Origins
In November of 1930, the Bank of Tennessee failed, which led to thousands of Tennesseans seeing their savings literally disappear over night and businesses losing valuable capital. President Roosevelt's inaugural promise of a "New Deal" to bring the nation out of the poverty and despair of the Depression found a receptive audience among reformers of all persuasions, with Tennessee being no exception. On May 18, 1933, Roosevelt passed the Tennessee Valley Authority which included flood control, improved river navigation, increased fertilizer production, better agricultural practices, natural resource conservation, and the generation of public electrical power throughout the seven states of the Tennessee Valley.
Dams
The TVA helped improve flood control and river navigation by constructing several dams throughout the Tennessee Valley. The first TVA dam project was at Norris Dam which opened in 1936. This dam took three years to complete and costed over 31 million dollars. The TVA has now constructed over forty other damns, reservoirs, and plants in the Tennessee area. In the process of building these dams, the TVA flooded more acres than it protected and displaced more than fifteen thousand of the region's farmers. The dams were constructed too slowly to promote immediate recovery, but they are still in use today to help Tennessee's flood control. Critics of the TVA fail to acknowledge that construction of the dams in itself was not meant to contribute to immediate recovery and that the New Deal had ambitious plans, in the end unfulfilled, to extend the TVA concept to other rivers in the valleys in the nation. These dams helped to control a part of nature that people living on the banks of the rivers had never thought that they could control. In addition to this, they increased the number of jobs, helped flooding, and helped to modernize the south.
Electricity
Another goal of the TVA was to provide electricity to the Tennessee Valley. In 1933, only two percent of farms in the Tennessee Valley had electricity, a stark contrast to the 90% of urban dwellers in the United States that had electricity at that time. Supplying this electricity not only helped to improve the lives of those living in the areas that it affected, but also provided many jobs to the high number of unemployed adults in the Tennessee Valley. The government subsidized artificially low electricity prices and wiped out the value of stockholders' investments. This model showed that a low-price, high-volume policy could profit private utilities. It was a successful aspect of the TVA, and by 1945 the TVA had brought electricity to 75 percent of the farms in the valley, 668,000 households, and could produce 2.5 million kilowatts of power.
Social Effects of the TVA
Prior to the TVA initiative, the Tennessee Valley was an extremely poor area of the Country. In the fall of 1933, over half of the families in some regions of the valley were on relief, and most did not have electricity. The people living along the Tennessee River were at the mercy of the meandering path of the river and its flooding patterns. From its inception, the TVA was meant to produce more than just electricity and its founders had broad social intentions. It was considered an experiment in social reconstruction and symbolized man's capacity to change their surrounding. Younger southern liberal politicians say the TVA as the model for how the federal government could rescue the South from poverty.