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No. 37 "The TVA Amendments: An Analysis of a Proposal to Increase the Power of an Agency Which Has Shown an Apparent Willingness to Evade the Law and Constitutional Limitations," May 27, 1935. American Liberty League. 400dpi TIFF G4 page images Digital Library Services, University of Kentucky Libraries Lexington, Kentucky Am_Lib_Leag_37 These pages may freely searched and displayed. Permission must be received for subsequent distribution in print or electronically. No. 37 "The TVA Amendments: An Analysis of a Proposal to Increase the Power of an Agency Which Has Shown an Apparent Willingness to Evade the Law and Constitutional Limitations," May 27, 1935. American Liberty League. American Liberty League. Washington, D.C. 1935. This electronic text file was created by Optical Character Recognition (OCR). No corrections have been made to the OCR-ed text and no editing has been done to the content of the original document. Encoding has been done through an automated process using the recommendations for Level 1 of the TEI in Libraries Guidelines. Digital page images are linked to the text file. Constitutional Principles The entire program of the TVA represents an effort to undermine constitutional provisions. The record of the TVA to date bears this out. The sponsors for the scheme are interested primarily in building up a Socialistic State. The attempt to circumvent court decisions through the enactment of the pending legislation is indicative of a disregard for the principles upon which our Government was founded. The bill, S. 2357, proposes by adroit means to keep within the letter while violating the spirit of the Constitution. Already the TVA has arrogated to itself powers in excess of those granted either by the law or by the Constitution. The pending bill seeks to legalize some of these unlawful acts and to bestow even greater powers upon a bureaucratic menace. It has no warrant in law, no justification in practice. â˜… â˜… THE TVA AMENDMENTS â˜… â˜… â˜… An Analysis of a Proposal to Increase the Power of an Agency Which Has Shown an Apparent Willingness to Evade the Law and Constitutional Limitations AMERICAN LIBERTY LEAGUE Rational Headquarters NATIONAL PRESS BUILDING WASHINGTON, D. C. Document No. 37 May, 1935 The TVA Amendments â˜… Pending legislation amending the Tennessee Valley Authority Act of 1933 reflects a determination to brush aside constitutional provisions which stand in the way of a vast experiment in State Socialism. The bill, S. 2357, passed by the Senate on May 14, 1935, should be rejected by the House of Representatives. Objectionable features include the following: 1. It seeks to circumvent lower court decisions on constitutional issues which should be decided by the Supreme Court. 2. It gives greater power to an agency which has shown an apparent willingness to evade the law and constitutional limitations in its zeal to promote a social experiment. 3. It facilitates a merciless competition by the Government with private industry. 4. It gives further support to a faulty "yardstick" for measuring private utility rates. 5. It sanctions an overexpansion of power capacity in an area which was amply supplied before the creation of the TVA. 6. It increases the Government's financial obligations for a project that was supposed to be self-sustaining. 7. It helps build up a bureaucracy which will attempt to order the lives and business activities of the people of a large area. 8. It gives a more secure status to an experiment which may be a precedent for the establishment of similar authorities in other river valleys at the expense of the taxpayers of the entire country. History of Bill The Senate passed the bill on the recommendation of its Committee on Agriculture which held no hearings and submitted a 13-line report. All the information officially made available to the Senate by the Committee is contained in the following paragraph: "We recommend the passage of the bill S. 2357. The bill amends the Tennessee Valley Authority Act of 1933. None of the amendments are of very great importance, but all are desirable in carrying out the intent and purposes of the Act. It has been found in practical operation that these amendments are necessary in order to clear up any doubt as to 2 the operation of the law and to clarify and make plain some of the provisions of the Act. It is believed that this bill will accomplish that result." The Senate Committee thus disposed of a bill which actually is of very great importance. Those in charge of the measure refused to delay action long enough to obtain a transcript of hearings held before the House Committee on Military Affairs. These hearings took place on March 28, 29 and 30 and April 2, 3, 9 and 10. Although nearly five weeks had elapsed between conclusion of the House hearings and passage of the bill by the Senate, the usual printed transcript was not available. Senators urging speedy passage of the bill evinced no interest when informed that the House Committee hearings contained information relative to a severely critical audit by the Comptroller General and much additional data tending to establish the objectionable character of the bill. Terms of Bill The bill, described by the Senate Committee as unimportant, consists of 13 printed pages. The vital provisions are designed to allow the TVA to go forward in a program interrupted or complicated by adverse decisions in the lower Federal courts. The bill broadens the authority of the TVA with respect to the sale of power and the acquisition of existing facilities. It provides that the. operation of dams and reservoirs shall be primarily for the purposes of promoting navigation and controlling floods but that power may be marketed in order to avoid its waste