The Tennessee Valley Authority: The Success of Decentralization and Central Planning of Public Utilities in the United States.
By: Michael W. Kramer
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The most successful New Deal program created by President Franklin D. Roosevelt was the Tennessee Valley Authority (TVA). The TVA was successful in decentralizing power and control and increasing the standard of living for the inhabitants of the southeastern United States (US). As the Great Depression spread throughout the world in the early 1930, a stabilizing economic and social force was needed to create order, prosperity, and organized successful development. The force utilized during the depression years was increased governmental involvement with big business and public works programs. From the passage of the TVA act in May of 1933 and throughout the era of the New Deal, governmental involvement in the Tennessee Valley region was highly successful in resurrecting opportunity for the general population. In the following pages, the argument will be made that governmental regulation of big business and utilities was definitely necessary to maintain the democracy of the nation through grass-roots decentralization of public corporations and utilities of the time. Details of the development of the Tennessee Valley region through central planning and organized development will now be provided to showcase the high benefits it had on the region.

However, before discussing the impact the TVA had on American History, an overview of previous studies on the TVA is needed. Generally, historians have argued that the TVA was either a success or a failure. Historical supporters of the TVA often argue that the central planning and decentralization of big business’ control was a success because it gave more power and prosperity to the general population of the Tennessee Valley. The supporters often have agreed that the central planning allowed more democratic grass-roots influence to flourish, allowing for a greater increase in the standard of living for most people. However, critics often argue that the TVA gave too much power to the federal government, and in turn replaced one central power of private enterprise with another central power of the federal government.1 The following pages will argue that the federal government’s power from 1933 to the start of World War Two in the TVA was highly successful in the administrative ranks as well as the grass-roots general population levels. By evaluating the positive impact the TVA had on the local society, it is possible to find out how the successful methods used could correlate to a greater area of influence in the world. Thus, the purpose of history is fulfilled, allowing one to learn from past accomplishments and failures in order to better prepare for the present and future.

Before examining one public works program of the New Deal, a brief explanation about what brought about the great depression and sequentially Roosevelt’s New Deal will be provided. Perhaps Alan Brinkley provides the best overall explanation about the cause and effect relationship of the depression and the New Deal, in relation to the TVA. Brinkley’s analysis of the New Deal is a great example of one historian’s viewpoint that the TVA was very successful. In Brinkley’s contestation of the New Deal, he stated that “concentrated wealth and concentrated power had damaged the nation’s social fabric; a system of decentralized power, limited ownership, and small-scale capitalism could restore it.” In his New Deal evaluation he also boldly stated that “if centralized wealth and power were the problems, then it was those in possession of that wealth and power who were to blame.” He concluded that the oligarch style institutions in place at the start of the depression should remain in-tact. However, the capitalist system in place needed redesigning in order to prevent excessive accumulations of wealth. If the unregulated capitalist system was left unaltered, he argued that a tyrannical dictatorship would result.2 Brinkley’s overview of the New Deal is extremely relevant in relation to the TVA. The decentralization of power, grass-roots administration, and increased living standards it left on the general population showcased democracy in the purest form. The methods of operation, goals, results, and legacy of the TVA will now be examined. Included in the evaluation, will be the leadership, organization skills, and true democratic administration provided by one man, who was absolutely imperative to the success of TVA.

Prior to the start of the New Deal and the passage of the TVA act on May 18th, 1933, conditions in the southern Tennessee Valley were problematic and depressing to the general population in the area. Problems of the Tennessee Valley region included massive flooding, lack of quality forestation conditions, growing unemployment, unavailable or unaffordable electrification for businesses and personal use, over centralization of industrial wealth in the hands of utility companies, and various other agricultural and developmental problems.3 Another important obstacle facing the region was that public electricity and power distribution was not being spread effectively to businesses, farms, and home residences. Power companies in place, prior to the start of the TVA, charged colossal rates that prohibited the economy from effectively advancing with new technological advancements that advanced daily life.4 As a result of this centralization of technology and wealth, decentralization was required in order to break up the stagnant economic concentration of wealth in place. Before analyzing how the centralization should be broken up, further evidence of what was in place prior to the TVA will be examined.

An excellent example of the conditions in the Tennessee Valley area, prior to the start of the TVA, came from the reports of Lorena Hickok. In the fall of 1933, the director of the Federal Emergency Relief Administration Harry Hopkins sent sixteen reporters to various parts of the country to report on the social and economic conditions of an area. Hickok was designated to the Tennessee Valley area to report on the conditions from as Hopkins put it “an ordinary citizens’ point of view.”

Hickok’s report to Harry Hopkins the following year on June 6th, 1934, effectively chronicled the dismal conditions that plagued the Tennessee Valley area prior to the start of the TVA. Hickok’s report on the terrible conditions effecting the environment and the people is best summed up as she stated in her report “Fairly typical, for Western Tennessee, I gather, was a district I visited yesterday. Table land. Thin Soil. Terrible Housing. Illiteracy. Evidence of prolonged undernourishment. No knowledge of how to live decently or farm profitably if they had decent land.” Hickok also detailed the failures of previously installed rural rehabilitation programs. She added, “All over the state, in rural areas, the story is the same – an illiterate, wretched people, undernourished, with standards of living so low that, once on relief, they are quite willing to stay there the rest of their lives. It’s a mess.”5 In the upcoming pages, Hickok’s experience will be revisited as the early effects of the TVA on the general population of the area will be examined.

