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The TVA: It Ain't What It Used to Be
What has befallen “the greatest peacetime achievement of twentieth-century America”s since the New Deal
February 1977 | Volume 28, Issue 2
TVA had also become a government organization that the valley’s people believed they could trust. When the private power companies built “spite lines” to claim TVA power territory, farmers chopped down the poles. John Gunther reported on his trek through the region that TVA’s employees were the most fiercely loyal group he had ever encountered. Thanks to the abilities and connections of Chairmen Morgan and Lilienthal and to favorable newspaper coverage, the TVA story was internationally well known, and the nation’s liberal community stood ready to defend the agency against its detractors. In 1950 historian Henry Steele Commager, in common with most academicians, pronounced the agency “the greatest peacetime achievement of twentieth-century America.” To win its battles in its third decade, the agency had to cash in those liberal chips.
By the late 1940’s TVA engineers had determined that the agency had exhausted most of the hydro power potential of the river and that it would have to turn to steam generation if it was to meet the growing demand on the system coming particularly from the Atomic Energy Commission plants at Oak Ridge and at Paducah, Kentucky. Lilienthal’s successor as chairman in 1946, Gordon Clapp, began construction of seven coal-fired plants between 1949 and 1953. In typical TVA fashion, several of them at the time were the world’s largest. In 1952 TVA asked the Bureau of the Budget to approve funds for a steam plant north of Memphis on the Mississippi River to supply an anticipated critical need for power in the Memphis area. The proposed new plant, at Fulton, Tennessee, was vigorously opposed by Middle South Utilities’ President Edgar Dixon, who feared that a TVA steam plant close to his subsidiaries, Arkansas Power & Light and Mississippi Power & Light, would signal the start of competition from a new TVA power system expansion. The Truman administration in its final days approved the capacity increase for the agency, but Congress waited on a budget request from the incoming Eisenhower administration before voting the necessary appropriations.
Eisenhower’s budget left out the Fulton plant, and the new President let Congress know his antagonism to TVA by labeling it an example of “creeping socialism” and accusing the agency of stealing industries from other areas. TVA supporters could marshal facts to dispute both claims, but the “socialism” charge by a popular President in 1953 was hard to overcome. That year Eisenhower told his Cabinet, “By God, if ever we could do it, before we leave here, I’d like to see us sell the whole thing, but I suppose we can’t go that far.” The Eisenhower administration was prepared to make good on the President’s hope, however, and it set about to cripple TVA’s progress.
The administration ploy became known as the Dixon-Yates case, named for Dixon of Middle South Utilities and Eugene Yates of the Southern Company, another power combine. To obviate TVA’s need for the Fulton plant, the administration proposed to supply AEC with power from a new privately built Dixon-Yates plant. The controversial plan was advancing until it was discovered in 1955 that the administration had deceptively hidden the fact that the government adviser who had helped devise the plan worked for the financial institution backing the deal. Not even the public outcry over that revelation would have stopped the plan, however, had the city of Memphis not decided to build its own steam plant and ignore the federal government.
When Clapp’s term on the board ended, the President named a retiring general of the Corps of Engineers, Herbert Vogel, as chairman, hoping apparently that he could pull the Dixon-Yates deal through. He was unable to do so, and though the administration continued to take pot shots at the agency, the only substantial change in the TVA act came in 1959 when Congress passed an amendment requiring new TVA power program costs to be financed from bonds. It also directed the agency to accelerate its repayment schedules to the U.S. Treasury so that public investment in the power system would be repaid more quickly than originally provided. With the demise of the Dixon-Yates plan, TVA won its last survival struggle, and in the absence of life-and-death controversy its national profile declined.
During the deceptively quiet period after Dixon-Yates, however, another major crisis was developing for the agency. TVA’s size, its power, its sometimes lackluster leadership, and its mistakes were cumulatively brewing a series of confrontations with its own people in the valley. The agency that had fought valiantly for conservation and the opportunity for grassroots participation was finding itself up against a new generation of critics with new definitions of conservation and new ways of thinking about participation. In most recent years the confrontations have grown to a crescendo from a disparate chorus of critics.