and to assist in liquidating the cost and in the maintenance of the TVA. More complete control is conferred over conditions surrounding the resale of power. Authority is given to acquire existing distribution facilities, generating plants and other incidental works, together with interconnecting transmission lines or any interest in them, and to dispose of them to states, counties, municipalities and non-profit organizations. To finance these purchases bonds up to $100,000,000 may be issued. The bond provision is a substitute for a section of the present law which authorizes $50,000,000 of bonds for the construction of dams, steam plants or other facilities to be used for the generation or transmission of electric power. Besides doubling the amount of the authorized bond issue and mak-3 ing it possible to use the funds to purchase existing facilities, the substitute provision contains an unconditional guaranty by the United States as to both principal and interest. The present law contains no provision for such a guaranty. As part of the effort to establish a legal basis for the power program, the bill amends the section of the present law giving authority to construct dams and reservoirs by providing that the purpose shall be to maintain a 9-foot channel in the Tennessee River from Knoxville to its mouth and to promote navigation and control of destructive flood waters. The Wilson, Norris, Wheeler and Pickwick Landing Dams are specifically mentioned. One very broad section instructs the TVA to construe liberally the purposes of the Congress in making provision for the national defense, improvement of navigation, control of destructive floods and promotion of interstate commerce and the general welfare. An amendment added on the floor of the Senate gives power to the TVA to advise and cooperate in the readjustment of the population displaced as a result of the construction of dams and the acquisition of reservoir areas. Another amendment similarly adopted extends the jurisdiction of the TVA over the Cumberland River basin, which embraces an area of 17,860 square miles. Court Rulings The pending bill is intended primarily to circumvent decisions by United States District Judge W. I. Grubb. He issued permanent injunctions restraining the consummation of the contract under which the TVA proposed to acquire electric distributing properties from the Alabama Power Company, restraining various Alabama municipalities from buying power from the TVA and from negotiating loans from any Government agency to finance construction of electric plants as outlets for TVA power, and restraining the Alabama Power Company from acting as an agency of the Electric Home and Farm Authority, Inc. Judge Grubb held that while the Government might distribute and sell electricity which was no more than an incidental surplus arising from and attached to the exercise of some clearly defined constitutional power, it could not under the Constitution go into the power business as a primary concern. From the facts before him he held that the electric power proposed to be sold by the TVA was not a surplus and that the operations were not attached to any constitutional power. In an opinion rendered on November 28, 1934, in denying a Government motion to dismiss, Judge Grubb said: "The United States is a Government of enumerated powers, conferred in express terms or by necessary implication on it by the Constitution. No power is conferred on it to engage in any private business, unless incidental to some power specifically granted. The power to produce, distribute, and sell electric power or any other commodity, generally, is not in terms granted, and must be connected with a granted power, in order to exist. "In this case, it is sought to be connected with the power to improve navigable rivers, the power to provide for the national defense or the power to make needful regulations concerning Government-owned property. The Government has the right to create electric power to aid its operations, under any one or all of these granted powers. It also has the implied right to dispose of any surplus power not used for the named purposes, to prevent waste. It has no power to produce and sell electric power, except as incidental to a granted power, as in case of the disposition of such a surplus. This is especially true within the limits of a State of the United States." In the same opinion Judge Grubb said: "A plan for the development of the Tennessee River Valley, as a social experiment, is in no sense related to the improvement of navigation of the Tennessee River or to the national defense or to the regulation of Government-owned lands, and the production and sale of electrical power in aid of such development and experiment would not be incidental or related to the exercise of any of the constitutional powers named. ****** "The official declarations of the directors can be read only with this result. They show that the project is not limited to the improvement of river navigation, to the national defense, or to the proprietary interest of the Government in its own lands, but is infinitely wider in scope, being intended to create an ideal community, as a social experiment, and to give it aid by supplying cheap electric power, produced by it for that purpose." In his final decision on February 22, 1935, Judge Grubb said that he did not find it necessary to pass on the question as to whether or not the act creating the TVA was unconstitutional. He implied a doubt on this point, stating that he had not looked into the question of the delegation of powers beyond what is legislatively proper or constitutional. He reiterated 5 that the evidence showed that the power intended to be disposed of was not a surplus and was not attributable to any constitutional