The aforementioned problems stated by Hickok required not an immediate temporary fix, but instead, a long-term and well thought out plan to create prosperous conditions that would indefinitely benefit the constituents in the area. President Franklin D. Roosevelt therefore offered a solution.

In order to restore order, balance, and prosperity to the region, Roosevelt made a decision that would inevitably alter the chaotic region forever. An in address before Congress on April 10th, 1933 (one month and 8 days before the passage of the TVA act), Roosevelt is quoted as saying “In short, this power development of war days leads logically to national planning for a complete river watershed involving many States and the future lives and welfare of millions. It touches and gives life to all forms of human concerns….Many hard lessons have taught us the human waste that results from lack of planning. Here and there a few wise cities and counties have looked and planned ahead. But our Nation has ‘just grown’.”6 During his speech, Roosevelt also suggested to the Congress legislation to create the Tennessee Valley Authority, a corporation clothed with the power of government but possessing the flexibility and initiative of private enterprises. This indeed marked the beginnings of a transformation of the American system. Instead of private enterprises that had the primary objective of profit gain being the main economic force in the country, government backed businesses and projects concerning the people’s needs as the number one objective started to take shape.

The transformation of economic initiative finally took shape on May 18th, 1933, as the Roosevelt sponsored Tennessee Valley Authority Act passed in congress. The act set out to do a number of things. Amongst them, to improve navigability and flood control on the Tennessee River, to enforce reforestation and proper land use in the Tennessee Valley, to provide agricultural and industrial development to the region, and to provide for the National Defense a corporation of government properties near the Muscle Shoals area in the state of Alabama.

In order to successfully delegate authority and administration to the project, Roosevelt decided to personally select three administrators to lead the project, with the advice and consent of the Senate. Importantly, the TVA act stated that the administrators shall not have any financial interests at all in the project. If any personal gain was selected, Roosevelt was given the approval to promptly remove the person from the administration.7 This again marked a great change in the US capitalist system. Profit and financial interest of the individual at the head of a business has always been the meter of success in US history. But now, the monetary motivation of the three individuals leading the project was not allowed. Instead, the wants and needs of the general population were to be the primary objective. Roosevelt then sought out three men capable of leading this mammoth undertaking.

Roosevelt’s personal appointing of the three TVA administrators was certainly a great success story. The three men selected to lead the project development were authorized fifty million dollars out of the public works fund in order to efficiently be responsible for the renovation of the Tennessee Valley. The men selected included chairman Arthur E. Morgan as well as Dr. Harcourt A. Morgan and David E. Lilienthal as co-directors. Each member of the TVA’s directorial board shared a different term limit expiration that would effect project development throughout the thirties. A. Morgan’s term was the longest, lasting till 1942, while H. Morgan’s lasted until 1939, and Lilienthal’s being the shortest until 1936. The specific duties of the directors were widely varied. Generally, Chairman A. Morgan was assigned supervision of all matters relating to dam and reservoir construction. H. Morgan’s directorial duties included, for the most part, all things related to agricultural. Finally, David Lilienthal was assigned to all legal work and power distribution matters. Very importantly in project development was that policies would be distributed by the TVA board as a whole and not as one man’s decision. This was highly successful in creating a true democratic practice with no profit motive or personal greed to corrupt the leaders of the TVA administration. This effectively would prevent a centralization of wealth that could hamper the recovery effort.8

Perhaps the most important appointee of the first TVA’s board of directors was that of Lilienthal. As the US entered into the great depression, distribution of public electricity was crucial for development of a region. Roosevelt was aware of this, and in December of 1933 via executive order created the Electric Home and Farm Authority (EHFA) with Lilienthal as its director. The main objective of the EHFA was to advance the general economic welfare of the nation by developing and fostering an increased use of electric power.9

The agency, with Lilienthal as its leader, would eventually create affordable power for all constituents in the Tennessee Valley. Instead of power being centralized into only the rich and fortunate of the region, Lilienthal and Roosevelt sought out for creation of a power utility company that would bring prosperity, a stable economy, and in increased standard of living to all residence along the Tennessee Valley region. The role of Lilienthal and his promotion of democratic grass-roots central planning impacted the region like no other New Deal program created in the Roosevelt administration. The social and economic welfare of normal everyday citizens and the prosperity they gained due to Lilienthal’s leadership will now be presented. But first, a short biography of Lilienthal will be provided.

Born July 8th, 1899, in Morton, Illinois, Lilienthal was the eldest son of Leo and Minna Lilienthal who prior to their marriage immigrated to America from Austria-Hungary. With his father being a merchant, he lived in several Northern Indiana towns until age seventeen when he moved to Greencastle, Indiana to study at DePauw University.

