Indiana Advocate

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One day last week David Eli Lilienthal, boss of Tennessee Valley Authority, came out of the White House with his lips twisted in a grin of satisfaction. He had just told President Roosevelt that there weren't going to be any more big private utilities in the Tennessee Valley: he had completed final arrangements for the purchase of Tennessee Electric Power Co. Big Commonwealth Corp. was to get $78,600,000 for its operating subsidiary.

Triumph for Lilienthal was, on the face of it, defeat for Commonwealth & Southern's Wendell Lewis Willkie. It was defeat for Willkie because it was the end of his battle to keep a privately owned public utility on its feet in the Tennessee Valley.

Yet Wendell Willkie showed every sign of feeling just about as much defeated as a grizzly bear on a rampage. Willkie is one of the few businessmen who, after trading punches with the New Deal, appeared to have as much fight left in him as his New Deal opponent. Fortnight ago when it gave the round to Lilienthal by authorizing an issue of bonds for the purchase of Tennessee Electric Power.* Congress--in much the same truculent mood as last week--carefully earmarked the money in the bill, thus ending the days of blank checks for TVA. Moreover, in announcing the purchase Mr. Lilienthal said it would complete TVA's purchasing--more or less implying the TVA was ready to call quits and not fight utilities outside the Valley.

These were the spoils of the vanquished and Wendell Willkie deserves most of the credit for winning them. Other businessmen have fought tongue-tied and embarrassed before the Congressional committee, have sued in the courts and taken their licking. In the courts Willkie has taken his beating with the rest, but he has seldom come off second best in sparring before committees or in political debate. Resourceful, informed, more publicly articulate than any big U. S. businessman today, he turned committee hearings into promotion for his own political-economic doctrines. He emerged from his fights bigger in public stature than he went in.

$75,000 of Argument. Willkie is an Indiana crackerbox debater in store clothes, and full of intellectual hops. He has an unruly mop of brown hair, a barrel chest, and he stands six feet one in spite of stooping as if he were perpetually leaning over a jury box. When he sits in a chair he sprawls like a sheepdog at rest but his blue, humor-flecked eyes look out from under knitted brows waiting for the argument to begin.

When it does, he gives tongue. He swings a leg over the arm of the chair, his coat begins to crawl up his back, his big hands move in expressive gesture. In a few minutes he is sitting up straight, his forelock is hanging in his eyes. His talk, with a native Indiana tang, is even more vigorous. To hell with formality. He talks as men do in the locker room, and spices his profanity with the Bible, Shakespeare and law. He spills out figures, dates, technical facts, historical parallels. When the argument grows hot his eyes get hawklike and his stubborn upper lip stiffens. If an opponent wilts under his fire, Willkie is disgusted. He doesn't want the argument to end.

For being that sort of man Wendell Willkie gets $75,000 a year, but he has never owned an automobile. (Old Indiana friends say that when he did try driving an automobile he was a menace, always arguing over his shoulder, frequently letting go the wheel to gesture with both hands.) Between his apartment on Manhattan's upper Fifth Avenue and his office on narrow, downtown Pine Street he uses subways and taxicabs.

Besides having no automobile, he carries no watch. He gets the time from waiters, or from clocks in store windows, and one of the duties of his man secretary is to tell him the time. The other duties of the secretary include seeing that his clothes are pressed and that he sometimes gets a haircut. His critics say that it's a pose, his friends that he has always been that way.

When the Gas Gave Out. The name of Willkie was originally Willcke. All four of Willkie's grandparents fled Germany after the revolts against the tottering Metternich absolutism in 1848. When Wendell was born in 1892 his father, Herman Willkie, was a lawyer and a wealthy landowner in the town of Elwood, Ind. (pop. 10,685). His mother was also a lawyer, the first woman member of the Indiana bar, and besides tending her family (six children, of whom Wendell was the third) helped her husband in his law practice. Elwood was then riding high. Natural gas had been discovered and the supply was so plentiful that no one took the trouble to turn out the street lights by day. It was just as cheap to let them burn.

