OT: Origins of the TVA: The Muscle Shoals Controversy, 1920-1932

“Origins of the TVA: The Muscle Shoals Controversy, 1920-1932,” by Preston J. Hubbard, Vanderbilt University Press, Nashville, 1961. This 340-page hard back tells the details of the extended fight for control of what became Tennessee Valley Authority in Congress.

Muscle Shoals is a rapids on the Tennessee River in northern Alabama. The War Department began construction to make nitrates there during World War I. Nitrates are essential for most munitions and a major fertilizer ingredient. Mostly they were imported from Chile with prices controlled by a nitrate trust, the Chilean Nitrate Producers Association. In time of war, blockades or submarine attacks can interrupt supplies making domestic production important to national defense.

Nitrogen is abundant in the air, but conversion to nitrates was difficult until discovery of the cyanamid process in 1898. Lime and coke are heated in an electric furnace to 4000F to make calcium carbide which reacts with air to form cyanamide. Cyanamide can be used as a fertilizer as it releases ammonia with water. Ammonia can be converted to nitric acid for nitrates or to urea as fertilizers.

In 1909, in Germany, Fritz Haber invented a catalytic process to make synthetic ammonia by reaction of hydrogen with nitrogen under pressure. He received a Nobel Prize for the discovery in 1918.

The Muscle Shoals plant was still under construction when the war ended, but they had built a steam plant for electricity and plants for both the Haber process and the cyanamide process. The cyanamide plant was built by American Cyanamide under contract with the War Department signed Dec 10, 1917. They had licensed German technology. The company was founded in 1907, and had headquarters in Nashville anticipating production at Muscle Shoals.

The cyanamide plant was successful; the Haber plant used technology from General Chemical Co (later part of Allied Chemical) but failed. Today ammonia is made with the Haber process using hydrogen from natural gas. Muscle Shoals lacked natural gas, but electrolysis of water (ie green hydrogen) could have been used or hydrogen can be obtained by reaction of steam with coke or iron. Today we have better catalysts and have learned to control catalyst poisons.

Soon after the war, Congress took up discussion of what to do with partially complete Muscle Shoals. Eventually they decided to finish the lock and dam system as Wilson Dam (named after President Wilson, completed 1924). As always when big money is involved the controversy drug on in Congress for years. Progressive Republicans led by Senator George Norris of Nebraska favored ownership and operation by the federal government. The farm community wanted low cost fertilizer but eventually Corp of Engineers determined the real asset was hydropower (with added benefits from barge traffic on the rivers and flood control). The Haber process made the cyanamide process obsolete.

Public power was vigorously opposed by the private power industry who objected to the competition. The commercial fertilizer industry also objected to possible competition. The discussion often included “the power trust” and the “fertilizer trust.” In December, 1924, Alabama Power was found to be controlled by a trust headed by General Electric. The next day GE announced they were dissolving their utility holding company, Electric Bond and Share Co and distributing shares to GE stockholders.

Public power proponents were labeled socialists. At the time, Germany controlled potash production. Production of phosphates for fertilizer use (made in electric furnaces) was added later.

The Niagara Falls power project completed in 1898 showed what was possible with cheap hydropower. Henry Ford, American Cyanamide, and Union Carbide each offered to buy the Muscle Shoals project. They would operate the nitrate plant and sell nitrates at minimum profit levels, but provisions allowed them to control the sale of power. Ford planned plants to make auto parts and aluminum. There were also arguments on how power would be distributed. If sold at the plant, power companies with distribution lines (mostly Alabama Power) would capture profits and control distribution. Nine southern power companies also bid for Muscle Shoals. Eventually it was decided that government should own distribution lines.

Henry Ford had run for Senate in Michigan in 1918 as a Republican and was a possible candidate for President in 1924. At the time, he was the richest man in the country.

Calcium carbide is commonly used to make acetylene (by addition of water) for welding and in carbide lamps. Union Carbide also used it as a raw material for chemicals.

Hearings were held again and again in Congress. Finally they reached an agreement, but President Coolidge used a pocket veto in 1928. Hoover opposed public power and vetoed the bill on March 3, 1931.

On campaign in Portland, OR, on September 21, 1932, Roosevelt outlined his plans for the power industry. The industry should remain private but public power projects like Muscle Shoals should be used as yardsticks to regulate power rates. His “birch rod” policy allowed communities dissatisfied with their service to establish their own power systems. He promised four major developments: Muscle Shoals, Boulder Dam, Columbia River, and St. Lawrence.

Democrats gained in the 1932 election. After 10+ years of negotiations, Franklin Roosevelt signed the bill that created Tennessee Valley Authority in May, 1933.

This book is an excellent example of the sausage making that goes into legislation. Congress held hearings and commissioned study committees repeatedly. The same arguments were made again and again. Powerful forces worked behind the scenes to press their position. That included financing agencies like Farm Bureau or working through industry trusts. Finally decisions were made, but it took a long time. Lots of patience.

The book is very detailed with extensive references especially to Congressional testimony. Index. References.


Muscle Shoals is also a famous recording studio that generated a lot of top hits!

To quote Lynyrd Skynyrd:

Now Muscle Shoals has got the Swampers
And they’ve been known to pick a song or two (yes they do)
Lord they get me off so much
They pick me up when I’m feelin’ blue
Now how about you?

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FDR had hoped to replicate this experiment in other parts of the country based on its success, jobs created, and cheap power produced for a wide geographic area. But because of the political wrangling, entrenched interests, the grief and strife, and eventually the start of World War II it never happened. The Grand Coulee and Bonneville dams were done, of course, but the kind of regional, multi-state cooperative effort on the scale of the TVA was abandoned as just too much trouble.


Re govt dams.

From the previous REA review–

Many hydroelectric dams were authorized by Congress to supply power in rural areas. The first two were the Red River Dam at Denison, TX and the White River Dam at Norfolk, AR. In 1943, Congress authorized eight more hydro projects in Texas, Arkansas, and Oklahoma. Bonneville Power (created 1937) in the Pacific Northwest is mentioned as an REA system, but the book provides no details. In 1950, seven dams were authorized in South Carolina, Kentucky, Tennessee, Virginia, and Florida. An additional 15 were already under construction.

TVA had a whole series of dams in addition to Muscle Shoals. And many more were built to provide power for REA. And that effort continued into the 1950s.

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TVA has a total of 49 dams, 29 of which are power generating. The rest are used for water control, as the rivers used to be wild, sometimes inundating whole towns, other times running dry and encouraging mosquito infestations and the like. It was estimated that the populace in the rural parts of the Tennessee River were up to 30% malaria infected.

TVA grew beyond dams, of course, to include coal fired power plants, natural gas, and even nuclear. Free marketeers and libertarians still complain about it, of course, but given that I have some of the lowest electric rates in the country I’m not going to complain.