Public Service Exemplars: “A Finer Spirit of Hope and Achievement”: David Lilienthal
David Eli Lilienthal dedicated 19 years of his life to government service, first as director of the Tennessee Valley Authority (TVA), the federal New Deal hydroelectric power project in the 1930s, and later as the first chairman of the Atomic Energy Commission (AEC), the federal agency created to control the civilian aspects of the nation’s nuclear power program. A 1981 New York Times obituary remembered him as “Keen but relaxed” as well as “an athlete, intellectual and executive.” For many New Dealers, Lilienthal became the beau idéal of a dedicated public servant. I discuss his life and times in my upcoming book Public Service Exemplars: “A Finer Spirit of Hope and Achievement.”
He was born on July 8, 1899, in Morton, Illinois. His parents, Leo and Minnie Rosenak Lilienthal, were Jewish immigrants from what became Czechoslovakia. Leo Lilienthal tried his hand at several vocations. He briefly operated a dry goods store in Morton before moving his family to Indiana. They lived in several towns there, including Valparaiso and Michigan City. Young David graduated from Elston High School in Michigan City in 1916.
For college, he studied at DePauw University in Greencastle, Indiana. He graduated Phi Beta Kappa with a bachelor’s degree in 1920. Lilienthal distinguished himself in college as a speaker, winning a statewide oratorical contest in 1918. He also tried his hand as a light heavyweight boxer.
Following a short stint as a reporter for the Daily Journal-Gazette in Mattoon, Illinois, during the summer of 1920, Lilienthal entered Harvard Law School. There he met Professor Felix Frankfurter, who later became an associate justice on the United States Supreme Court. Frankfurter became Lilienthal’s mentor, encouraging the young man in his legal career, and recommending him for a job in a Chicago law practice with prominent labor lawyer David Richberg after graduation. Lilienthal assisted Richberg in writing a legal brief in a landmark case, Michaelson v. United States (1924), where the United States Supreme Court held that striking railroad workers were entitled to jury trials when they were charged with criminal contempt.
His most high-profile case during those early years allowed Lilienthal to work with legendary advocates Clarence Darrow and Arthur Garfield Hays, co-founder of the American Civil Liberties Union, to defend a black physician, Dr. Ossian Sweet, of Detroit, Michigan, in a murder case. Dr. Sweet had purchased a home in a formerly all-white neighborhood. Angry neighbors surrounded the house, screaming racial epithets and threatening the doctor and his family. Gunshots fired from inside the house during the mob attack injured one white man and killed another. With these seasoned attorneys on his case, Dr. Sweet and his co-defendants were acquitted by an all-white jury.
Despite this early victory in an important civil rights case, Lilienthal established his reputation as a public utilities’ attorney. He left Richberg’s law firm in 1926 to concentrate on utility law, continuing his ascent. He represented Chicago in a landmark case, Smith v. Illinois Bell Telephone Company, a case where the United States Supreme Court refunded $20 million to telephone customers who had been overcharged. For five years beginning in 1926, he edited a legal information publication for Commerce Clearing House.
Recognizing that Lilienthal was an expert, Wisconsin Governor Philip LaFollette, son of the famed Progressive Robert M. La Follette, Sr., appointed him to the state’s public service commission. From that position, the up-and-comer attracted public attention for his legal prowess as well as his tenacious investigations of the gas, electric, and telephone utilities. Largely because of Lilienthal’s efforts, the commission approved more than $3 million dollars of rate reductions for more than a half-million customers. Lilienthal occasionally overreached, however; his attempt to ram through a one-year 12.5 percent rate cut on Wisconsin Telephone Company was struck down by the state courts.
After LaFollette lost the 1932 Republican gubernatorial primary election, Lilienthal recognized the handwriting on the wall. His days on the public service commission were numbered. He needed a new position, and he knew where he might find one. Recognizing a kindred spirit in Franklin D. Roosevelt, Lilienthal contacted the president-elect’s advisers to inquire about the possibility of joining the new administration. Roosevelt responded by appointing Lilienthal to a three-person board overseeing the new Tennessee Valley Authority (TVA), a key feature of the new president’s New Deal programs.
TVA was designed to alleviate the poverty in parts of Alabama, Kentucky, Mississippi, and Tennessee during the Great Depression. Farmland in those states was uncultivated because many impoverished farmers could not afford to purchase feed, seed, and equipment to work their fields. TVA would aid residents by building a hydroelectric plant to generate inexpensive electricity. The program also created construction jobs.