In the panic of 1893 financial ruin struck the Willkies and a few years later Elwood's natural gas, prodigally wasted, played out. By the time "Wen" Willkie and his three brothers were in long pants they found plenty of work in summer moving abandoned Elwood houses into the country to be used as outbuildings for farmers. Their home was a sort of perpetual debating society. They kept more than 6,000 books around the house and old Herman Willkie, back at his law practice harder than ever, woke his children in the mornings by shouting quotations from the classics.

When "Wen" went to the State University in Bloomington in 1909 he soon became a practicing politician as well as a conspicuous figure. He wore a loose-necked red sweater, chewed tobacco, preached socialism from campus soapboxes. By the time he became sophomore he was a leader of the campus "barbs," roared against the fraternities, preached revolt against the university faculty. One of the fraternity leaders (Beta Theta Pi) was his aristocratic friend Paul Vories McNutt, whom Willkie still likes to josh at Indiana University alumni dinners. But in two or three years Willkie's socialism wore out. As a senior he even broke down and joined the pompadoured Betas, but he did not brush his hair.

Gunnery. Graduated from law school in 1916 Willkie went into law practice in Elwood, dropped it on the day War was declared because he had a family hatred of anything Prussian. He became a lieutenant of field artillery, learned to like gunnery, never learned to like army discipline. While he was in training at Camp Knox, Ky., he and Edith Wilk, onetime town librarian of Elwood, were married. Held up by a blizzard, Lieutenant Willkie was two days late for the wedding, turned up with a frozen, bedraggled bridal bouquet. Sweet-faced Edith Wilk carried it to the altar.

When Willkie got back from France, where he spent several months defending court-martialed soldiers from army discipline, he got a job in the Firestone legal department at Akron, later joined the law firm of Mather & Nesbitt and became one of the attorneys for Northern Ohio Power & Light (now Ohio Edison Co.) and other "vested intersts" (the Willkie Indiana pronunciation). He also mixed in politics: debated against the Ku Klux Klan, spoke for the progressive doctrines of Bob La Follette, the elder, fought the nomination of William Gibbs McAdoo at the 1924 Democratic convention because of the Klan issue. In 1926 aristocratic Public Utilitarian Bernard Capen Cobb wrote to an officer of his Northern Ohio Power & Light: "Do not let this young man get away from us. . . . He is a comer and we should keep our eye on him."

By 1929 B. C. Cobb, who had gathered together three Midwest and Southern utility holding companies, dissolved them and put their eleven big operating companies under a new holding company giant: Commonwealth & Southern, with operating units in eleven States from Michigan to Alabama. To Manhattan he summoned Wendell Willkie to be C. & S.'s attorney. When old-line Utilitycoon Cobb retired in 1933, he made Willkie president.

New Deal Ideas. In 1932 Wendell Willkie gave $150 to the Roosevelt campaign fund. The time came when he announced that he would like to have it back, but that was later. For Willkie and Roosevelt had quite a few ideas in common. Willkie made no attempt to hide his opinion that business had sinned in 1929 and should take its punishment. He plumped for Federal regulation of holding companies, conceded that utilities that bought Federal power should be subject to Federal regulation of rates.

With his own utility system Willkie set out to do a number of things that the New Deal advocated. To widen the use of electricity one of his first acts was to hire 500 salesmen to sell electrical devices. C. & S. began to extend its lines into rural areas; as electric consumption increased, it began to lower its rates, inviting more consumption. When Willkie took over in 1933, Commonwealth & Southern's average domestic rate per kilowatt hour was 6-c-. Today it is 3-c-.

The system sold 4,147,339,000 kilowatt hours in 1933. In the twelve months which ended last May 31 it sold 8,238,016,338; net for the holding company's common went from a deficit of $808,000 in 1933 to a profit of $5,147,000.

