l i m i t tim e at w h ich pow er coulo. be s o l d a t c o s t .

C o m p tro lle r G e n e ra l— P u rc h a s in g

A nnual a u d i t c o m p le te j u r i s ­ d ic tio n .

T ra n sm iss io n l i n e s

Ro d u p lie a tio n - c o a d e ia n a tio n re q u ire d .

B x p e r is e n ta tio n

None

E x te n s io n g e o g ra p h ­ i c a l a r e a —-wider Hone m arket No in o r e a s e Bonds L im it t o g overtime x:t a n d e x is tin g needs Surpliis e n e rg y To counties, ramioipallties & Loans rural cooperatives topurohase local distribution systems*

P ro p o sed C onveyance, e x c e p t la n d s on w hich p erm an en t s t r u c t u r e s are l o c a t e d . steep co m p lete a c c o u n ts oi c o s t o f ( e a t s r a t in e a n a t r a n s m i s s i o n f a c i l i t i e s only.

T.V.A* t o make r e p o r t*

49 Stat* 1075

S e n a te proposal adopted* 49 Stat* 1076 Keep a c c o u n ts of costs of generation and tranead su ic... f a c i l i t i e s a s well as the costs accord* ii'i;..; to a uiAform s y s te m f o r public utilities as F e d e r a l Power Comm ission uses* Rates to produce re v e n u e s in e x c e s s of cost* Projects to be self* l i q u i d a t i n g and s e l f supporting* 49 Stat* 1077

C o n tr a c ts and p u r c h a s e s .:.&c.e sv o c 0 -..;-.oc.t t o proper* a d v e r t is i n - - on 'b asis o f 'com­ p e t i t i v e o ld - .la g . A dverfciainu o f b id s Senate' p ro p o s a l a d o p te d . 43 S ta t* 1 0 8 0 -1 0 8 1 . n o t r e q u i r e d in. c a s e o f emergenc:-/,, • r e ­ pairs o r when amount e x c e e d s ^500,.= Acceptance o f bid d ep en d s on b i d d e r ’ s i n t e g r i t y , s k i l l , e x p e r i e n c e , and f i n a n c i a l r e s p o n s i b i l i t y * A nnual a u d i t * D u p lic a t io n i f unable t o p u rc h a s e ,,. Power t o a c q u ir e e x i s t i n g e l e c t r i c a l Senate proposal adopted. 49 Stat* 1076* fa c ilitie s * Right to experiment, and to cooperate with ex­ A 1 th C h em icals periment stations, demonstration farmers in use of fertilizer* 49 Stat* 1076* C um berland R iv e r P r o j e c t

Rejected

|5 6 ,Q 0 0 ,()0 0 in c r e a s e S a le o f a n d w ide d i s t r i b u t i o n

Rejected Senate proposal--right to sell surplus power* 49 S t a t , 1076

Mo mention

House proposal adopted*

C onst r u c t i o n

Ko m ention.

A p p ro v al r e q u i r e d

C ondem nation

P ro p o se d

P ro p o s e d

T re a s u ry Leposits

Proposed

Proposed

Proposed

Proposed

Proposed

Proposed

Population Readj ustment Resale rate schedules

STATU IE

SEii'ATfc PROPOSAL

HOOSE PROPOSAL

ITEMS

49 Stat* 1076-1077*

S e n a te p r o p o s a l adopted, all construction works a f f e c t i n g n a v ig a t io n « flood control must be ap­ proved by a u t h o r i t y w i t h i n 60 days* 49 Stat*1079* A dopted* C o r p o r a tio n to enjoy the rights relativ t o t a k i n g t i t l e an d p o s s e s s i o n of la n d in advenes o f f i n a l ju d gm ent u n d e r eminent domain as pro­ v id e d for i n 46 Stat. 1421* 49 Stat. 1075. Adopted* Proceeds from sale of power to be de­ posited in Federal Treasury, except suoh as is required for operating expenses* 49 Stat* 1079* Adopted* Right to aid people moved from reser­ voir areas in relocation* 49 Stat* 1080* Adopted, to be included in contracts with power purchasers* 49 Stat* 1076*

«76«* £or construet1on purposes; to build dam® and reservoirs according to an Integrated plan; to keep accounts of costs of cmsbrnetiom, generation, and distribution; to seek a marketj to avoid competition; to render financial aid to local distribution centers; to prohibit miscellaneous dam construction without A nthority approval; and to advice and cooperate in the population readjustment problem* The power interest and Mr* Wlllkle also had considerable influence on the enacted legislation*

For

example the power Interests suggested uniform accounting practices; a fair rate of' return; th© filing of rates; and the prohibition of wholesaling and retailing in areas until the Authority either purchased or condemned existing facil­ ities, these being included in th© enactment* gained on one frontf they lost on another; of prohibiting Federal subsidies,, to T.V.A*

While they

in the matter However, 'the

legislation did suggest the features of self-liquidation and self-support* The chemical group had little affect if any on their asking of complete restriction in the chemical pro­ duction business*

The enactment authorized chemical

experimentation and product Ion* The Aluminum interests sought unhampered control of the Little Tennessee but lost when fee legislation granted the T,.V»A.f the power to approve all construction work on the Tennessee Elver and its tributaries*

-77BOND a m m s E m -

1939

On May 12* 1939 th© T*V’#A# and Commonwealth and Southern Company entered into a contract whereby the Authority agreed to purchase and Commonwealth agreed to sell th© operating electrical properties of the Tennessee Electric Power Company* and the Alabama Power Company# The properties to be c nveyed included all of the Commonwealth and Southern properties associated with the two previously mentioned subsidiaries including steam and hydro generating plants# transmission facilities# and local distribution systems in the Tennessee Valley as well as a distribution of the properties and total purchase price between th© Authority and thirty eight local distribution areas including municipalities and rural cooperatives who under the contract agreed to purchase their local distribu­ tion systems*

The purchase price was set at $78,600*000*

this price being fixed as of May 1, 1939# and was subject to adjustment for net additions after that date* and for a certain credit for each day the conveyance was delayed after that date# th© closing date being June ®0, 1939*

The

Authority1© share in th© total purchase price amounted to #44 ,000*000 which represented about $14,000,000 in trans­ mission facilities* and $30*0 0,000 In generating plants# Mae remainder or $5 4 ,6 0 0 , 0 0 0 amounted to the municipal distribution systems which would be directly purchased by them*3^

In order to consummate this contract'it was be­ lieved essential to amend the Tennessee Valley Authority Act of 1935 to provide for the requisite power to purchase generating plants already In existence*

Xn this respect an

amendment to the original T.V.A# Act was proposed to Congress through Senator George Norris*

Under th© original Act the

Authority had only the power to use its bond authorisation v to pay for transmission properties and to build new generat­ ing plants and dams#

However* under the contract the

Authority was buying not only transmission lines but generating plants as well#

The only additional authority

granted by th© amendment was th© power to us© th© bond pro­ ceeds for the purchase of those exist3jig generating plants# Th© total amount of bond authorisation would not be Increased by the amendment»

Under the existing law the

Authority had the right to sell a total of $100,000*000 in bonds#

Of this total $50,000,000 was authorized under

section 15 of the T*V*A* dot for the construction of dam§, steam plants, other properties, and for the acqxxisltlon or construction of transmission lines*

Th© other $50,000,000

was authorized under section 15A for loans to municipalities to finance their part of acquisitions*

The proposed amend­

ment merely combined these two sections Into one authoriza­ tion of #100,000,000, and the proceeds of that #100,000,000 could be used for all of those purposes in the existing act plus the right to purchase generating plants*

Accordingly,

-79-

th® amendment repeals the original bond provisions of the Under this proposed amend­

act enacts th© new Authority,

ment the authority to Issue bonds would expire January 1* 1 9 4 l A TO Th© purpose of the contract end resulting proposed amendment appeared to have been the adjustment of business relations between privately owned utilities and the Authority * A settlement of the question of competition In the texrrltorlal field between private companies and governmental power Interests was ©ought*

If the contract failed to be

consummated by failure to adopt the a&mendmeni * duplication of facilities would continue and destructive competition between public and private agencies could result*

If the

contract was permitted to b© executed not only would dup­ lication and destructive competition be eliminated but the purchase price agreed upon would Insure the redemption of all bonds and preferred stock belonging to th© stock holders of the two subsidiary companies at par value During th© hearings on the Norris Amendment at least three dtermlned groups lobbied for Its passage*

At

the time of the presentation of tills evidence the chairman of th© coumaittee, Mr* Andrew J# May of Kentucky, was a bitter opponent of th© T*V*A#

The groups which appeared in favor

of the bill were as follows, the X*V*A*j State interests; and Commonwealth and Southern* T.V.A* stated that the T.V.A* value of the pro­ perties to be purchased were approximately §70,000,000

based on accounting studies which included a consideration of the actual cost when built, operations, revenues, ex­ penses, and accrued straight line depreciation®

To this

was added an approximate #9,000,000 in nuisance value which accounts for the total sale price of #78,600,000 included in the contract.

In other words the T.V.A* justified Its

purchase price by proposing to the Committee that the government spend $9,000,000 more than actual property valuation for the purpose of wiping out the nuisance of competition.

Said Chairman May, "let me admonish you.

"Let me make this statement In the record: you have not been as close to the controversy since it started as I have, and I have been in It every hour before this committee, and the original pur­ pose of it before th© Congress and all the evidence tended to show it was In the interest of national defense, the utilization of the nitrate plant, and the navigation of th© Tennessee River under these two functional powers of the Constitution, the war powers and commerce clauses and when we proposed the original act, we put into it $50,000,000 bonds authority upon the idea that it is all T.V.A. would ever need for those purposes." 17S Since the cities and rural cooperatives had agreed to finance the purchase of their local distribution systems, the committee inquired as to the necessity of the T.V.A. issuing more than #44,000,000 in bonds or their share of the purchase price. The reasons given for the additional sum were first, the T.V.A. desired to make future purchases In the utility field; secondly the purchases system had to be Integrated with the Authority’s existing system, and this unification program would cost

*81*

approximately #4,000,000; thirdly, approximately #4,000,000 would be needed to rehabilitate the purchased system and put it into excellent operating condition; and fourthly, in order to protect Commonwealth and Southern in this precarious financial transaction th© company Insisted that a provision b© placed In the contract to the effect that If for some reason the municipalities and rural cooperatives Could not obtain th© requisite funds, on the closing date of the contract, then the Authority could loan them the required sums # PQWE'K INTERESTS Mr* Willkie thought that if Congress did not authorise th© appropriations sought th© securities of th© Tennessee. Electric Power Company would be destroyed* Commenting on this point Chairman May said, ftX commenced, six years ago, opposing th© Tennessee Valley Authority, and In 1935 fought bitterly to the end to prevent th© 1955 amendment to th© act that authorized the duplication of the system* X said then that It meant the destruction of th© investments of the people of Tennessee, and of the stockholders and bond holders in your company* It looks like my prophecy has come true #**—1 1 STATE INTERESTS Speaking before th© Military Affairs Committee Governor Cooper of Tennessee H&id, w£f you gentlemen fail to pass th© law or if you block Its passage, you will perpetuate a wasteful competition in Tennessee*

You will

find detej^ned municipalities going ahead and duplicating

facilitl©©, Just as they have done, and there will be a huge additional and wasteful expenditure of Federal money*M

In

fact, he declared,, that the people of Tennessee were "vital­ ly and tremendously Interested In securing T.V.A* power," and this attitude had been signified through ©lections in which enormous majorities bad voted in favor of the T.V*A* and its program* 1*^ It is a truism that pressure groups who stand to benefit by the passage of a measure will work hard In behalf of their own interest*

However, such Is equally

true In reverse*

When some groups stand to loose an

Interest close to

their own way of thinking they, too,work

hard in behalf of their Interests*

The coal and railroad

interests found themselves to be members of th© latter group in relation to the T,V.A* bond amendment* MINING INTKRE.3T3 The organized coal miners of .America objected to the adoption Of the proposed amendment«

To the coal

Industry and the miners, th© adoption of the proposed amendment simply meant a displacement of the coal consuming generating plants equipment*

the substitution of hydro-generating

In brief, the purchase

of the private utility

by the T*V*A# constituted the greatest single InvastIon of the market for coal by subsidised water power ever attempted by th© Federal Government*

The situation which would

—0J5— confront the coal industry as a result of the T*V*A* pur­ chase of private utilities was presented In an address by John D# Battle, executive secretary of the National Goal Association*

In opening hi® remarks he Indicated that

5,000,000 miners were employed in th© bitumnious industry, and that 00 cents out of every dollar received by the producer was paid out In wages*

Xn part, h© said,

"The bitumnious coal Industry lias strongly opposed T*y*A*’a hydroelectric power program from its inception* This opposition rests upon the simple fact that the large Increments of electric power that T.V.A# has undertaken to generate and market must inevitably destroy many existing outlet® for coal as well as preempt large future markets for coal In the T*V*A* area* "The loss of these outlets for coal and the resulting closing of mines and the permanent large-scale elimination of jobs In the production and transport of coal is unfortun­ ate, and disastrous under any circumstances# It is doubly hard to bear when, as th© case is here, It comes about through government action with the aid of subsidies out of the Federal Treasury, and when In reality coal offers a more economical medium to day for the generation of additional Increments of electric power., in the Tennessee Valley than the T*V*A* substitute, If the cost of the latter were to be computed at Its true total* "The extent of this displacement of coal by T.V.A# hydro power and the resulting loss In job® and In wage© 1© a matter of very simple arithmetic* The coal equivalent of 1,000,000 kilowatt-hours of electricity I® 710 ton®. That I© the quanity of bitumnious coal--at the rate of 1*52 pounds per kilowatt-hour— required to generate that quanity of electricity* T.V.A. report® that It sold 806,000,000 kilowatt-hour® of electric energy In the last 6 month® of 1938# But that 1® only a starter* It project® It© annual out put upon th© completion of what Is des­ cribed as Its lG-*dsm system at 8,100,000,000

*84kllow&tt ^hour's* Simple M l tipi Ioat ion of 8,100 by 710' Is 5,751*000 ton® of coal prospectIvely displaced by T.V.A* hydro power*. "It has been estimated— and the estimate never challenged— that 1 ton of bitum­ nious coal by the time it reaches Its final destination represents X day1® work ami wages for one man* At any rate, T«V«A «*s complete electric out put in terms of coal will destroy 5,751,000 man days of employment annually* "At all events, we know for a certainty that the coal tonnage as above stated represents more than $11,000,000 to the producers, of which 60 percent Is labor payrolls and almost $13,000,000 In railroad freight revenues, of which 45 percent Is labor payrolls* So what we are dealing with in this situation Is a potential direct wage loss of more than #12,000,000 annually in the mines and on the railroads*"3’”* As a result, then, of the extravagent use of public funds in substituting hydro for steam generation th© coal miner faced a lower standard of living, th© shutting, down of mines, the limiting of coal markets, unemployment, the limitation of school terms due to loss of wages and Inability to pay taxes, relief, and impair­ ment of purchasing power

Or in the words of Brovided that

this percentage could be x»evised and changed by the board when approved by the President#

In the face of difficulty

these provisions appeared inadequate#

Ehile the percentage

might be . changed, the States to which th© payments in lieu or taxes slight to® made could not.