TVA appeared to be the sort of high-profile public works program favored by New Dealers. It was large, expensive, and highly visible. It was designed to get Americans working again, which surely was a goal for every person in positions of authority across the country.
Critics found much to hate. FDR’s political opponents charged that New Deal programs such as TVA were part of a socialist plot to undermine traditional American values of hard work and economic self-sufficiency. A large federal program would wreck the federal budget and, worse, make ordinary citizens slavishly beholden to the federal government, which was becoming an out-of-control behemoth.
Neoclassical economists contended that private sector entities were supposed to operate in a free market unencumbered by government interference. No market is completely free, of course—laws and policies promulgated by governments inevitably affect market performance—but the goal is to minimize interference as much as possible. Yet TVA was a big, bold, expansive program. Because it provided low-cost electric service and acted as a market participant, the Authority distorted supply and demand curves, thereby interfering with pricing. According to detractors, such interference was economically inefficient and impeded the natural flow of commerce. The New Deal would not end the Great Depression. Rather, New Deal programs such as TVA pushed the United States from a free market to a controlled economy.
The Roosevelt administration believed that TVA would improve citizens’ lives. The Authority flooded 153,000 acres of land in the Tennessee Valley region. The flooding created an outdoor recreation area. Two new dams, Norris and Wheeler, generated hydroelectric power. A vocal supporter of the project, David Lilienthal became known as “Mr. TVA.” Harcourt Morgan, an agricultural expert and former president of the University of Tennessee, joined the board, as did Arthur E. Morgan, a prominent engineer. Morgan became chairman of the board.
Lilienthal and Morgan soon butted heads. Morgan was a staid traditionalist who preferred to move slowly and cautiously. He was concerned that the TVA might attract controversy if its leaders made hasty decisions. Lilienthal, the proverbial brash young man in a hurry, was frustrated by Morgan’s cautious conservatism. Moreover, Lilienthal had a vision that TVA should reflect the administration’s commitment to engaging citizens with their government. In his view, the Authority spoke in “a tongue that is universal, a language of things close to the lives of the people.” TVA operated employed local people and educated them, lifting them out of poverty and providing them with opportunities to improv their lives and the lives of their families. This faith in the transformative power of government institutions perfectly captured the idealism of the New Deal.
The most direct expression of Lilienthal’s vision occurred when he delivered a commencement address at the University of Virginia on June 14, 1948. In “The Citizen as Public Servant,” Lilienthal suggested that citizens should improve communities by working in government for some portion of their adult lives. He suggested that “This period will not only call for steadfastness and faith, but for great skills in self-government, great judgment and open-mindedness in the development of public policies, and creativeness in all the arts of government. In these circumstances we must summon all of our talents for citizenship, for self-government, for public service as we chart our course through these dark waters.” Lilienthal agreed that private enterprise was valuable, but government service was important as well. “What I urge is a fluid kind of citizen-service, in which men and women move from private life into public service for a period of years, and then back to private life.”
Arthur Morgan did not share Lilienthal’s faith in government service. Aggravated by his colleague’s aggressive posture, the old man urged Roosevelt not to reappoint Lilienthal at the expiration of his three-year term in May 1936. Morgan was so incensed at Lilienthal’s service on the board that he, Morgan, threatened to resign if the president reappointed Lilienthal. Never one to bow to threats, FDR used his charm to placate Morgan even as he reappointed Lilienthal. After Morgan had left the board in 1938, Roosevelt appointed Lilienthal the new chairman in 1941.
Morgan was not Lilienthal’s sole antagonist. Wendell L. Wilkie, president of the Commonwealth and Southern Corporation, argued that Lilienthal was too heavy-handed in his administration of the TVA. By using Public Works Administration (PWA) funds to construct power distribution facilities, Lilienthal placed private companies at a competitive disadvantage and refused to negotiate with utility executives over rates for generating electricity. According to Wilkie, the plan was “to force us to sell at his price.”
Conservative Republican Senator Styles Bridges of New Hampshire was furious at Lilienthal’s tactics. He stood in the well of the Senate and denounced Mr. TVA as “a Fuhrer” of “an authoritarian state in the heart of America.” The comparison with Adolf Hitler was over the top, but it demonstrated the Right’s frustration with the TVA.
