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PSF: Coo ke M. L
141
X 7 Bax
PSF MORRIS E. COOKE
Subject File
Box
PSF: Morris Cooke
MOUSE JUHM BHL
pinne
RURAL ELECTRIFICATION ADMINISTRATION
OFFICE OF THE ADMINISTRATOR
MAY RECEIVED 4
WASHINGTON
may 4 1936
my dear Im President
One of the matter which ur
dis curred on Thursday has reached ms
from ano the quarter. my information
whether Correct or not is to the effect that
1. the third fasty to the situation doEs
not Entertain the views ascribed 5 himi; to
2. the farty most at intent will Lane
his medicine" quick buy will 4.5
acaft another Just.
This latter fact-ifit is one- must han a
sliong bearing on the solution's this
admmu Gaten Jroblem.
yours suncerely
Morris Lewely Boom
PSF: Morris Cooke
RURAL ELECTRIFICATION ADMINISTRATION
OFFICE OF THE ADMINISTRATOR
WASHINGTON
file freesmal. mal.
few Draner
May 8, 1936.
My dear Mr. President:
Schmidt, one of the editors of Engineering News Record,
a McGraw Hill publication, came to see me yesterday in re the
expiration of Lilienthal's term. He said he spoke not only
for himself but a Mr. Henry who has done the T.V.A. ceramics
work. He was directed to me indirectly through Paul Wooten,
the McGraw Hill Washington representative. He knew practical-
ly all details of existing situation.
The point in his talk that impressed me - considering
from whom he gets his livelihood - was his insistance that
T.V.A. is now only incidentally a power proposition. The
control of a watershed for water and soil conservation he
thought had become the paramount issue. He urged that this
is the time to serve notice on the private utilities that
peace is the watchword. He deprecated very emphatically
D.L.'s early speeches and thought they had made him so com-
pletely persona non grata to the industry that he should not
be re-appointed.
Yours very sincerely,
Morris L.Come-
Honorable Franklin D. Roosevelt
The White House
Washington, D. C.
PSF: Morris Cooke
pressure
RURAL ELECTRIFICATION ADMINISTRATION
OFFICE OF THE ADMINISTRATOR
(2)
WASHINGTON
May 29, 1936.
My dear Mr. President:
Following our conversation about the legislation creating
the National Resources Commission - eliminated as Title II of the
Flood Control bill - I have made some inquiry about the possibility
of reviving legislation on this subject at this session. Senator
Byrd's attitude alone seems to make it impossible. He is apparently
not averse to the idea of such commission, but he feels that the
legislation presented to date makes the purposes to be accomplished
and the techniques by which they are to be accomplished too indefi-
nite. Whether this represents his whole attitude or not I do not
know. He says however, that nothing could move him from talking
to death any proposal made at this session.
Secretary Hull has agreed to make the principal address
at the opening session of the World Power Conference and to do the
other things during the week which the Executive Committee think
are incumbent upon the State Department. If when you arrive at a
decision about the plans discussed for Friday, September 11, you will
advise me it will help us materially in our further planning for the
week.
In informal conference with representatives of the electrical
industry an understanding has been reached that Dr. Durand will be
supported as President of the World Power Conference, to be elected
in September and to hold office for the six years between now and
the next plenary session. Fortunately it was possible to arrange
this without debate on the name or two which I discussed with you.
Yours very sincerely,
Morris L. boom.
Honorable Franklin D. Roosevelt
The White House
Washington, D. C.
PSF: Morris Cooke
RURAL ELECTRIFICATION ADMINISTRATION
OFFICE OF THE ADMINISTRATOR
WASHINGTON
yen- Damner
P.F.
November 6, 1936.
My dear Mr. President:
You may have read Dr. Arthur E. Morgan's
memorandum dated September 28 suggesting the lines
along which the power pool negotiations should be
prosecuted. But if not, the attached analysis may
have some interest for you. I am sure that these
recommendations are full of dynamite.
My copy of Dr. Morgan's paper is at your dis-
posal in case you want to see it.
Yours very sincerely,
Morris <. books.
Honorable Franklin D. Roosevelt
The White House
Washington, D. C.
