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The T. V. A. and Inter-Governmental Relations

Published online by Cambridge University Press:  02 September 2013

Alexander T. Edelmann
Alexander T. Edelmann
Affiliation:
University of Kentucky
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Extract

The development of the public power program in the Tennessee Valley area has had marked effects on inter-governmental relations, in some cases creating new relationships and in other cases modifying those already existing. Many of these relations concern coöperative activities of the T. V. A. and the state and local governments, and the results of their joint endeavors have done much to expand and improve governmental services. In its relations with the local governments, the Authority has consistently followed the policy of depending on their coöperative efforts to achieve the social and economic development of the Valley without attempting to impose its will on them. “The rôles of the states, and of cities, counties, districts, and voluntary associations within the states, are enhanced, not diminished, in importance, by this recognition of interest and jurisdiction. Coöperation, not destructive competition; Federal responsibility in Federal and interstate matters, with local initiative and self-reliance in matters of a local nature—these are policies by which the development of the Valley is being and should continue to be guided.” These principles have not always been appreciated by the local units, however, and their occasional unwillingness to assume responsibilities or to fulfil obligations to each other have presented problems that have tended to hinder the most successful conduct of the public ownership program. In fact, the readjustments in inter-governmental relations that have sometimes been necessitated, especially in connection with the power program and the resulting loss of taxes, have in some instances been accompanied by painful and significant friction.

Information

Type
American Government and Politics
Information
American Political Science Review , Volume 37 , Issue 3 , June 1943, pp. 455 - 469
Copyright
Copyright © American Political Science Association 1943

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References

1 For a list of some of the contracts providing for these activities, see the Independent Offices Appropriations Bill for 1941, Hearings before the Subcommittee of the Committee on Appropriations, House of Representatives, 76th Cong., 3rd Sess., Part 2, pp. 1692–1694.Google Scholar See also Durisch, Lawrence L., “Local Government and the T.V.A. Program,” Public Administration Review, Vol. 1, No. 4, p. 326 (Summer, 1941)CrossRefGoogle Scholar, and Anon., “Relation of Federal Regional Authorities to State and Local Units,” Annals of the American Academy of Political and Social Science, Vol. 207, p. 130 (Jan., 1940).

2 Annual Report of the Tennessee Valley Authority for the Fiscal Year Ended June 30, 1936, pp. 1–2.

3 Public Resolution—No. 88—76th Cong., 3rd Sess., Chap. 432, H. J. Res. 544, Sec. 39 (June 26, 1940).

4 For an analysis of the tax losses and a survey of the proposals for replacement, see Macon, Hershel L., “Payments in Lieu of State and Local Taxes,” Southern Economics Journal, Vol. 8, pp. 493–503 (Apr., 1942)CrossRefGoogle Scholar; Durisch, Lawrence L. and Macon, Hershel L., “Payments in Lieu of Taxes by the T.V.A.” Journal of Politics, Vol. 3, pp. 318–334 (Aug., 1941)CrossRefGoogle Scholar; and Edelmann, A. T., “Public Ownership and Tax Re placement by the T.V.A.,” in this Review, Vol. 35, pp. 727–737 (Aug., 1941).Google Scholar Information on the operation of the Norris-Sparkman Amendment for the fiscal year ending June 30, 1942, is contained in the Tennessee Valley Authority Release of September 2, 1942.

5 48 Stat. 58 (May 18, 1933).

6 From 1933 through 1940, Alabama received a total of $577,607 and Tennessee, $381,504.

7 Nashville Tennessean, Feb. 3, 1939, and Montgomery Journal, Apr. 27, 1940.

8 The total annual loss in property taxes was estimated in 1939 to be $93,679, while the in lieu of tax payments were $141,802. This loss is analyzed in Hearings before the Committee on Military Affairs, House of Representatives, 76th Cong., 3rd Sess., on bills to amend the Tennessee Valley Authority Act of 1933, pp. 136–161 (1940).

9 The contract effecting the transfer is given in the Independent Offices Appropriations Bill for 1941, Hearings before the Subcommittee of the Committee on Appropriations, op. cit., p. 1668.

