On May 18, 1933, when President Franklin D. Roosevelt signed the Tennessee Valley Authority Act, he took what he saw as a vital step toward fulfilling his promise of a “New Deal” for the American people. The Great Depression had dragged on for more than three years by that point, with no end in sight.
The newly created Tennessee Valley Authority (TVA) would serve as a federally owned and operated electric utility company and a regional economic development agency for the Tennessee Valley. Running through seven states in the Southeast—Virginia, North Carolina, Alabama, Kentucky, Mississippi, Georgia and Tennessee—the region was one of the poorest in the country and one of the hardest-hit by the Depression.
Spring rains swelled the Tennessee River each year, causing flooding that stripped away the vital topsoil needed to grow crops. But the mighty river held tremendous potential, if it could be controlled. The TVA aimed to do just that—and a lot more.
“It’s a multi-state regional economic development authority with all of the powers that implies,” says Eric Rauchway, professor of history at the University of California, Davis and author of Why the New Deal Matters. “[The TVA] is authorized to build dams both to improve navigation and to generate hydroelectricity, to create networks to distribute that electricity as public power…as well as to deal with basically every aspect of common life in the region.”
Origins of the TVA: Muscle Shoals
Congress had authorized the U.S. government to begin construction of Wilson Dam at Muscle Shoals, Alabama in 1916. The site had been named for the rapids or “shoals” produced by a steep drop in elevation in the Tennessee River at that point. Though the dam was originally intended to provide hydroelectric power for two factories tasked with producing nitrates for explosives, World War I ended before the facilities were completed.
Throughout the 1920s, politicians debated what should be done with the site. Senator George Norris, a progressive Republican, believed the government should take greater control over energy production. Norris tried repeatedly to introduce bills providing for federal development of the Muscle Shoals site—only to see them shot down by Republican presidential administrations.
Progress and Controversy
But with Roosevelt now in the White House, the tide had turned toward Norris’s ideas. The TVA’s ambitious slate of objectives included improving navigation of the river, controlling flooding, reforestation, providing a reliable supply of water, modernizing farming techniques and providing affordable electricity for the people of the region. Its efforts made a difference almost immediately: Dam construction and other agency activities created thousands of jobs, and by 1935 the cost of electric power across the Tennessee Valley had dropped to 30 percent below the national average.
While it brought electricity and modern conveniences to many rural families who had never had them before, the TVA had negative impacts as well. Construction of the Norris Dam in Tennessee, which began in October 1933, forced nearly 3,000 people from their homes, but the government offered compensation only for the relocation of some 5,200 graves.
Legal Battles Over the TVA
Government-owned power plants, Roosevelt had argued in his 1932 presidential campaign, should serve as a “yardstick to prevent extortion” by private power companies. “They would know the labor costs, they would know the production cost, they would know the distribution costs, and they could then say—well, this is a reasonable amount to charge,” Rauchway says of the publicly owned plants. “That of course threatened…private monopolies, who wanted the authority to decide what was reasonable to charge for themselves.”
Wendell Wilkie, president of a large power utility company called the Commonwealth and Southern Company, led the fight against the TVA. He and other power company representatives brought numerous lawsuits and injunctions in the 1930s, blocking the TVA from providing power to many cities across the South in the interim.
But in February 1936, the Supreme Court ruled in Ashwander v. Tennessee Valley Authority, a case brought by the Alabama Power Company, that Congress did not exceed its constitutional powers by creating the TVA to build Wilson Dam and sell and distribute the electricity generated there. In the 1939 case, Tennessee Electric Power Company v. TVA, the Court again upheld the TVA’s constitutionality.
How the TVA Succeeded—and Fell Short
During World War II, the TVA would play a critical role in U.S. war production. The region churned out everything from munitions to fertilizer for food production to aluminum for airplane machinery. Electricity from the TVA also powered Oak Ridge in the hills of Tennessee, one of the top-secret sites built to produce uranium for the atomic bomb during the Manhattan Project.
The TVA brought higher incomes and greater comforts to much of the region’s population, slowed erosion of the land from the river’s flooding and improved the use of the land. But the agency fell short of the idealized vision of its creators in other ways.
“It didn’t keep people on the land in the way they originally envisioned would happen,” Rauchway explains. Instead of encouraging local and regional farming, and fostering a kind of cooperative “slow food” movement, he says the TVA “accelerated the integration of the region into the modern economy.” Also, many factories in the region shifted from hydroelectric to coal-fired power after World War II, a change that would have long-term environmental impacts.
Despite its shortcomings, the TVA would serve as a model for both rural electrification programs in the United States and government-led regional development programs around the world, particularly in poorer countries. One of a handful of public works programs created during the New Deal that still exists, it remains the nation’s largest publicly owned power provider, sending electricity from a combination of hydroelectric, coal-fired, natural gas, nuclear and renewable energy facilities to some 10 million people across the Tennessee Valley.