The One Hundred and Sixtieth Press Conference (Excerpts) [Reprinted in The Public Papers and Addresses of Franklin D. Roosevelt, Vol. 3, 1934, (New York City: Random House, 1938), p. 465]

Warm Springs, Ga, November 23, 1934

Q. Mr. President, is there anything you can tell us on the record concerning the visit of your various power officials here today?
THE PRESIDENT: They are members of a committee, I could not tell you the name of it, that has on it somebody from the Federal Trade Commission, somebody from T.V.A., somebody from Interior and one or two from the Power Commission. They have been working - I think the whole thing came out last spring - on a general survey of the power situation, and they are going to talk with me about that tonight.

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THE PRESIDENT: It is one of the inter-departmental committees to report on the general situation.

Q. With recommendations for legislation?
THE PRESIDENT: Yes, and policy.
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Q. I feel I am doing a lot of talking here, but the other day you spoke of power and there are a lot of interpretations on it. Purely...
THE PRESIDENT: Oh, the interpretations are all pure. (Laughter)

Q. Do you mind telling us what your ideas are regarding private power companies?
THE PRESIDENT: All right, I shall give you something on that, but this has to be off the record because I don't want to be in the position of interpreting what I said. (Laughter) It is a perfectly simple thing.

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I can put it this way: Power is really a secondary matter. What we are doing there is taking a watershed with about three and a half million people in it, almost all of them rural, and we are trying to make a different type of citizen out of them from what they would be under their present conditions. Now, that applies not only to the mountaineers - we all know about them - but it applies to the people around Muscle Shoals. Do you remember that drive over to Wheeler Dam the other day? You went through a county of Alabama where the standards of education are lower than almost any other county in the United States, and yet that is within twenty miles of the Muscle Shoals Dam. They have never had a chance. All you had to do was to look at the houses in which they lived. Heavens, this section around here is 1,000 percent [better] compared with that section we went through. The homes through here are infinitely better.

So T.V.A. is primarily intended to change and to improve the standards of living of the people of that valley. Power is, as I said, a secondary consideration. Of course it is an important one because, if you can get cheap power to those people, you hasten the process of raising the standard of living.

The T.V.A. has been going ahead with power, yes, but it has been going ahead with probably a great many other things besides power and dam building. For instance, take fertilizer. You talk about a "yardstick of power."

Dr. H. A. Morgan is running the fertilizer end of it and at Muscle Shoals he is turning out, not a nitrate - the plant was originally built for a nitrate plant - but he is turning out a phosphate. He is conducting a very fine experiment with phosphate of lime. They believe that for this whole area around here, and that would include this kind of soil around here, phosphate of lime is the best thing you can put on land in addition to being the cheapest.

Now at once, the fertilizer companies, the National Fertilizer Association that gets out figures (laughter), say, "Are you going into the fertilizer business?" The answer is a very simple one. The plant is primarily an experimental plant. That is the primary purpose. Therefore, they are going to take this year a thousand acres of Government land, worn-out land typical of the locality, and they are going to use this phosphate of lime on these thousand acres and show what can be done with the land. They are going to give a definite demonstration. They will compare it with the other fertilizers, putting them in parallel strips, and they will see which works out best and at the lowest cost. Having the large plant, they will be able to figure out what is a fair price for the best type of fertilizer.

Having done that and having figured out the fair price, it becomes a process of education. If the farmers all through that area can be taught that that type of fertilizer at x number of dollars a ton is the best thing for them to use, then it is up to the National Fertilizer Association and its affiliated companies to meet that price. Now, that is the real answer, and we hope that they will meet that price, adding to the cost of manufacture a reasonable profit. We shall know what the cost of manufacture is, and it is very easy to say what a reasonable profit is. Now, if those gentlemen fail to avail themselves of this magnificent opportunity to conduct a sound business and make a profit, well, it is just too bad. Then somebody will get up in Congress and say, "These fellows are not meeting their opportunities and the farmers will have to have the fertilizer and of course we shall have to provide it." But I, for one, hope that that day will never come. Now, that is not holding a big stick over them at all. It is saying to them, "Here is your opportunity. We go down on our knees to you, asking you to take it."

Q. Just a little guiding light.
THE PRESIDENT: In other words, what we are trying to do is something constructive to enable business...

MRS. ROOSEVELT: An intimation. (Laughter)
THE PRESIDENT: No, it is not even an intimation. No, it is a generous offer.