Againsthe section was

•#100** inadequate in that it ha sod the percentage payment entirely on th© place where the power was generated,, limiting the payment to power generated at certain hydroelectric dams in Alabama and Tennessee*

Uh&er this arrangement dams acquired

by the Tennessee Electric Power Company purchase were not covered by the language of th© section*^®® Accordingly, the Morris-Sparkm&n bill was intro­ duced in Congress to make th© needed changes by replacing the ad valorem tax losses on generating and transmission facilities, and for replacing 40 percent of the losses in property taxes on lands acquired by the T#V*A. for the location of dams and storage reservoirs#

Bx’iefly th© bill

sought to amend section 15 mo as to lift th© percentages to be paid to the States#

A graduated scale from 10 per­

cent in 1940 down to 5 percent in 1948, and remain there after at 5 percent without any discretion In the T#V#A* board to raise or lower them#

Th© amendment also provided

that th© payments from the gross proceeds should be divided between the six States of Alabama, Tennessee, Georgia, North Carolina, Mississippi, and Kentucky*

Th© states

were to redistribute the amounts to the counties#

The

formula for division provided 50 percent of the amount to be paid would be paid to the States according to the sales in each State and the other 50 percent in proportion to the amount of property owned by the T#V#A* in each state# As a xainimum provision no State was to receive less than #10,00.0.200

Unique a© it may seem, not a single interest lobbied against this bill during the hearings before the Military Affairs Committee of the House#

On the contrary,

the T#V#A*, th© Governor of Tennessee, secondary school interest®* county Judge®, county attorneys, mayors, taxpayers associations, and representatives in Congress from the Valley States affected all worked in its behalf#

In gen**

eral these pressure groups wanted th© amendment because of financial difficulties brought about through governmental purchase of Tennessee Electric Power Company properties# Perhaps another reason for failure to lobby against th© amendment grew out of the fact that replacement. In lieu of taxes, was about the only solution since a State cannot tax an instrumentality of the Federal Government without the consent of Congress#

Precedents in this field were

lacking! whereas, "in lieu" payments had been used before for national forests, mineral®, and oil lands#

All of the

pressure interests will not be discussed sine© each group was in general agreement with th© others as to th© serious­ ness of th© problem and as to the necessity of favorable congressional action#201 TETOESSEE.TAXPAYERS ASSOCIATION According to statistics presented by th© Tennessee Taxpayers Association, th© problem for Tennessee became very simple yet serious#

Th© following table illustrate® th©

losses sustained, by various counties, municipalities, and

school districts

in

Tennessee#

in property

taxes

alone# fable XX202 Ad Valorem Property fax Replacement Liability on Electric Utility Properties Acquired by Tonnesae© Valley Authority and by Local Distributing Systems

Stntc of Tcnnraac© T v a n m w Vultey A uihnrlly I

:

I>pcnl HbtrlbutlDR syaloma

t . i. i

2 II, 117.02 l; 707.17 1,27“! 54 2.278.1°

300.00 75.00

1.833.00 2.267.01 2.803.00

2. MS’

12000 .

!or 87. ■ 2,308.

11,201.

e.fi'tt.&i

23.744.10 80,022.01 1

' 328. 00 1,128.00

1.128! 00

2,231.71

2,231,71 10, 200.1(J 3,210. 72 a!m o 11.403.70 2,177.84 17.07J.5 18,613.27 18.&13. ' MO. OB 2,noo. 2, 000. 03 180.139 £78LM 2,100.00 1,714.00 1,714. £2.024. £2,024.04 82,044. 48 8.S8104 6,463. 8,403.20 W8. 0, W 8. 31 '■

0

4,400.00 1,066. *■ 2!09s! 74 5,271.14

11,000.0 Oil, 124.00 970-80 3, 310.01

22.001,

fcmoc

I.3S6.0S

3, .788.72

' 772 00 '' 13. 40 ».}, l>05.1

1,717.88 2,841. SO 4,808.00

4,508.00 804.20

J, 572! 20

21.00

33.00

18.00 70S. 43

6,164.06 4. &)H. 00

2. 42

24

5,470

8.04S

Taxes on Tennessee Valley Authority property .... Tax rate per $100, year 1938, $2.35; required, $3.32.

29

Polk:

33,326 7,440 109,790 36.780 77, 537 18,792 114,839 33. 498

According to Mr* E# W* Palmer, Vice President of the Tennessee Taxpayers Association, ”It is the view of the Tennessee Taxpayers1 As­ sociation that the question of utility tax replacements Involves two problem®— a Federal problem and a State problem# #•Boiled down, the Federal problem involves but a single question* What shall the T*V,A* contribute In lieu of taxes to State and local government in Tennessee and in other States similarly 'affected by reason of its present ownership of generating and transmitting properties heretofore owned by private

-105wTh© only fair and equitable answer to that question* it seems to those taxpayers In Tennessee for whom 1 speak* is that the T*V*A# should contribute in full all tax losses directly attributable to the prop­ erties acquired by it#•*. "Does the Norris-Sparkman bill do this? We are Informed that in practical application ©Sid bill would accomplish this purpose substantially if not completely insofar as Tennessee la concerned, and ad valorem taxes on T#V*.A* property is Involved* According to our analysis of th© bill* it is de­ signed to make up ad valorem tax losses on generating and transmission properties acquired by the T*V*A* so that each unit of government will be paid the same amount of ad valorem taxes on such prop­ erty as was formerly paid thereon when operated by private utilities* While the bill replaces only 40 percent of the property taxes lost and to be lost on the lands used for dams and storage reservoirs* it is recognised that a portion of this loss is properly chargeable to navigation and flood control* wThe State problem is divided into two phases— first* th© recapture of ad valorem taxes on distribution systems owned by municipalities and cooperatives; and* second* the recapture of State privilege taxes* The State problem* as we pQe, see the matter* mainly requires State regulation* ” ^ 0 SCHOOL INTERESTS Hot only county governments but school districts

as well were affected by T*V*A* tax displacement*

The

following memoranda concerning th© school situation in Fannin County* Georgia* illustrates th© general situation* (See Table XXIII on Hoxt Page)

-106-

Table XXIIIs0® Facts About th© Fannin County High School FA CTS ABOUT F A N N IN CO U N TY

,

Four hundred and five square miles; 252,800 acres, 50,000 acres in forest lands owned by Government; also the thousands of acres now owned by ' Tennessee Valley Authority; 1,890 farms, 200 tenant farmers; 12,435 total popu­ lation, 4,345 of school age; 99.6 percent pure native white stock; 9.0 children per square mile; total expense for education, 1938, $84,109; 1,143 in first 1grade * * * 64 graduated In county. Total tax collected by all agencies In Georgia, $117,997.82, County tax____________________ _______________________________ $75, 001. 00 Tennessee Power Co______________________________________- 60,000.00 Others— ____________________________ : ___________________ 15, 001. 00 Blue Ridge______________________________________ Tennessee Power Co______________________________________ Others____________________________________________________

24,240.82 19,253.36 5, 993. 46

Morganton school district_____________________________________

3, 248. 00

Tennessee Power Co______________________________________ Others______________________________ \____________________

2,847. 00 401.00

State Tennessee Power Co., $15,000______;_______________________ Epworth and others, Tennessee Power Co., $64___________________

15,000,00 5, 502.00

Tennessee Power Co., $103,164.36________________________ 117,997.82

Or in another light in the same county in 1938 th© Ten­ nessee Electric Power Company paid in taxes to Fannin County* and its subdivisions #53*018*51 which was divided as followst General governmental purpose s *****»»*»» #30*472»40 Grammar Schools•*#.##•*####*• ##**#*#«*#♦ 10* 104*47 Blue Ridge School District *»«.#•**#.«#•#• 9*824*87 Morganton High School#**»**»***»#**«*»* 2*916* 77 All other taxpayers* except the Tennessee Electric Com­ pany* paid taxes in th© amount of §22,513 *69 and which were applied as followst General governzaental purposes•#•««••*•*§15*312*25 Grammar Schools#♦*♦*«*#••#**#•#••***«#* 4*459#30 Bln© Ridge School District#•##•#•*«•«## 8,540*14 Morganton High School«•«••**•••••***#»• 422*QO In view of these facts the Tennessee Electric Power Company paid at least 70 percent of the taxes of the county con­ tributing 75 percent, to high school support and 55 percent

to grammar school support#

School Interests, therefore,

favored the passage of th© Horr 1a-Sparkman amendment and suggested that /In lieu1* payments be ma.de directly to the units effected*20^ STATE BiTBBEffiS Governor Cooper of Tennessee also favored the amendment#

In selected Instances, certain counties were

loosing 41% percent of their total taxes#

He felt that

the states were not ashing for an outright contribution from th© Federal Governmentf sine© th© consumers of T#V*A* power were already paying

12

% percent for this purpose

included in th© regular T*V*A# power rate# the

12

In other words

% percent was an added margin over and above the cost

of producing the power and was being collected by the Authority for the purpose of tax replacement#

This 12%

percent represented the national average of taxes paid by th© private utilities according to the Federal Power Com-* mission* amount#

All that Tennessee desired was the return of this Besides the 60 percent sacrifice th© State of

Tennessee also stood to loos© all privilege or business taxes on utilities which In the past had amounted to ap­ proximately §700«GOG *

In the last analysis, Governor

Cooper favored revising the amendment in two aspects 5 first, that tax replacement payments be mad© directly to counties#

This h© thought Imperative because while th©

original bill provided that th© States were, to divide th©

-108* replacements amounts with counties# they had failed to do so#

Secondly# that no State should he required to suffer

tax losses greater than 50 percent of the revenue formerly collected from private utilities*&08 Using the 12k percent of wholesale held in reserve for tax replacement the following table show© the amount that this percentage would produce, and the amount that would be paid to the six state© in the Tennessee Blver Valley#

Hie table also illustrates the portion to

be paid to State and local government s# and finally th© residue of such funds reserved for taxes after mailing the aggregate payments in replacement of taxes# Table XXIV® 0 9 Reported Tax Replacement Reserves of T*V#A*~-*How they Would be Applied Under the Horris**Sparkman Bill

TABLE BASED ON 13)i PERCENT TOTAL RESERVES

Fiscal y ea r

A nnual pow er sales

1640 . 1041. 1042 . 1943 .

310,307,000 12.569.000 13.653.000 14.665.000

10M.

15. 604.000

T ax replat em ent reserve

$1,288,375 1.671.125 1,706,725 1.833.125 1,961,750

P a y m e n ts u n d e r N orris-S parkm an bill a S ta tes $1,237,248 1,253,241 1,261,270 1.252,288 1,238,707

Tennessee $847,102 847.102 847.102 847.102 847.102

$51,127 317.884 445,455 580,837 725,043

0PBGRE3& XQEA.L AT'T'iTTOE While th© Military Affairs Committee realised the acuteness of the tax losses# and th© imperative need

-109* of establishing some quit able remedy# they wore# never the less# inter©sted in offsets on tax losses for benefits derived by th© people in the Tennessee Valley due to activities of the T#V#A#

Even though the total tax loss

In Tennessee alone amounted to approximately $4,0 0 0 # 0 0 0 the savings in Authority rates totaled |7#000#000 annually* Beyond this there were the benefits of flood control# navigation# reforestation# soil erosion, prevention# recre­ ation facilities# and new Industries#210

In th© period

1933 to 1937 there was a net increase of 543 manufacturing establishments#

Included In this total wore 128 now

industries employing ment of ®15*9OO#O0O*

1

S#0 Q 0 # and with a oonstznacfclon invest­ The Committee a® well as th© T#V #A.

felt that these benefits offset some of the lost taxes# 2 1 1 The Committee also Inquired as to the possibility of some type of consumer® tax# levied by the county# on the amount of electricity used to aid !|pl making up the tax losses#

While none doubted th© power of legislature of

Tennessee^ &© enact such a sale® t®x# most authorities agreed that the levy would act a® double taxation on th© consumers .of

power* 2 1 2

Since all evidence pointed to the non-ute of th© consumers tax the Military Affairs Committee then suggested an increase In T#V*A# rates to take care of tax matters# But# according to Director Lilienthal the Constitution of the United States would forbid any change in these long term twenty year contracts# either by the State or by

-110* either contracting party#213 At the conclusion of the hearings# the Military Affairs Committee tabled the bill#

in order to secure a

vote on th© bill# the Senate attached it as a rider to a Work Relief Appropriation Bill and arranged to limit the debate to one hour#214 Summing up the discussion from the floor of the House many congressmen thought that the passage of this proposed amendment "would establish one of the moot dangerous precedents in the history of government# If the principle involved in the pending amendment was carried out and extended to all the operations of the Federal Government# It would mean that every municipality# every taxing ult# and ©very State in the Union ought to demand from th© Government of the United States reimbursement for property taken In order to carry out the necessary functions of Federal Authority# Every city that has a post office# ev#ry State that has a Federal highway# every water course that has a navigable channel which has been dredged from taxable property# should immediately file a claim with Congress to be re­ imbursed for taxable property taken from th© tax rolls of such taxing units#"215 As passed by Congress fcho amendment authorised the board to pay in lieu of taxes to the States and counties the yearly percentage© provided for in th© Horria-Aparkman bill#

The formula for division of proceeds

among the States# and th© mlnlmpm payment were included# as previously outlined*?^ It seems proper to state that policy formation regarding the T#V#A*# as It w orked out in the legislative branch#^ was the product of 5

(1) the President*s original

-ill* proposal backed by his control through party lines; (2) the power of th© personality of Senator Georg* w* M orris as evidenced In his senatorial control; (3) the American Farm Bureau as a special Interest group supporting the Authority *s creation; (4) th© Commonwealth and Southern In original opposition and# once it had lost the fight In the field# in support of wider financial power for the Authority* Clearly policy formation Is a continuing process as evidenced by;

(1) repeated attempts to fundamentally

alter an announced policy; (2) repeated efforts to widen an announced policy; (3) th© creation of new "vested Interests" as seen in the actions of the T#V*A# before congressional committees considering proposed amendment© to an announced policy# This leads us directly to a consideration of the activities of the

as such activities indicate

policy formation resulting from actual administration*

-11EChapter

III

*

Administrative Formulation of Policy THE UNIFIED PLAN >

It is through the creation and operation of the

unified program that the T.V.A. itself enters into the picture of policy formation.

For through interpretation of statutes,

administrative policies are conceived and justified.

It is

administrative interpretation of congressional intent which develops the full outlines of policy in action. in the political area is policy formation.

Any action

Otherwise govern­

ment becomes static, sterile, and impotent. Obviously the Tennessee River is the most charac­ teristic physical factor of the Tennessee Valley.