authority. Constitutionality The constitutionality of the Tennessee Valley Authority Act has been questioned in an opinion given to the Edison Electric Institute by James M. Beck and Newton D. Baker, two eminent legal authorities. The high points of the joint opinion of the Messrs. Beck and Baker are summarized by them as follows: "Analysis of the Tennessee Valley Authority Act is believed to establish that its provisions do not, in whole or in part, constitute a regulation of interstate commerce or a provision for national defense, but merely present a project for the Federal Government to embark in the power business; and it seems incontrovertible that if its provisions can in part be deemed to have some relation to the exercise of those powers, such relationship at most extends only to an insignificant and not controlling fraction of the provisions and purposes of the Act. "The Tennessee Valley Authority Act can not be sustained as an exercise of the power to regulate interstate commerce. The Tennessee Valley Authority Act can not be sustained as an exercise of any of the powers to provide for the national defense. The Tennessee Valley Authority Act attempts to usurp power reserved to the states and the people and expressly prohibited to the Federal Government by the Tenth Amendment. Even if the Tennessee Valley Authority Act were otherwise constitutional, it is debatable whether it does not involve an unconstitutional delegation of legislative power by the Congress. Assuming that TVA were constitutionally authorized to carry on the power business, it would be acting in a proprietary capacity; and the attempt to withdraw all electrical utility property owned and used by TVA from state or local taxation would be invalid." Messrs. Beck and Baker point out that the program, acts and policies of the TVA are not within the terms of the law in that the law does not authorize the acquisition and operation of electrical distribution plants, it does authorize the regulation of local utility rates only to the extent of preventing discrimination, and it does not authorize the activities of the Electric Home and Farm Authority, Inc. The EHFA The Electric Home and Farm Authority, a Delaware Corporation created for the purpose of financing retail sales of approved electrical appliances in the Tennessee Valley area, fur- nishes a striking example of what is being done by executive order. This agency is a subsidiary of the Tennessee Valley Authority, its directors being the three members of the Board of the TVA. However, the EHFA does not owe its existence to any provision of the Tennessee Valley Authority Act. Instead, its powers rest upon an executive order issued under authority of the National Industrial Recovery Act. The certificate of incorporation of the EHFA in Delaware states that it "is formed pursuant to and in accordance with an executive order of the President of the United States, dated December 19, 1933, Number 6514." Executive Order Number 6514 quotes from the section of the National Industrial Recovery Act in which it is declared to be the policy of the Congress "to provide for the general welfare by promoting the organization of industry for the purpose of cooperative action among trade groups, . . . to promote the fullest possible utilization of the present productive capacity of industries, to avoid undue restriction of production . . . , to increase the consumption of industrial and agricultural products by increasing purchasing power, to reduce and relieve unemployment, to improve standards of labor, and otherwise to rehabilitate industry." The Order recites that as a means of effectuating such policy, the Congress has authorized the President to establish such agencies as he may find necessary. The Executive Order then continues: "Whereas, in order, effectively and efficiently, to carry out said policy of the National Industrial Recovery Act, it is expedient and essential that a corporation be organized having the powers and functions of a mortgage-loan company and such other powers and functions as may be necessary to accomplish the purposes of said act; "Now, therefore, under and by virtue of the authority vested in me by the National Industrial Recovery Act of June 16, 1933, it is hereby ordered that an agency, to wit, a corporation, under the laws of the State of Delaware, be created, said corporation to be named the Electric Home and Farm Authority, Inc." The President allotted $1,000,000 from the Public Works fund for the capital stock of the Corporation. Further funds were provided by a loan of $10,000,000 from the Reconstruction Finance Corporation. With absolutely no authority in law other than the general terms of the National Industrial Recovery Act, the Electric Home and Farm Authority, Inc., becomes a subsidiary of the TVA, which is created through specific congressional act containing no authority for such subsidiary. Moreover, it is permitted under its charter to do an amazing number of things. It may finance the purchase of electrical appliances and equipment by advancing money, extending credit or guaranteeing the obligations of individuals, firms and corporations. It may manufacture, buy and sell electrical appliances and equipment and goods, wares and merchandise of every class and description necessary or useful for its operations. It may buy, discount and sell notes, warehouse receipts, bills of lading, mortgages, conditional sales contracts and other similar evidences of debt. It may borrow money and issue notes, bonds and debentures secured by mortgage, pledge or otherwise, without limit as to amount. It may improve, manage, sell, lease, mortgage, or otherwise dispose of any part of the property of the Corporation. It may apply for, acquire and use licenses or territorial rights