Valley of Vision

With six pens and a happy smile President Roosevelt last week brought into being the Tennessee Valley Authority, another administrative engine for planned economy. Modeled after the Port of New York Authority, this independent Federal agency, with its own credit and its own crew, is to undertake what the President had called "the widest experiment ever conducted by a government"--the industrial development of a 640,000-sq. mi. watershed. Its domain starts in the wooded heights of the Cumberland and Great Smoky Mountains, sweeps down past Knoxville and Chattanooga, dips into Alabama at Muscle Shoals, turns north through the rolling farm lands of Tennessee and Kentucky and comes to an end at Paducah on the Ohio. In this vast basin the U. S. Government is not only going into business on a grand scale but is inviting U. S. Industry to join it in a project which may change the whole economic character of the central South.

The Tennessee Valley Authority Act, as signed at the White House, specifically called for three administrators who believe heart & soul in the wisdom and feasibility of its manifold purposes. For chairman President Roosevelt promptly appointed Arthur Ernest Morgan, 55, president of Ohio's Antioch ("Work& Study") College. An engineer of much experience, Chairman Morgan has been fascinated by water and its uses since as a youngster he roved the Minnesota prairie. He wrote the Minnesota and Arkansas drainage codes, helped with those of Mississippi, Ohio, Colorado and New Mexico. He tamed the wild Miami River after it had flooded Dayton in 1913. Since 1920 he has built Antioch College up from an obscure experiment to a vigorous college with 650 enrolled and a big waiting list.

Chairman Morgan's assigned objectives are as follows: 1) flood control works along the Tennessee River to even up its flow between a March torrent and an October trickle; 2) a 9-ft. channel for navigation from Knoxville to Paducah (650 mi.); 3) reforestation of marginal lands to prevent soil erosion and to supply the next generation with a timber crop; 4) decentralization of industry so that Tennessee Valley residents may live on farms while working in factories; 5) manufacture of fertilizer; 6) production and distribution of cheap hydroelectric power. For these purposes the Tennessee Valley Authority is permitted to sell its own 3 1/2%, bonds, but not underwritten by the U. S. Treasury. President Roosevelt estimated that the whole integrated project, an old social dream of his and of Nebraska's Senator Norris would supply 200,000 new jobs and stimulate the "back-to-the-land" movement. If it succeeds, he is ready to experiment similarly with the valleys of the Missouri and the Columbia.

Life blood of the whole Tennessee watershed plan is power. Its heart is the Wartime plant at Muscle Shoals. There the Government has sunk nearly $165,000,000 in two nitrate plants, idle since 1919, and the colossal Wilson Dam, finished in 1925. What to do with this national defense investment provided a 13-year controversy ended by last week's bill-signing. Henry Ford bid for it and was turned down. Alabama Power Co. unsuccessfully offered to take it off the Government's hands. American Cyanamid Co.'s bid was also rejected.

Throughout the long tiresome fight over policy, hollow-eyed Senator Norris held out doggedly for Government operation of Government property. Presidents Coolidge and Hoover each vetoed a Muscle Shoals bill because it "put the Government into the power business." After President Roosevelt signed the Tennessee Valley Authority bill for that very purpose, he handed Senator Norris one of the pens used, saluted him as "the grandfather of this legislation."

With the Muscle Shoals plants, which have never produced a commercial pound of nitrate and which many an expert now considers obsolete, the Tennessee Valley Authority is to experiment on fertilizer production. It is free to ransack the Patent Office files for new ideas with which to bring its equipment up-to-date.

The Wilson Dam power station today contains eight generators, with a combined rating of 260,000 h. p. The Tennessee Valley Authority's first step will be to install ten more, at a cost of $5,000,000, bringing the plant up to 610,000 h. p. Because of the Tennessee's uneven flow, a dam and power plant will be built at Cove Creek, some 300 mi. upstream where the Clinch and the Powell rivers converge north of Knoxville, at a cost of about $35,000,000. The Cove Creek plant, with a rating of 149,000 h. p., will be connected with the Wilson Dam plant by the Authority's own transmission lines. Together they will produce two billion kilowatt-hours per year, to be distributed and sold over their own wires at a rate so low, presumably, that industries will scramble to move into the valley and use it. Thereafter the Government's agency may extend its power sphere until it reaches from Atlanta to St. Louis, from Cincinnati to New Orleans. Such a prospect is based on an Army engineering survey to the effect that $1,200,000,000 invested in 149 plants along the Tennessee could develop 4,000,000 h. p. which in turn would generate 25,800,000,000 kilowatt-hours per year at a switchboard price of 4 1/3 mills.

Competition. Biggest lack in the Tennessee Valley project at present is consumers for this enormous supply of power. The valley today has a population of about 2,000,000. Two-thirds of it is served by six Commonwealth & Southern companies --Alabama Power, Tennessee Electric Power, Georgia Power, South Carolina Power, Mississippi Power, Gulf Power-- with 431,965 customers on their lines. Electric Bond & Share's Birmingham Electric Co., Tennessee Public Service and Memphis Power & Light serve 121,910 more. Together these private companies are equipped to supply 33% more power than the area is using. When Muscle Shoals goes into operation, excess production will jump to 66%.

In the Tennessee watershed Commonwealth & Southern companies have 20,000 mi. of high tension wires, 17,000 mi. of local distributing lines. The Tennessee Valley Authority may go into direct competition by means of its own lines to distribute its own power. If this is ever done. Wendell L. Willkie, Commonwealth & Southern president, warned Congress that a $400,000,000 private investment would be wiped out.

Scandal. Almost as big news last week as the creation of the Tennessee Valley Authority was a wind of scandal that suddenly whistled across Muscle Shoals. Since 1925 the War Department has contracted annually with Alabama Power Co. and Tennessee Electric Power Co. to dispose of its Wilson Dam power at 2 mills per k.w.h. Both companies hooked their lines to the Government plant. They were specifically forbidden to exchange their own surplus power by means of this connection. Last week's charge was that they had so exchanged extra power, thereby depriving the Government of revenue and seriously damaging its electrical equipment.

Last January Franklin Roosevelt, as President-elect, visited Muscle Shoals. According to the charge, Wilson Dam equipment was so rigged that day as to fool him and his party about what the power companies were really doing. Six weeks ago Secretary of the Interior Ickes recalled to Government service Louis R. Glavis, sent him to Muscle Shoals as a secret investigator. Mr. Glavis was in the Department of the Interior under Taft's Ballinger. For rendering a red-hot report on that Administration's handling of fraudulent coal claims in Alaska, he was discharged.

Last week Investigator Glavis was back in Washington with evidence which he said "only scratched the surface of the rottenness at Muscle Shoals." He had log books, meter readings, secret orders and other documents which were turned over to the Department of Justice. Army engineers hotly denied that there had been any wrong-doing at Muscle Shoals. So did the two power companies concerned.

One view of the Glavis charges was that they would establish, once and for all, the "Power Trust's" alleged attempt to discredit Government operation of Muscle Shoals. Another view was that they were shot off at this time to help launch the Tennessee Valley authority by starting a popular backfire against private utility operations.

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