JULY 14, 1955
HYDE PARK—With the Attorney General's consent apparently the city of Memphis will build its own plant and the President has ordered the cancellation of the Dixon-Yates contract.
I confess that following the intricacies of the long-disputed Dixon-Yates contract and its ultimate cancellation was difficult for the average person, but one little item was of special interest to me. Somewhere I saw that the original plan would practically have wiped out the whole Tennessee Valley Authority idea as far as the creation of power was concerned and would have reduced TVA to flood control and navigation, neither of which produces any revenue to speak of.
Nor have I any reference as to what would happen to the program of production of fertilizer at the Muscle Shoals plant and to the broader plans, of course, which have developed in an agricultural way throughout the whole area.
The idea behind the development of TVA was to prove that floods could be controlled in a river valley, that a yardstick could be set up, which would lower the price of power, and that a whole area could be improved agriculturally and industrially. Also it was maintained that the initial cost would in time be completely repaid. All this TVA has accomplished, together with much research which has benefited the area greatly.
There is, of course, much agitation about the return to private production and management of all types of enterprise which have been undertaken by the government, but I think there is something to be said on two points.
One is that seldom does private enterprise contemplate a comprehensive plan for the development of a whole river valley. It would require great resources and willingness to wait over a long period for adequate returns on investment.
The other point is that if private enterprise alone is in competition there may be a tendency for mutual understandings, which might put the motive for profit ahead of the planning for the development of the area in the interest of the individual consumers.
That is the whole idea back of having a yardstick, which private enterprise must meet in competition. It has been demonstrated over and over again that we would have saved money had we controlled floods in the Ohio, Arkansas, and Mississippi rivers and in many others.
It may be that in comprehensively developing these resources we might work out different plans whereby the early blueprinting, construction and activation would be turned over for further development to private enterprise. But I think there is a case to be made for our country to take a look at the whole system, which today means that at frequent intervals we lose millions of dollars through uncontrolled floods. We can no longer afford to be so shortsighted and wasteful.