For the history-minded, news that president Obama appears to be mulling a possible privatization of the TVA is at least a little bit ironic – and definitively ironic is the opposition that Tennessee’s two Republican Senators are already voicing against any such proposal.
During the 1920s, the virtues of public vs. private ownership of dams and plants to harness the Tennessee River’s giant hydroelectric potential were hotly debated. Originally, the U.S. government had begun construction on two dams and two nitrate plants near Muscle Shoals in northern Alabama during WW I. When the war ended before the project was completed, the Harding administration at first sought to transfer the installation into private ownership.
When Henry Ford became interested in purchasing the area, opposition coalesced around Senator George Norris, (progressive) Republican of Nebraska, a constant thorn in the side of the three Republican preisdents of the 1920s. Norris argued that the Muscle Shoals facilities should remain government owned and operated and should become the center of a public works project to develop fertilizer, flood control, and power for the welfare of the people. In 1925 President Calvin Coolidge appointed a committee to investigate whether private or public administration would operate more efficiently. The Muscle Shoals Inquiry committee members, unwilling to resolve the controversial issue, declared the problem political rather than technical.
Norris continued to lead the fight to keep governmental control of the Muscle Shoals property. He demanded that the government administer the facility for the benefit of the people living in the Tennessee River Valley, and twice engineered the passage of bills calling for governmental control of the facilities, once in 1928 (pocket-vetoed by Coolidge) and once more in 1931, vetoed by Hoover, who had been a leading proponent of the privatization effort.
The stalemate ended in 1933 with the election of Franklin D. Roosevelt to the presidency. Roosevelt visited Muscle Shoals and charged the Tennessee Valley Authority (TVA) with planning the usage, development, and conservation of the natural resources in the Tennessee River basin to the combined advantage of agriculture, forestry, and flood prevention. While many consider the TVA a model of re-vitalization of an area through government projects, charges of unconstitutionality were lodged by private companies, which said that government ownership of utilities prevented private companies from entering the market. Conservative critics, including future president Ronald Reagan as early as the 1950s, criticized the TVA as a typical top-heavy big-government boondoggle.