A rocky road

It took a Republican senator from Nebraska and the newly elected New Deal president to spearhead the creation of what has become the nation's largest public utility.

Along the way, the Tennessee Valley Authority - at least in some minds - saved a region of the United States that was brutally poor.

The TVA story actually begins in 1916. As the war in Europe grew in intensity, President Woodrow Wilson decided the United States would join the war effort. He ordered the construction of two nitrate plants and a hydroelectric dam to power them in what became one of the largest federal projects at the time. The project, set for the Muscle Shoals area along the Tennessee River, was geared to produce homegrown nitrate, a key ingredient in military explosives.

When World War I ended two years later, however, the armistice left the government with two nitrate plants that had not produced a single ounce of nitrate for the war. One was completely inoperable.

Even after costing taxpayers what would amount to nearly $1 billion in 2008 currency, the government walked away and left the building idle.

What would become of these factories and the proposed Wilson hydroelectric dam became known as "the Muscle Shoals controversy" and consumed more than a decade of hand-wringing among politicians, farmers and power companies.

It wasn't until 1933 that Congress signed TVA into being, an effort driven by Republican Sen. George W. Norris, of Nebraska.

In the course of more than a decade, Norris had fought Henry Ford, electrical companies, presidents and popular opinion to get TVA on the table. In the end, President Franklin D. Roosevelt, a Democrat who masterminded the New Deal, helped the senator usher in the new federal entity that combined waterworks, navigation, hydroelectricity and economic development.

In 1920, the first of several proposals surfaced that provided ideas of what should be done with the failed nitrate factories. One proposal was the Wadsworth-Kahn bill that would allow the government to operate the plants and sell surplus nitrate and electricity in the marketplace.

Proponents of the bill argued there was an increased need for fertilizer in the cotton belt. Opponents argued that the government would thwart free market competition and unfairly subsidize an industry that was just beginning.

The House rejected the proposal in 1921.

The first seed of TVA was suggested that same year by Rep. Finis J. Garrett, of Tennessee, a Democrat who presented a four-fold plan that included nitrates for national defense, fertilizer for agriculture, water power and the development of a navigable waterway. The idea was ignored for more than a decade.

Henry Ford, the man who transformed the automotive industry in Detroit, put in a bid July 8, 1921, to take the project from the government's hands. His initial offer stipulated the completion of Wilson and Joe Wheeler dams, which Ford proposed to rent to the federal government for 100 years. He also proposed to purchase the nitrate plants at the bargain price of $5 million, about 6 percent of the original cost.

The Birmingham Age-Herald reportedly named Ford a "savior" of Muscle Shoals, but critics were concerned that Ford, who had promised a minimum amount of electricity to the government, would monopolize regional hydroelectric power and phase out nitrate production.

On Dec. 2, 1921, Ford drove to Muscle Shoals from Detroit to drum up support for his proposal and told reporters along the way that his primary concern was to provide American farmers with fertilizer, but added he also contemplated using the excess electricity for manufacturing, including auto parts.

By January 1922, Ford sweetened the deal with plans of a 75-mile long metropolis in Muscle Shoals - larger than Detroit - that would become one of the country's industrial centers, employing up to 1 million workers. It was an attractive proposition at a time when unemployment was increasing. Muscle Shoals would make Detroit and New York City resemble small towns, a lavish promise at the time.

In response, by February 1922, a small real estate boom occurred in the Tri-Cities from outside speculators wanting to cash in on the excitement. Today, among the only remnants of the proposed mega-metropolis is Ford City, a modest community of a couple hundred residents, and, in some areas of Muscle Shoals, sidewalks that lead nowhere that were built in anticipation of mass developments that never came to fruition.

Norris, a dominant force on the Agriculture Committee that first looked at Ford's proposal, strongly opposed Ford's privatization plan.

At that time of Ford's visit, Alabama Power Co., a private utility, put in its bid of $5 million to acquire the electrical portion of the project without the nitrate factories. The proposal included the promise of some electricity to the industry.

The Florence Chamber of Commerce contended that since Alabama Power Co. was partly British-owned, the government should reject the offer and accept Ford's proposal to get industries into Muscle Shoals.

With Ford's proposal awaiting a vote, Norris introduced his first "Muscle Shoals bill" on May 11, 1922. It would authorize completion of Wilson dam, production of fertilizer to be sold to farmers at cost and excess hydroelectricity to be sold in the marketplace.

Norris eventually introduced revised and watered-down versions of the bill in 1928 and 1930 for public control of the project, but Presidents Calvin Coolidge and Herbert Hoover vetoed the respective bills.

In March 1923, public opinion supported Ford, who had effectively argued that his ownership would reduce fertilizer costs by half. Ford's mass production lines had a similar effect on automotive prices. Ford supporters also argued that Ford's plant would break the international monopoly over fertilizer production, mainly from Chile. Huge rallies in the South implored Congress to approve Ford's bid.

In December 1923, newly appointed President Coolidge told Congress that the Muscle Shoals property should be sold to private hands.

The next month, January, 1924, power companies entered into the fray and offered to get into the nitrate business themselves. At the time, the Muscle Shoals problem was perceived mainly as one concerning fertilizer production and not of electricity.

Not every Southerner was enthralled with Ford's offer, including industries worried that they wouldn't get access to cheap electricity with Ford's plan.

On March 4, 1924, after two years of discussion, Ford's proposal, called the McKenzie bill, finally reached the floor of Congress and passed the House, a significant victory for Ford. Throughout Muscle Shoals, elated people burned bonfires and rang church bells in support of the promised "Detroit of the South."

Norris stalled the Senate's vote on the bill and allegations arose that Coolidge and Ford had negotiated a swap in 1923: Coolidge would give Ford Muscle Shoals if the automotive giant would promise not to run for president.

Amid growing popular skepticism over the rumored deal, Ford withdrew his offer in October 1924.

Shortly after, Wilson Dam, which began construction in 1917, was completed in 1925.

The Muscle Shoals issue languished over several years before Franklin D. Roosevelt entered the picture.

During a 1929 Federal Trade Commission investigation into how private power companies influenced press coverage of the Muscle Shoals controversy, then New York Gov. Roosevelt called for Muscle Shoals to become a public operation. Roosevelt's 1932 presidential election platform included public power projects such as Muscle Shoals.

After Roosevelt won the presidency, Norris reintroduced the Tennessee Valley Authority Act. It was approved by Congress and quickly signed by Roosevelt.

Later in February of 1933, Roosevelt introduced a plan for the valley's development that included flood control, power development, navigation and economic development, a program he told the media was "the widest experiment ever conducted by a government."

On May 18, the Tennessee Valley Authority officially came into existence.

Before the deal was signed, Norris and Roosevelt visited Wilson Dam in January, 1933, and watched the waters rushing out of its floodgates. They had the following exchange:

"This should be a happy day for you, George," Roosevelt said.

"It is, Mr. President, I see my dreams come true."

Historical background summarized from newspaper archives and the book, "Origins of the TVA: the Muscle Shoals controversy, 1920-1932" by Preston J. Hubbard.