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The Indiana Farmer

Wendell Willkie's spirited opposition to TVA forced the agency to prove its right to exist. His gracious behavior in defeat helped make TVA's existence an accepted fact.

His name alone can evoke nostalgia among people of a certain age, in the same way that Pierce-Arrow or Cab Calloway or Flash Gordon does. Wendell Willkie is remembered as the boyish presidential candidate with the always-tousled thick hair who had the guts to take on Franklin D. Roosevelt when he ran for his third term.

photo of President Roosevelt signing TVA Act

Although President Franklin D. Roosevelt signed the legislation creating TVA in 1933, the establishment of public power was secured only after a legal and political battle that lasted six years.

But in the years just before that 1940 race, Willkie was a formidable figure in private industry who rose to prominence by challenging the power of the Tennessee Valley Authority.

A lawyer from Indiana and a lifelong Democrat who’d been an active campaigner at the momentous 1932 Democratic convention, Willkie might have seemed an unlikely candidate to challenge either Roosevelt or one of the president’s favorite New Deal programs. He had backed another man, Newton Baker, in 1932, but once FDR captured the nomination, Willkie supported him and contributed to his campaign.

TVA was one of Roosevelt's most daring ideas, warily praised by Willkie as a “magnificent proposed development.” But his private career put him at odds with the TVA experiment. As a young utility executive, Willkie had led the merger of 165 firms into a single entity, Commonwealth and Southern, that became the largest utility holding company in the nation. Less than six weeks before Roosevelt’s first inauguration, the 40-year-old Willkie was made president of C&S.

But the company was a private business with major interests in the Tennessee Valley region, and it saw TVA as a rival — one that, to its way of thinking, possessed an unfair advantage.

In October 1933, Willkie met with TVA Director David Lilienthal in Washington. The two men had something in common: Each was an Indiana lawyer with a reputation as a boy wonder. They began negotiations to determine how, and whether, a public corporation like TVA could coexist with private utilities.

photo of david lilienthal

In one-on-one negotiations, TVA Director David Lilienthal was impressed by Willkie’s “terrifically vital personality.”

Lilienthal later admitted that Willkie, at the time the more powerful of the two, intimidated him. Nevertheless, Willkie made certain concessions. He agreed to let TVA sell electricity in some markets previously controlled by C&S, but only if TVA would refrain from competing with the company outside the Tennessee Valley region.

Although Willkie complained that TVA’s low rates were forcing C&S to reduce its prices, his company remained the dominant power provider in the Southeast for a while. The private utility bided its time, hoping Roosevelt would be defeated in 1936, at which point the New Deal would disintegrate and TVA with it.

In the TVA region, cities with municipal electric systems voted one after another to buy TVA power. TVA tried to purchase the facilities of private companies, including C&S, so it could serve more people, but it was impeded by lawsuits and injunctions.

In 1936 Roosevelt was reelected by a landslide, and the legal battles began to go in TVA’s favor. In January 1938, the Supreme Court ruled that TVA had the right to build power plants in competition with private industry.

Willkie and Lilienthal continued their negotiations over the sale of C&S holdings, Willkie insisting that the government pay top dollar. But in January 1939 he suffered a second defeat in the high court when the justices ruled in favor of TVA, dismissing charges that the agency was unconstitutional.

Willkie took the defeat graciously. Grateful that TVA had pledged to keep C&S employees in power-related jobs, he announced, “We accept the inevitable with good spirit and are selling our properties at as good a price as we can get the government to pay.” It turned out to be a lucrative deal: C&S’s facilities brought $78.6 million from TVA.

When Lilienthal, in front of newsreel cameras, handed him the check at a bank in New York, Willkie smiled and remarked, “Dave, this is sure a lot of money for a couple of Indiana farmers to be kicking around.”

Willkie switched parties and in 1940, largely as a result of the name he had made for himself in the TVA battle, won the Republican presidential nomination as a dark-horse candidate. In the general election he polled a significantly larger number of popular votes than either of FDR’s previous challengers.

Willkie remained a popular figure after the third Roosevelt victory. He backed the president’s efforts to prepare for the coming of World War II, and served as an international envoy for FDR during the war. The Republicans spurned him as a candidate in 1944, and he died soon after the convention. A smoker, careless of his health, he was only 52.

David Lilienthal, Willkie’s longtime nemesis, was at home in Norris, Tenn., when he heard the news on the radio. “I simply cannot believe it,” he wrote in his diary, expressing his deep respect for a worthy opponent. “I am still stunned . . . I feel deeply that here is the loss of a terrifically vital personality.”

 

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