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LILIENTHAL, DAVID E. 1899-1981

NATURAL RESOURCES MANAGER

Rising to the Challenge

Born in Illinois of Czechoslovakian parents, David Lilienthal graduated from Harvard Law School in 1923, where he had studied with Felix Frankfurter, then a professor at the school. Lilienthal went to work in Chicago for a private law firm. His personal interests centered around issues of conservation and development of natural resources. Following his successful handling of a difficult telephone rate case before the U.S. Supreme Court, he was appointed head of the State Utility Commission of Wisconsin in 1931. Two years later, on the advice of Supreme Court Justice Frankfurter, President Franklin D. Roosevelt invited Lilienthal to join the board of the Tennessee Valley Authority (TVA).

The TVA

In April 1933 President Roosevelt asked Congress to create an agency to oversee the use, development, and conservation of the Tennessee River Valley. This proposal included safe navigation, reforestation, industrial and agricultural programs, national defense production management, and the production and distribution of power at Muscle Shoals in northern Alabama, where the river's sudden drop made possible the establishment of a hydroelectric dam. The TVA was to be run by a committee of three men: Arthur Morgan, Harcourt Morgan, and Lilienthal.

The Challenge of Cheap Power

From 1933 to 1938 a battle raged within the triumvirate that administrated TVA. Its first chairman, Arthur Morgan, was most interested in national economic planning through cooperation between government and business. He argued for the selling of electric power at the same rates as those set by private companies, which viewed government involvement as a threat to their business advantage. Lilienthal believed otherwise. He suspected that centralized control of the means of production might be self-defeating. If a monopoly on the price of electricity existed, then the purpose of government involvement to put people to work and make power affordable, thus spreading its use, would be lost. Instead, he argued that public power had to compete directly with private business by selling at lower rates, thus driving prices down and ensuring competitiveness among all groups involved. The disagreement between the two men became so strong that it reached the White House, and Morgan was fired in 1938 and replaced as chair by Harcourt Morgan, an ally of Lilienthal's whose vision of cheap power for everyone thus prevailed. More trouble loomed on the horizon, however. The major private utility in the Tennessee River Valley—the Commonwealth and Southern Corporation, headed by Wendell Willkie—accused Lilienthal of trying to drive it out of business. Although the charges were denied, by 1939 the federal government had purchased a substantial amount of shares in the corporation. Though this move was controversial, it reflected the shift to antitrust competitiveness and government spending that had started with the firing of Arthur Morgan and that helped establish TVA as the biggest producer of power, with nine dams, and as a provider of work in a region of three million people whose average income was less than half the national average.

Lilienthal's Legacy

Lilienthal, who succeeded Har-court Morgan as head of TVA in 1941, successfully pursued a career as a "power public servant." Although he was given a second nine-year term as TVA chair in 1945, he left his post to become the first head of the Atomic Energy Commission in 1946 and went into private business in 1950. His optimistic belief in upower for the people/' thus associating the benefits of technology with a greater sense of democratic values, made him a popular hero of sorts, even when he was criticized as too aggressive in his beliefs. His work with TVA gave it the necessary foundations to thrive and become the largest producer of electric power in the United States well into the 1980s,