Now, coming down to power. You take the example of Corinth we went through the other day. In Corinth, without Government assistance - they did it themselves - they had a county electric-power association and they used to buy their juice from the Mississippi Power Company. Because they were on a through line to Tupelo, the T.V.A. came along and stepped in as a middleman, and still bought the power from the Mississippi Power Company at a lower cost per kilowatt on the agreement with the Mississippi Power Company that it would take more juice. The result was that the Mississippi Power Company gets the same gross profit as it was getting before, but it is selling more power. Then the T.V.A., merely acting as middleman without any profit to itself, turns around and sells it to the county electric- power association. That part of it does not change the existing situation at all. The Mississippi Power Company merely gave a lower rate to the Alcorn County people, but it did it via the T.V.A., instead of direct. It was merely a bookkeeping matter. It does not cost the T.V.A. anything, and it does not receive anything.

Now the Alcorn County people, that is the Alcorn County Electric Power Association, did a very interesting thing. There they had Corinth, which is a good- sized town, and they found they could distribute in Corinth - these are not accurate figures - they found they could distribute household power at about two cents a kilowatt hour. But if they were to run an electric line out to a farm, they would have to charge three cents. In other words, the farmer would have had to pay more.

What did the Corinth people do? They said, "We can get cheaper power than the farmer, but we think he should have the same rates we are getting." Voluntarily they agreed to take and to pay for two-and-a half-cent power which enabled the farmer to get two-and-a-half cent power. That is an extraordinary thing. That is community planning. Now, there was no reason in God's world why the Mississippi Power Company could not have gone to Corinth and said the same thing - no reason in the world. It just never thought of it. It could have done that same thing. But it was the T.V.A. that went down and sold the idea to the people in that county and said, "Let us have a uniform power rate for the man next to the powerhouse and the same rate for the man who lives twenty-five miles up the Valley. We don't want to concentrate any more people in Corinth. We want to increase the rural population."

The result of that operation is that they are increasing - they have more nearly doubled the consumption of power. Furthermore, they have gone ahead and formed another association, tied up with this county one, by which people can buy refrigerators and electric cookstoves and all the other gadgets at a figure which is somewhere around 60 or 70 percent of what they were paying before.

Now, the process behind what they were paying before amounted to this: A subsidiary of the Mississippi Power Company in the business of selling refrigerators, generally owned - I am just saying this as a mean aside - generally owned by a son of a president of a power company - there is a lot of that nepotism - would go around and say, "We will sell you a refrigerator. The cost is two hundred dollars. You can pay for it over thirty months. The total cost to you at the end of thirty months will be three hundred dollars." In other words, it was a hundred dollars extra for installment payments. It did not say that, but that is what it amounted to. In other words, it was selling them the thing at two hundred dollars, and it was making an average of 18 to 20 percent on that sale during this thirty months.

Now, who else profits? That selling corporation, of course, made not only its 15 or 20 percent, but also made quite a lot on what it had paid for the machine. It had probably paid a hundred and seventy-five dollars for the machine, so it made twenty-five dollars on the machine. Now, whom did it buy it from? It did not buy it from the General Electric or the Westinghouse. It bought it from the middleman, and he also made a twenty-five-dollar profit on it, and the General Electric Company got only a hundred and fifty dollars for the machine. Therefore, when the consumer paid three hundred dollars, it was just 100 percent more than the General Electric Company got for the machine.

We went to the General Electric Company and said, "Will you give us your wholesale rate on machines?" It said, "Sure." And we went to all the other refrigerator manufacturers so as to have a complete line, and then we said to the householder, "You can buy this for a hundred and fifty dollars plus a five - dollar handling charge, paying for it over thirty months at 5 percent interest instead of 18 percent." The net result is that instead of paying three hundred dollars, he pays a hundred and seventy- five or a hundred and eighty dollars. His installment cost is at 5 percent instead of 18 percent. He gets it at the wholesale price, which the Mississippi Power Company could have done exactly as well as the T.V.A. In other words, we are teaching him something.

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Q. None of this, I take it, is on the record.
THE PRESIDENT: No, it is just so that when you talk about it in the future you will know all about it.

Q. Can't we write this as background?
THE PRESIDENT: I think not. You had better keep it. If you write anything at all it will look like trying to explain something....

Q. Can't we use this, what you said this afternoon about Tennessee Valley and before - can't we use that?
THE PRESIDENT: Instead of using it right now, jot your notes down and let me give you a hint. The National Resources Board preliminary report is coming out, and it ties right in with it. Let me dig that up for you. Don't use it today - use it for a Sunday story or a Monday story.

Q. These notes are worth a thousand dollars at least, minimum.
THE PRESIDENT: Wait until you learn more about it. You don't know enough about it to write a story....

Q. Mr. President, if you were going to write a story today for the morning papers, what would you write?
THE PRESIDENT: I would write that the power people were all down here and were discussing power policy and legislation, just a preliminary talk.