Love him or hate him, Lilienthal was enormously successful. By 1943, after the United States had entered World War II, TVA was, in Lilienthal’s words, “the largest producer of power for war in the Western Hemisphere.” By 1944, the Authority’s annual output amounted to 10 billion kilowatt-hours, which meant that TVA was the nation’s largest producer of electric power.
On May 2, 1945, President Harry Truman reappointed Lilienthal to a nine-year term at TVA, but the tenure was short-lived. Owing to his reputation as a man who got things done, Lilienthal was in high demand. He had expressed interest in a range of public policy questions, including the future of nuclear weapons following the use of the atomic bombs over Japan in 1945.
In January 1946, Undersecretary of State Dean Acheson asked Lilienthal to serve on a committee that would advise President Truman on the U.S. position on nuclear weapons before the United Nations. Lilienthal agreed to serve. Reflecting on the destructive power of nuclear weapons, Lilienthal later confided to his diary that “I feel that I have been admitted, through the strangest accident of fate, behind the scenes in the most awful and inspiring drama since some primitive man looked for the very first time upon fire.”
The committee produced a 60-page report, Report on the International Control of Atomic Energy, known colloquially as the Acheson-Lilienthal Report, outlining a plan for postwar atomic energy management and control. The authors recommended that the United States share its atomic energy secrets with a new international agency that would regulate nuclear power to prevent weapons proliferation by strictly controlling nations’ ability to acquire fissile materials. It was a bold, innovative idea, but Truman was not convinced. He appointed financier Bernard Baruch to present the plan to the United Nations. Baruch edited the plan enough to ensure that the Soviets vetoed the proposal although, to be fair, they probably would not have accepted the plan in any case.
Despite Lilienthal’s failure to persuade Truman to submit nuclear weapons to international control, in October 1946 the president appointed Lilienthal to head the new Atomic Energy Commission (AEC). Following a contentious Senate confirmation battle in which Lilienthal was smeared as, at best, a security risk harboring left-wing sensibilities and, at worst, a Communist, he took up his duties in 1947. He proved to be a vehement proponent of atomic bomb production to ensure that the Soviets did not pull ahead in the arms race. When faced with the question of whether the United States should pursue a crash course to produce a hydrogen bomb, Lilienthal voted against the measure because it might detract from atomic bomb production. He lost that fight.
Lilienthal also sought to use nuclear power for peaceful purposes, such as generating electricity. At the time, however, coal production was inexpensive and environmental concerns were minimal. Consequently, the commercial nuclear power industry did not become viable until the Eisenhower administration, after Lilienthal had left government service.
His tenure at the AEC was rocky. Lilienthal was tasked with coordinating relations between the civilian scientific community and military leaders who were interested in maximizing the impact of nuclear weapons. Lilienthal’s congressional critics found him to be overly sympathetic to civilian scientists, some of whom expressed reservations about nuclear weapons proliferation. Senators Brien McMahon and Bourke B. Hickenlooper were especially vociferous in their criticism, believing that Lilienthal had not done enough to ensure that the United States produced the requisite number of atomic weapons. It was an era when Communists were thought to lurk around every corner. Lilienthal had departed from government service by the time that Wisconsin Senator Joseph McCarthy hurled charges against Communists inside the State Department, but suspicion of “reds” was nonetheless rampant during those early Cold War years.
Lilienthal left the helm of the AEC in February 1950 after serving for 19 tumultuous years in government service. Much in demand as a consultant and adviser, he briefly worked with a prominent financial services firm, Lazard Freres & Company, before becoming president of Minerals Separation, an industrial minerals producer, in 1952. A year later, he became chairman and chief executive officer of the Development and Research Corporation. Despite its innocuous-sounding name, the firm was involved in large construction projects, including dams and electric generation, all over the world. The corporation dissolved late in the 1970s.
Although he no longer served in government, Lilienthal closely followed developments involving the issues near and dear to his heart. The author of six books, Lilienthal commented on a variety of public policy issues. In his 1963 book, Change, Hope, and the Bomb, he fretted about the failure of the commercial power industry to resolve the problem of nuclear waste disposal, writing that it was “particularly irresponsible to go ahead with the construction of full-scale nuclear power plants without a safe method of nuclear waste disposal having been demonstrated.”
Lilienthal received numerous honors and awards during his life, including the National Academy of Sciences Public Service Medal in 1951. He received honorary degrees from DePauw University, Lehigh University, Boston University, and Michigan State College (later renamed Michigan State University). He died on January 15, 1981, at age 81.