Potenti­

ally the river is a great waterway of navigation.

Enormous

dams on the main channel and its tributaries would aid navigation and flood control on the river itself as well as on the Ohio and Mississippi Rivers.

The dams which would be

useful for navigation and flood control might be employed to generate electric power.

This multipurpose arrangement

might be achieved best by a single coordinated or integrated program.

Thus experience shows It to be necessary to work

out a single plan for the development of the Tennessee River System in order that floods may be controlled, navigation

a system of

made possible, and the natural power of the river

-113rendered available*

In addition, other values come into be­

ing such as national defense, plant food development, and the host of things contemplated through surveys, experiments, and demonstrations* An analysis of the actual funotions of the T.V.A. will provide a basis for evaluating the weight of the authority upon policy formation*

By comparing the functions

with congressional reaction, a measure may be established for determining the influence of T.V.A. upon policy in operation.

And so We turn directly to the six major areas

of the unified plan:

(1) Navigation, (2) Flood Control,

(3) Fertilizers, (4) Defense, (5) Studies and Experiments, and (6) Power Development.2^ NAVI CATION By the provisions of section 4 (j) of tbs T.V.A. Act,

Congress authorized and directed the Authority to

construct dams and reservoirs in the Tennessee River and its tributaries of such a type as would best promote navigation on the Tennessee River and its tributaries.

Such dams were

to provide for a 9 foot draft navigation channel from Knoxville,

Tennessee, to the mouth of the river, and to

maintain an adequate water supply for navigation* To visualize the extent of such a 9 foot channel It is only necessary to remember that past navigable depths

on the Tennessee River had been as low as one foot*^® This plan for a 9 foot navigation channel includes a series of nine dams with navigation locks on the main river channel, beginning with Fort Loudoun and ending with the Kentucky dam below Faduoah on the Tennessee River.

The

system will add approximately 658 miles of 9 foot navigation channel to the great inland waterway system of the United States when finally completed.

219

The Board of Directors of the T.V.A. in complying with the congressional policy, have provided that each dam, when completed, will be fitted with a navigation look vary­ ing In size from a maximum of 110 X 600 feet to a minimum of 60 X 360 feet. 90 feet.

Maximum lock lifts vary from 37 feet to

According to plans the entire system will be open

for operation by June 1945.

Taking all dams controlled by

the T.V.A. into consideration 17,195,600 acre feet of water will

be available either directly or indirectly for purposes

of navigation.

The 9 major dams on the Tennessee River will

directly contribute 12,222,600 acre feet of relatively navigable pools, and the storage dams will conserve approxi­ mately 4,973,600 acre feet to be released into the Tennessee in the event of low water.

220

Beyond this series of 9 high navigation dams, yet an integral and essential part of the plan, the T.V.A. has

-115created a system of storage dams on the principal tributaries. These dams provide tremendous water storage (approximately 4,973,600 acre feet), and will aid In reducing seasonal fluctuations in the flow of water in the main navigation channel.

Th© coordinated system of high navigation and high

storage dams will maintain proper navigation level thus making for wider and more constant navigation pools.

221

Previous to the enactment of the T.V.A. Act in 1933 navigation depths on the Tennessee practically eliminated commercial transportation by boat.

The depths ranged from

one to six feet or at best three feet short of the proposed 9 foot Authority channel.

(See Status of Navigation on

Tennessee Biver in 1930, footnote 218).

By 1932 traffic

volume on the Tennessee River had dropped to the lowest level in thirty eight years.222 In 1933 the volume of river traffic stood at 22,482,000 ton miles, and the following chart graphically indicates increases in ton miles as between the years 1938 and 1939.

(T.V.A. Annual Report 1940, p. x)

-116 Table XXV223

SHIPPING O N TENNESSEE RIVER 19 3 9 *

1 9 3 8*

47929,000

70,700,000

TON W I L E S

TON M ILES

* F tg u fo s a v ailab le f o r calendar g e a rs onlg - U.S, Engineers

Studies by the T.V.A. Transportation Economics Division show thet the probable volume of traffic greatly increases as the 9 foot navigation channel to Knoxville nears completion.

By an analysis of reports obtained through a

comprehension field canvass of transportation users, it was estimated that freight carried on the Tennessee Eiver would amount to S,647,509 tons in 1945.

By applying alternative

overland rates and barge costs to the above tonnage, the estimated total annual savings to users of the waterway in 1945 amounted to $3,451,740, a saving of #1.30 per ton.S24 A thorough survey of future tonnage possibilities

on the Tennessee River mad© by th© United States Corps of Engineers, estimates that by 1950 river traffic will be

-117the 17,800,000 ton level; with an estimated annual saving in transportation costs to equal #22,800,000.

These predict­

ed Increases are accredited to the 9 foot navigation channel improvement as well as the lock and lift additions included in the dam construction program.

The T.V.A. Transportation

Economics Division almost doubles the estimates of the United States

Engineers, estimating that by 1950 th© possible

tonnage will meet the 29,304,500 ton level. The T.V.A. was of th© opinion that full develop­ ment of the Tennessee River and other parts of the Mississippi River System called for a system of river terminals available to shippers at reasonable costs.

These

terminals should not be allowed to grow up haphazardly, but should be fitted into railroads, highways, and other trans­ portation services rendered communities along the river. Such terminals should be designed according to modern standards, with efficient loading and unloading facilities. Such a position on the part of the T.V.A. called for a standard plan in accordance with a common purpose. "The T.V.A. is making studies of the relation of river transportation to the feeder lines, both rail and truck, that will lead into the back country away from the main river. Sites for publicly owned docks are being acquired with a view to giving the most economical arrangement of terminals along the waterway.w226 In addition to maintaining a 9 foot channel for

-118— commercial navigation on th# river, th# T.V.A. has mad# ex­ tensive provisions for secondary navigation fey smaller craft on the main river lakes and pools as w ii as on the tributary reservoirs.

These provisions have Included the

stumping of shallow areas, grading and excavation where necessary to obtain an adequate seeondary channel, and the installation of a system of navigation elds and channel markers along these secondary channels*

The T.V.A. pre­

pares navigation charts, showing docks, terminals, channels, and other aids to navigation*

Such secondary navigational

aids are of direct value to the large number of pleasure craft plying the Tennessee Valley lakes.

There are 1,800

boats of a pleasure craft or recreation type on Morris lake alone.

Excursion steamers have already appeared on

the lower Tennessee Elver. In conclusion it can be said that the T.V.A* has made measurable progress in its seven years of existence in fulfilling the Congressional mandate for a 9 foot navigation channel on the Tennessee Hirer.

Through con­

struction it has added to the Wilson Dam, which it received from the War Department in 1933, four main river dams and two tributary storage dams.

Still under construction are

three main river dams and one tributary storage dam*

By

purchase T.V.A. has acquired four additional dams. At the time of the creation of the T.V.A. the

-119Tennesse© River channel from Paducah to Wilson Dam, 200 miles upstream, had a controlling depth of approximately four feet and from Wilson Dam to Chattanooga, a distance of 204 miles, feet.

the controlling depth was approximately two

In 1940, with the Authority’s construction program

still incomplete, a channel of approximately six feet was available over this entire stretch of 464 miles.

"Develop­

ment of the channel from Paducah to Knoxville to the full navigable depth of 9 feet Is expected to be completed by the middle of 1945.»228 The T.V.A. has not modified the policy of Congress appreciably as far as navigation is concerned.

Th© only

possible shift in policy seems to be in connection with the recreational aspects of navigation and these seem to be reasonable inferences from the policy as announced by Congress• FLOOD CONTROL Flood control is one of the triad of T.V.A. multiple w^ter control objectives integrated with navigation and power development arising out of the unified water control 229 concept as provided for In the act. The history of th© Tennessee River has been one of destructive floods.

The length of the river proper Is

about 800 miles while it is 1,200 miles from the source of

-120th© Holston to th© mouth of the Tennessee.

The Tennessee

watershed covers an area of 40,600 square miles in 7 States,

and is comprised of 26,000,000 acres of land,

18,000,000 of which is In farms, and, 8,000,000 acres in forests.

Its principal tributaries are the Holston,

Clinch, Duck, Elk, Hiwassee, and Sequatchie rivers*

230

The average annual rainfall in the Tennessee Valley is 52 inches, which means that nearly 6,000 tons of water fall upon ©very acre of land each year*

The six

main tributaries of the river rise in the mountains where the rainfall surpasses 80 inches, and this rushing water must drop from an altitude of 6,000 feet to one of 700 feet before emerging to form the main river.

To the people

who live on the Tennessee, the lower Ohio, and the Mississippi Rivers, this has meant insecurity from floods, and to the region in general it has meant an unmanageable stream* The following table will show the maximum flood discharges for the Tennessee River and its principal tributaries.

Table XXVI831 Maximum Recorded Floods

Hiver

Station 9

•

Tennessee :Johnsonville Tennessee :Florence Tennessee :Chattanooga Tennessee :£noxville Clinch :Clinton Holst on :Bogersville Little Tennessee :McGhee Elk :Elkmont Duck ;Columbia Hiawassee :Reliance Holichucky :Greenville French Bread :Ashevill® South Fork Holston:Bluff City Little Tennessee :Judson Hiawassee .-Murphy • •

jDrainage Maximum recorded discharge Area Teir Cubic feet (Sq. • *

38,500 1897 1897 30,800 21,400 1875 8,990 i 1901 3,090 1886 1918 3,060 2,470 1920 1,700 1926 1902 1,210 1920 1,180 1901 1,140 1916 949 1902 828 1902 670 410 1902 « •

» *

* *

• •

• * 9

•

• *

« • 9 9

• •

» *

* •

• « * ♦

410,000 465,000 364,000 198,000 . 110,000 92,000 89,000 41,000 40,200 53,400 77,000 90,000 33,000 40,800 30,000

• •

An uncontrolled Tennessee contributes as much as 25 percent to the crest of floods on the lower Ohio. Practically all of this flow can be retained for several days when T.V.A. dams are completed thus reducing the flood crests at Cairo and on the lower Mississippi by from 232 two to three feet. Through the congressional flood control policy, the T.V.A. hah inaugurated a plan to actually control the destructive high crest waters of the Tennessee and its tributaries.

Through this control it hopes to benefit the

-122people, the industries, and agriculture in terms of large savings from damage created by the unmanaged water of the river.

To accomplish this purpose T.V.A. proposed a uni­

fied system of 9 high dams and several high storage dams on the principal tributaries.

The method of proposed

flood control for the Tennessee Valley provides for the development of flood storage space in tributary reservoirs, and behind high dams along the Tennessee.

In order to

efficiently manage the river flow, the Authority requires a daily report on rainfall and stream stages along the basin area.

With this system of forecasting water

levels can be predicted in advance and floods controlled.

233

When all dams on the Tennessee and its tribu­ taries are completed the T.V.A. will have a total reser­ voir volume of 17,141,100 acre feet of water storage space.

The reservoirs are always held in readiness, through

quick operation of dam releases, for any emergency that may occur. The accompanying statistical table shews T.V.A. reservoir capacity.

Table XXVII234 Reservoir Statistics ! Reservoir area at top of Spillway Gates in terms of acres

Bams Kentucky Pickwick Landing Wilson Joe Wheeler Guntersvilie Bales' Bar Chickamauga Watts' Bar Fort Loudoun Norris Hiwassee Cherokee Ocoee No. I Ocoee No. II Blue Ridge

s

256,000 46,600 15,500 66,300 70,700 5,760 39,400 41,600 14,900 40,£00 6,200 31,100 1,360

Total Reservoir Volume top of Gates in terms of acre feet 6,100,000 1,091,000 535,000 1,150,000 1,018,700 124,800 705,000 1,132,000 365,500 2,567,000 438,000 1,640,000 76,600

••* * * * -* * « ■ ►

3,290 641,216

197.S00 17,141,100

The six reservoirs now completed, (1940) through dam construction, will provide 4,000,000 acre feet of con­ trolled storage and make possible a great reduction in flood crests not only on the Tennessee but as well on the Mississippi.

When all dams planned for but not yet

authorized are completed, the entire system of reservoirs will provide approximately 10,000,000 acre feet of controlled storage. It Is obvious that flood control as a policy announced by Congress has been unaltered by the practices

of the T.V.A*

As In the case of navigation, the T.V.A.

has performed the traditional service of administration, i.e., carry out the policy of the "policy determining branch" of government. FERTILIZER Committee hearings and congressional debate both clearly indicate that it was the Intention of Congress that the Muscle Shoals nitrate plants should be put to peace time use in the field of fertilizer experimentation and production.

Accordingly, when the original act was passed,

it provided for the transfer of these properties to the T.V.A., and directed the Authority to conduct a large scale fertilizer demonstration program.

Section 5 (d)

of the act contained the following authorization: "The board in order to improve and cheapen the production of fertilizer is authorized to manufac­ ture and sell fixed nitrogen, fertilizer and fertilizer ingredients at Muscle Shoals by the employment of existing facilities, by modernizing existing plants, or by any other process or pro­ cesses that In its judgment shall appear wise and profitable for the fixation of atmospheric nitroen or the cheapening of the production of ertilizer."23d

f

Under this congressional mandate, the Authority formulated five objectives: "First, it took into consideration the effect that high prices and shortages in the essential plant foods might have upon the farmer.

1£5"Second, it took an inventory of the plant food elements for the purpose of ascertaining their source and amounts for an all time national need. "Third, the prospects of success in reducing the cost of the deficient element or elements to the land. "Fourth, the adaptability of the government plant at Muscle Shoals for this purpose. "Fifth, production of new forms of fertilizer and the use thereof in actual field tests on prac­ tical farms." To the T.V.A. "the greatest obstacle in the way of an effective land conservation program lay in the economic plight of the farmer himself, who had been practically forced by conditions he could not control to exhaust the fertility of his soil. Obliged to raise cash crops, increasingly on the single crop-basis, in order to pay taxes, interest on debts, and the cost of goods he did not produce, he could not buy enough fertilizer to return to the land the valuable elements the plants took out. Nor could he afford, as a rule, the expanse of protect­ ing his farm against leaching and erosion." The restoration of the land to normal productive strength depended mainly on the ability of the farmer to purchase fertilizer.

This he had been financially unable

to do because of exorbitant plant food prices.

Under these

conditions the future seemed to hold out a country with overtilled, eroded, non-productive farm lands.

In this

respect the T.V.A. realized that with the Muscle Shoals properties it had an opportunity, in cooperation with Federal, State, and local agencies, to strike at one of the greatest of the farmers1 burdens.

-126In relation to the second objective T.V.A# found at least a dozen mineral elements that were essential to plant growth and development.

All were sufficiently

present in the soils to meet plant requirements except nitrogen, potassium, and phosphorus. Because of these de­ ficiencies , compounds containing any of these nutrients may be used as a fertilizer.

When the Authority took over

the nitrate plants in 1933, it had to decide whether it would continue the experimental production of agricultural nitrates.