After completing his studies at DePauw, Lilienthal transferred to Harvard Law School and obtained a degree in June of 1923. He then began work for Donald R. Richberg, a respected labor lawyer in Chicago. Richberg eventually became a chairman and assistant to President Roosevelt and the National Recovery Administration.10 Richberg was indeed very influential on Lilienthal as he was taught public law and effective business practices. Prior to the start of his employment in the TVA, Lilienthal was a lawyer and member of the Public Service Commission of Wisconsin.11

However, a dramatic and life altering event with eventual significance occurred on July 31st, 1917, while Lilienthal was in Chicago. As simple as it seemed at the time, Lilienthal witnessed a crowd gathering around a small mouse struggling for survival in a pool of water near a railroad station. Each time the mouse came close to freeing itself, the men would throw clumps of mud at it or hit it with their canes. Lilienthal, angered at the men laughing at the dying mouse, wished to attack them but instead passed on. He stated in his journals, “I wish now I had knocked down a couple of them and made them ashamed of themselves. And such creatures expect mercy for themselves from some higher authority, as they are to mice!”12

In understanding Lilienthal and his role in the TVA, he finally got a chance to give mercy to misfortunate peoples exploited by a higher authority. Instead of the higher authority being men gathered around a struggling mouse, Lilienthal saw the higher authority being an uncontrolled and unfettered capitalistic system. As the unemployed and struggling masses gathered in the country during the depression years, Lilienthal sought out to save them from the exploitative hand of big centralized businesses that served the fortunate rich, and left the innocent worker as lifeless as a mouse.

Just months after the start of the TVA, Lilienthal, along with his colleagues in the TVA’s administration board, began to set forth a working and acceptable program for the inhabitants of the Tennessee Valley region. Lilienthal effectively came up with a plan that would alter the course of history forever. On November 10th, 1933, in a speech before the Lawyers’ Club of Atlanta, Lilienthal proposed what he titled “A Five-Point Program for the Electrification of America.” The program contained two main objectives that the TVA would pursue, along with five main points Lilienthal saw as not only necessary to the Southeastern US’ recovery, but to the democratic capitalistic system of the country as a whole.13 The ideas of Lilienthal and his brilliant role in the TVA will now be examined to showcase how one man effectively changed the nation forever, bringing the population the means and ends to prosperity and better living.

Lilienthal knew that electricity represented a dramatic transformation of American life. As a result, he sought out to allow the entire population to be able to effectively share the benefits of the new technology. In his address to the Lawyers’ Club, he presented the two objectives the TVA would seek. The first objective stated that the TVA would seek more effective protection of the public interest, by setting up a measure of public operation of power as a “yardstick”. Secondly, he sought an “Electrified America”, with an increased use of electricity for the homes, farms, and factories of America.

In the first objective set forth by Lilienthal, he reaffirmed the stance of President Roosevelt that the people and not private businesses must maintain control of power. Lilienthal indeed recognized what the previously mentioned historian Brinkley saw as the cause of the depression. Therefore, his first objective mentioned the negative aspect of private ownership of utilities because the profit motive of the companies did not allow for the effective spread of electricity. Lilienthal stated evidence of private corporation corruption when he sighted how Illinois utility owner Samuel Insull pocketed money that was supposed to be going for state utilities. Lilienthal also added in his address that “In some states it was perfectly obvious that the regulators were not regulating the utilities, but in effect, the utilities were regulating the regulators.” He also added that the “Widespread scheme of capturing the sources of public information would have destroyed the American system of democracy which Jefferson and Jackson established.”14 Therefore, in order to eliminate the exploitation and lack of advancement due to private ownership, Lilienthal promoted public ownership of public utilities. The benefits of this he reasoned would bring about humongous amounts of prosperity for all of the country, making the country return to a true democracy by, of, and for the people and not the rich. Effectively, this would eliminate the centralization of wealth in place by attempting to eliminate poverty, joblessness, and the low standard of living for the general population at the time.

Moving forward now to Lilienthal’s second main objective for the TVA. The benefits of a business affected with public interest are best described when Lilienthal quoted co-worker Stuart Chase in his address. Chase’s vision of the TVA’s success seemed almost too good to be true at the time. He stated:

“We are witnessing the oncoming of a new kind of civilization as electric power displaces older other power forms. It will shift populations, change the map, profoundly affect both the number and the skills of workers, revise upward the quality and variety of commodities, break down the division between country man and city man; and, if it is not wrecked by the brute claims an obsolete financial system, it promises a world replete with more freedom and happiness than mankind has ever known…Electricity can give us universally high standards of living, now and amusing kinds of jobs, leisure, freedom, an end to drudgery, noise, smoke, and filth.”15

Chase’s criticism of private ownership excellently demonstrated what the TVA could accomplish. The two main objectives indeed required some changes in how business and public utility ownership should be perceived by the people. Lilienthal successfully outlined this to the people with the five-points of his plan.

The first point of Lilienthal’s plan proclaimed that the Tennessee Valley project was a project never before undertaken in America. He reaffirmed that the TVA project required serious thought and planning. If a defeatist attitude and pessimistic outlook was in place, Lilienthal stated that the beginning construction of the Cove Creek and Joe Wheeler dams should be totally dropped and ended. He stressed that trust of the TVA and governmental agencies was needed in order to restore a hopeful mindset in the population. Lilienthal stated, “This country has grown because of its spirit of daring, of adventure, of pushing through difficulties rather than sitting before them and wailing and whining about them. The very difficulty of the task will sharpen our wits and toughen our determination. Once the American people put themselves squarely behind this objective of an Electrified America, the greatest single difficulty in the way has been removed.”16

The first point of Lilienthal’s plan hoped to gain the approval of the people. The second point focused solely on a major revision of the electrical rates. By re-examining the electrical rates, Lilienthal proposed a rate schedule that would allow for as many people as possible to benefit from a new electrified South. Lilienthal agreed with the President of the Hartford Electric Light Company that a completely electrified house should be able to earn a rate of two cents or less for the entire requirements of light, cooking, refrigeration, hot water, and other electrical appliances. Most importantly however, if the population was paying low rates for electricity, the general population could afford other goods and services. Having low rates and the population’s needs as one of the main goals of the TVA was the complete opposite of the electrical situation in the south before the TVA. By removing the monetary enrichment goal of private electrical enterprises prior to the TVA, Lilienthal and the directors of the TVA were assured that the people would definitely be supportive of the plan.