10 See the testimony of the governor of Tennessee, Hearings before the Committee on Military Affairs, op. cit., pp. 19–92.Google Scholar

11 See the remarks of Representatives Elston of Ohio and Kefauver of Tennessee, Hearings before the Committee on Military Affairs, op. cit., p. 475.Google Scholar The Tennessee constitution of 1870 has never been amended, despite many efforts in that direction.

12 See the remarks of Representatives May of Kentucky and Kefauver of Tennessee, Hearings before the Committee on Military Affairs, op. cit., pp. 481–482.Google Scholar

13 The New York Herald-Tribune, Apr. 2, 1939, declared that pending the Congressional appropriation necessary for the T.V.A. purchase of the Commonwealth and Southern properties, the $13,000,000,000 electric utility industry stopped attacking federal competition, believing that “unrestricted operation of government projects in one large area will uncover economic fallacies and generate strong sentiment in favor of private companies.” It was believed that T.V.A. might “meet its Waterloo” in the growing demand for its replacing taxes.

14 New York Times, Dec. 9, 1939.

15 Memphis Press-Scimitar, Feb. 24, 1940.

16 Representative Rankin of Mississippi, advocating this, expressed the opinion of many. Hearings before the Committee on Military Affairs, op. cit., p. 504.

17 Memphis Press-Scimitar, Apr. 2, 1940.

18 See annual reports of the Tennessee Taxpayers Association, especially the First Annual Report, pp. 38–41 (1937), and the Second Annual Report, pp. 3–17 (1938).

19 Very incomplete audits have disclosed annual shortages of about $500,000 in accounts of local officers, and it is estimated that comprehensive audits would reveal shortages of well over $1,000,000 a year. Memphis Commercial Appeal, Nov. 20, 1940.

20 The Cash Basis Act of 1937 does provide for state review and approval, as well as prescribed forms and procedures, of budgets for counties electing to come under the act. However, the voluntary feature of the act has greatly lessened its value. Chap. 300, Public Acts of the State of Tennessee, 1937.

21 Chap. 18, Acts of the General Assembly of the Commonwealth of Kentucky, 1942.

22 Tennessee Valley Authority Release, Sept. 2, 1942.

23 Report on Tax Replacement Requirements in Tennessee, Necessitated by Sale of Private Electric Utility Property to Various Public Agencies, Tennessee Tax Replacement Commission, by Stanley J. White and E. H. Eakle, Exhibit D., p. 16.

24 The Knoxville and Nashville distribution systems were authorized by the acts creating them, Chaps. 106 and 262, Private Acts of the State of Tennessee, 1939, and the Chattanooga distribution system, by an amendment to its original act, Chap. 455, loc. sit., 1941.

25 Statements of H. A. Morgan, director of the T.V.A., and Senator Norris relative to the responsibility of the states are given in the Knoxville Journal, Aug. 1, 1939.

26 The amount of taxes and tax equivalents collected by the distribution systems is given in Municipalities (Electric Departments only) and Coöperatives Purchasing Power from Tennessee Valley Authority, Financial Statements for the Fiscal Year Ended June 30, 1942, Exhibit 1, pp. 1–18.

27 Nashville Tennessean, Jan. 31, 1941.

28 Knoxville News-Sentinel, Feb. 6, 1941.

29 Nashville Banner, Jan. 16, 1941, and Nashville Tennessean, Jan. 31, 1941.

30 Memphis Press-Scimitar, Feb. 8, 1941.

31 See Nashville Banner, Feb. 3 and 4, 1943.

32 Code of Alabama, 1940, Title 48, Sec. 18.

33 Birmingham News, May 21, 1939.

34 Code of Alabama, 1940, Title 48, Secs. 342–344.

35 Chap. 42, Public Acts of the State of Tennessee, 1935.

36 Ibid.

37 Nashville Banner, Jan. 16, 1941, and Knoxville News-Sentinel, Feb. 6, 1941.

38 Chap. 18, Acts of the General Assembly of the Commonwealth of Kentucky, 1942.

39 Ibid., Sec. 31.

40 Ibid., Sec. 3 (12).

41 Ibid., Sec. 31.

42 Chap. 37, Public Acts of the State of Tennessee, 1935; Chap. 185, Laws of Mississippi, 1936; and Chap. 18, Acts of the General Assembly of the Commonwealth of Kentucky, 1942.