Nitrate production of the Nation had increased

to such a point where there was no imminent danger of a peace time deficiency in that commodity.

Secondly, the

findings of the land grant colleges, the United States Department of Agriculture, and other agencies, to the ef­ fect that the farmer could maintain the nitrogen content of his soil by growing nitrogen-fixing legumes seemed to rule out a continuation. "Under the circumstances, it appeared to the Authority that to use the Muscle Shoals plant for the production of nitrate fertilizers would have beencontrary to the congressional mandate to 'im­ prove, increase and cheapen the production of ferti­ lizer and fertilizer ingredients,’ sine© no chemical nitrate could compete In efficiency with the modest legume."238 T.V.A. also found that Potash was found in most native soils.

While it was present in abundance it was

not always in a form readily available for plant

•1*7* assimilation*

However, large deposits existed in New

Mexico which would give the United States a source of fertiliser rich in potassium* For the shove reasons and because of the signi­ ficance of phosphorus in the restoration of soils the Authority gave major Initial emphasis to the development of technique and processes for the manufacture of phosphatic plant food.

Most soils in the Tennessee Valley,

and elsewhere, were crucially deficient in x^hoaphoru®, an element of the greatest concern in a program of soil economy.

Therefore a plan, based upon the use of phos-

pha tie plant foods for stimulating the growth of cover crops, was formulated*

Such crops were essential to the

prevention of soil erosion, to pasturage, and to the iavigoratioa of the sell by means of the natural processes of nitrogen fixation* The Authority is fortunately situated so far as its supply of raw material i® concerned, because its Muscle Shoals facilities are contiguous to the Florida and Tennessee beds of phosphate rook, which produce approxi­ mately 3p00,000 tons annually*22*®

Farmer© owning these

tracts mine the rock under contract and ship It to Muscle Shoals*

The difficulties which stood in the way of an increased use of phosphatic plant foods in the past were formidable*

The processes of preparing commercial phos­

phate had not changed for over 80 years.

Ordinary commer­

cial phosphate contained only 16 to BO percent available plant food.

Bags, transportation, and State taxes formed

a considerable part of the costs.

Under such conditions,

the farmer was unable to buy as much phosphate as he needed to secure sufficient nitrates by means of nitrogen fixing plants.

Consequently his soil was badly depleted.

Since

there was room for technical improvement in Increasing the phosphatic plant food content before the western deposits will be economically accessible, the "Authority ... decided that It oould render no greater service ... than by making tests and demonstrations looking toward production of more concentrated and cheapened phosphate..." Having ascertained the effect of high prices and consequent shortages of fertilizer on the farm economy, and having decided to produce phosphatic plant foods, the Authority was ready to consider its last fertilizer objec­ tive:

to determine whether the cost of phosphorus to the

farmer could be reduced; and if the nitrate plants at Muscle Shoals could be adapted to such productions with little cost to the government.

*129* Accordingly the Authority inaugurated a program of thorough Investigation and research*

In 1934 it organiz­

ed a chemical laboratory at Muscle Shoals to conduct ex­ periments looking toward new fertilizer combinations, processes, and improved manufacturing equipment.

After a

thorough study of the Muscle Shoals properties it was found that the old electric furnaces at Nitrate Plant No. B could be turned to phosphatic plant food production by the electric furnaoe method.

At the same time, the use of this

method would permit the utilization of low cost T.V.A. hydro-electric power, and avoid the expense of new large scale machinery. The Authority’s research woik has also centered upon the problem of producing a highly concentrated phos­ phatic soil improver as a means of reducing fertilizer costs to fanners.

After four years of intensive research

two distinct processes were worked out.

Both are dis­

tinctly in the direction of concentration and price reduc­ tion.

The first process leads to a concentrated triple

superphosphate made by pyro-electric methods, and now Containing about 45 percent available plant food. The second process developed at Muscle Shoals yields an even higher concentrate known as calcium meta­ phosphate containing 65 percent available plant food.

-130Compared to regular commercial phosphate fertilizers of 16 to SO percent variety these two new products are distinct discoveries in the line of plant food improvement*

Even

though the concentrated material Is sold at a higher price per ton than the regular commercial fertilizer, it is never the less cheaper per unit of plant food and therefore more economical for the farmer.241 Beyond these two experimental phosphatic materials the Authority has also produced In quantities two inter­ mediate products that can he reclaimed in connection with the making of triple superphosphate and calcium metaphos­ phate*

One is a liquid phospharic acid with phospharic

acid equivalent of 82 percent, the other a solid phosphorus with a phosphoris and equivalent of 223 percent.

They have

a wide range of possible uses including agricultural.242 Since 1933, therefore, T.V.A. has developed three plant foods through the laboratory stage Into the commerci­ al area.

It is now possible to turn to the last of the

Authority's objectives previously referred to.

This ob­

jective has to do with the actual testing of the fertilizer products and includes, first, a semi-works or pilot plant stage where the elementary principles established in the laboratory are applied to the production of phosphates in sufficient quantities for experiment station testing and, secondly, a works or quantity production stage In which

large volumes of the phosphate fertilizers are produced to be tried out in actual field tests on practical farms.24® The most suitable and economical forms of phos­ phate fertilizer for use in the future can be determined only by actual tests with growing crops under a variety of conditions.

To secure such tests as a guide to manufactur­

ing plans the Authority entered into a cooperative agree­ ment with the agricultural experiment stations of the seven basin States, and with the United States Department of Agriculture.

In 1935 this three way agreement was signed

by the presidents of the seven Valley States Land Grant Universities, the Chairman of the Board of Directors of tie T.V.A., and the Secretary of the United States Depart­ ment of Agriculture.

The governing bodies of the several

college experiment stations agreed to conduct the desired fertilizer tests, to locate them in the most suitable sec­ tions of the respective States, and to use their equip­ ment and trained personnel in the work.

The Authority

agreed to furnish the fertilizer and to allocate #4,000 to each of the seven States to assist in defraying the ex­ pense of the work.

By this agreement the Authority

avoided the expense of setting up experimental equipment * its ** own. 244 of New fertilizer products must be widely tested on

-132many crops, under a variety of conditions of soil and climate*

The T.V.A* Act provided that the Authority might

cooperate with national, State, and local experiment sta­ tions in tests of the use of new forms of fertilizers during the experiment period of their introduction.

Ex­

periment station Investigations have had three main pur­ poses.

First they determine if a new form of fertilizer

Is harmful in any way.

Next they ascertain if the new

forms of phosphates are as effective, per unit of phos­ phorus, as standard commercial phosphatic fertilizers. In the third place, they discover the relative efficiency of each on a wide range of crops.

The above mentioned

information is obtained by experiments in greenhouse pots, from field cylinders or rims, and from station and sub­ station plots and fields, and sometimes from outlying fields, situated on private farms but controlled by the 245 Station. In 1937 the Authority was able to report that experiments station tests had shown generally that the plant food in these high grade phosphates produced the same beneficial results on the growth of crops as the same quantity supplied In commercial fertilizer.

As an

example, "the Georgia College of Agriculture experimented with a pasture consisting of a worn out cotton farm. Application of 1,000 pounds of limestone alone in­ creased the yield six percent. With 300 pounds of T.V.A. superphosphate and 1,000 pounds of lime, the

yield Increased 65 percent. Good Fertilizer favors grass against weeds* With lime alone the weed count was 75,000 per acre. With phosphate added it was only 16,000* The cattle passed the final ver­ dict by grazing on the phosphated pasture and refus­ ing to waste time on the other•" 246 The preliminary testing of T.V.A, experimental plant foods continued throughout the year 1940 on a nation wide basis*

Agricultural experiment stations in every

State except one requested fertilizer for testing.

Since

1933 these stations have made more than 13,000 outdoor plot tests and an even greater number of quick laboratory and greenhouse pot tests.

247

Following the experimentation with Authority phosphate fertilizer by the State experiment stations, practical field use of the fertilizer was begun by means of large scale demonstrations on actual farms.

The planning

and coordination of this project was under the direction of the Authority, the actual management was handled by the various State Agricultural Colleges. Two methods have been employed In carrying out these practical tests:

(1) the single demonstration farm,

and (2) the area demonstration.

Under the former, the

farmers are expected to form county-wide soil conservation associations.

Committees in the local association select

the demonstration farm, or the test demonstration farmer. The farm must be representative of soil conditions in the

-134county, and must b© favorably located.

A plan is worked out

for each demonstration farm covering the schen© of cropping and the combination of fertilizers and liming materials which should be used to suit the needs of the farm and the community.

The demonstration farmer agrees to keep records

on crop yields in consideration of the fertilizers obtained* B© also agrees to pay the transportation costs of the Authority fertilizer, buy new seeds, and frequently build new fences.

The T.V.A. agrees to furnish the fertilizer

through the facilities of the State extension service and the county association* The second method is the area demonstration. Single farm demonstrations naturally arouse neighborhood Interest.

Such interest leads to an area demonstration

based on the results obtained with the fertilizer on the demonstration farm.

These areas comprise as high as 10,000

acres and include all farmers within that area operating 248 through a soil conservation or fertilizer association. The following table shows the increases In test demonstra■H

tion activity from 1935 to 1940.

-135 Table XXVIII249 Summary of Tost Demonstration .Activity 1935-1940 Totals No. : No. to June States Coun­ : of 30 ties :farms ■

Acres in Farms

• •

tons of ; Phosphate s Acres Distribut-i Treated ed :

• •

1935 1936 1937 1938 1939 1940

7 10 14 19 20 22

95 280 396 479 517 652

* 984 :13,861 :21,459 :23,027 125,710 :30,683

1,986 33,310 167,014 31,338 444,836 2,259,965 833,008 3,453,952 52,831 921,925 3,703,371 66,684 4,188,584 85,041.30 1,178,813 4,890,018 112,662.15 1,558,688

• *

Under a cooperative arrangement with the Agri­ cultural Adjustment Administration in 1939 , the Authority provided the concentrated phosphatic material for distri­ bution by the A.A.A. as grants in aid under the soil con­ servation program.

The Authority was reimbursed by the

A.A.A. for the cost of materials*

The arrangement enabled

the T.V.A, to further fulfill the mandate of the Act of 1933 providing for "education and introduction of the use of such products in cooperation with practical farmers.** \

For guidance in the application of these phosphates, th© distributing agency advised farmers to contact neighbor­ ing test demonstration farmers.

The farmers reimbursed

the A.A.A. by paying for the fertilizer out of their bene­ fit checks. Th© Authority*s development of equipment for the

production of metaphosphate as well as the product Itself is a distinct achievement in the direction of greater con­ centration and attendant savings in cost.

Metaphosphate

contains 28 percent available phosphorus which is equiva­ lent to 64 percent P205 (phosphorus pentoxide).

In con­

trast, superphosphate, the widely used commercial product, carries only 7 percent phosphorus and ranks as a 16 percent 250

PgOg material.

The results of the Authority’s experiments with phosphate are rather far-reaching.

The electric furnace

method of making phosphates supplies a market for hydro­ electric power.

In the second place through the high con­

centration obtainable in these new plant foods, freight costs can be reduced.

In this respect the enormous de­

posits may ultimately be opened for use in the eastern f a m ­ ing region of the United States.

In the third place the

extensive use of the Authority plant foods makes practic­ able a change in farm methods that will conserve the soil, limit reservoir sitting, and enlarge the farm income through greater farm production.

Fourth, the supply of

phosphates to the farmer, and indirectly the use of legumes as a source of nitrogen, will relieve the demand for com­ mercial nitrates of low concentration and high price. Finally the most important contribution of the electric

furnace process in phosphate manufacture is its ability to make profitable use of low grad© ores that would be left * „ 251 unmined. Here again,

the Authority seems to have sub­

stantially carried out Congressional policy.

Only in its

cooperative agreements with the A.A.A. can it be urged that the Authority altered the policy as marked out by Congress.

And even there, when the A . A . A . policy is taken

Into consideration, the administrative alteration of policy seems slight or non-existent. NATIONAL DEFEN3L The original T.V.A. Act of 1933 imposed upon the Authority specific duties relative to national defense. Section 5 (g) required the Authority to maintain nitrate plant no. 2, or any part of It not used for agricultural purposes, in stand-by condition for the fixation of atmos­ pheric nitrogen and the production of explosives.

Section

5 (h) authorized the Authority to undertake experimenta­ tion in nitrogen products for military purposes; and Section 20 reserved the right of the government of the United States, in the event of war, to take possession of any of th© property mentioned in the act for making explos­ ives or for other war purposes. The region in which this T.V.A. national defense

program is to b© carried out is strategically located. is a natural or primary defense area.

It

The location of the

Muscle Shoals nitrate plants and the sites of the various generating plants and dams are well inland for safety from attack.

The Tennessee Valley is protected by mountains and

by distance from the coasts.

It has excellent transporta­

tion facilities with a year around 9 foot navigation channel through the heart of the Valley.

Both large blocks of

available power and dependable inland water ways are essential to national defense.2^2 As outlined by Director Lilienthal, the T.V.A. has a defense program. wl.

The munitions plant at Muscle Shoals is ready as soon as the signal is given to be adapted to the production of ammonium nitrate for high explosives.

w2.

T.V.A. has developed a huge supply of power that is now of strategic importance to th© defense of the nation, a power supply with­ out which the production of airplanes on the scale needed would be impossible; for today power is a principal reliance in America’s production of aluminum.

**3.

The need for power and ever more power In this emergency has led us to order our dam construc­ tion program to be speeded up by every device; this pressure means the completion of one of T.V.A*s. new dams 10 months ahead of schedule; it will add 5 new power generators in dams already completed ...

"4.

The facts about badly needed raw materials essential to the defense program, facts T.V.A. has been developing for seven years, ©re ready

and have been made available to the country's new Defense Commission, and to businessmen upon whom we must rely for a speedy production of essential defense materials.** 253 About one-third of the resources classified as "strategic** and "critical** by the Army and Navy Munitions Board are available in commercial quantities in the T.V.A. area. 254 In carrying out its mandate, the Authority has undertaken to maintain nitrate plant no. 2 at Muscle Shoals in stand-by condition#

The plant has been recon­

ditioned and modernized in accordance with the standards prescribed in the act and by th© War Department.

It is

prepared to produce large quantities of elemental phos255 phorus for use in national defense work. Nitrate plant no. 2 was designed and built to produce 110,000 tons of ammonium nitrate annually and by the cyanamide process.

Other vital war materials may also

be produced in this plant.

Elemental phosphorus which is

used for smoke screen and incendiary purposes can be pro­ duced In furnace no. 1 at the rate of 10 tons per day and eleven other furnaces could be immediately adapted to the same end.

Another national defense use to which the 12

electric furnaces could be put is the production of calcium carbide which Is used to generate acetylene gas.

