Tennessee Valley Authority (TVA)

Identification Federal agency created to revitalized the Tennessee Valley

Also known as TVA

Date Established on May 18, 1933

Place Service area includes parts of Alabama, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia

The Tennessee Valley Authority (TVA) was one of President Franklin D. Roosevelt’s earliest New Deal programs, established during his first one hundred days in office. This federal agency took responsibility for revitalizing the Tennessee Valley through flood control, navigation improvement, hydroelectric-power production and electric distribution, and agricultural programs. By offering cheap electricity and river control, the TVA promotes economic development across the seven southern states that it serves.

The origins of the Tennessee Valley Authority stretch back to the last days of World War I. In early 1918, President Woodrow Wilson ordered construction of a hydroelectric dam and adjoining nitrate plants to produce explosives near the town of Muscle Shoals, Alabama, on the Tennessee River. Construction of the dam continued after the end of the war, but politicians were at odds over who would operate the facilities and distribute the electric power. Nebraska Senator George W. Norris argued that the government should take responsibility for the properties, by that time named Wilson Dam, and sell inexpensive electric power to nearby communities. Throughout the 1920’s, Norris sponsored legislation for government control of Wilson Dam, but opposition from the White House and lack of support from Congress halted his efforts.

Early Leaders of TVA

By the early 1930’s, Norris’s designs had morphed into a larger plan for the government to take an active role in improving the Tennessee Valley. During the 1932 presidential election, Norris campaigned for New York governor Franklin D. Roosevelt. On the campaign trail Roosevelt promised all Americans—both urban and rural—access to inexpensive electricity. As his national power policy, Roosevelt planned to standardize power rates through government-operated power projects and regulation of private power companies. Roosevelt’s landslide victory in November, 1932, ensured that Norris’s Tennessee Valley plan would have renewed consideration in Washington, D.C.

On March 4, 1933, Roosevelt took the oath of the office of the presidency, and the next month, he introduced the TVA Act to Congress. Roosevelt championed Norris’s plan to build a series of dams to control flooding, provide navigation, generate electric power, and stimulate industrial development in the Tennessee Valley. The TVA Act proposed a regional approach to managing the Tennessee River watershed, and its electric-power program would establish a standard “yardstick” rate for electricity. On May 18, 1933, Congress passed the TVA Act by a wide margin, and later that same day, Roosevelt signed the measure into law. In addition to transferring Wilson Dam and its adjacent properties to the agency, Congress appropriated $50 million for the TVA and gave it comprehensive powers for owning, developing, and operating hydroelectric resources in the Tennessee Valley. The operating region includes parts of Tennessee, Alabama, Kentucky, Virginia, Georgia, North Carolina, Mississippi, South Carolina, and Wset Virginia.

Roosevelt designed the TVA to be managed by a three-member board of directors, with one member serving as chairperson. The agency’s headquarters were to be in Knoxville, Tennessee, just a few miles from the headwaters of the Tennessee River. With help from Norris and other advisers, in May, 1933, Roosevelt selected educator and engineer Arthur Ernest Morgan as the chairperson of the board. Next, Roosevelt selected Harcourt A. Morgan (no relation to Arthur Ernest Morgan), an agricultural expert and former president of the University of Tennessee, and, finally, David Eli Lilienthal, a lawyer and electric-power specialist, to round out the first board of directors. Each member focused on a particular area of the TVA’s work: Board chairperson Arthur Ernest Morgan led the engineering effort and resettlement programs for those directly affected by the projects; Lilienthal directed the electric-power program and drafted power policy; and Harcourt Morgan managed an agricultural division focused on fertilizer production and educational programs for farmers. The diverse mission of the TVA attracted thousands of employees, including construction workers, office assistants, sociologists, administrators, and engineers.

Overcoming Challenges

During the 1930’s, the TVA embarked on a massive engineering effort to harness the Tennessee River and its tributaries. Board chairperson Morgan administered the dam construction program with great efficiency. He demanded that the TVA hire its own construction teams and recognized the right of workers to organize unions. In 1936, Roosevelt dedicated the TVA’s first dam, named Norris Dam after Senator Norris, located about twenty miles northeast of Knoxville. Natural resource development, river improvements, and hydroelectric dams were crucial to the TVA’s approach to rebuilding the region.

