THE SENATE SAVES PUBLIC POWER
Curtis, G. L.
The Senate Saves Public Power By G. L CURTIS Washington, D. C. ON Friday, Nov. 24, 1944, the Senate of the United States, after three days of debate, rejected a proposal which, had it been...
...It seems to me that the inevitable effect of th* amendment would be to give tremendous advantage to the private power companies in bidding for the power to be generated as a result of the expenditure of public money for flood control dams...
...The public power Senators thereupon proceeded to write into the bill their own amendment, which provides in effect that the Secretary of the Interior may construct whatever transmission lines are necessary to get the power to the consumer at the lowest possible rates, with the first chance to buy the power from the Secretary being given to public bodies such as municipalities and to co-ops...
...Blueprint For Reaction Here's a list of the Chamber of Commerce's other nine basic power proposals, translated into plain English so that they may be understood when they turn up in Congress: 1. The Chamber is for "full opportunity for private enterprise" in the production, purchase, and sale of power...
...6. This proposal is the one quoted at the beginning of this article, and supports sale at the point of production...
...Bailey's supporters...
...Those rivers constitute a part of the great body of natural resources which belong to the American people, and they ought to be developed for the benefit of the American people...
...And that's why the Bailey amendment was not just a technical provision of no practical-consequence...
...The expense is so great that only a big enterprise can afford to construct one, and no municipality or REA project or co-op could ordinarily build one of its own...
...In part he said: "Mr...
...3. The Chamber recommends that "Congress regain the control of the development of water resources that it has lost to administrative agencies...
...If no one, aside from the Government of the United States, has either the power, the financial strength, or the inclination to develop them for the use and service of the American people, I do not choke at any reasonable measure designed to harness those forces of nature for the benefit oi the American people...
...If we had relied upon private enterprise alone, the Grand Coulee Dam and the Bonneville Dam would never have been built, and the Tennessee Valley would never have begun its development...
...Therefore it comes down to a naked proposition as to whether we want to repeat the mistakes which wo have made in the past and to permit private power companies in most instances to buy the power at their own price...
...Those who were in the Senate during the time the Muscle Shoals project was in operation, before the establishment of the TVA, will remember the exceedingly great advantage which the private power conv panies enjoyed...
...Its real point is that, on the old states' rights theory, Congress should do very little about the development of water resources...
...As this is written, the bill has not yet gone to the conference committee...
...Bailey to the pending Flood Control Bill...
...To sum up: if power "must be sold at the dam and if the Government can't build transmission lines to take it out to the people, the private utilities are the only remaining customer for the power...
...No one doubts it...
...24, 1944, the Senate of the United States, after three days of debate, rejected a proposal which, had it been accepted, would have been one of the hardest blows at public power in many years...
...Federal power is produced at dams^ These dams, particularly on War Department projects, do not have power production as their primary object...
...The friends of the private utilities do not come before the Congress and say: "Please sell all Government power to private utilities at our own price, let us make a good profit on it, and let us sell it to those who want it when it suits our convenience to do so...
...President, I should like to state briefly the reasons which compel-me to vote against the so-ealled Bailey amendment as modified...
...Therefore all proposals for new projects like the TVA in other parts of the country should "be examined with great care...
...To him, the whole system of private enterprise was at stake...
...The crucial words are: "The sale of such electric power as may be generated at reservoir projects (of the War Department's many dams for the primary purpose of flood control) shall be made at the point of production...
...This is a particularly round-about way of throwing sand in the turbine by opposing power projects through the device of making them look more expensive than they are...
...What that means is that we should not have any more valley developments in the United States, and that the residents of the Mississippi and the Missouri and the Columbia and the Arkansas and all the other great river valleys of the country-should go without the benefits of power development, flood control, and navigation improvement so that the private power companies can continue to make their profits...
...The Senators^themselves were fully aware of the gravity of the issue before them, and the discussion was conducted in a serious vein which warrants a place for it in the records of great American Congressional debates...
