On the occasion of the anniversary of the TVA

By Nancy Spannaus

May 18, 2019—As we celebrate the 86th birthday of the Tennessee Valley Authority (TVA), while in the midst of devastating floods in the Midwest, it is time to turn our minds to building a TVA on the Missouri.  For the sake of the people of those states and our national food supply, we have no choice.

Time for a TVA on the Missouri
FDR signs the legislation creating the Tennessee Valley Authority May 18, 1933 (TVA)

The Tennessee Valley basin was the scene of frequent destruction from the uncontrolled Tennessee River, when President Franklin Roosevelt signed the TVA Act into law on May 18, 1933. An impoverished rural population in the seven-state watershed was subject to rampaging floods, deadly mosquito-borne diseases, and depressing poverty. While the Federal government had begun to develop a fertilizer and munitions industry in the area, at Muscle Shoals, the project had languished, along with the population.

Over the succeeding decade, and more, the TVA turned this situation around, bringing electricity, industry, productive agriculture, and a rising living standard to the region. It became a model for the world.

The current crisis in the Missouri River basin is of more gigantic proportions than faced in the TVA region. As you can see from the map published below, this basin encompasses a full one-sixth of the land area of the country, including the farm states of Nebraska, Kansas, Missouri, and Iowa. The basin is home to well more than 50% of the nation’s corn and soybean production, and more than a quarter of its cattle, hogs, and eggs. This productive capacity, and the people who produce it, are now being wiped out by the floods. This monumental destruction calls for a new TVA on the Missouri–a Missouri Valley Authority, if you will–to bring new prosperity to the region, and the nation.

Wasted Opportunities

I am by no means the first to raise the possibility of applying the TVA model to the Missouri River basin.  Proposals to set up a Missouri Valley Authority (MVA) were raised in 1943-44 in the wake of devastating flooding in the region, and again in 1949. One of the leading spokesmen was Senator James E. Murray of Montana, a Democratic New Dealer.

A political fracas ensued, apparently over funding issues, and Murray’s MVA was shelved in favor of the Pick-Sloan Plan, which became law under the authority of the Omnibus Flood Control Act of 1944. That plan, developed by engineers from the Army Corps of Engineers and the Bureau of Reclamation, called for a massive project, involving the construction of 147 dams, 38 power plants, dredging of rivers, extensive irrigation infrastructure, and 1500 miles of levees along the Missouri (the area from Sioux City, Iowa, to St. Louis, Missouri, where the Missouri flows into the Mississippi River).

The Oahe Dam, near Pierre, South Dakota

The plan was authorized, but Congress never funded it!  Yes, six major dams were built, which have served the function of providing electricity and water control. One was the Oahe Dam in South Dakota, which was dedicated by President John F. Kennedy on August 17, 1962. President Kennedy paid tribute to both the engineers who created the dam, but also the political leaders who had the vision to develop the plan.  He said (in part):

… When we are inclined to take these wonders for granted, let us remember that only a generation or two ago all the great rivers of America, the Missouri, the Columbia, the Mississippi, the Tennessee, ran to the sea unharnessed and unchecked. Their power potential was wasted. Their economic benefits were sparse. And their flooding caused an appalling destruction of life and of property. Then the vision of Theodore Roosevelt was fulfilled by Franklin Roosevelt, and to demonstrate how important this is as a national issue, two distinguished American Presidents from New York State saw how essential it was to the Nation and New York State to develop the resources of the West.

And as a result, this Nation began to develop its rivers systematically, to conserve its soil and its water, and to channel the destructive force of these great rivers into light and peace. And today, as a result of this, the face of this Nation has been changed. Forests are growing where there was once dirt and waste. Now there is prosperity where our poorest citizens once lived. If there is one outstanding story among all this which indicates the kind of progress we can make working together, it’s the story of the REA [Rural Electrification Administration], and of Sam Rayburn of Texas, and Franklin Roosevelt of New York, and George Norris of Nebraska.

Less than 30 years ago, in the lifetime of most of us here, as you know, fewer than 10 percent of all our rural homes in this country had electric power. Whenever I read about the statistics of desolation, in the underdeveloped world, Latin America, and all the rest, we should realize that less than 30 years ago only 10 percent of our rural homes had electricity. That’s how quickly the face of a nation can be changed by determination and by cooperative action by all the people.

Then, a farmer had no opportunity to participate in the mainstream of American life, to use labor-saving machinery, nor did his wife; nor did they have light, or a telephone, or a radio. Today, more than 95 percent of rural homes have electric power. The lives of these farmers and their families and their children have been enriched by living in the closest communion with the rest of our country….