This gas

is essential in the working of steel and of fabricating

-140steel structures*

Some of the furnaces might be turned to

the production of electric steels and ferro-alloys such as ferro manganese, ferro chromium and ferro silicon, all of which are required in th© manufacture of war munitions. Again some of the furnaces could be used for the production of abrasives and refractories which are also required in munitions making.

While the furnaces are installed for

the electrothermal process, provisions could be made to use the electrolytic prooess.

Aluminum and magnesium are

made by this later process, and both are highly essential in the construction of airships.

Chlorine, a war gas, is

also made by the electrolytic process. Beyond this, according to Director Lilienthal, the T.V.A. has made substantial military contributions. Elemental phosphorus, which T.V.A. is prepared to produce, is in great need as an important ingredient in chemical and air warfare.

T.V.A. also produces the essential and

requisite amount of power for the Aluminum Company of America located at Alcoa, Tennessee.

This organization

manufactures aluminum used in the making of airplanes. T.V.A*8. dams, then, are a major source of power supply upon which th© aluminum industry depends to provide 256 materials for the goal of 50,000 airplanes a year. Through the facilities of T.V.A*s. industrial and chiemical research laboratories, T.V.A. engineers have

-141perfected a process to extract aluminum from a common clay found in the United S t a t e s . T . V . A .

and the agencies

with which it is cooperating have developed new uses of native minerals.

It has information concerning deposits

of olimine, which can he used as a refractory in the steel Industry.

Promising results have been obtained in process­

ing olimine as a source of magnesium, a metal used along with aluminum in airplane construction.

T.V.A.has also

studied the extent and locations of kyanit© deposits. This mineral can be used as a refractory, and in the manufacture of airplane spark plugs.

258

T.V.A. engineers have

also Invented a process whereby flax is processed and woven into parachute harnesses for America’s airforce.

Meta­

phosphate, a concentrated soil fertilizer, has been in­ vented to recreate and restore the soil fertility of American farmlands for the production of food so essential in war.2^ The greater portion of the T.V.A.’s activities in the field of defense reflect the atmosphere of the decade of its work and the attitude of Congress when it marked out the policy.

It was essentially © "standby" policy

plus the preparedness research normal to such a policy. Little If any creation or modification of policy seems apparent from the activities of the T.V.A. In relation to

the national defense aspects of the. program laid out by Congress. T m t m s s m valley resources surveys

The fifth objective arises out of Section 22 of the T.V.A. Act which directs the Authority to make surveys looking toward legislation which will aid in the proper use, conservation, and development of the Tennessee River drainage basin and "of such adjoining territory as may be related to or materially affected by the development con­ sequent to this act," and to provide for the general wel­ fare of th© citizens of th© Tennessee Valley area.

The

T.V.A# consistently insists that it was the policy of Congress that the primary objectives of the unified plan of river control be administered in relation to the social, economic, and physical background of the act#

In the

material to be discussed here this must be kept constant­ ly in mind#

The surveys, experiments, and demonstrations

conducted by th© T.V.A. fall into, and will be discussed under tne following topics:

(1) Agricultural Industries,

(2) Public Health, (3) Minerals, (4) Social and Economic Studies, (5) Transportation, (6) Recreation, (7) Forestry#^60 Agricultural Industries Barriers to the success of the soil conservation program in th© Tennessee Valley ar© two fold:

(1) a rather

low inooiae and (2) the need for farm equipment suited to the special conditions of th© region#

Demonstration and

research projects have been undertaken to eliminate these harriers#

These developments are centered upon the prob­

lems involved in special types of farm machinery, new uses for rural electricity in the processing of farm crops, and the improvement of marketing facilities. Such studios and demonstrations have been carried on largely by T.V.A. Agricultural Industries Division in cooperation with State Agencies having adequate facilities for technical research, including the agricultural colleges, experiment stations, and the engineering colleges# The program of research and demonstration may be divided into four project fields Including:

(l) research

and demonstrations of low cost farm machinery for use with soil conserving crops:

(2) research and demonstrations in

local processing of Tennessee Valley area crops; (3) studies of cooperatives; and (4) research and demonstrations relat­ ing to the effective use of electricity on the farm. The soil conservation and erosion control program promoted by the Authority calls for the replacement of some cultivated crops, such as corn and cotton, by ©mall grains.

legumes

and

Such a program, however, Is not feasible on

small, low income farms, unless low cost agricultural

-144machines are mad© available. this end have been undertaken:

Research activities toward for example, a low cost

electric hay drying device has been developed.

The

Tennessee Valley produces an abundance of hay bftt fre­ quent rains make outdoor curing very difficult.

To remedy

this situation the drier has been designed and developed to cost approximately #400.00.

Its performance has

attracted requests for information concerning it from £6 262 states and five foreign countries. Again, to reduce the cost of procuring lespedeza and crimson clover seed, an inexpensive attachment for the ordinary mowing machine has been developed.

The attachment recovers about 40

pounds of seed per acre, and will cost less than #25.00. The commercial manufacturer of this device (to which the Authority’s experimental work contributed improvements) reported sales of 200 of these units In 1937, and 1,000 advance orders were placed for 1938.

Other equipment units

under development and improvement Include & small low cost machine

for threshing legumes and small grains.

It is

operated by a one to three horsepower motor, and is design­ ed to cost less than #200.00.

In test runs on wheat, oats,

vetch, red crimson clover, rye, and orchard grasses were threshed with recoveries averaging from. 75 to 93 percent of the seed.

The machine is now being manufactured by a

farm implement company in Korth Caroline.

A satisfactory

'•140low cost feed grinder or mill using a small motor has been developed to encourage th© home consumption and planting of small grains for livestock feed and table use.

A high

speed seed cleaner has been developed to permit the farmer to plant a better quality of legume seeds as well as elec­ trically operated pump machinery.

A furrow seeder develop­

ed in cooperation with the University of Tennessee Agri­ cultural Experiment Station has reached the stage of commercial manufacture and actual farm use.

This is a low

cost machine designed to plant fall grains in hillside legume sods, plowing a furrow along the contours of the slope and dropping seed and fertilizer all at the same time.

Year around protection against soil erosion and

addition of an extra crop are thus provided. are increased because

Grain yields

the furrows prevent leaching of the

nitrogen in the legume sod.

To advance the use of this

implement over fifty demonstration meetings were held throughout the Valley during the fiscal year 1940.

The

machine is now being manufactured by a Louisville, 263 Kentucky implement farm. The Authority cannot engage in the manufacture of farm machinery, nor can it finance or directly promote manufacturing.

Consequently, the Authority is limited in

projects such as outlined above to research and experiment­ al demonstration.

Much research has been carried on toward develop­ ing new methods of processing and handling farm produce. The more effective utilization of the agricultural prod­ ucts of the Valley is being fostered in several ways*

A

method of pressure cooking of cotton seed meats which re­ duces the time required for cooking from two hours to twenty minutes, as well as increasing the oil yields, has been developed.

Experimentally It has increased ex­

traction by ten pounds of oil per ton of seed which would give the average small oil mill an additional in­ come of $7,800 a year; or a potential added value to the £64 Nation's cotton crop of $5,000,000 a year. Demonstration projects have also been carried on in the freezing of farm products.

A quick freezing machine

for small fruits and vegetables has been established at Cleveland, Tennessee.

In the summer of 1937 strawberries,

youngberries, and peaches were quick frozen.

The fruits

are frozen by dipping in a heavy sirup at 3° F., instead of much colder temperatures as used in the dry process. The freezing takes only six minutes compared with several hours by other methods.

When sold on Hew York and St.

Louis markets all commanded premium prices because of flavor, texture, and appearance. 140,000 pounds of fruit.

In 193© the plant froze

In 1939 the plant was leased for

commercial freezing of strawberries, peaches, and veget­ ables.

The frozen products from the 1938 season were sent

to St. Louis to teat refrigerated barge transportation and thence to New York to teat refrigerated car shipment.

The

fruit arrived In prime condition at both points and was disposed of satisfactorily as well as demonstrating the economical transportation of frozen foods to distant markets. The improved freezing process is expected to relieve the glut of fresh fruits in season and spread them over the year. £ 6 5 . Demonstration projects have also been carried on relating to the improvement and standardization of the re­ fining of sorghum syrups.

The results of these experiments

and demonstration projects were made available to other agencies in 1940,and they also indicated that increased yields of sorghum per acre, community processing to insure uniform quality of syrup, and cooperative marketing prac­ tices will make this crop a worthwhile source of income to the people of the Tennessee Valley. As much as £0 percent of the sweet potato crop of the Tennessee Valley Is wasted due to irregular shape and small size.

Elimination of waste and spoilage through

dehydration will overcome this waste.

Through experi­

mentation, the Authority has developed a dehydrating unit

—148— that has produced sweet potato slices and sweet potato flour having uniform quality and indefinite keeping quality. Sweet potato curing by electrical heat has also been tried experimentally and found successful. In spite of increasing demands for linseed oil, the flax crop in the United

States has decreased.

Experi­

mental work has been conducted to determine costs of grow­ ing and harvesting flax, cleaning the fiber, the possi­ bilities of processing the fiber on cotton mill machinery, and new uses of fiber, seed, and by products.

Successful

mechanical experiments have been conducted in which the fiber of the flax has been separated from the stalk as well as degumming the fiber of gum and waste.

Also, © large

drier for flax straw and an individual fiber testing mach­ ine were designed and constructed and have produced satis­ factory results.

It has been found feasible to process

flax seed on cotton seed oil machinery.

£66

The Tennessee Associated C.operatives, Inc., were formed in 1933 by’T.y.A. to reduce the relief burden in rural areas.

Its board of directors is the same as that

of the Authority.

The corporation has general powers to

promote, organize, establish, manage, coordinate and finance rural cooperative enterprises in the Tennessee Valley States.

The shares were issued in the name of the

United States and have no par value. , The Federal

Emer­

gency Belief Administration granted funds amounting to $300,000 to the corporation to be administered in aiding the cooperatives to relieve depression distress# The corporation is independently engaged in ex­ tending aid to local cooperative creameries, canneries, milling, and rural refrigeration associations.

It has

also attempted to improve the winter diet of the people on relief.

Southern Highlanders, Inc., and Land 0 f The

Sky, Inc., are its marketing organizations.

The former

deals with the selling of handcraft articles made in the Tennessee Valley mountains, and the latter with the market­ ing of the products of the local canning cooperatives.

A

marketing association known as the Strawberry Growers Cooperative has also been organized.

One

hundred and fifty

five of these active cooperatives now exist In the region controlled by the T.V.A.~ T.V.A. estimates, based on studies and surveys, show that there are some £00 uses for electricity on the farm, all of which will save the farmer money.

Research

has been carried on in the development of equipment for the profitable utilization of electricity on the farm and in the rural community.

Examples are the rural community,

refrigerators; electric brooders for pigs and chickens; electrically heated hot beds; dairy utensil sterilizers;

-130tobacco curing apparatus; an electrically heated cabinet for aging of hams, and other meats; and electrical insect traps.260 The rural low coat community refrigerator can b© Installed in sruall towns or on a convenient farm and used by a small number of families. $650.00.

The unit costs approximately

It provides not only cooling space but also

freezer compartments for individual families.

In addition

it contains a room for cutting up and preparing meat and produce for storage.

In 1940, nineteen of these walk in

type of refrigerators were being used in the Valley area. It is estimated by T.V.a . that nearly #3,000,000 could be saved in pork alone by the use of these refrigerators in £69 the Valley area. An economical pig brooder has been developed that can be constructed at hoj^e.

In 1938 six units were

placed on farms for demonstration purposes.

Electrical

Ohidk brooders of one to two hundred size have been widely tested.

Electrical soil heating in hot beds has also been

demonstrated in the Valley region.

An electric combination

dairy utensil sterilizer and water heater has been develop­ ed as well as electric cabinets for curing hams, and electrical insect traps for use in growing tomatoes which have resulted in approximately 100 percent freedom from

-151boll wo m s .

Te3ts in artificial ventilation in tobacco

curing barns indicated that an even flow of air and proper humidity appreciably improve quality and increases the yield of good leaf tobacco.

Losses amounting to nearly

f

#300,000 annually to the Valley tobacco grower are 270 attributable to poor curing. The T.V.A. also conducts a program of rural electrification education and demonstration.

The object

of such a program is to make information concerning elec­ trical equipment available to rural people in order that Increased farm income and standards of living may be im­ proved.

Specialists supported by the Authority and the

agricultural extension staffs of Alabama, Georgia, Miss­ issippi, and Tennessee conduct training schools for county agents, home demonstration agents, and other farm leaders, who in turn arrange local demonstrations of farm and home eleotrification.

During the fiscal year 19 39 these ex­

tension services conducted 775 meetings, demonstrations, and schools on farm'and home uses of electricity.

24,517

people attended, and this number was increased to 43,000 farm people in 1940.

This educational work is bringing

results in terms of appliances purchased and markets for 271 power expanded. Technical research by public agencies is

-15£~ ;

essential if farm Income is to be increased and new types of farm equipment developed#

It has been necessary for

the Authority to test the new equipment and processes on a practioal scale in order to prove the existence of a de­ mand for such products.

Here, too, business opportunities

on a commercial scale have been shown to exist,and the results of experiments and researches have been turned over to private manufacturers.

Beyond this, the creation of

new agricultural industries opens new markets for the products of the area, raises rural income, and creates employment for surplus rural populations.

Then too the

method of setting up joint projects with local agencies has been much more economical than establishing new engineering laboratories Public Health The T.V.A. plays a dual role In matters of health and safety.

It accepts a direct responsibility to guard

the health of its employees as well as certain obligations to the people of the communities in which It operates. First in relation to its construction employees, the Authority provides medical care, physical examina­ tions, immunizations, and rehabilitation for the injured. Studies and investigations relative to the elimination and prevention of the potential hazards of dusts and toxic

gases to the health of the employee are being made.

The

Authority also supervises water supplies and sewage dis­ posal.

It also strives to reduce construction accidents.

Courses in safety methods dealing with the handling of explosives, automobile driving, and first aid are made available.273 A basic obligation which rests upon the Authority is to keep down malaria in the reservoir areas.

In

cooperation with the United States Public Health Service end the various Valley State health departments, the Authority makes studies of stream pollutions,conducts malarie control operations and studies in the reservoir areas, and experiments with methods for reducing the £74 malaria incidence. Surveys of school children living within flight distance of mosquito breeding areas are made annually.

It

was found that infection Increases were insignificant, demonstrating the effectiveness of control methods. Studies on the effectiveness of mosquito proofing for homes have been conducted.

Such proofing has been found to be a

deterrent to malaria transmission.

Laboratory research

has also been continued on the malaria bearing mosquito as well as studies on more economical and effective larvicides.

Conclusions to date indicate that cuprous arsenite

-154produces the best results. T.V.A. manufactures this arsenate 275 in quantities through its pilot plant. Minerals Regional studies and field Investigations have been primarily concerned with examinations of mineral distribution, mode of occurrence, character, economy, and relation to water transportation terminals.

Voluminous

Information has been collected on asphalt rook, limestone, sandstone, and clay.