The third point stated in Lilienthal’s five-point program was very much related to the second point. He stated that electricity using appliances must be put into homes and farms on a scale never successfully attempted before. Bringing electricity alone and encouraging the use of electricity was of course an essential part of the plan, but low rates alone would not do the job. Instead, as was mentioned in the second point, economic linkages must be created to allow the average man and woman to buy electrical appliances, farming materials, and other new electricity using technologies. Lilienthal mentioned that “without large-scale distribution of low cost appliances, there will never be a widespread use of electricity…anyone who leaves this factor out of consideration is not thinking this matter through.”17

Fourth, Lilienthal restated point number two, but instead applied it to the entire Southern economic system. In the fourth point, he stated that all the forces of business, scientific, and engineering ingenuity must be concentrated upon reducing the costs of operation. Yet again, this related to his second point, that the population must be able to share new technological wealth and it must not be concentrated to only the rich.

Finally, his fifth point summed up the entire objective of the TVA. Lilienthal saw the main problem of the depression, and like Roosevelt and his New Deal he had the panacea to fix the disease of centralized wealth and power that the nation was going though. The panacea he laid out in two words, an “Electrified America”. His statement at the end of his address further laid out the plan. He proclaimed, “We must keep before our minds the great potential wealth which is lying at our doors, now idle. What American people want badly enough they get, whether it is the conquering of a wilderness, an education for every child, or a decent and orderly revision of our entire economic structure.”18

In concluding his plan for the TVA, he mentioned that a progressive mind was required to fix the problems plaguing farmers, businesses, and ordinary citizens. The “yardstick” of how successful the TVA could be by using central planning to decentralize the wealth, increase the standard of living, and lowering costs for the people required a successful “game plan” in order to succeed. He stated that “the stakes are too great for us to permit such a constructive program to fail.”19

The outcome of Lilienthal’s plan for the TVA will be now examined. If the plan was successful and the life of all constituents was improved dramatically, it is quite possible to apply his ideology for success to the entire nation. If running a business with the people’s needs and benefits as the main objective succeeded greatly, perhaps (as Lilienthal put it) “a decent and orderly revision of the entire nation’s economic structure” could be attempted to benefit not only the Tennessee Valley region, but the entire nation, possibly world, as well.

As the year 1933 came to its conclusion, the TVA grew in giant proportions. Lilienthal’s plan thus went into action, with his vision being the main catalyst of advancement in Tennessee Valley development. The major accomplishments in the first full year in 1934 will now be highlighted and examined to see how efficiently Lilienthal’s previously mentioned objectives and plans were carried out.

When the TVA started in late 1933, mass public restoration projects were created to rid the area of joblessness and poverty. Some of the first projects and successes of the TVA were the complete reconstruction and repairing of the Wilson Dam in the Muscle Shoals area. Two other dams were also being constructed, the Norris and Wheeler dams. The creation of these two dams provided drastic increases in the Tennessee Valley’s flood control, navigability, and future power development. Four additional constructions of dams were also on the agenda after the estimated completion of the Norris and Wheeler dams in 1936. The TVA sought not only to provide the local jobless with only employment, but it also mandated a thirty-three hour work week with time available for workers to take training courses on different farming methods to best suit their needs for advancement. Workers enjoyed excellent labor rights, a reflection of what Lilienthal previously strived for in his early years as a lawyer were hence being put into use under the TVA. The depressed people figuratively were being thrown a lifeline from Lilienthal, as they tried to escape from the hardships they once endured.

As well as dam development, the TVA was conducting all sorts of reforestation projects, erosion improvements, new highways, geological surveys, and natural resource management. These new projects and sub-divisions of the TVA were all extremely successful in creating jobs and resurrecting a once broken and desolate land into a new cleaned up and improved environment.20

In 1934, the successes of Lilienthal’s plan for the TVA were already beginning to show. President Roosevelt who organized and setup the entire TVA almost two years earlier agreed that a terrific transformation was happening in the Tennessee Valley region. Most importantly, the transformation he spoke of was positively affecting the out of work American. While Roosevelt was much like Lilienthal in foreseeing the benefits of power, he declared it only secondary measurement of success. Instead, he considered the improvement of standards of living for the valley’s people as the number one “yardstick” of the TVA’s success. Roosevelt commended H. A. Morgan, one of the three TVA directors, for excellent work with fertilizer in the first year. He noted that the new experimental phosphate plants were providing many jobs and increasing educational opportunity for the people employed under the TVA. More importantly however, he noted that economic linkages were successfully being created as rural areas were increasing able to get cheap electricity. As a result of this, Roosevelt stated that the rural population “can buy refrigerators and electric stoves and all the other gadgets at a figure which is somewhere around sixty or seventy percent of what they were paying before.”21 It is possible to conclude from this that Lilienthal’s main objectives were showing signs of success. People were getting power for amazingly cheaper rates, and also were benefiting from it by being able to purchase new consumer technologies they previously could not afford.