PSF: Morris Cooke
RURAL ELECTRIFICATION ADMINISTRATION
OFFICE OF THE ADMINISTRATOR
WASHINGTON
MEMORANDUM FOR THE PRESIDENT
(To accompany letter dated November 6, 1936)
On September 29, the day before the power pool conference at the
White House - I attended a small preliminary gathering at the TVA of-
fices in Washington on the invitation of Chairman Arthur E. Morgan.
Mr. Delano, Judge McNinch, Mr. Manly, Mr. Wehle and Mr. Lilienthal were
among those present. Dr. Morgan distributed and asked discussion on a
mimeographed "Memorandum on a proposed TVA and Commonwealth & Southern
Power Transmission Pool", marked "Confidential" in long hand.
The document sets out what Dr. Morgan assumes to be the basis on
which negotiations with private utility companies should be conducted.
This document found its way within twenty-four hours to the McGraw Hill
Company (publishers of the Electrical World) in New York, was quoted in
the New York Times and later was distributed to certain TVA employees.
The fact that this Memorandum contained theses quite antagonistic in my
opinion to the public interest makes me want to record my feelings in
regard to it. This comment would normally have been written to Dr.
Morgan as the author of the memorandum.
While the pleasant purposes of this memorandum are quite obvious I
would personally feel that I was endangering the public interest as well
as my personal reputation were I to act under it or otherwise become a
party to it. There is little recognition in this memorandum of the es-
sential qualitative difference of & public and private interest in power
matters. It is largely couched in private utility verbiage and patter to
which the public group bade adieu twenty years ago. Specifically: -
1. It calls for "mutual confidence" between the parties to the
proposed contract, i.e. Uncle Sam and the Commonwealth &
Southern (see page 8). I can negotiate with private utili-
ties but give them my confidence never! "Mutual confidence"
18 not a requisite in negotiating workable contracts.
2. "Agreement on the ends sought" and "points of view which are
to control" (see page 1) sounds to me like the Liberty
League's demand that the President declare his objectives.
3. "Fair Value" and "prudent investment" are utilized as
terms having definitive and fair meanings, rather than
terms that when recognized by law inevitably involve acri-
monious litigation for their determination. The suggestion
of compensation for "initiating and insuring useful de-
velopments" sounds like our old friend going concern value
to me. There is a fairly definite reference to severance
damages on page 17 and elsewhere.
4. The suggestion that matters in dispute be left to a board
composed of three members one to be chosen by Government,
one by the private interest and these two to choose the
third, is only made by one not familiar with the history
of utility negotations. For twenty five years it has been
a method preferred by the private interests. But I can
recall no case where it has actually been carried out. Un-
less the private people get the man they want in the third
place their representative refuses to agree and the negotia-
tion falls.
5. "A private utility in transferring properties to the public
would be justified in asking that its responsibilities to its
personnel be assumed" seems to suggest the necessity for in
fact continuing the management. The essential difference in
public and private point of view in this field would make
this inadvisable.
6. On page 10 and following pages an unfavorable comparison is
made between the technical situation as it existed in England
when the Grid plan was adopted and the present situation among
private companies in Tennessee Valley. But no mention is made
of the Federal Trade Commission explorations, write-ups, etc.
as a source of information as to the private industry in this
country.
7. It is recommended that any community wishing to have its own
distribution system must acquire the existing one. It should
do so of course if the asking price is fair in order to avoid
duplicating facilities. But if by prior agreement it is
forced to acquire existing property irrespective of asking
price the latter will surely be "adequate".
contom rup ware sime scripts CO2 ioz The eng return ONL THE or
n
wast ban was ziar of starts buta bas noda salvad
I have purposely sought to confine my comments to matters in
the memorandum. But significant matters are omitted as for instance
the very keen present desire of private companies just outside the
Tennessee Valley to purchase the power not immediately required in
the Valley.
After over twenty years of experience in carrying on reasonably
successful negotiations with private electric utility companies I am
very definitely of the opinion that it is practically impossible for
more than one person to conduct such negotiations if the public in-
terest is to be fully safeguarded. To have representing the public
two persons approaching the question at issue from radically dif-
ferent standpoints is very hazardous - especially if one of the
negotiators feels free at odd moments to take the opposition into
his confidence.
In negotiations such 88 these there is every reason why the
appointed negotiator should report progress from time to time to
the source of his authority and his instructions. But as to the
technique of carrying out his instructions he should be either
untrammeled or supplanted.
