The Vote for Public Power | March 12th 1935

On March 12th 1935, one of the most contentious public votes took place in Chattanooga. The outcome shaped the region’s future in ways nobody could have imagined.

At stake – whether to fund bonds to create a municipal power distribution system vs. continued dependence on a sole private provider; the Tennessee Electric Power Company. TEPCO was the largest private-sector electrical power monopoly in Tennessee’s early history and was composed of the assets of forty-five different companies.

Access to electric power was still not guaranteed for those outside cities. As a privately owned monopoly, TEPCO resisted extending power into less-profitable areas.

The Tennessee Valley Authority was established just two years earlier as one of President Roosevelt’s Depression-era New Deal programs. Other noteworthy New Deal programs that remain today include the Securities and Exchange Commission (SEC), Social Security, and the Federal Deposit Insurance Corporation (FDIC).

TVA provided a different option – it would produce and make wholesale power available to municipalities and cooperatives for distribution (power lines to your homes and businesses).

The merits of public power were clear to a majority of the public. However as March 12 drew closer a barrage of propaganda was launched in an attempt to confuse, create fear, and doubt among voters. In the months and weeks leading up to the vote accusations of voter registration fraud were alleged and dramatic advertisements filled the newspapers

Those who organized the Public Power League to urge support for municipal power on the TVA side included, George Fort Milton, publisher of the Chattanooga News . Milton’s efforts and involvement were crucial in the creation of the public power option and its success.

The Citizens and Taxpayers Association represented advocates of private power, with money and political organization on its side. Roy McDonald, publisher of the Chattanooga Free-Press , was categorically against the public power project and predicted that Roosevelt was out to led the country into ‘dictatorship’ through its 'New Deal program in the Valley'.

L. J. Wilhoite, public power promoter, declared in a radio address the night before the election, “every type of vote padding and corruption ever conceived” has been used to defeat the bonds and citizens must help prevent theft of the election. Wilhoite would go on to be chairman and member of the Electric Power Board (EPB) from 1935-1960.

On the morning of the twelfth, the editor of the Chattanooga Times , Lapsley G. Walker, had warned readers that the city of Chattanooga was at the "crossroads" and that it would go to the "right and private ownership" with "economic initiative" or the "left" with higher taxes, increased electric rates, and "socialism."

Despite cold rain and sleet on March 12th, 1935, a record voter turnout delivered the landslide decision of 19,056 to 8,096 in favor of funding bonds for the creation of public power

EPB of Chattanooga was formally created – however, the fight for public power was far from over.

Chattanooga would need its own power distribution system – and sought to purchase the facilities of privately owned TEPCO, whose leadership refused to sell.

TEPCO was owned by Commonwealth and Southern Corporation, a giant utilities conglomerate. Its president, Wendell Willkie, and local president Jo Conn Guild, waged a five-year legal battle against the TVA, challenging the constitutionality of the public utility in federal courts. The courts upheld the TVA act.

It took almost 4 1/2 years of negotiations to come to an agreement. In August 1939, the TVA purchased TEPCO for $78.4 million. Chattanooga’s share of this was $10,850,000.

Practically to the last person - TEPCO workers were rehired by the EPB. Jo Conn Guild and others formed a new company called the Tennessee Utilities Corporation, which operated the street car and bus lines in Chattanooga and Nashville for many years.

Former TEPCO president Jo Conn Guild, Jr.(right) is shown on an Incline Railway car in 1949. Guild's father co-designed the Incline Railway #2. Source: Chattanooga Public Library

Today, EPB remains one of the largest municipally owned electric power distributors in the country, serving over 170,000 homes and businesses in a 600-Square mile area that includes greater Chattanooga and Hamilton County, portions of surrounding Tennessee counties, and areas of northern Georgia.

In 2010, EPB Fiber Optics became the first provider in the United States to deliver up to 1 Gig (1,000 Mbps) internet speeds utilizing a community-wide fiber optic network accessible to every home and business in its service area.

S. R. Finley, the first employee of EPB, recalled negotiations between TVA and TEPCO:

"…I came down full time on July 12, 1937 and assembled an engineering staff and began the project of laying out and designing a power system to serve the city of Chattanooga.
You might say that the real battle of TVA happened right in Chattanooga because at that time TVA had no market for their power. They had a lot of dams built Norris Dam, but they had no market, and you can't run a power system without somebody to sell your electricity to... so what Chattanooga was doing was very important to TVA.
We had a contract with the TVA—a thirty year contract—in which they were ready to deliver power anytime we were able or ready to buy it.
…getting those people together was like a lot of temperamental opera stars."
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