Lorena Hickok also saw great advancements and improvements brought on by the TVA. In revisiting her report to Harry Hopkins, she spoke highly of the benefits of the TVA’s electrification program. She stated “Everywhere, even though the relief loads remain large, you hear the same story. Business has picked up…I was told that no city in the south (Memphis) has received greater benefits…the Chamber of Commerce is getting inquiries from industries attracted there by the low power rate, and the proprietor of a thirty-eight room hotel relates with satisfaction how she operates her hotel, with lights, fans in all rooms, two vacuum cleaners, two electric irons, refrigerator, and radio with an electric bill of around twenty dollars a month.”22 Not only were rural areas benefiting from the TVA, but cities were recuperating from the depression by a great deal.

Perhaps the greatest example of the glories created by the TVA was that of Tupelo, MS. The once agrarian and powerless town was the first city to be electrified under the TVA. The electricity and economic linkages provided by the TVA to Tupelo is just one example of the social and economic prosperity delivered to rural and urban areas in the Tennessee Valley. In Tupelo, average consumer householders finally saw relief from the depression. For as little as $6.98 a month, householders were able to afford cheap electricity and channel it through new technologies such as electric ranges, refrigerators, and water heaters. Economically, the TVA’s lower rates allowed for average American home owners to profit. For instance, prior to the start of the TVA on April 1st, 1933, Roy Boggan (a Tennessee Valley home owner) paid $12.46 for 274 kilowatt hours of electricity. However, exactly one year later, in 1934, his bill was only $5.87 for 337 kilowatt hours of electricity. For nearly fifty percent less, Boggan was able to use more electricity for drastically less costs by opting to choose the TVA as his electrical provider. Mr. Boggan’s experience is similar to what would occur throughout the entire Tennessee Valley. American homeowners, business owners, industry, and the entire population now had the opportunity to share in the prosperity of electrification started by the TVA. In revisiting Lilienthal’s five-point plan for developing the region, it is safe to say that it was undeniably very successful in transforming the once desolate region to the ecstasies of prosperity. The Tupelo example was just one of scores of rural and urban areas that would eventually be successfully modernized in the southeastern US.23

While cities such as Tupelo prospered greatly from the TVA, the impact it had on relieving the poor conditions for rural agrarian constituents was equally if not more effective. Importantly, the inhabitants of the region were able to find and then enjoy the rewards of their manual labor through working for the TVA.

The previously mentioned employment splendor brought to residents of the Tennessee Valley in the early years of the TVA continued throughout the later portion of the 1930s. As Roosevelt’s New Deal continued throughout the decade, a Federal Theatre Project (FTP) play about the TVA greatly demonstrated the continuing lifestyle enhancements brought to countless civilians in the region. In the prologue of the FTP’s play about the TVA, the previously horrid conditions that once existed in the valley are demonstrated. “Occupations (when they exist at all) are primitive, a throwback to an earlier America. Here stands the results of poor land, limited diet, insufficient schooling, inadequate medical care, no plumbing, industry, agriculture or electrification!”24

As the play continued on, a farmer and his wife complained profusely about the high costs of electricity and their struggle to make ends meet. After visiting an unnamed electric company and being told that there is nothing they can do for the couple, the farmer angrily shouted “By God, the government ought to do something about this…if laws are made for utilities (to prosper), why aren’t laws made to help people like me?”25 While the play ends here, salvation and the solution to the problems were demonstrated through governmental intervention and the TVA. Towards the ending of the FTP’s play, the directive of the TVA was explained, along with pictures of water flowing brilliantly through the now completely constructed Norris Dam. As the curtain fell during the ending of the play, a parade of men and women joyfully and happily sang the TVA song created by Jean Thomas. The song lyrics effectively (as follows) displayed the promising effect the TVA had on rural farmers and other proletariat alike:

My name is William Edwards,
I live down Cove Creek Way;
I’m working on the project
They call the TVA.
The Government begun it
When I was but a child,
And now they are in earnest
And Tennessee’s gone wild.

All up and down the valley
They heard the glad alarm;
The Government means business-
It’s working like a charm
Oh, see them boys a-comin’,
Their Government they can trust,
Just hear their hammer ringin’,
They’ll build a dam or bust!
For things are surely movin’,
Down here in Tennessee;
Good times for all the Valley,
For Sally and for me.26

After analyzing the prosperity and successes of the TVA, it is imperative to remember how harsh and depressing the situation in the Tennessee Valley region was prior to the TVA’s conception. Therefore, it is necessary to see how the transformation was successfully accomplished. In doing so, the purposeful aspect of studying history is accomplished. An account of the successful planning and decentralization, as demonstrated by Lilienthal, will now be examined.

Lilienthal eventually would spend six and one half years being involved in the TVA. Finally, in 1940 he was able to reflect upon the “yardstick” of measuring the accomplishments and failures of the TVA. Lilienthal, as was previously mentioned, argued against over-centralization of big business and centralized wealth. More significantly, he noticed that the same could be applied for governments. As was mentioned earlier in the historiography, critiques of the TVA have argued that it replaced one centralized power of big business with another of big government.27 However, Lilienthal presented exceptional evidence against that argument which will now be verified.