The TVA’s electric-power program was central to the TVA’s survival. Before the TVA, a number of private power companies existed in the region. The largest of these companies was Commonwealth and Southern, an electric-power holding company led by Wendell Willkie. Arthur Ernest Morgan and Lilienthal both negotiated with Willkie, but they took different approaches. By the mid-1930’s, Morgan, who favored cooperation with private power companies, clashed with Lilienthal, who encouraged expansion of government operations and direct competition with private companies. Morgan also questioned Lilienthal’s ethics and personal philosophies. Roosevelt, who preferred Lilienthal’s electric-power policy, attempted to remedy the uneasy situation through individual meetings, but in 1938, he removed Morgan from the board.

At the same time as these early board disagreements and negotiations with private power companies, the Supreme Court ruled several New Deal agencies unconstitutional. Two legal challenges, Ashwander v. Tennessee Valley Authority (1936), led by George Ashwander, and the Tennessee Electric Power Company v. Tennessee Valley Authority (1939), brought the agency before the Supreme Court. In the Ashwander case, petitioners argued that the TVA could not enter into competition with private power companies. The Supreme Court ruled in favor of the TVA, but limited its ruling to the agency’s operation of Wilson Dam in Muscle Shoals, Alabama. The second case, led by the Tennessee Electric Power Company, dealt with the TVA’s other electric-power producing facilities and their relationship to preexisting power companies. Again, the Supreme Court ruled that the TVA could generate, distribute, and sell electric power alongside private power companies. In 1939, following the second ruling, Willkie sold all of his Tennessee Electric Power Company properties to the TVA for $78 million. The TVA’s legal victories of the 1930’s solidified its mission and bolstered Roosevelt’s New Deal programs.

By the end of the decade, the TVA had completed four dams, Norris, Wheeler, Guntersville, and Chickamauga, and had four other dams under construction. The giant turbines in the powerhouses of these dams quickly electrified rural areas. A stable power supply and a 650-mile navigable waterway attracted industry to the region. The TVA also brought hundreds of jobs to the region. Lilienthal led the agency during World War II and oversaw the completion of its dam projects and other river improvements.

Impact

With roots in the New Deal programs of the 1930’s, the TVA remains a unique government agency. It is the nation’s largest public power company. With the help of 158 locally owned distributors, the TVA provides power to about 9 million people in the Tennessee Valley. The agency is an international example of regional development and government regulation. Its multiple missions have resulted in untold benefits and spurred enormous economic growth in the Tennessee Valley.

Bibliography

Hargrove, Erwin C. Prisoners of Myth: The Leadership of the Tennessee Valley Authority, 1933-1990. 2d ed. Knoxville: University of Tennessee Press, 2001. By examining the TVA’s leadership, Hargrove explains how the agency remained relevant long after its dam projects had concluded.

Hubbard, Preston J. Origins of the TVA: The Muscle Shoals Controversy, 1920-1932. Nashville: Vanderbilt University Press, 1961. Authoritative source chronicling the legislative and political events leading up to the creation of the TVA.

Lilienthal, David E. TVA: Democracy on the March. New York: Harper and Brothers, 1944. Key source for understanding the early TVA; connects public ownership to democracy and free enterprise, arguing that the TVA represented a model of decentralization that gave economic power back to the people.

McCraw, Thomas K. TVA and the Power Fight, 1933-1939. New York: J. B. Lippincott, 1971. Offers an excellent analysis of the TVA’s early power program, the struggles of the agency’s first board of directors, and the complicated court battles with private power companies during the 1930’s.

Neuse, Steven M. David E. Lilienthal: The Journey of an American Liberal. Knoxville: University of Tennessee Press, 1996. The first half of this detailed biography describes Lilienthal’s role in the early policy decisions of the TVA, especially the electric-power program.

Owen, Marguerite. The Tennessee Valley Authority. New York: Praeger, 1973. Written by a TVA employee, this excellent introduction to the history and purpose of the agency remains a relevant work.

Purcell, Aaron D. White Collar Radicals: TVA’s Knoxville Fifteen, the New Deal, and the McCarthy Era. Knoxville: University of Tennessee Press, 2009. Social history of the early TVA, this study examines the experiences of fifteen 1930’s TVA entry-level employees accused of belonging to the Communist Party USA.