Tests, have also been run on talc,

mica, mica-resin, barite, chert and vermiculite and olivine. Vermiculite, after experimental and research work, has been found to be a good thermal and acoustical insulating material.

Olivine has encouraging possibilities as a new

source for magnesium compounds.

All are minerals found in 276 varying quantities in the Tennessee region. Ceramics research has been carried on through laboratory facilities established by the T.V.A. at Norris, Tennessee.

The principal purposes in connection with these

studies are, first, to develop increased markets for Tennessee Valley kaolins.

Research has definitely shown

that Immense reserves of fine quality of this primary material exists in the Tennessee Basin.

A method of

processing and refining has been marked out on a commercial basis which will obviate the need for importing English

-155kaolins and at the same time greatly increase the local market for this raw material.

A second objective has been

to demonstrate the practicability of manufacturing a high grade porcelain dinnerware from this kaolin.

A third

purpose has been to demonstrate the practicability of electric firing for ceramic ware.

Such has been found

feasible and at the same time producing an increased market for electric power.

T.V.A* has an interest in promoting the

wider uses of these clays as a base for increased purchas­ ing power in the region.

In June 1939 the United States

Bureau of Mines took over the ceramics laboratory as the Authority was of the opinion that further large scale experiments were not warranted.

pno

r

Social and Economic Studies Social studies and economic surveys have been conducted where it was thought they were necessary to the execution of the T.V.A. program.

Naturally this sort of

research grows out of the necessity of solving social and economic problems arising out of the building of dams and are of several types.

Families must be relocated as their

land is purchased and they are required to move from the reservoir areas.

The Authority enlists the aid of local

agencies in an attempt to help such families to relocate on better lands.

The Authority also conducts studies to

determine the effect of the purchase of reservoir areas upon the tax rolls and county finances so that a fair policy of compensation may be adopted.

Data have also been collected

on county and municipal governmental finances in the area selected for dam construction, such factors as tax delin­ quency and assessed valuation having a bearing on prices paid for reservoir area land.

Surveys on available labor

supply have been mad© as well as studies on the rqcial composition of the population.

In this connection surveys

of housing facilities have been carried out.

27Q

Tra ns porta tion Studies by the T.V.A. Transportation Economies Division indicate that water rates on the Tennessee may be made to offset carrying charges which now tend to drain the Valley of its raw materials and to penalize the estab­ lishment of local industries.

Investigations are also

being made to detenuine the best design and proper loca­ tion of wharves on the reservoir pools.

Data has been

obtained relative to a system of public use terminals which would be constructed and operated on a uniform plan and for a common purpose.

The feasibility of establishing a

common carrier freight service has been investigated and establishment considered.

-157Reereatlon The T.V.A. Act of 1933 directed the Authority to develop the Tennessee river to control floods, improve navigation, and utilize the resource of falling water to make hydroelectric power.

Recreation has become an im­

portant by-product of such river development.

The Tennessee

River winds through the heart of a country rich in scenic and recreational resources.

The scenic resources inven­

tories have revealed the assets of high mountain peaks, clear lakes and rivers, agreeable climate, easy access­ ibility, picturesque highways, and dens© forests.

The

region contains the Greak Smoky Mountains National Park, many national forests, the historic battlefields at Chattanooga, and the resorts of the Asheville area. T.V.A. lakes supply the great bodies of water.

The

To eighty

million people living within a 500 mile band around the Tennessee River watershed, this means an opportunity to fish, to boat, to swim in the lakes or to seek other forms of recreation along its shores and in the surrounding territory.

This Tennessee Valley recreational domain in­

cludes more than on© half million acres of water surface and nearly 6,000 miles of publicly owned shores surround280 Ing lakes located in six states. Section B2 of the Act authorizes a program of

Investigation and planning for the better us© of the scenic and water resources of the Tennessee Valley, in the inter­ ests of public recreation.

The Authority has therefore

undertaken studies to determine the needs for conservation and the opportunities for wise development and use of re­ creational resources throughout the Tennessee Valley and adjacent territory.

Accompanying the studies have been

experiments and demonstrations on lands within the Author­ ity's control.

These have served the triple purpose of

supplying needed information and experience, stimulating public interest, and furnishing initial facilities for popular enjoyment of the reservoirs.

Most of this activity

is carried on in cooperation with the National Park Service, the C.C.C., other related federal agencies, and the States 281 immediately concerned. First among the basic studies undertaken by the Authority were inventories of the recreation resource it­ self.

An analysis of the function of recreation was made,

with the purpose of determining how the region could meet the recreational requirements of the people.

After a care­

ful classification of the kinds of out door recreation people desired, the proper areas were selected to fulfill these recreation desires. In 1935 the Authority undertook a comprehensive survey of the scenic resources of the Tennessee Valley.

-159This survey resulted in a cataloging of all scenic resources in the urea, together with maps, photographs, and descrip­ tive matter on the natural scenery of the region.

This

survey disclosed the fact that outstanding scenery in the Valley region is in and around its eastern half, a region containing mountains, streams, cliffs, gorges, and valleys of great scenic quality.

The area also contains an inter­

esting cultural and historical heritage, and is favorably located with respect to population centers and roads.

OQO

In 1938 a report was mode on the findings of a survey relating to the "Reoreational Development of the Southern Highlands Region.”

In this report, four regions

were distinguished on the basis of differences in degree of population concentration, types of land use, and potenti­ alities for recreational development.

The study also sug­

gests that the recreational and conservation activities of each of the seven States concerned be consolidated Into a single State Department, with a division of parks.

Each

State should also regulate billboards, commercial roadside developments, State inspection and control of restaurants, hotels and other places of lodging.

Wayside parks should

also be developed. Due to the influence of the T.V.A. reservoirs upon highways in and around them the Authority has conducted

studies of recreation travelwaya.

In the main, these

studies have been directed toward making recreational sites available, securing adequate highway construction, and appropriate roadside development.

The principles of de­

sign brought out in these studies were Incorporated in the Norris freeway.

This freeway is an important demonstra­

tion of rural scenic highway planning.

The roadside as

well as the roadway itself is included in the design.

The

right of way has a minimum width of 250 feet.

Billboards 283 and other commereiel developments have been eliminated. The T.V.A. program of converting a shallow flow­ ing river into a series of deep still lakes affects all plant and animal life dependent upon the river.

To many

species, it presents problems of survival, to others prob­ lems of readjustment.

Accordingly, the Authority, in co­

operation with the United States Bureau of Fisheries and Biological Survey, has undertaken investigations of wild­ life conditions in the Valley area in order to develop and maintain fish and game resources.

Equally intensive studies

are being made to determine wise methods of developing and conserving upland game, waterfowl, and fur species.

This

developing and restoring of an adequate fish, game and fur population is of great economic importance from the stand­ point of local income and food supply.

Fishing and hunting

are dependent upon the maintenance of ample supplies of stock as well as upon favorable habitats.

To provide these

favorable conditions is a primary objective of the Authorr> q

a

ity's recreational program. In view of the fact that the T.V.A. properties are publicly owned, the Authority has adopted the policy that ”all plans and programs for the use of such properties shall be directed to secure the maximum of public benefit.” It is furthermore a matter of policy that in the use of such properties those shall be preferred which will benefit most the greatest number of people. In 1934 the Authority entered Into an agreement with the National Park Service in which it was recognized as the park authority.

Since that time, it has constructed

and is operating five demonstration parks.

Morris Park,

located on Morris lake, contains 3,887 acres and has a shore line of approximately five miles.

The park is designed for

hiking, horseback riding, and nature enjoyment.

The park

also maintains vacation cabins, a public lodge, and an outdoor theater besides a trailer camp, eg. bathing beach, picnic areas and a riding stable.

Licenses granting con­

cessions for a tearoom and the riding stable have been issued.

Big Ridge Park, twelve miles east of Norris town,

contains 4,500 acres.

It functions as a vacation center

for moderate income groups.

Cabins, lodge, eath house,

and picnic areas are maintained as well as a tea room con­ cession.

A camp for organized group such as the Boy and

-162Girl Scouts, 4H Clubs, and other fraternities has accommo­ dations for 50 persons and includes a central building, bunkhouses, and swimming facilities.

These groups may

rent the entire facilities of this camp for periods ranging from on© week to a month.

Wheeler, Muscle Shoals, and

Pickwick Parks are smaller than the two demonstration Parks just described.

However, they serve the same purpose and

have similar facilities.

At Muscle Shoals facilities for

negroes consisting of shelters, picnic areas, and sanitary facilities are provided.26^ Since the demonstration parks of the Authority have accomplished their objective of stimulating State and local action in the provision of similar facilities, the Board now follows the policy of leasing T.V.A. properties to the States for park development.

The lease is drawn for

a period of 15 years at a nominal annual rent.

The lease

also requires that all construction plans, modes of opera­ tion, and maintenance of facilities be in accordance with Authority park standards.

Provisions are made for inspec­

tion, and leases may be terminated for improper use.

Four

such leased areas are now in operation.S87 Since fishing and hunting are an Integral part of any program of recreation, the Authority has taken steps to annually stock the T.V.A. lakes with millions of young

-163-

gam© fish.

This stock is reared et T.V.A. fish hatcheries

operated in cooperation with the U.S. Bureau of Fisheries. Game management and refuge areas are being de­ veloped in reservoir areas.

A 40,000 acre tract design­

ated as the Wheeler Migratory Waterfowl Hefuge has been established for wild fowl.

It is managed jointly by the

T.V.A. and the Bureau of Biological Survey. Forestry The total land area of the Tennessee Valley is 26.180.000 acres of which the forest land accounts for 13.500.000 acres or 52 percent of the total.

Approximately

11,000,000 acres of the forest land is in private owner­ ship, the remainder being owned by public agencies such as the United

States Forest Service.

Not over 20 percent of

the total forest land receives adequate fire protection, for yearly forest fires burn over one out of every twenty acres of forest land in the Valley.

Nearly 7,000,000 acres

Of agricultural and abandoned land present a definite prob­ lem of erosion control.

Of the total, 1,000,000 acres

were so badly destroyed as to make further cultivation un­ economic.

Another 1,500,000 ©ores were so depleted by

erosion and gullies that they may be classed as critical areas, and the remaining 4,500,000 ©ores needed some control

—164— measures.

T.V.A's. interest In forestry derives from the

fact that well established forests help to prevent erosion, storing the water on the land and lessening siltage damage to reservoirs.209 The Forest Resources Planning Division of the T.V.A. Department of Forestry Relations functions primarily as an investigative organization.

It conducts experiments,

investigations, and demonstrations,cooperatlvely with other organizations, or independently when it can do so without duplicating or usurping the fuhctionsof other agencies.290 On© of the major studies of this Division is an Inventory of forest resources.

This was accomplished by a

comprehensive field survey to determine the location of various forest types and species, their volume, condition, rat© of growth, and mortality.

In 1940 work had been com­

pleted on 24,500,000 of the 26,180,000 acres in the Valley. This survey also included data on the depletion of timber

fry wood using Industries.

Here it was found that the de­

cadent forests produced about $50,000,000 worth of raw products annually and forest industries furnished 350,000 farm families with part of their employment and income. Data also was collected on the movement of forest products by truck as a basis for determining regional boundaries from which wood using industries are drawing their raw materials.

Ownership studies were also included as a source

-165of date for analyzing the effect of ownership on forest 291 development. Studies have also been conducted in the field of silviculture and management in order to determine the use­ fulness and relative efficiency of various forestry prac- ' tices in the control of water on the land and to investi­ gate the economic returns which may be received from forests managed in the interests of watershed protection. The great variety of trees and soils in the Tennessee Valley affords great possibilities for the use of trees in water oontrol on the land as well as for the production of timber. These studies are directed toward determining those silvi­ cultural and management practices which will result in the maximum financial returns compatible with optimum watershed conditions.

In this connection progress has been made in

crop investigations of superior varieties or strains of black

walnut, black locust, honey locust, persimmon, and

blight resisting chestnut.

Continued attention has been

given to the development of superior types, toward improve­ ment of techniques in the production and handling of such plants, and to field demonstrations in the use of improved 392 tree crop species. Backed by research and investigation, an oppor­ tunity is present for a vast demonstration in reforestation,

-166wild life conservation, recreation, fire protection, soil conservation, and an opportunity for a better cash Income for many Valley farmers. It is in the field of experimentation that the basks of policy alteration is laid.

By emphasizing the

"social aspeots" of their experiments, the T.V.A. influ­ ences the general policy.

This is evidenced by the reac­

tion of congressmen to the "socialistic" tendencies in the work of the T.V.A. as recorded In chapter II.

It is also

evidenced in the content of both fevorable and unfavorable pressure-group testimony.

The most complete evidence,

however, is to be found In the work of the agency itself. It is true that a liberal interpretation of the statute would justify the shift in policy.

And It is significant

that the reports of the T.V.A.a11 rely upon a liberal interpretation of its statutory authority.

When compared

to the policies regarding navigation, flood control, de­ fense, and fertilizers, the social improvement, policy looms as an area of administrative definition rather than as an area of legislative definition. POWER DEVELOPMENT As clearly indicated by the various provisions of the T.V.A. Act, it was anticipated that as a neoessary result of the development of the Tennessee River Basin in

167 the interest of navigation and flood control, a large potential resource of hydro-electric power would be de­ veloped.

This congressional purpose is clearly set forth

in several sections of the Act.

In brief, the Authority is

authorized to generate, transmit, and market this power at rates which will encourage mass consumption.

£94

The first step in oarrying out the power program required under the Act was the formulation of a power policy.

Early in 1933 the following policy was publicly

announced; ”1.

The business of generating and distributing electric power Is a public business.

”£•

Private and public interests in the business of power are of a different kind and quality and should not be confused.

"3.

The interests of the public in the widest possible use of power is superior to any pri­ vate interest. V^here the private Interest and this public interest conflict, the pub­ lic interest must prevail.

w4.

Where there is a conflict between public interest and private interest in power which can be reconciled without injury to the pub­ lic interest, such reconciliation should be made.

”5.

The right of a community to own and operate its own electric plant is undeniable. This Is one of the measures which the people may properly take to protect themselves against unreasonable rates. Such a course of action may take the form of acquiring the existing plant or setting up a competing plant, as circumstances may dictate.

160 "6.

The fact that action by the Authority may have an adverse economic effect upon a privately owned utility should be a matter for the serious consideration of the Board in framing and executing its power program. But it is not the determining factor. The most import­ ant considerations are the furthering of the public Interest in making power available at the lowest rate consistent with sound finan­ cial policy, and the accomplishment of the social objectives which low cost power makes possible. The Authority cannot decline to take action solely upon the ground that to do so would injure a privately owned utility.

”7.

To, provide a workable and economic basis of operations, the Authority plans initially to serve certain definite regions and to develop its program in those areas before going out side •

"8.