In Lilienthal’s critique of the downfalls of centralized administration, he stated that big business and remote administration by the hands of the few was detrimental to the essence of democracy. He stated, “In a country as vast as the US, with its range of physical and economic variations, power cannot be administered entirely from the national capital. Excessive centralization in Washington is bound to cause interminable delays before decisions are arrived at, and put into effect in the field.”28

Additionally, Lilienthal argued that the effect a centralized and remotely administered government would have on everyday citizens would be catastrophic. He added, “One of two things will ultimately happen. Either distrustful citizens will refuse to yield to the national government power which it must have for protection, or an arrogant central government will impose its will by force. In either case, the substance of democracy has perished.”29

The solution Lilienthal had to prevent the disaster from happening was grass-roots local control of administration, authority, and the wants and needs of everyday citizens. He stated that “local participation is not merely wise, it is essential”30 for the preservation of a healthy, prosperous, and thriving democracy that would provide the population with utilitarian means and ends to their lives.

In looking over how Lilienthal applied his theories to the TVA, it is easy to conclude that the grass-roots and local citizens’ involvement was the reason for the achievements, prosperity, and affluence that the TVA methodically accomplished. Lilienthal sighted several aspects of the TVA and how it was successful in involving as many people as possible in the administrational aspects of the operation. Consequently, Lilienthal’s planning of operations in the TVA is an admirable example of “Democracy on the March,” which he would eventually name a future book of his detailing the triumphs of the TVA in maintaining a successful democracy. Furthermore, his book is a testimony to democracy working together harmoniously with technology, government, and individual talents. He writes “I believe that through the practice of democracy the world of technology holds out the greatest opportunity in all history for the development of the individual, according to his own talents, aspirations, and willingness to carry the responsibilities of a free man. We have a choice: to use science either for evil or for good.”31 Unlike various robber barons from nearly two decades ago, Lilienthal did not use the TVA for personal financial gain. Instead, his strong and virtuous democratic beliefs are a testimony to true American greatness.

Lilienthal, much like he did with his easy to understand five-point plan, outlined two essential aspects for decentralization that were carried out through the TVA.

First, he stated that a decentralized administration is one in which the greatest possible number of decisions are made in the field at the grass-roots level. He presented exceptional evidence of how a corrupt centralized public utility company, the Commonwealth and Southern Corporation (CSC), does not promote the economic welfare of hundreds of thousands of people. He noted that the downfall of the CSC was that problems of operation are not determined by state or local managers, but hundreds of miles away in New York city.32 The effect this centralization had on the general population was overwhelmingly negative. As it left civilians powerless and at the mercy of a democracy of the few.

The TVA, on the other hand, was able to flourish due to ownership and control being invested in the people themselves. This, in effect, was precisely Lilienthal’s second essential for decentralization.. His second essential stated, “a decentralized federal administration must have as its objective the development of the widest possible participation of the people themselves.”33

One of the greatest examples of the TVA’s brilliant involvement with the grass-roots was with the rehabilitation, rebuilding, and fortifying of soil in the southeastern portion of the US. In a 1940 speech at the University of New York (UNY), Lilienthal explained that when the TVA’s decentralized administration worked together with small farmers , the economic opportunity they once lost was resurrected. In addition to the cooperative and grass-roots administration in the TVA, by setting up what Lilienthal termed “farm communities” farmer’s were able to find a renewed faith in themselves and each other. Their capacity to meet responsibilities to their land, country, and neighbors was dramatically easier to accomplish.

While soil rehabilitation raised the standard of living for farmers and stimulated farmers cooperative work, Lilienthal also noted in his UNY speech four other major accomplishments that decentralization brought to the area in the 1930s.

First, his plan to resurrect industrial processes and allow private enterprises to flourish he unveiled as a dramatic success. The aforementioned economic linkages created with electricity were undoubtedly successful for the region’s economy. Secondly, as was also detailed in earlier pages, he showcased how lowering prices and securing mass-consumption of electricity benefited people of all classes. Third, he reiterated how the TVA’s flood control allowed raw materials to be transported with no hazards to far away places such as Pittsburgh, St. Louis, and even Minneapolis. Lilienthal marvelously compared the cleaned up waterways to how governmental interstate roadways allowed the quality of life to be as utopian as possible for all of an area’s inhabitants.34

Finally and notably, fourth, Lilienthal stated that “sometimes you can add two and two and get zero.”35 He stated how sufficient central planning of natural resource development allowed the Tennessee Valley to flourish. By accounting for conservation methods, he noted that the future of the environmental resources were successfully accounted for in the TVA. He outstandingly contrasted other non-successful methods of conservation when he stated “the desolate, abandoned sawmill towns of Northern Wisconsin and Michigan, in the midst of cut-over forest land are a bitter demonstration that the addition of an industrial operation and a great natural resource may, if coordinated planning is absent, prove that two and two sometimes are zero.”36

As 1940 past, and America’s entry into WW2 began to take heed, Lilienthal changed the focus of the TVA noticeably. Among the changes included grass-roots conservation of energy due to a severe 1941 drought in the region, a major increase of aluminum development for war materials, and various future planning for social and economic recovery once the war was finished. Furthermore, Lilienthal related the methods the TVA used in fixing the economic hardships of the depression with defending the democratic freedoms that the country held deeply. He noted that the TVA was not a simple project with a simple agenda, but instead, a drastic program that required deep grass-roots democratic cooperation of all Americans.

