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[McCook Daily Gazette]
McCook, Nebraska ~ Friday, August 29, 2008
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Sen. George W. Norris vs. Henry Ford


Monday, June 9, 2008
In the years leading up to 1933, the greater Tennessee Valley was looked upon as a very sad case, even for the Depression '30s. Agricultural lands were worn out, crop yields were dismal, and whole forests had been destroyed, making land erosion a major problem when the Tennessee River flooded, which was often.

During the years of World War I the usual importing of nitrates from Chile (to make munitions) was questionable, so two nitrate plants were constructed in the Muscle Shoals region along the Tennessee River. Since the making of nitrates required huge amounts of electricity, the first Tennessee dam (Wilson Dam) was constructed to provide power for the operation. The war ended before a single pound of nitrate was produced.

Making the best of a bad situation, the government used the nitrate plants to get into the fertilizer business, and embarked on a program to teach farmers new farming methods, using fertilizers and conservation to increase yields of their crops. They replanted forests, established a system to prevent forest fires, and improved the habitat for fish and wildlife. Most of all, they tamed the river and the electricity produced by Wilson Dam enhanced life for the citizens of the entire region, providing power for light and previously unknown appliances, all of which made life easier, farms more productive, and drew new industries, with good jobs for the area.

After World War I there was a strong national movement toward private ownership of large projects. Toward this end many people clamored for Private Interests to do the job of providing electricity and making fertilizer -- better and cheaper than could the federal government. Many, especially among older farmers, also resented the intrusion of the federal government in their lives, and the loss of farms to the lake formed by the dam.

In 1921 Henry Ford, who had revolutionized the automotive industry with his innovative ideas of mass producing automobiles, stepped forward and offered to buy the Tennessee River Valley dams and fertilizer plants from the Government -- for $5 million (about 6 cents on the dollar). He would lease Wilson Dam and another back to the government for 100 years, and sell the fertilizer, produced in the nitrate plants.

At the same time he promised to turn the Tennessee Valley into a vast manufacturing region -- larger than Detroit, which would become the country's largest industrial center -- employing over 1 million workers -- Detroit of the South. (Bob Harris, of the TVA, speculates that had Ford upped his offer to 25 cents on the dollar his offer would have been accepted.) To many, Ford's plan was looked upon with great favor. The Birmingham Age-Herald called Henry Ford, a "savior of Muscle Shoals." A district of Muscle Shoals was named Ford City, and Detroit Street names were given to its streets, some of which remain today.

But Ford's plan faced major opposition in Congress, and this opposition was led by the senator from Nebraska, George Norris. Norris proposed that the government should tame the river, by completing the dams, and the nitrate production should be sold to the farmers at cost, and the excess hydroelectricity be sold in the marketplace. His proposed plan could be used as a model for governments all over the world to control river flooding, provide cheap electricity, and eliminate food shortages and poverty. His plan was vetoed by President Coolidge, and later by President Hoover.

In the 1920s, various forms of Ford's plan were introduced to Congress, with varying degrees of support, but each time were thwarted, largely due to the legislative skills of Sen. Norris. The Norris plan and the Ford plan offset each other for more than a decade -- until the election of Franklin Roosevelt, in 1932.

Sen Norris started out as a Republican, but as that party turned more conservative he switched to a Progressive Independent. During the campaign of 1932, Norris felt that Franklin Roosevelt was a man he could work with. His support was considered so important that Roosevelt made an important campaign stop in McCook.

Upon election, Roosevelt quickly seized upon Norris' TVA plan for the Tennessee Valley as the cornerstone of his New Deal Initiative, as "a corporation clothed with the power of government but possessed with the flexibility and initiative of a private enterprise, to help an impoverished region" (and ultimately the entire country).

On May 18, 1933, the Tennessee Valley Authority officially came into existence. At the ceremony, Roosevelt commented to Norris, "This should be a happy day for you, George." Norris answered, "It is, Mr. President. I see my dreams come true."

There is no doubt that the TVA did bring great cultural and economic benefit to the Tennessee Valley, a region covering parts of seven states -- as large as England. Before TVA only 3 percent of the Valley farmers had electricity. The river frequently flooded, causing widespread erosion of farm lands. Trees had been indiscriminately cut, denuding the landscape. Poor farming practices had worn out the land and cotton yields were dismal. Probably most of all, farmers had lost hope of a brighter future. The TVA reversed all this, bringing diversification, with new industries and profitable farming.