Man Goon Morris LA Cooke.
PSF: Cooke
croher
RURAL ELECTRIFICATION ADMINISTRATION
Sile
32
OFFICE OF THE ADMINISTRATOR
WASHINGTON
PF.
January 4, 1937.
My dear Mr. President:
I have seen Mr. Fels and he has volunteered to
go after that assignment with every energy, even to the
extent of making & trip into the South if the end can
best be accomplished that way. He expressed the view
that if necessary the funds for an extended vacation
could be found through private sources.
He thought that some assignment if only of a
minor character might give point to a sojourn abroad -
perhaps something like a study of "Little Waters" in
one or more foreign countries. Without making a com-
mitment I said this might be possible. Mr. Fels may
want a word with you about this.
I will follow up and advise you of any develop-
ments.
Yours very sincerely,
Morris <.Goose
Morris L. Cooke
Honorable Franklin D. Roosevelt
The White House
Washington
D. C.
RURAL ELECTRIFICATION ADMINISTRATION
OFFICE OF THE ADMINISTRATOR
WASHINGTON
January 4, 1937
My dear Mr. President:
The enclosed remarks of Dr. Arthur E. Morgan at the
American Economic Association meeting in Chicago last week do
not in my opinion make for the integration of Administration
policy even if they do not "give aid and comfort to the enemy".
You will note such expressions as -
"the socially irresponsible Napoleonic complex
which dominates some so-called reformers"
"public ownership advocates *** sometimes men
who do not disclose their real purpose"
"red tape, bureaucracy, logrolling and patronage
*** might levy a heavier tax than over-
capitalization"
"present blind and emotional campaign *
to break up large and efficient systems"
"vast expansion of electrical co-operatives by
Government grants" cause "misgivings"
"electric power issue is not just & glorious
battle which will take one side or the
other to victory"
"treason to paint the utility dragon with less
horrible claws and with less flaming breath"
Perhaps one would not be warranted in saying that
Dr. Morgan is out of effective sympathy with New Deal power
activities but given the opportunity he would eliminate from
their administrative posts nine out of ten of those in respon-
sible charge.
Yours very sincerely,
Morris
Honorable Franklin D. Roosevelt
The White House
Washington
D.C.
REMARKS OF ARTHUR E. MORGAN,
CHAIRMAN OF THE T.V.A.
AS CHAIRMAN OF A DISCUSSION ON POWER
AT THE ANNUAL MEETING OF THE
AMERICAN ECONOMICS ASSOCIATION,
DECEMBER 30, 1936
The electric power problem is partly an issue of broad
social philosophy, and partly a practical problem of effective
organization. Both these elements are important, and to neglect
either one would be to leave the problem unsolved.
Through the whole of so-called Western civilization there
is under way a deep-seated but slow moving social change, which
might be called a social revolution. During the whole course of
history it has been common for men in power to see other men as
parts of the natural environment, to be used in whatever way they
may be most serviceable - as slaves or cannon fodder or serfs or
tax-payers or customers. It has been so usual for those in power
to take the cream of things and to establish themselves and their
families in privileged positions and with vested interests, that
the very structure of society has been largely built upon that
condition. Not only the evils but the excellencies of civiliza-
tion are interwoven with that type of social organization. Much
of the great music, art, science and scholarship of America, even
much of its reform activity, is supported by the income from
special privilege.
Very generally a position of power and authority has been
2.
associated with privilege and exploitation. The slow moving
social revolution is a rebellion against the resulting condi-
tion of unequal opportunity. That revolution has two sources
of strength. The gradually increasing sensitiveness of
sympathy and understanding, which leads men in a greater or
less degree to share their lot with others, and not to see them
just as parts of the environment, like land and forests and
animals, to be used as most convenient - this is a real factor
in the social revolution which is going on. Without that spirit
there would be no social controls but brute force and cunning.
Its highest expression is in the dictum, "Thou shalt love thy
neighbor as thyself."
The other source of strength for this social change is
the growing intelligence and education and the growing sense of
power of the common man, which results in revolt against
exploitation, and demands that capricious and arbitrary in-
equalities of opportunity shall be removed. We are slowly
discovering that common men by mutual confidence and united
action can protect themselves against those who would treat them
only as convenient and productive parts of the environment. Often
that united action lacks discrimination.