in respect to copyrights, trade marks, trade names, brands and labels, and inventions. It may own, sell or lease real estate. It may deal in stocks and bonds or other obligations of any person, firm, association, trust or corporation. As if this were not enough, the charter says that the Corporation may "do all and everything necessary, suitable and proper for the accomplishment of any of the purposes or the attainment of any of the objects or the furtherance of any of the powers herein set forth." The charter states that the Corporation is to exist for seven years from the date of incorporation notwithstanding the fact that the National Industrial Recovery Act was enacted for a two-year period. The TVAC Another of the extra-legal activities of the TVA is the Tennessee Valley Associated Cooperatives, Inc. This agency was incorporated on January 23, 1934, under the laws of Tennessee. Its board of directors is the same as that of the TVA. It engages in activities for which there is no specific sanction in the Tennessee Valley Authority Act or in any other law. Some facts concerning it are given in question and answer form in the primer of information issued for the general public by the National Emergency Council as follows: Q. What is the Tennessee Valley Associated Cooperatives? A. A corporation formed to aid cooperatives in the Tennessee Valley Authority area. Q. What are its objects? A. To promote, organize, establish, manage, finance, coordinate and assist in any way whatsoever in the development of such cooperative enterprises. Q. What is its life? A. It was organized for perpetual existence. Q. Has it any funds? A. A fund of $300,000 was allocated to it by the Federal Emergency Relief Administration. Q. What activities are under way? A. Nine cooperatives have been launched, and four projected. These embrace fruit, berry and vegetable canning; seed potato cultivation, flour grinding, dairying, and handicraft textiles. The annual report of the TVA for the fiscal year 1934 sheds additional light on the activities of the TVAC. It is stated that the $300,000 was furnished by the Federal Emergency Relief Administration with the understanding that it would be used in aiding cooperatives to relieve or prevent distress and that activities up to the end of the fiscal year 1934 were designed primarily to improve the winter diet of as many persons in need of relief as possible. The financing of cooperatives was linked legally to relief through a purpose to promote the use of more green vegetables and dairy products. The prevalence of tuberculosis and pellagra, it was stated, had shown the necessity for a more correct diet. Comptroller General's Audit The present law requires the Comptroller General of the United States to audit the transactions of the TVA at least once each fiscal year. The friends of the TVA defeated efforts by Senator Barbour of New Jersey and others to attach an amendment to the pending bill which would have given the Comptroller General the same supervision over all expenditures which he has over those of ordinary Government departments and boards. The Comptroller General's report discloses an astonishing list of irregularities and disregard for law in the financial operations of the TVA. An excerpt from this report, as quoted to the Senate by Senator Austin of Vermont, follows: "The nature of exceptions established consists of purchases without competition, in violation of Section 3709 of the Revised Statutes; emergency purchases unsupported by showing of emergency; modifications of specifications; awards on basis of personal preference; dual compensation; excessive allowances and reimbursement of traveling expenses to prospective employees; payment of per diem at designated posts of duty; allowance of overtime to annual employees; allowance of charge for personally-owned motor vehicles without prior authorization; overpayment on pay rolls; payment of pay rolls without administrative approval; subscription to newspapers and periodicals in excess of statutory limitations; payment for rented office equipment lost or stolen; payment for power plants, transmission lines, and real estate acquired without having clear title thereto; rent for land occupied by Civilian Conservation Corps camps paid at rates higher than for land purchased outright; lump-sum payments under cost-plus contracts and fees without original invoices and in excess of reported progress of work; claims paid for loss and damage to property; apparent overpayments on electric equipment under annual agreements; cost of reconditioning plant agreed by contract to be for payment account of losses; rent for buildings without evidence showing that payments are not in excess of 15 per cent of fair market value; pre-audited certified vouchers increased and payments made to vendors in excess of amounts shown on the invoices; allowances in expense accounts for bridge toll tickets before such books have been used; loans to cooperative associations without security; hire of special conveyances, such as busses and airplanes, for visitors and students; and non-compliance with contractual provisions for insurance protection covering personal injury." Dr. Arthur E. Morgan, Chairman of the TVA, offered a peculiar defense of some of the irregular transactions in testimony before the House Committee on Military Affairs on May 20. He said that many of the points never would have been raised if the Comptroller General had designated an "able" field representative to look over the TVA operations at the Authority's expense. He showed an impatience because the audit was based on legal requirements rather than upon a comprehensive understanding of the objectives of the TVA. Competition with Private Utilities The ruthless competition of the TVA with the private