...The vote to kill the amendment did not end the struggle...
...Secretary Ickes, under whose direction the Government transmission lines would be constructed and the distribution of the power to co-ops and municipalities would be carried out, jumped into the fight with both arms swinging...
...Hence, to get the power from the dam to the users, the normal practice is for the Interior Department or some other Federal agency, to build transmission lines which carry the power to populated areas, and then sell the power to public bodies and co-ops and to private companies as well when they get it there...
...They may be aimed chiefly at flood control or navigation improvement, and their valuable power output is a by-product of other objectives...
...Barkley's argument against the Bailey amendment made one of the strongest cases for public power: "Our rivers were hot made by us...
...The effect of it would be to turn over the public power of the United States, all power generated at public dams, to private utility companies...
...Bailey supported his position with great earnestness and conviction...
...The Senate of the United States has done its job for the moment...
...The recent victory in the Senate is a mighty symbol of the strength of the public power cause, but the private utilities are resourceful and imaginative, and they will return to the fight over, and over again...
...I do not believe, Mr...
...The result of both methods, however, if successful, would be just the same...
...Pointing out that the amendment would give a monopoly to whatever private utility happened to be closest to the project, so that it could force the Government to sell the power on the private utility's terms, he contended that "The amendment would therefore result in lower income to the Federal Government and in higher power rates to the farmers and other consumers who might otherwise be benefited from the Federal power developments...
...Bailey may not have received the inspiration for his amendment from the U. S. Chamber of Commerce, and he assured his fellow Senators that he did not, his proposal is identical, in effect, with one of the major points in the anti-public power program of the Chamber...
...This is a fancy way of saying that the Interior Department, the TVA, and similar agencies should have their powers taken away from them so that they won't be able to get power to the people any more...
...Lister Hill of Alabama described the amendment as one which "would put the Federal Government absolutely at the mercy of the private power companies...
...It and the rest of the private power proposals of the Chamber may be expected to bob up in Congress from now on with regularity...
...5. Projects, says the Chamber, should be well planned...
...One of its proposals was this: "All Government by-product power should be sold, as such, at the point of production...
...They were not made by any private enterprise, free or otherwise...
...La Follette, Progressive, and Barkley, Ellender, Pepper, McClellan, and Murray, all Democrats...
...7. This recommendation is that the "Bureau of Reclamation should handle all reclamation projects, and the Army Engineers should handle all flood control projects and continue with navigation...
...Although Sen...
...George Aiken, Vermont Republican, first to comment on the proposal, said of the amendment...
...This, translated, means that the Government should let power resources go to waste until the members of the Chamber of Commerce want them, and that the private utilities should monopolize the sale of Government power...
...2. The Chamber says that Government power rates should be high enough to cover costs and taxes...
...The people may get it eventually, if the power companies choose to bring it to them, but they get it at private power rates and after paying the profits which fill the pockets of the pyramid of power company executives...
...9. According to the Chamber's report, the "TVA is the most significant departure from the long-established American way of life that has taken place in many years...
...4. The Chamber proposes that the costs of all pending projects be reconsidered...
...The particular proposal debated was an apparently simple and technical amendment offered by Sen...
...It was opposed by many Southern Democrats and by Republicans as well, and the final vote, rejecting the proposal by a vote of 42 to 27, showed 13 Republicans, 28 Democrats, and one Progressive on the side of public power, and 14 Republicans and 13 Democrats against it...
...Eternal vigilance will be needed if progressive forces are to block the continuing utility raid on America's great power resources, developed and potential...
...To understand the significance of this amendment, it is necessary to understand a little of the mechanics of power distribution...
...The power must be transported by transmission lines to the eventual user...
...Josiah Bailey, North Carolina Democrat...
...The issue divided parties and regions...
...Those transmission lines are sometimes long and frequently extremely expensive...
...La Follette made the final speech against the Bailey amendment before the vote was taken...