But these benefits were bought at great cost. Gradually, the TVA's direction turned more from fertilizer, conservation, and flood control, to the distribution of electricity, and Congress began to notice that the TVA was a very expensive agency to support. In the '50s President Eisenhower referred to the TVA as an example of Creeping Socialism, saying, "I'd like to sell the whole business." Muscle Shoals (a Democratic area) had been designated as permanent headquarters, but during the Eisenhower era many headquarter functions were moved to Knoxville, a Republican stronghold.

In 1959, the TVA was changed, to a semi-private corporation, which had to exist on its own, from revenues derived from selling power. At the same time it was restricted to selling power only to those agencies to which it had sold in 1957. The TVA is a $9 billion/year company, which has no stock, but it can issue bonds. Since 1998, it has received no federal funds, but pays money to the federal government in lieu of taxes and oversees water and land resources along the Tennessee River.

In the 1970s, the TVA led the way in the construction of nuclear power plants, building too many plants too fast, which proved to be unbelievably expensive. Though the TVA now must pay its own way, it carries a debt of some 20 billion dollars!

Today, the TVA provides some of the country's cheapest electricity to some 8.8 million customers along the Tennessee Valley through 29 hydro-electric dams, 11 coal fired plants, and six nuclear plants. It also manages a 650 mile navigable route of the Tennessee River for boats and barges. Most of the power is derived from coal-fired plants, only 1 percent from renewable power sources, and the hope that eventually 50 percent of the power will come from nuclear plants.

Thomas Kilgore spoke out on the occasion of the TVA's 75th Anniversary. "There are things that I think are constant in the TVA -- and that is the mission, if you will, a mission that will last another 75 years."

Source: Florence Times-Daily


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The protagonists better can be framed, I think, as "FDR vs. Ford" rather than Sen. Norris vs. Ford. FDR's New Deal legacy, the first great move to socialism in this country, lingers on though most of his schemes were killed as being unconstitutional. TVA is among a handful of New Deal agencies that remain.

And FDR tried to get around recalcitrant Supreme Court justices by "packing" the court. That didn't work but enough justices eventually came around to his position. Interestingly, the court never has ruled directly on the constitutionality of the Tennessee Valley Authority Act (It is difficult to see the similarities of the original Act and the TVA of today). I suspect that in the near future, the constitutional issue finally will be raised and a determination, in effect, will be made on the direction of socialism in America.

Because, stripped of all its goodness's and lightness's, the TVA is purely and simply a federal program in direct competition with other free-enterprise suppliers of electricity that are in abundance in the surrounding area.

So, that gives two reasons so far why TVA should be liquidated. And Congress either, fully has come to grips with this anomaly of the U.S. Constitution and it mostly ignores the TVA since there are no appropriations involved.

That $20 billion debt you mentioned? It's closer to $25 billion and with the present direction of the TVA, that debt will bump up closer to the $30 billion limit Congress set on TVA borrowing or bond obligations.

TVA crows it is "self-financing" which it is, but they never mention their "backdoor" financing of excessive borrowing. Eventually, "somethin's gotta give" as the song goes. Someone has to cancel TVA's credit card.

That's three reasons so far, so stay with me for a fourth and perhaps the most important. The Government Accountability Office (GAO) on May 21, 2008, released a scathing report on TVA's weaknesses and vulnerabilities in its computer security systems.

That report was so disturbing that I have called for the resignations of Tom Kilgore and the remaining TVA board members immediately to resign and to turn over TVA operations to the Department of Energy; at least temporarily, until DOE can develop procedures for the liquidation of TVA's assets.

It is unknown how much the sale of those assets will reduce TVA's outstanding indebtedness but it should go a long way. The government does not guarantee TVA's bonds.

I do write a lot about the TVA and for more reading please see http://norsworthyopinion.com and http://norsworthyattheshoals.blogspot.co...

Ernest Norsworthy

emnorsworthy@earthlink.net

-- Posted by ErnestNorsworthy on Mon, Jun 9, 2008, at 7:35 PM


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