43 For the text of the bill, see Report on Tax Replacement Requirements in Tennessee, op. cit., p. 83.

44 Knoxville News-Sentinel, Feb. 14, 1939.

45 See the Knoxville News-Sentinel, Feb. 11 and 16, 1939; the Nashville Tennessean, Feb. 10, 1939; and the Jackson (Tennessee) Sun, Feb. 10, 1939.

46 The T.V.A. and the Federal Government were also understood from authoritative sources to be opposed to the tax. Nashville Tennessean, Feb. 12, 1939.

47 Crump had been a leader in the movement for repeal, and though agreeing to support a tax on power “as a last resort,” he later declared that “liquor tax money would relieve any 3 per cent levy on power.” Nashville Tennessean, Feb. 10 and 24, 1939; Chattanooga News, Mar. 1, 1939; and Charlotte Observer, Mar. 21, 1939.

48 Florence (Alabama) Times, Mar. 17, 1939 and Tuscumbia (Alabama) Times, May 19, 1939.

49 Florence Times, Mar. 6, 1939 and Birmingham News, May 21, 1939.

50 Nashville Tennessean, June 18, 1941; Chattanooga Free Press, June 18, 1941; and Chattanooga Times, June 20, 1941.

51 Chap. 111, Public Acts of the Stale of Tennessee, 1943.

52 Nashville Banner, Feb. 6, 1943.

53 Re Alabama Power Company, Public Utilities Reports (New Series), Vol. 4, p. 225 (1934).Google Scholar

54 Ibid., p. 233.

55 Ibid.

56 Knoxville Journal, Oct. 10, 1934.

57 Knoxville News-Sentinel, Oct. 9, 1934.

58 Ibid., Oct. 12, 1934.

59 Ibid., Oct. 10, 1934.

60 The pro-utility Birmingham Age-Herald declared that the Commission's contention “constitutes nothing less than a rather heroic assertion of a principle which lies at the very roots of our government—that of states' rights” (July 16, 1934).

61 The Commission was denounced by mass meetings, civic clubs, labor unions, and many other organizations. See the Montgomery Journal, Sept. 7, 1934, and Oct. 30, 1934.

62 Limestone (Athens, Alabama) Democrat, Oct. 11, 1934.

63 Montgomery Journal, Oct. 11, 1934.

64 Birmingham Post, July 16, 1934; Florence Times, Sept. 21 and Oct. 22, 1934; and Montgomery Journal, Oct. 30, 1934.

65 Alabama Laws, 1935, p. 1.

66 The most important were:

Is the act violative of the constitution of Alabama and the due process clause of the 14th Amendment in “arbitrarily exempting one class of activities from regulation by an agency of the state, and requiring other like activities to be regulated by such agency?”

Does the act violate the state constitution “in that the legislature fails thereby to provide for regulation of a class of activities which it declares to be ‘non-utilities’?”

“Is the attempt of the legislature to declare what is a non-utility an interference with the powers of the judiciary to determine whether or not any functionary is subject to state regulation as such?” Published in the Birmingham News, June 9, 1939.

67 Ibid.

68 Chattanooga Times, Jan. 12, 1934.

69 Memphis Press-Scimitar, Jan. 8, 1934.

70 Knoxvitte News-Sentinel, Jan. 7 and June 29, 1934; Memphis Commercial Appeal, May 4, 1934; and Rogersville (Tennessee) Review, May 31, 1934.

71 Re Tennessee Electric Power Company et al., Public Utilities Reports (New Series), Vol. 2, p. 4 (1934).

72 Nashville Banner, Oct. 10, 1934.

73 Mobile Times, Oct. 29, 1934.

74 Chap. 42, Public Acts of the State of Tennessee, 1935.

75 Louisville Courier-Journal, Dec. 21, 1941.

76 Ibid.

77 Ibid., Feb. 5, 1942.

78 For a partial text of the address, see ibid., Feb. 12, 1942.

79 Chap. 18, Acts of the General Assembly of the Commonwealth of Kentucky, 1942.

80 For a more detailed account, see Edelmann, A. T., “Kentucky Accepts T.V.A. Power,” Journal of Land and Public Utility Economics, Vol. 18, No. 4, Nov., 1942, pp. 481–484.CrossRefGoogle Scholar

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