...For 40 years, argued the Secretary, Congress has provided that Government power should be sold for the benefit of public agencies and farm co-ops, and, he continued, "I cannot believe that the Congress will want to overthrow these sound policies that have been imbedded in our laws and have resulted in promoting the industrial development of the West and South and in the The Senate Roll Call For the .Bailey Amendment—27 Against the Baily Amendment—12 protection of the consumers in those areas...
...President, that it is sound public policy, when we are spending public money for the purpose of flood control and incidentally for the development of power, to permit private interests to have an undue advantage over public bodies in the purchase of power...
...8. This proposal is too technical to be worth detailing...
...The measure was part of the anti-public power program of the United States Chamber of Commerce, its general principle had been endorsed by Gov...
...The fight for public power is always being waged...
...This is the old hokum which ignores the fact that Government rates do pay for Government projects, and masks the effort of the private utilities to fool the public into believing that private rates are not unnecessarily high because of private profits and inefficiency...
...Let him who can make that bit of fancy window-dressing square with the foregoing nine propositions of the Chamber...
...The real object of this one is to give the Bureau of Reclamation of the Interior Department as little authority in the power field as possible, since the Bureau is particularly aggressive in behalf of public power, and to spike the creation of more agencies like TVA...
...Enter Ickes Swinging On the other hand, Sen...
...A notable fact about these fights over public power is that many of them are based on such technical concepts that it is difficult for the average voter to understand just what's happening, while most of the newspapers seem to have no desire at all to explain it to him...
...This-same issue will be presented again to the Senate before the end of this term in the Rivers and Harbors bill...
...Among the most vigorous opponents of the Bailey amendment, besides those already mentioned, were Sens...
...On May 29, 1944, the Chamber of Commerce laid before its members a 10-point power program...
...In the recent debate, as has been noted, the issue was squarely drawn and the Senators stood up and declared themselves...
...And, just to make sure that the Secretary of the Interior didn't build any transmission lines to get the power out to the farmers and the municipalities, the original Bailey amendment effectively forbade him to build any lines for three years...
...That proposal, if seriously accepted, would close down Bonneville, Grand Coulee, the TVA, and substantially every other of the great power projects of the nation...
...Maloney, both Democrats, were among Sen...
...Because they had their transmission lines at the dam site, they were enabled to purchase great quantities of power at ridiculously low rates because they were the sole bidders for the power...
...John Bricker of Ohio, and it was sponsored in the Senate by Sen...
...The Chamber of Commerce of the United States favors the development of the water resources of the nation for the greatest benefit of the nation as a whole...
...But this public power amendment must now be laid before a conference committee of the members of the House of Representatives and the Senate, to iron out the differences between the views of the two branches of Congress...
...The policy of the proposed amendment would deprive the ultimate consumer of the benefits of low cost electric energy produced at public projects and^ would permit their monopoly by a few private utilities...
...They were not made by any corporation...
...but the private utilities will be back...
...The Bailey amendment is a case in point...
...He expressed his belief that the Duke Power Company in North Carolina had made a great contribution to the welfare of his state, and said that to allow the Federal Government to sell its own power in competition with private companies is "immoral, it is so unfair...
...While I am as much in favor of free enterprise as is anyone else, if I know what free enterprise is, I am not in favor of making it so free that it will be free to do nothings or free to do anything it may see fit to do in order to carry out its own program...
...Because dams even primarily for power must be located at a favorable spot from the standpoint of the course of the river, and because dams for flood control and navigation improvement may be a considerable distance from heavily populated areas, the dams may be located at points fairly distant from the ultimate consumers of power...
...Issue Squarely Drawn The practical consequence of the Bailey amendment would have been to require that the power produced at Government projects be sold at the dam to private utilities who would then sell it to their own customers at whatever rate they can get away with, since the private utilities are the only other big enterprises which can foot the bill...
...Instead they propose a technical amendment, dressed up in language which looks friendly to the farmers and the municipalities, and end up with a proposal to sell the power at the dam...
...Thomas of Oklahoma and Sen...
Vol. 8 • December 1944 • No. 49