utility industry has severely injured investors in securities. An example of the methods used is furnished by the proposed purchase of the electric light and power property of the Tennessee Public Service Company at Knoxville. The officers of this company did not wish to sell but felt obliged to agree to do so by reason of competition threatened by a municipal enterprise which proposed to get its power from the TVA and an outright grant of $600,000 and a loan of $2,000,000 from the Government to finance the construction of its plant. The sale did not take place as it was blocked in the courts by stockholders. Originally the TVA, which used indefensible methods in promoting sentiment favorable to public ownership and adverse to the company, offered for the properties a sum equal to only about one-fifth of the outstanding securities. Even the final offer fell far short of an amount sufficient to cover actual cash investment. Similar methods used by the TVA have been disclosed in a number of other cases in the courts of Tennessee and Alabama. The TVA Yardstick The program of the TVA has been given a popular appeal by reason of the intention to provide a yardstick by which the reasonableness of rates for electricity throughout the United States may be judged. Actually the yardstick is a faulty one. It falls short of a full 36 inches. While the directors of the TVA profess to have established rates which do not compete unfairly with private industry, their claims do not bear analysis. Arbitrary basic calculations have been made by the TVA in determining the investment for rate-making purposes. Because of this, the assertion by the TVA that account has been taken of factors which affect private industry means nothing. The Comptroller General's report shows that the properties transferred to the TVA at the time of its establishment represented a net cost of $132,792,294.03, without any addition for interest on investment over a period 'of more than a dozen years. This amount was scaled down on the books of the TVA to $51,000,000, or 38 per cent of the property cost. Even this total does not figure in the determination of rates, parts of it being eliminated by reason of allocation to other activities and to navigation, flood control and national defense. In fixing rates the TVA has estimated the present value of the Wilson Dam and steam plant for power purposes to be only about $20,-000,000, although the actual investment for power purposes is shown by its own figures to have been about $30,000,000 and the actual investment for all purposes about $60,000,000. The Comptroller General's report describes as "entirely inadequate" the depreciation reserves set up in pursuance of the announced purpose to keep the books of the TVA on a basis comparable to those of private industry. On this point the report says: "Despite the apparently excessive depreciated value at which the Muscle Shoals property was taken over on the books, the Authority is not using the valuation basis for depreciation but instead is basing depreciation on the earnings from the sale of power by charging 10 per cent of the gross revenue to operations as depreciation and accumulating the amount of such charges as a reserve for depreciation. "Such reserve appears to be entirely inadequate. The-properties in question are depreciating in value and if the return from operations is to be properly determined, the reasonable value of all things concerned including depreciation of original investment must be taken into consideration. "Assuming a very conservative rate of valuation consumption for example, two per cent, the amount of depreciation, based upon the value at which the properties in question were capitalized by the Authority, would be approximately $1,000,000 per annum. "A larger revenue will proportionately increase the reserve for depreciation at the present 10 per cent method of amortization, but to accumulate a reserve on the 10 per cent plan equivalent to the amount that would be charged to depreciation on a valuation basis at 2 per cent, the gross revenues would have to be more than ten times the present amount or about $10,000,000 per annum. "There is very little basis for assuming that, revenues will ever reach such a figure." The operations of the TVA thus far offer no proof that the rates for power as fixed furnish a proper yardstick for comparison with those of private industry. In fact, there is reason to believe that if private industry were subsidized in the way that the TVA is, with lower interest charges, a preferred status as to taxation and a host of minor perquisites such as the franking of mail, special freight rates, and the privilege of drawing upon other Government agencies for assistance, rates lower than those now offered as a yardstick would be established. Given similar conditions, private industry invariably will perform business functions more efficiently and more cheaply than a governmental bureaucracy. â– Further, it must be considered that when a private company is forced out of business by 12 governmental competition, the taxes on the property are lost, and thus the income of municipal, state and Federal governments is reduced. This reduction must be made good by the very people who are supposed to have benefited through lower utility rates. Surplus Power Capacity In its determination to develop water power the present administration, both in the Tennessee Valley and in other regions, has been indifferent to existing power capacities sufficient to meet all demands for years to come. In 1933, at the time of the creation of the Tennessee Valley Authority, existing power plants in the Tennessee basin, including that at Muscle Shoals, had an excess capacity over demands of 105 per cent. The Wheeler and Norris Dams of the TVA