Curtain's Fall. In 1933 smart, aggressive Harvard-man Dave Lilienthal, who had been fighting the ogre of private ownership as a member of the Wisconsin utility commission, took over TVA. Member of a three-man board, he dominated it from the start, became chairman two years ago when old Arthur Ernest Morgan, onetime president of Antioch (work-learn) College, was fired after a spectacular battle against Lilienthal policies. From the start utilitymen never doubted that Dave Lilienthal intended to run every private utility out of the Tennessee Valley.

In the early days of TVA, Wendell Willkie managed to wangle an agreement by which C. & S. interchanged power with TVA, was free from TVA competition in certain areas. It expired in 1937. Meanwhile, TVA covered the valley. Towns were encouraged to build or buy city-owned distributing plants with Government money. TVA transmission lines foliated alongside and over private lines with cheap power, made possible in part at least because TVA paid no taxes,* operated under a rubber capital structure, even sent out its mail postage-free.

Hemmed in by Government competition, the utilities were cut off from new capital markets. Wendell Willkie cried out for private operation Binder full Government supervision. In vain. He advocated a revolving fund of $100,000,000 to finance private rural expansion, promising low rates if big-scale operation were made possible, while other bigshots in the utility field cringed at the rumpus that Willkie kicked up.

Willkie said with TVA's privileges he could market power 35% cheaper than TVA was doing. Dave Lilienthal only grinned. Willkie offered to sell C. & S. Tennessee Valley properties at "any reasonable figure." Dave Lilienthal turned down the offer. Last fall, before a Congressional committee investigating TVA, daring Wendell Willkie offered to sell at any price SEC would set. The offer was not accepted but negotiations were quietly resumed between C. & S. and Lilienthal. Last week's announcement by Dave Lilienthal drew the curtain, perhaps permanently, on out-loud haggling over power.

Power Politics. Before the curtain still stands Willkie. All his maneuvers did not save the Tennessee Valley for Commonwealth & Southern (whose remaining operating companies still represent more than a billion dollars in assets). But he did something else. He took the case of the utilities to the public. He articulated the argument against public ownership, generating power regardless of cost, and the argument for private ownership, under regulation, selling power at low rates and making a decent profit on its capital invested.

The effectiveness of his fight is shown by two facts: 1) that Congress is now highly critical of TVA and similar projects--and the whole yardstick idea has taken a political beating, 2) that Wendell Willkie (a lifelong Indiana Democrat) is today the only businessman in the U. S. who is ever mentioned as a Presidential possibility for 1940.

This "possibility" is at present mildly fantastic, but obviously Wendell Willkie is still going places. Into Willkie's office come 500 letters weekly, all urging him to keep up the fight, many predicting that it will wind up with him in the White House. On these Wendell Willkie casts an interested' but realistic eye. Stamped with anti-New Deal mark, he is still too much of a liberal to suit old-line Republicans. When friends ask him whether he intends to be a candidate he answers, "Wouldn't I be a sucker to say 'Yes?' "

Par. Today Wendell Willkie is the biggest political figure in U. S. business. Electric power (he calls it "par") is his business, but power in the general sense is a word that recurs often in his philosophy. Free enterprise, free competition and free trade are his tenets for raising the economic standards of society.

He believes that the "magic touch of par" corrupted business in the booming 20s. "Par," he says, "is just as destructive on Pennsylvania Avenue as it was in Wall Street. Par goes to men's heads. When you see the bust of Napoleon on the desk of a businessman, you'd better get out quick and sell him short. The same goes for Government officials."

Not yet ready to say whom he wants to see as the anti-New Deal candidate in 1940, Wendell Willkie has already picked his New Deal man: Franklin D. Roosevelt, whose ability as a public leader he admires, although he thinks it beclouded by vindictiveness.

"Next election," he says, "the New Deal is going to be on trial again. President Roosevelt is its ablest spokesman and in a Democratic country it deserves an able advocate. I hope he runs. Then we can debate it to everybody's satisfaction. It will be a great discussion."

*TVA will put up $46,000,000 of the price. The remainder is to be paid by Chattanooga, Nashville and other communities which will divide title to the property.

*In lieu of taxes TVA pays the States in its area 5 % of gross receipts from power sales.

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