In a speech before the Rotary Club in Knoxville, he declared that the same cooperative methods and critical thinking used when planning the TVA were needed to win the war and protect the freedom of countrymen. He patriotically bellowed “Who says it can’t be done!”37, denoting that the countries transformation of industry and natural resources towards war materials was a possible and realistic goal that could be accomplished.

Lilienthal was correct, as America’s WW2 preparation, entry, and eventual winning of the war proved that critical cooperative central planning in times of need to achieve difficult goals could be accomplished.

In concluding the life of Lilienthal, after his departure in the TVA he began a new career path as chairman of the Atomic Energy Commission. The legacy and far-reaching accomplishments that he brought to citizens in the Tennessee Valley as the TVA’s administrator and eventual senior chairman positively effected the nation forever. His laboring did come under scrutiny in the late 1940s however, as he was unsuccessfully tried as being a communist traitor during the Red Scare. 38 With the evidence provided in the previous pages, it is astonishing that his loyalty to the nation would come under examination, as Lilienthal was surely one of the most patriotic country loving men in the history of our great nation.

The legacy of the TVA, on the other hand, has had influential significance all throughout the world. In 1961, future TVA director Aubrey J. Wagner, a University of Wisconsin graduate in 1933, wrote that as many as fifty-five foreign visitors a day would to observe the TVA and the positive outcomes of decentralization and central planning. In his writings, he proclaimed that “I am convinced on the belief that the Tennessee Valley has undergone an experience in economic progress which they (other countries) hope to see paralleled in their own underdeveloped countries.”39

Further evidence of the extensive historical significance of the TVA has been highlighted by Walter M. Daniels. After studying various analyses the TVA’s successes and failures, Daniels’ concluded that Lilienthal’s decentralization theories as to how to develop once barren geographical regions were extremely valid and applicable to all aspects of land and economic rehabilitation throughout the world. Daniels’ writings additionally demonstrate how electrical utilities in the US, when paralleling the TVA model for development, were successfully constructed in places such as Columbia, Missouri, and all throughout the countryside.40

The evidence included in the previous pages has highlighted the successes of central planning of public utilities in mainly the pre-WW2 years of the TVA. Historians have often argued that of all the New Deal programs started by Roosevelt, the TVA was the most successful and greatest accomplishment ever conceived during the time period.41

The in-depth historically significant effects that the TVA had on the southeastern portion of the US are almost impossible to bring enough praise and accreditation too. In conclusion, the once barren and depressing conditions that engulfed the area prior to the start of the New Deal were successfully relieved through governmental involvement and regulation of over centralized public utilities previously in place.

The preservation of the democracy of the nation through grass-roots decentralization of public corporations and utilities of the time was overwhelmingly successful in the TVA. In addition, the depressing conditions of the early 1930s required a concise and well thought out plan in order for prosperity to once again flourish in the region. Lilienthal successfully provided the arrangement of the plan through his excellent leadership, administration, and beliefs. The southeastern US figuratively required a virtuous and intelligent man to “turn on the electrical switch” in the area and allow the glories of electricity and prosperity to illuminate the area. Lilienthal indeed turned the switch, and in effect illuminated the area dramatically to the power of technological advancement. The monopolistic centralized wealth that once engulfed the area was decentralized. He reconstructed the social and economic conditions by redesigning the uncontrolled capitalistic system in place. As a result the country was no longer by, of, and for the rich, but as the founding fathers of American democracy intended, BY the people, OF the people, and FOR the people.