In the wake of Kennedy’s assassination, and that of Martin Luther King and Bobby Kennedy, of course, the political outlook in favor of such investment in progress began a process of slow, deadly attrition, from which we are still suffering today. The rest of the Pick-Sloan plan of water control was never carried out, and the results have been unnecessary wanton destruction.

The MVA Revisited

In 1949, Senator Murray made a new attempt to establish a TVA-style authority to coordinate and drive through the development of the Missouri River basin. The transcript of a Senate debate on Murray’s bill to establish a Missouri Valley Authority shows that Murray, with allied Senators Guy Gillette of Iowa and Hubert Humphrey of Minnesota, envisioned following precisely the TVA model: a government-funded authority which would carry out comprehensive development plans, and gradually pay back the Federal Treasury with revenues from electricity generation.

Time for a TVA on the Missouri
The Missouri River Basin

Sen. Gillette, in particular, emphasized the way in which the TVA’s government-funded investment had paid back the nation to its extraordinary advantage. A small excerpt will give the flavor:

We have invested about $800,000,000 in the Tennessee Valley development. The returns from electric power are liquidating the costs at Government interest rates, or the cost of money to the Government. Books are not kept in accord with those of a private utility, because it is not a private utility and it has no parent company management fees, no preferred-stock and no common-stock dividends to pay. It merely pays to the Government whatever it has in margins at the end of the year.

Accountants have had quite an argument about whether or not the TVA is paying out. The argument revolves around the TVA bookkeeping practices versus those of a private utility. That argument seems to me wholly beside the point. The TVA has already paid for itself more than once.

When the Congress of the United States established the Tennessee Valley Authority, the seven affected States were paying 3.4 percent of the total income taxes collected by the United States Treasury. In 1947, the same area was paying 6.3 percent of the total income tax payments made in the United States. Today, after 15 years of TVA, with improved agriculture, 2,100 new factories and other growth, the valley is paying almost twice as much of income tax, percentagewise, as it did before TVA. On a cumulative basis. the increase in income-tax collections from 1933 to 1947 has been more than $2,000,000,000–about two and one-fourth times as much as this Nation has invested totally in the Tennessee Valley Authority.

I want to be clearly understood. That is not the total gain in income-tax collections. The gain has been much more than that. The $2,000,000,000 represents the gain resulting from the proportionate increase in payments by that area–the excess over 3.4 percent of the national total. At the present time, TVA is paying for itself at least every 2 years on this basis.

The 1949 effort to form an MVA failed. Clearly the nation lacked sufficient national leadership required to push through such a grand project at that point.

The Prospects Today

It will take a gargantuan effort today to implement a coordinated, Missouri River Basin-wide plan to restore this region to economic health. Indeed, an MVA would encompass an order of magnitude larger territory than the TVA; the Missouri basin comprises 500,000 square miles, and includes at least parts of ten states. This compares to the Tennessee Valley basin, with an acreage of about 40,000 square miles. While the Missouri Basin area has—unlike the Tennessee watershed in the 1930s—been the center of highly developed agriculture, is largely electrified, and has some significant basic infrastructure, the problem of both controlling the River in flood, and providing needed water resources in periods of drought, is daunting.

Time for a TVA on the Missouri
Some of the devastation from the Midwest flooding

In addition, this disaster comes on top of a crisis in the farm sector, whereby more than half of all farm households in the nation made negative income last year. (They survived by working in jobs off the farm.) Prices for commodities have been significantly below the cost of production, the cost of farm equipment is rising, and there is increasing concentration of production in huge corporate farms. This has resulted in both a loss of highly productive family farms and an alarming increase in farmer suicides (according to the CDC, the highest in the nation).

Now, in the face of the flood conditions, Midwest farmers face the wipe-out of means of transportation (roads, railroads), contaminated water supplies, and ruined storage grains.  Spring planting has been held up significantly while the extraordinary rains continue.

This situation must be reversed, by emergency action.

Work needs to begin immediately on dredging and levees, as well as transport infrastructure repair.  Which begs the question: where will the funds come from?

Senator Murray’s argument for a central Authority, a Missouri Basin Authority, would appear to be sound. Changes in the river flow in any area will affect other parts in the more than 2000-mile river, and coordinated planning of all aspects of the repairs and improvements required is essential. The Army Corps of Engineers, the Bureau of Reclamation, state governments and authorities, should all be involved in developing the plan. Such an overarching authority could be funded by government bonds directly, as was the TVA, or it could be funded through the implementation of a Hamiltonian infrastructure bank, such as the one featured on this blog.

There is nothing “natural” about the current disaster in the Midwest farm states. The technologies for controlling the river, and the credit for funding the necessary infrastructure rebuilding, are all at hand, as they were when FDR launched the TVA 86 years ago. They only require the mindset of a Hamilton or an FDR: invest in the general welfare, and the nation will thrive.


Tags: , , , , , , , ,