TENNESSEE VALLEY AUTHORITY ACT 48 Stat. 58 (1933)

A debate over the best use for an uncompleted defense plant site at Muscle Shoals—in the heart of a chronically depressed region—emerged after world war i, ending with passage of the Tennessee Valley Authority Act. In 1933, President franklin d. roosevelt urged creation of "a corporation clothed with the power of government but possessed of the flexibility and initiative of a private enterprise" to rehabilitate and develop the resources of the Tennessee River valley.

The resultant act, largely written by Senator george w. norris, encompassed a variety of objectives including national defense; flood control and the improvement of navigation; the development of agriculture, industry, and electric power; and even reforestation. To accomplish these goals, Congress created the Tennessee Valley Authority (TVA), granting it the power to construct dams and power works in the valley and to increase production of badly needed fertilizers. The act also authorized the TVA to sell any energy produced in excess of its needs, giving preference to publicly owned organizations; the TVA further received authority to build power lines to facilitate sales and transmission of power. A series of amendments in 1935 and 1939 sought to liquidate the system's costs by providing for sales of electric power, producing "gross revenues in excess of the costs of production," to acquire major utility properties, and even to issue credit to assist the distribution of its power.

Supporters of the act relied on arguments including the general welfare clause, the commerce power, and the war powers. The Supreme Court sustained a TVA contract for the sale of surplus power in ashwander v. tennessee valley authority (1936), thus effectively sustaining the act's constitutionality.

David Gordon
(1986)