TVA -Is it really constitutional?

March 3, 2013 by Ernest Norsworthy

TVA – is it really constitutional?

March 3, 2013

If ever the Supreme Court looks again at the TVA Act of 1933, it will see how wrong their decision was in approving the existence of TVA. The Court never ruled on the key issue under which TVA now operates. Since TVA is a government competitor in in a free market economy, it flies in the face of the essence of our Constitution.

Ruling narrowly on a contract issue and never reaching the core point, the Court succumbed to the will of FDR and went along with this New Deal program although many others were later ruled unconstitutional. Supreme Court Justice McReynolds’ dissent in Ashwander vs TVA rings as clear today as it did in its ominous warning from the past.

He spoke plainly when he accused TVA for dissembling and pretending one thing but claiming another. Ironically, that trend found throughout TVA’s sullied existence, belies many of TVA’s motives.

The trial court ruled TVA unconstitutional and on appeal to the circuit court, ruled in its favor. The Supreme Court had to decide one way or the other whether TVA was legally granted the authority to pursue the purchase of utilities of the Commonwealth & Southern Corporation’s subsidiaries in Tennessee, Alabama, Mississippi, and Georgia.

In McReynolds’ dissent he proffered;

The trial court made findings of fact which fill more than sixty printed pages. They are not controverted, and, for present purposes, are accepted; upon them the cause stands for decision. Plainly they indicate, and that court, in effect, declared, the contract of January 4th was a deliberate step into a forbidden field, taken with definite purpose to continue the trespass.

Further,

The record leaves no room for reasonable doubt that the primary purpose was to put the Federal Government into the business of distributing and selling electric power throughout certain large districts, to expel the power companies which had long serviced them, and to control the market therein. A government instrumentality had entered upon a pretentious scheme to provide a “yardstick” of the fairness of rates charged by private owners, and to attain “no less a goal than the electrification of America.”

And TVA said,

When we carry this program into every town and city and village, and every farm throughout the country, we will have written the greatest chapter in the economic, industrial and social development of America.

To read the entire dissent of Justice McReynolds and the ruling by the Court, see http://www.law.cornell.edu/supct/html/historics/USSC_CR_0297_0288_ZX.html

Why his dissenting vote to affirm the TVA law is haunting today is that he was so correct in his opinion some 78 years later. His perception that it was just a ruse by TVA to do just what it has done to the detriment of millions of citizen in the Tennessee River Valley makes his dissent even more poignant.

Justice McReynolds opined then and it is even more critical today to acknowledge that the breach between a competitive, free market economy and an ever-growing government dependent culture is at its widest.

Even a quick perusal of the TVA Act will show how misdirected TVA has become, how mismanagement has led ratepayers to a $30 billion debt. To claim that TVA is “self-supporting” is ludicrous and was not even considered in the original TVA Act. Early on, TVA used its power to force “competing” utilities out of business because of TVA’s low and subsidized electricity rates.

Is the TVA Act unconstitutional? It has been unconstitutional from the very start.

Ernest Norsworthy

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