The initial areas selected by the Authority may be roughly described as (a) the region immedi­ ately proximate to the route of the transmission line soon to be constructed by the Authority between Muscle Shoals and the site of Norris Dam; (b) the region in proximity to Muscle Shoals, including northern Alabama and north­ eastern Mississippi; and (c) the region in the proximity of Norris Dam (the new source of power to be constructed by the Authority on the Clinch Biver in northeast Tennessee)• At a later stage in the development it Is con­ templated to include roughly, the drainage area of the Tennessee River in Kentucky, Alabama, Georgia, and North Carolina, and that part of Tennessee which lies east of the west margin of the Tennessee drainage area. To make the area workable end a fair•measure of public ownership, it should include several cities of substantial size (such as Chattan­ ooga and Knoxville) and ultimately, at least one city of more than a quarter million, with­ in transmission distance, such as Birmingham, Memphis, Atlanta, or Louisville.

-169 While it is the Authority’s present Intention to develop it© power program in the above de­ scribed territory before considering going outside, the Authority may go outside the area if there are substantial changes in general conditions, facts, or governmental policy, which would necessarily require a change in this policy of regional development, or if to privately owned utilities in the area do not cooperate in the working out of the program. Nothing in the procedure here adopted is to be construed in any sense a commitment against extending the Authority’s power operations outside the area selected, if the above con­ ditions or the public interest require; where special considerations exist, justifying the Authority’s going outside this initial area, the Authority will receive and consider appli­ cations based on such special considerations. Among such special considerations would be un­ reasonably high rates for service and a fail­ ure or absence of public regulation to protect the public interest. w9.

”10.

Every effort will be made by the Authority to avoid the construction of duplicate physical facilities, or wasteful competitive practices. Accordingly, where existing lines of private­ ly owned utilities are required to accomplish the Authority’s objectives, as outlined above, a genuine effort will be made to purchase such facilities from the private utilities on an equitable basis. Accounting should show detail of costs, and permit a comparison of operations with pri­ vately owned plants to supply a ’yardstick* and an incentive to both private and public manager©•

j

”11.

The accounts and records of the Authority as they pertain to power will always be open to inspection by the public.” 295

-170It seemed apparent to the T.V.A. that the private power industry had become involved in a vicious circle of high prices with low consumption of electricity.

Their

solution to this problem was the application of the prin, n olples of mass production and mass consumption. 2 9 6

Ac­

cordingly the T.V.A. Board has either purchased or con­ structed dams and installed generating facilities looking toward mass production.

During the fiscal year 1940 T.V.A.*s

gross kilowatt-hour generation amounted to 4,113,229,253 kilowatt-hours, as compared to 5,556,000,000 kilowatthours for 1941.

The latter gross generation is an increase

of over 37 percent for the previous year.

The total 1940

figure includes hydro, steam, and internal combustion engine generation.

Hydro generation alone amounted to

3,214,148,860 kilowatt-hours, whereas In 1941 eighty one percent of the Authority's total generation was at hydro­ electric plants and nineteen percent at steam and internal combustion plants.

During the fiscal year 1940 T.V.A.

added 742,800 kilowatts to its hydro generating capacity and had under construction at the close of the fiscal year another 756,600 kilowatts of capacity.29^ Therefore, a by product of T.V.A.'s generating activities is surplus power.

It becomes the basic obliga­

tion of the Board, under the Statute, to market this

-171surplus.

The Authority disposes of its power on a whole­

sale basis only, and is not engaged in the distribution of electricity to the ultimate consumer.

Its function in

this respect terminates with the delivery of power to the lines of the public and private distribution agencies. The Authority*s only interest in retail distribution lies in its role as a party to a bulk power contract in which low rates are agreed upon.

The methods that have been

employed in disposing of this power by the Authority on a wholesale basis and in accordance with the statute and their power policy are as follows: First— through the purchase of private electric utility properties, including generation and transmission facilities, in order to establish a marketing territory. The policy here is that "every effort will be made by the Authority to avoid the construction of duplicate physical facilities, or wasteful competitive practices.

According­

ly, where existing lines of privately owned utilities are required to accomplish the Authority’s objectives,... a genuine effort will be made to purchase such facilities from the private utilities on an equitable basis."

298

The position of the Authority with respect to existing facilities and investment is well summed up in the words of Director Lilienthal who said;

-172"To avoid duplication of facilities, to avoid territorial competition, to buy property at fair prices, are cardinal policies of the Tennessee Valley Authority• Our adherence to the policies should reassure you of the Authority’s determina­ tion to respect prudent investment in useful property*"„ Most of the transmission facilities purchased from the pri­ vate utilities is resold to cooperatives and municipalities. In some cases the municipality purchases its local distri­ bution system direct from the private utility, the Author­ ity purchasing the remainder of the major transmission lines and the generating and substation facilities.

The

following chart represents the sequence of acquisition of this type of electric properties from private utilities. Table XXIX SEQUENCE OF A CQ UISITION ELECTRIC PROPERTIES BEFORE

1938

F\

1 MISSISSIPPI POWER CQI9M

(p o rt}

z ALA BA M A POWER CO 1936

/ - . . - j L

T..., . .....

g

Costs

Manuf. (1) Crushing, screening, bag­ ging etc. at #1 per T. Bags and twine, at #1.75 per T. State tax, average at 30# per T. Freight, average at #3 per T. Dealers profit, average at 10$ Cost to farmer (2)

56% mater­ ial (must buy 2 T. to get 1 % P20B)

66 2/5$ material (must buy li T. to get 1 T. p 2°5)

# 38.00

$ 50,00

# 46.00

6.00

£.00

1.50

10.50

3.50

2.63

1.80

.60

.45

18.00

6.00

4.50

7.43

6 .21

5.51

81.73 ..... mJ L 3 L

60.59

68.31 :

(1)

Estimated at #6*313 per ton of 16 2/3% material, #£5.00 per ton of 50% material, and #36.67 per ton of 66 2/3% material.

{2)

Farmer actually pays more depending upon manu­ facturers profit and sales costs, not included in above.

(3)

This cost to farmer usually amounts to about #106.00.

251. Tennessee Valley Authority, Annual Report. 1937, pp. 36, 37 252. 48 U.S. Statutes at Large 61, 685 Tennessee Valley Authority, Annual Report, 1936, pp. 49, 53 353. Address by D. 1 . Lilienthal, "National Defense: the Role of the Southeast and T.V.A.", June 1940, pp. 2-3

* -245£54. Tennessee Valley Authority, Annual Report. 1936, pp. 53, 54 Military metals including red and brown ares are found in "ample" quantities in the Valley. Both ares contain "ample" phosphorus ratio. Deposits of minor metals such as zinc, lead, and copper are available in the Tennessee Valley region together with certain "possibilities" as to aluminum* manganese, and chrom­ ium. Coal deposits, essential to the manufacture of materials for chemical and explosive warfare are wide­ spread. The region also has existing deposits "in quantities" of phosphate rock, limestone, salt, potash, and pyrite, a source of sulphuric acid. 255. Tennessee Valley Authority 256

1935, 1936, 1939, 1938,

P* P* P* P*

22; 51; 80; 96

1935, P* 23; 1936,

*

pp. 49-53 257. Address of D. E. Lllienthal. "The Armament of a Democracy* , November 1940, pp • 4-5 256, Address of D. B. Lilienthal, "National Defense: of the1-Southeast and T.V*.A. June 1940, p. 7

Role

259. Address of D. E. Lillenthal, "T.V.A. and National Defense," May 1941, pp. 3-4 260. 48 U.S. Statute at Large 69; Tennessee Valley Author­ i t y . Annual Report. 1935, p. 35 261. Tennessee Valley Tennessee Valley

Authority,Annual Report. 1939, p. 81; Authority,Annual Report. 1938, p. 84

262. Tennessee Valley Tennessee Valley

Authority,Annual Report. 1938. p. 84; Authority,Annual Report. 1939, p. 82

263. Tennessee Valley Tennessee Valley Tennessee Valley

Authority,Annual Report. 1936, p. 60; Authority,Annual Report. 1938, p. 85; Authority,Annual Report. 1940, p. 31

264. Tennessee Valley Authority, Annual Report. 1935, pp. 40-41; Tennessee Valley Authority, Annual Report, 1938, pp. 85-86

244265.

Tennessee Valley Tennessee Valley Tennessee Valley

Authority, Annual Report. 1937, p. 44; Authority, Annual Report. 1938, p. 86; Authority, Annual Report, 1939, p. 84

266.

TennesseeValley pp. 87-88

Authority, Annual Report. 1938,

267. Tennessee Valley Authority, Annual Report.1954, p. 46; Tennessee Valley Authority, Annual Report. 1938, p. 90; Tennessee Valley Authority, Annual Report. 1939, p. 85 268.

Tennessee Valley Tennessee Valley Tennessee Valley Tennessee Valley

Authority, Authority, Authority, Authority,

Annual Annua 1 Annual Annual

Report. Report. Report, Repori.

1936, p. 1937, p. 1938, p. 1940, p.

869.

Tennessee Valley Tennessee Valley

Authority, Annual Report, 1938, p. 88; Authority, Annual Report. 1936, p. 33

✓

33; 19; 88; 31

270. Tennessee Valley Authority, Annual Report, 1937, p. 19; Tennessee Valley Authority, Annual Report, 1938, pp. 88-89; Tennessee Valley Auiho rity, Annua1 Rep or t . 1939, p. 83 271. Tennessee Valley Tennessee Valley Tennessee Valley p p . £9, 30

Authority, Annual Report, 1938, p. 89; Authority, Annual Report, 1939, p. 83; Authority, Annual Report. 1940,

At the end of the fiscal year 1940 domestic appli­ ance sales by local dealers in the Tennessee Valley Area amounted to approximately #12,500,000. The average sale per residential customer amounted to #46.00. Appli-ances consisted of 35,400 electric refrigerators, 12,600 electric ranges, 4,700 electric water heaters, 1,300 electric water pumps, 14,600 electric washers, and 188,400 unclassified items. These purchases will in­ crease the total residential consumption in the Tennessee Valley Area by 55,000,000 kilowatt hours annually and thereby increase the revenues of the Authority^ distri­ butors by #1,000,000 a year. 272. Tennessee Valley Authority, Annual Report. 1939, p. 85 273. Tennessee Valley Authority, Annual Report, 1938, pp. 76-79

-245274. Tennessee Valley Authority, Annual Report, 1936, p. 57; Tennessee Valley Authority, Annual Report, 1930, p. 70 The methods of control now employed by the Author­ ity in its various reservoir areas are fluctuation of reservoir levels in order to destroy the breeding environment of the mosquito. A clean shore line is also maintained. Fluctuation is supplemented by shore line spraying with oil and dusting with parts green from boats and airplanes. 275. Tennessee Valley Authority, Annual Report, 1939, pp. 99-100 276. Tennessee Valley Authority, Annual Report. 1939, pp. 86, 88; Tennessee Valley Authority. Annual Report. 1940 , pp • 52, 33 The following reports have been prepared: Mineral Resources of the Guntersville Reservoir; Index to the Mineral Resources of the Tennessee Valley and Adjac­ ent areas. 277.

Tennessee Tennessee Tennessee Tennessee

Valley Valley Valley Valley

Authority, Annual Report, 1955, Authority, Annual Report.1936. Authority, Annual Recort.1937. Authority, Annual Reportt 1939,

278.

Tennessee Valley Authority, Annual Report, Tennessee Valley Authority, Annual Report, Tennessee Valley Authority, Annual Report,

p. p. p. p.

44; 63; SO; 87

1935, p. 43; 1936, p. 61; 1938, p. 90

Other studies and surveys are such as those of the history and status of fa inn tenancy, tbe preservation of prehistoric Indian material, the proper economic balance between market and subsistence crops, practices in municipal government and finance, economic develop­ ment and use of natural resources of the Valley, 'the availability of commercial credit, and the administra­ tion and organization of local governments. 279. Tennessee Valley Authority, Annual Report. 1936, p. 56; Tennessee Valley Authority, Annual Report. 1939, pp. 88-89 Other transportation studies made or under way include warehousing and storage facilities; freight rates, intraterritorial and interterritorial rate

246adjustments; refrigeration charges on perishable freight; and export and import freight rates. A sailing line and a system of navigation markers have been laid out. In the field of organized transportation two reports have been prepared by the Authority and published under the titles of "Th© Interterritorial Freight Hate Prob­ lem i n the United States," and the "Supplemental Phases of the Interterritorial Freight Hat© Problem of the United States." These surveys deal mainly with freight rates. 280. Message from the President of the United States* 76th Congress* 3rd Session, Kfouse of Representatives, Docu­ ment No. 565* p. 1* 6 * 281. Message from the President of the United States. 7$th Congress, &rd Session, House of kepresentatives, Docu­ ment No. 565 * pp. 1* 3, 19 "The Authority’s recreation studies include such divers® items as a comprehensive inventory of the scenic resources of the region; surveys of related recreation resources; studies of the conservation of forests and wild life; analysis and classification of the types of out door recreation which the region might offer; studies of the powers, functions, organization and activities of public recreation agencies; examination of privately operated resorts and other recreation facilities; studies of tourist travelways; and careful analysis of the planning measures and controls already in use, or needed, to effect appropriate conservation and develop­ ment of the recreation resources." £82. Message from the President of the UnitedStatea. 76th Congress, 3rd Session* House of Representatives, Docu­ ment No. 565, pp. 20-23 283. Message from the President of the United States. 76th Congress, 3rd Session, House of Bepresentatives, Docu­ ment No. 565, pp. 23, 25, 27, 63 They are as follows: The Blue Ridge Valley, Cumberland Plateau, and Cumberland Mountain, provinces. The Blue Ridge area is suitable for mountain scenery. The Cumberland Plateau is adapted to hunting and fish­ ing. The Cumberland Mountain province contains out­ standing scenic and historic features. The Valley area contains the T.V.A. lakes.