1 Richard Lowitt, “Camelot – Beside a Shining River Lake.” Reviews in American History 19, no. 4 (December 1991): p. 539-544.
2 Adam Brinkley, “Dissidents and Demagogues”, ed. Colin Gordon, Major Problems in American History, 1920-1945, (Boston: Houghton Mifflin Company, 1999) p. 381-389.
3 Information Pamphlet: Text of Speech by Arthur E. Morgan carried on NBC Networks, 15 August 1933, John Serenus Bordner Papers: Box 6, Folder 15, WHS.
4 Information Pamphlet: TVA – Electricity For All, December, 1933, John Serenus Bordner Papers: Box 6, Folder 12, WHS.
5 Lorena Hickok, “Report, Florence, Alabama,” Franklin D. Roosevelt Library, Hopkins Papers, Box 66, 6 June 1934, <> (19 September 2002).
6 Congress, Senate, President Franklin Roosevelt speaking on the creation of the TVA, referred to the Committee on Agriculture and Forestry, 73rd Cong., 1st sess., Congressional Record 77, pt. 2 (10 April 1933): 1423.
7 US Congress. “Tennessee Valley Authority Act,” 18 May 1933, <> (28 September 2002).
8 TVA General Information Questions and Answers, December 1933, John Serenus Bordner Papers, Box 6, Folder 12, WHS.
9 Ibid, Information Pamphlet: TVA – Electricity For All.
10 David E. Lilienthal, The Journals of David E. Lilienthal: Volume I: The TVA Years 1939-1945. (New York: Harper & Row Publishers, 1964) p. 1-14.
11 Marquerite Owen, The Tennessee Valley Authority. (New York: Praeger Publishers, 1973), p. 4.
12 Ibid, David E. Lilienthal – Journals, p. 2.
13 Press Release – TVA to A.M. Papers: Text of Speech by David E. Lilienthal before the Lawyers’ Club, 11 November 1933, John Serenus Bordner Papers: Box 6, Folder 14, WHS.
14 Ibid, Speech by David E. Lilienthal.
15 Ibid, Speech by David E. Lilienthal.
16 Ibid, Speech by David E. Lilienthal.
17 Ibid, Speech by David E. Lilienthal.
18 Ibid, Speech by David E. Lilienthal.
19 Ibid, Speech by David E. Lilienthal.
20 TVA Activities and Accomplishments to Date, 1935, John Serenus Bordner Papers: Box 6, Folder 13, WHS.
21 Franklin D. Roosevelt, “One Hundred and Sixtieth Press Conference (Excerpts), Warm Springs, GA.,” 23 November 1934, <> (27 September 2002).
22 Lorena Hickok, “Report, enroute, Memphis to Denver,” Franklin D. Roosevelt Library, Hopkins Papers, Box 66, 11 June 1934, <> (27 September 2002).
23 Magazine Advertisement - Tupelo, MS, and the TVA, 1934, John Serenus Bordner Papers: Box 6, Folder 13, WHS.
24 Arthur Arent, “Power, Act I, Scene 15,” Federal Theatre Project, 23 February 1937, <> (27 September 2002).
25 Ibid, Arthur Arent.
26 Ibid, Arthur Arent.
27 Ibid, Richard Lowitt.
28 David E. Lilienthal, “The TVA and Decentralization,” 1 June 1940, <> (27 September 2002).
29 Ibid, David E. Lilienthal, “The TVA and Decentralization”.
30 Ibid, David E. Lilienthal, “The TVA and Decentralization”.
31 David E. Lilienthal, TVA: Democracy on the March. (New York: Harper & Brothers, 1944). p. xxii
32 Ibid, David E. Lilienthal, “The TVA and Decentralization”.
33 Ibid, David E. Lilienthal, “The TVA and Decentralization”.
34 Press Release – TVA to A.M. Papers: Text of address by David E. Lilienthal before Columbia University in New York City, 16 January 1940, John Serenus Bordner Papers: Box 6, Folder 14, WHS.
35 Ibid, Address by David E. Lilienthal before Columbia Univ.
36 Ibid, Address by David E. Lilienthal before Columbia Univ.
37 Text of address by David E. Lilienthal before the Rotary Club of Knoxville, TN., 2 May 1941, John Serenus Bordner Papers: Box 6, Folder 13, WHS.
38 David E. Lilienthal, This I Do Believe. (New York: Harper & Brothers, 1949), p. ix-xii, 3-13.
39 Aubrey J. Wagner, “The Emerging South”, The Torch, 1964 July, Aubrey J. Wagner Papers: Box 1, Folder 1, WHS.
40 Walter M. Daniels, Should we have more TVA’s? (New York: The H.W. Wilson Company, 1950), p. 3-11, 69-70, 173.
41 Stuart Chase, “TVA: The New Deal’s Greatest Asset, Parts I to IV,” June 1936, <> (27 September 2002).


Primary Sources:

Arent, Arthur. “Power, Act I, Scene 15,” Federal Theatre Project, 23 February 1937, <> (27 September 2002).
Bordner, Serenus John. The Papers of John Serenus Bordner. Wisconsin Historical Society.
Chase, Stuart. “TVA: The New Deal’s Greatest Asset, Parts I to IV,” June 1936, <> (27 September 2002).
Hickok, Lorena. “Report, Florence, Alabama,” Franklin D. Roosevelt Library, Hopkins Papers, Box 66, 6 June 1934, <> (19 September 2002).
________. “Report, enroute, Memphis to Denver,” Franklin D. Roosevelt Library, Hopkins Papers, Box 66, 11 June 1934, <> (27 September 2002).
Lilienthal, E. David. TVA: Democracy on the March. New York: Harper & Brothers, 1944.
________. “The TVA and Decentralization,” 1 June 1940, <> (27 September 2002).
________. This I Do Believe. New York: Harper & Brothers, 1949.
________. The Journals of David E. Lilienthal: Volume I: The TVA Years 1939-1945. New York: Harper & Row Publishers, 1964.
Roosevelt, D. Franklin. “One Hundred and Sixtieth Press Conference (Excerpts), Warm Springs, Ga.,” 23 November 1934, <> (27 September 2002).
U.S. Congress. “Tennessee Valley Authority Act,” 18 May 1933, <> (28 September 2002).
U.S. Congress. Senate. President Franklin Roosevelt speaking on the creation of the TVA, referred to the Committee on Agriculture and Forestry. 73rd Cong., 1st Sess. Congressional Record 77, pt. 2 (10 April 1933).
Wagner, J. Aubrey. The papers of Aubrey J. Wagner. Wisconsin Historical Society.

Secondary Sources:

Daniels, M. Walter. Should we have more TVA’s?. New York: The H.W. Wilson. Company, 1950.
Gordon, Colin. Major Problems in American History 1920-1945. Boston: Houghton. Mifflin Company, 1999.
Lowitt, Richard. “Camelot – Beside a Shining River Lake.” Reviews in American History 19, no. 4 (December 1991): 539-544.
Owen, Marquerite. The Tennessee Valley Authority. New York: Praeger Publishers, 1973.

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