will raise the excess capacity to 160 per cent, while under its projected five-year construction program involving additional dams, the excess capacity would be raised to over 700 per cent. The overexpansion of facilities, already in progress and to be given a new impetus under the pending legislation, represents a shocking waste of the taxpayers' money. Expenditures of TVA The Tennessee Valley Authority already has spent a sum far in excess of what was contemplated at the time of the enactment of the law. Enormous additional amounts are to be added to the capital investment. The revenues from the sale of power are only an insignificant sum in comparison with the amount that is being expended. The TVA originally had an allotment of $50,-000,000 from the Public Works fund. Subsequently, it was allotted $25,000,000 by the President from emergency funds. The Electric Home and Farm Authority, Inc., has had $11,000,000, while the Tennessee Valley Associated Cooperatives have had $300,000. In view of its ability to obtain allotments from emergency funds the TVA has not used its authority to issue $50,000,-000 in bonds. The pending bill doubles the amount of bonds which may be issued. By the end of five years, if the TVA carries out its program for construction of dams, the Government's investment, including the original 13 Muscle Shoals costs, will be upwards of $500,-000,000. This is not a large enough sum to make much of an impression in this era of frenzied spending, but it is very much more than the cost of the Panama Canal. In view of the manner in which the TVA has proceeded with the construction of dams which were not authorized in the original act and has extended its activities in many other ways, it is appropriate to refer to the report of the House Committee on Military Affairs in 1933 prior to the enactment of the act. "The Authority cannot proceed upon a visionary and impractical program of construction," said the Committee in the report. "In addition to the limitations of law there will be limitations of fact. The $50,000,000 to be derived from the sale of bonds will hardly go further than build Cove Creek Dam and Dam No. 3, and make the necessary alterations to modernize the nitrate plant, to install the necessary fertilizer equipment, and to provide adequate working capital. For every other dollar that the Authority may use for constructing dams it must come to Congress for appropriations. Thus Congress holds the reins upon the Authority." Instead of being compelled to go to the Congress as it should, TVA has been supplied with abundant funds from moneys not appropriated for its use, and if it were not for the restraining influence of the courts, it would continue an attitude of utter disregard for the Congress. The guaranty of principal and interest of the $100,000,000 of bonds, as provided in the pending bill, should not be necessary if the TVA were the self-sustaining enterprise that it has been pictured. As a Socialistic experiment it will prove a steady drain upon the Treasury. It is not strange that the Government is asked in advance to make good defaults of interest or principal as they may occur. Bureaucracy Never have the dreams of bureaucrats flowered so perfectly as in the Tennessee Valley. Bureaucracy thrives on interference in the affairs of individuals and in the conduct of business. In the Tennessee Valley the lives of the people are to be shifted into new paths. Economic planning is to be applied to an entire industrial area. A "Land of Promise" is to be created under the magic of the TVA. 14 Unless the courts intervene the TVA may become more potent than the government of any of the seven states in which it exerts its influence. It will tolerate the Congress which created it only to the extent that it must turn to it for new funds. The latest figures show, that the TVA has nearly 14,000 employees, whose compensation amounts to about $1,300,000 monthly. This new and powerful bureaucracy has been permanently engrafted upon the governmental organization. The TVA is not an emergency agency. While many of the 14,000 employees are engaged in construction activities, their services will be required for an indefinite period. The present construction program has been mapped out on a five-year basis and it is expected that additional dams will be built thereafter. A Precedent It is a significant and an alarming fact that members of the Congress from various other sections have introduced bills for the creation of authorities similar to the TVA. For every river valley of importance, and many of no consequence, it is proposed to set up a Government corporation to promote navigation, control floods, develop water power and accomplish sundry other purposes. Most of these bills propose an initial appropriation of $50,000,000 or more. A sample of the measures is H. R. 4235 for the creation of a Wabash Valley Authority. This bill, which appropriates $60,000,000, is designed, according to its title, "to promote the general welfare of the United States in a comprehensive plan to control destructive floods of the Wabash and White Rivers and their tributaries, to conserve the soil from erosion, build up forest reserves, preserve wild life, increase recreational centers with cabin and cottage sites, utilize submarginal lands, expand subsistence farming, extend water navigation and commerce, produce electrical energy for interstate transmission, provide a healthy and cheaper water supply for household and irrigation purposes, and to relieve unemployment among the people." The sponsors of these bills may not unreasonably argue that if the taxpayers of the entire country are to finance a social experiment in the Tennessee Valley, there is no reason why they should not do so for other equally worthy areas. 15