247284. Message from the President of the United States, 76th Congress, 3ri Session, House of Representatives t Docu­ ment No. 565, pp. 29, 30 285. Message from the President of the United States. 76th Congress, 3rd Session, House or Representatives, Docu­ ment Nol 565, p. 61 286. Message from the President of the United States. 76th Congress, 3rd S e s s i o n H o u s e 'of Representatives, Docu­ ment No. 565, pp. 43, 44, 46-47 287. Message from the President of the United States. 76th Congress, 3rd Session, House of Representatives, Docu­ ment No. 565, pp. 48-51 Cave Lake State Park at Caryville, Tennessee, Harrison Bay State Park at Chattanooga, Booker T. Washington State Park for negroes ©t Chattanooga, and Little Mountain State Park at Guntersville Lake. 288. Message from thefPresident of the United States. 76th Congress^ 3rd Session, House of Representatives, Docu­ ment No. 565, p. 56 289. Tennessee Valley Authority, Annual Report. 1937, p. 45 290. Work of the Forest Resources Planning Division. Mimeo­ graphed, Department of Forestry" Relations, Tennessee Valley Authority, p. 1 291. Yrfork of the Forest Resources Planning Division. Mimeographed, Depa rtment of Forestry Relations, Tennessee Valley Authority, pp. 1-2; Message from the President of the United States. 76th Congress, 3rd Session, House of Representatives, Document No. 565, p. 33 292. Work of the Forest Resources Planning Division. Mimeo­ graphed, Department of Forestry Relations, Tennessee Valley Authority, p. 3: Tennessee Valley Forest Log. Mimeographed, Department or Forestry Relations, Tennessee Valley Authority,* September 1940, p. 7 293. Tennessee Valley Authority, Annual Report. 1936, p. 62 294. Tennessee Valley Authority, Angus1.Reportt1940. p. 4; 46 U.S. Statutes at Large 61-65

-248Section 4 (j) provides that the corporation shall have power to build dams, reservoirs, power houses, transmission lines, and incidental works on the Tenn­ essee River and its tributaries, end to unite the various power Installations into one or more trans­ mission lines. Section 5 (1) confers the power to produce, distribute, and sell electric power. Section 10 authorizes the Board to sell the sur­ plus power to States, counties, municipalities, corp­ orations, partnerships, or individuals, giving pre­ ference to States, counties, municipalities, and cooperative organizations of citizens and farmers. This section also provides for rural electrification. Section 11 declares the policy of the act to be to distribute and sell the surplus power equitably among the States, counties, and municipalities within transmission distance. Section 12 confers excess authority to construct, lease, purchase, or authorize the construction of transmission lines within transmission distance from the place where surplus power is generated and to interconnect with other systems. 295.

Tennessee Valley Authority, Annual Report. 1934, p. 23

296.

Tennessee Valley Authority, Annual Report. 1936, p. 26

297.

Tennessee Valley Authority, Annual Report. 1934, p. 2; Tennessee Valley Authority, Annual Report. 1940, pp. 84-85; Tennessee Valley Authority, Annual Report, pp. 36-37

298. Tennessee Valley Authority, Annual Report. 1934, pp. 23*24; Tennessee Valley Authority, Annual Report.1941 1935, p. 26 299.

Tennessee Tennessee Tennessee Tennessee

Valley Valley Valley Valley

Authority, Annual Authority, Annual Authority, Annual Authority, Annual

Report. Report. Report. Report.

1934, 1938, 1939, 1940,

p. p. p. p.

30; 59; 49; 27

300. Tennessee Valley Authority, Annual Report. 1940, p. 92; Tennessee Valley Authority, Annual Report. 1941, p. 36

-249301*

1934, P* 27; 1941, P. 38

302.

1934, p. 27; 1936, P* 8

303.

1934, pp. 30, 33; 48 U.3. Statutes at Lar#:e 64

304. Tennessee Valley Authority, Annual Beport 305.

1935, 1937, 1938, 1939, 1940,

p.

P* P* P* P*

29; 18; 65; 78; 29

1934, pp• 29-32 These cooperative associations are private, non­ profit membership corporations organized on a county wide basis. Their objective is to own and operate a local distribution system. The members are supplied with power purchased by the cooperative from the Authority at wholesale rates. Memberships have a value of $100.00 payable in cash with a 20 percent dis­ count; or over a period of years through the addition of a one percent surcharge per kilowatt-hour for the first 100 kilowatt-hours used per month: A Board of five elected by the members of the association manage its affairs, operations being in charge of a super­ intendent •

306. Tennessee Valley Authority, Annual Report. 1935, p. 31 These estimates are based upon the actual bill under the old rates as compared with the bill under the new rates for identical consumption in 1935. 307. Tennessee Valley

Authority, Annual Report, 1935, p. 31

308. Tennessee Valley

Authority, Annual Report. 1935, p. 32

309. Tennessee Valley Tennessee Valley Tennessee Valley pp. 20-21, 74

Authority, Annual Report, 1935, p. 32; Authority,Annual Beport. 1936, p. 30; Authority, Annual Report. 1937,

250 310*

Tennessee Valley Authority, Annual Report, 1939, p. 7©

311*

Tennessee Valley Authority, Annual Report. 1940, Face p* 96

312.

Tennessee Valley Authority, Annual Report. 1935, p. 26; Tennessee Valley Authority, Annual Report. 1936. pp. 28-29 The major provisions of the standard contract may he summarized as follows: "Power supply.--The contractor agrees to purchase and the Authority to supply the entire power requirements of the contractor, unless exceptions are specified. The maximum demand for power which the Authority agrees to meet is specified, and provision is mad© for the allot­ ment of additional capacity when needed. Schedule of rates.— The contractor agrees to pay for power at the Authority1s standard wholesale rates and to resell it at the standard schedule of retail rates established by the Authority. Lower rates to other municipalities.— If at any time during the life of the contract, the Authority extends lower rates to another municipality which are not justified by different conditions of service, the Authority agrees to extend the lower rate to the contractor. Developmental surcharge.— In order to maintain revenues during the developmental period in which an increased demand for power may not compensate for the greatly reduced resale rates provided by the Authority's schedule, the contractor is permitted to impose a sur­ charge on commercial and industrial rates in an amount subject to the approval of the Authority, Adjustment of rates.— Provision is mad© for the adjustment of wholesale and retail rates in the event of a major increase or decrease in the general price level. Reduction in rates.— The Authority agrees to re­ duce wholesale rates whenever such reductions become feasible through a decline in the cost of generating and transmitting energy.

*251Distribution without discrimination.— The con­ tractor agrees to distribute electrical energy to ultimate consumers without discrimination between consumers of the same class, and to avoid the grant­ ing of any discriminatory rate, rebate, or other special concession. The contractor agrees to ob­ serve the principle that the sale of energy for industrial use shall be a secondary purpose. Disposition of contractor's revenues.— The con­ tractor agrees to apply electric system revenues against the following items In the order named: Operating expenses. Interest on electric-system bonds or other in­ debtedness. Amortization of electric-system bonds or other indebtedness. Reasonable reserves for new construction or contingencies• Payments in lieu of taxes at rates equivalent to the taxes assessed against other property of a similar nature. A return on the equity of not more than 6 percent per annum. After all of these items have been covered, the contractor agrees that all remaining revenue shall be applied to reduction in rates. Administration of contractor’s system.— The con­ tractor agrees to administer its electric system as a separate department and not to mingle funds or accounts with those of any other of Its operations, to keep its electric-system accounts in accordance with a uniform system of accounting prescribed by the Authority to furnish such operating and financial statements as may be requested by the Authority, and to allow the agents of the Authority to have free access to all books and records relating to electrio-system operations. Service to near-by areas.— The contractor agrees to serve near-by rural areas whenever such service can feasibly be rendered. Conformance to specifications.— All equipment, material, and work in connection with contractor's electrical Installation must conform to specifications

252and plans acceptable to th© Authority and must be main­ tained in a safe and satisfactory way* Other rules and regulations*— The contractor agrees to b© bound by any other rules and regulations adopted in the future which are standard ©nd of uniform applicability to customers of the Authority *,f 313. Tennessee Valley Authority, Annual Report. 1934, pp. 31-33 314. Tennessee Valley Authority, Annual Report. 1935, P* 31 315. Tennessee Valley Author ity, Annual Report. 1935, P* 32 316. Tennessee Valley Authority, Annual Report, 1935, P- 33 317. Tennessee Valley Authority, Annual Report, 1936, P- 30; Tennessee Va lley Authority, Annual Report, 1941, P* 44 318* Tennessee Valley Authority, Annual Report, 1940, Face p. 98; Tennessee Valley Authority, Annual Report, 1941, p. 41 519* Tennessee Valley Authority, Annual Report, 1940, pp. 90, 91, 92, 19; Tennessee ¥aXley Autho rity, Annual Report. 1941, p* 39 320.

Tennessee Valley Authority, Annual Report* 1936, pp * 30, 34

321. Tennessee Valley Authority, Annual Report, 1936, p. 31 322. Tennessee Valley Authority, Annual Report* 1937, pp. 21-22 323. Tennessee Valley Authority, Annual Report* 1939, p. 73 Chapter IV 324. Three cases ha re reached the Supreme Court of the United States in which this high tribunal has definitely given an answer to this problem. These cases are as follows: Ashwander v. The Tennessee Valley Authority; Alabama Power Company v. Ickes; The Tennessee Electric Power Company v. The Tennessee Valley Authority

325. 46 U.S. Statutes at„Lar&© 61-65; 49 U.S. Statutes at Large 1076-1077 " 326. Ashwander v. Tennessee Valley Authority, 297 U.S. 288 327.

14 Fed. Supp. 11

328.

78 Fed. Rep. 581

529.

Ashwander v. The Tennessee Valley Authority, 297 U.S. 288t Article 4, Section 3 of th© Constitution. "The Congress shall have power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States; and nothing in this Constitution shall be so construed as to prejudice any claims of the United States, or of any particular state.”

330. Ashwander v. Tennessee Valley Authority, 297 U.S. 339 331. National Defense Act 1916, 39 U.S. Statutes at Large 166 332. Alabama Power Company v. Ickes, 302 U.S. 464 333. 91

F (2d) 303

334 . Alabama Power Company v . Ickes, 302 U.S1 478 335. Alabama Power Company v. Ickes, 302 U.S. 464, 472 336. Tennessee Electric Power Company V. Tennessee Valley Authority, 306 U.S. 11© 337. Tennessee Electric Power Company V. Tennessee Valley Authority, 306 U.S. 139 338. Tennessee Electric Power Company v. Tennessee Valley Authority, 306 U.S. 144 339. Tennessee Electric Power Company v. Tennessee Valley Authority, 306 U.S. 145 340. Tennessee Electric power Company v. Tennessee Valley Authority, 306 U.S. 118

254Bibliography Franklin D. Roosevelt, Looking Forwards John Day Company, New Tork, 1933 Franklin D. Roosevelt, On Our Way. John Day Company, New York, 1934 Marshall E. Dimock, Modern Politics and Administration * American Boot Company, New ttrk, i93^ James W. Garner, Political Science and Government, American Book Company, New 1fork, 1928 Harvey Walker, Public Administration in the United States, Farrar and Rinehart, New York, 1937 T.V. Smith, The Legislative Way of Life, University of Chicago Press, 'bMea6b~,~!$'io',MI Douglas B. Maggs (Ed.), Selected Essays in Constitutional Law, The Foundation Press Inc. , Chicago,1 Tol. 4, 1938 Harold R. Bruce, American Parties and politics. Henry Holt and Company, New York# 1936 Odegard and Helms, American Politics. Harpers, New York, 1938 Edward P. Herring, Group Representation before Congress. John's Hopkins Press, Baltimore, 1929 Muscle Shoals, Hearings before the Committee on Military Affairs, House of Representatives, 73rd Congress, 1st Session, United States Government Printing Office, Washington, 1933 House Committee on Appropriations, Hearings on Deficiency ^ppronriations, 73rd Congress, 2nd Session, United States Government Printing Office, Washington, 1934 Tennessee Valley Authority, Hearings before the Committee on Military Affairs, House of Representatives, 74th Congress, 1st Session, United States Govern­ ment Printing Office, Washington, 1935

-255Tennessee Valley Authority, Hearings before a Subcommittee of the Committee o f Military Affairs, House oi Representatives, fdth Congress, 1 s t Session, United States Government Printing Office, Washington, 1939 Tennessee Valley Authority, Hearings before a Committee on Mllitary Affairs, &ouse of Representatives, 76th Congress, 3rd Session, United States Government Printing Office, Washington, 1940 Congressional Record, 71st Congress, 2nd Session, United States Government Printing Office, Washington, December 2, 1929 - July 3, 1930 Congressional Record. 72nd Congress, 2nd Session, United States Government Printing Office, Washington, December 5, 1932 - March 4, 1933 Congressional Record, 73rd Congress, 1st Session, United States Government Printing Office, Washington, March 9 - June 16, 1933 Congressional Record. 74th Congress, 1st Session, United States Government Printing Office, Washington, January 3 - August 26, 1935 Congressional Record. 76th Congress, 1st Session, United States Government Printing Office, Washington, January 3 - August 5, 1939 Congressional Record, 76th Congress, 3rd Session, United States Government Printing Office, Washington, January 3, 1940 - January 3, 1941 48 United States Statute at Lar&®» United States Govern­ ment Printing OfficeY Washington, 1934 49 United States Statute at L a m , United States Government Printing Office / Washington, 1936 53 United States Statute at Large. United States Govern — ment Print ing ~6ff ice, Wa shi ngto n , 1939 Tennessee Valley Authority, Annual Report, United States Covernment Printing Off icewashington, (1933-1941)

—256 House Document No. 328, Tennessee River and Tributaries North Carolina. Tennessee. Alabama. Kentucky. 71st Congress\ 2nd Session, United States Government Printing Office, Washington, 1930 Message from the President of the United States trans­ mitting a survey entitled "A history of navigation on the Tennessee River and its tributaries” . House Document £54, 75th Congress, 1st Session, United States Government Printing Office, Washington, 1937 Tennessee Valley Authority, Prospective Commerce on the Tennessee River. Published (mimeographed) by the T.V.A., Knoxville, Tennessee, 1941 Tennessee Valley Authority, Board of Directors, Report to the Congress on the Unified Development of the Tennessee River System. United States Government Printing Office, Washington, 1936 Recreation Development of the Tennessee River System. 76th Congress, 3rd Session, Document N o . 565, House of Representatives, United States Govern­ ment Printing Office, Washington, 1940 "Benchmarks in the Tennessee Valley” , Reprint from Survey Graphic. January, March, May 1934 Carleton R. Ball, A Study of the Work of th® Land-Grant Colleges~ln the Tennessee Valley Area in Cooper­ ation with the Tennessee Valley Authority. Published (mimeographed) by the T.V.A., Knoxville, Tennessee, 1939 Tennessee Valley Authority, fifty Inches of Rain. Published (mimeographed) by the T.V.A., Knoxville, Tennessee, 1939 Address by D. E. Lllienthal. "National Defense: The Role ” of the South east and T.V.A*", Published (mimeo­ graphed) by the T.V.A., Knoxville, Tennessee, 1940 Address by D. E* Lilienthal. "The Armament of a Democracy", published {mimeographed) by the T.V.A., Knox­ ville, Tennessee, 1940

-257Address by'P. S. Lilienthal. "T.V.A. and National Defense", published (mimeographed) by th© T.V.A., Knoxville, Tennessee, 1941 Work of the Forest Resources Planning Division. Department of Forestry Reiations/ Mimeographed, Tennessee Valley Authority, Knoxville, Tennessee, 1940 Tennessee Valley forest Log. Department of Forestry Relations, Mlmeograpbed, Tennessee Valley Authority, Knoxville, Tennessee, September 1940 Ashwander v. Tennessee Valley Authority, 297 U.S. 288 Alabama Power Company v. Ickes, 302 U.S. 464 Tennessee Electric Power Company v. Tennessee Valley Authority, 306 U.S. 118*"

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