Whenever some new and important economic factor enters our
common life, there we find a point of intensified conflict in this
3.
deep running social revolution. Regardless of how technical and
matter-of-fact a treatment of current social and economic issues
may be, nearly always there exists in the background this living
issue of equality of opportunity, and the elimination of special
privilege. To deny this factor in a consideration of social and
economic issues is like trying to understand human nature solely
by the study of a cadaver, and not by the actions of living men
and women.
Electric power is such an important new development that
it naturally becomes one of these points of intensified conflict.
With its enormous expansion, some men in the age old manner of
men in positions of power have manipulated the industry so that
great tribute would flow to themselves. Abuses in the industry
have been great and quite general. They have taken the form of
over-capitalization, excess charges by service companies owned
by insiders, excessive rates, prejudiced propaganda, and the
misleading of investors. Against those excesses we have rebellion,
quite generally honest rebellion, honestly led; but sometimes led
by&embittered and prejudiced persons, sometimes by impractical
enthusiasts, and sometimes by those ever-present parasites who
attach themselves to any promising movement primarily to promote
their own interests.
4.
Correction of utility abuses also has been furthered by
the innate decency of many men in the industry. Men of self-
respect and of honorable business standards more and more are
coming into positions of responsibility in the power industry.
The very nature of the business, being one of service to the
community, tends to develop in responsive men a spirit of
service; and pride in fine technical achievement tends to have
the same effect. Moreover, those in power in the industry are
beginning to see that unless they-bring about necessary changes,
those changes may be imposed by the public in a more drastic and
arbitrary manner. That process of correction isfar from complete,
but in so far as it actually has taken place it should be fully
recognized. Those whose mental sets were determined by conditions
in an earlier stage of the industry or by the most offensive present
day organizations, may call it treason to paint the utility dragon
with less horrible claws and with less flaming breath, but honest
recognition of the facts is essential.
Both those who now control private utilities and those who
are pressing to correct abuses have today a very grave obligation.
There is a. strong pressure over the world in dealing with the deep
running ourrent of social change, to eliminate an attitude of
reasonableness and mutual inquiry and to fall back on arbitrary
force and violence. This drift is of very serious import. The
5.
way of Russia, Italy, Germany and Spain is not impossible here.
The Attitude of calloused exploitation which still characterizes
certain of the less responsible private utilities, and the
socially irresponsible Napoleonic complex which dominates some
so-called reformers, are alike serious. Patience, tolerance,
mitual understanding and a spirit of adjustment are necessary on
both sides.
I have said that the electric power problem is partly a
matter of social philosophy, and partly a question of effective
organization, and that neither element can be safely overlooked.
Both private utility managers, and those in public life who would
correct their abuses, make a grave mistake when they treat the
power issue as solely or even chiefly as a matter of political
attitudes, for it also is a difficult problem of organization.
Private power people who denounce public ownership in toto
with 8. cry of "graft" and "incompetence" are doing neither their
industry nor the public any long-time public service. Electric
power supply is a public matter which must be under public control.
The manner of that control must be arrived at by open-minded inquiry
and experiment and not by irresponsible propaganda. A teacher of
electrical engineering who worked under my direction onoe gave a
very restrained and discriminative talk on public ownership of
power. The general manager of a large utility system severely
6.
criticized me for allowing it in his territory. He said that it
made no difference how restrained and moderate the disoussion had
been, that his company had won that territory and intended to
hold it by every means in its power, that the question of public
and private ownership was a closed issue in that territory, and
that the least suggestion of encouragement to discuss it was an
offense to his company. Such an approach is no contribution to
the problem.
On the other hand, there are public ownership advocates,
sometimes open advocates, but sometimes men who do not disclose
their real purpose, who see nothing to the power issue but a
dramatic public battle which will mark them as heroes. The
issue is not so simple as that. America has as yet no well
matured methods for administering public power. Our governmental
machinery, grown up largely around clerical and administrative
work in our national capitol, is not developed to handle
efficiently the exegencies of large soale utility business. Red
tape, bureaucracy, legrolling and paironage are grim realities
which unless greatly reduced might levy a heavier tax than over-
capitalization. America has as yet made relatively little
contribution to the technique of government administration of
large scale business. The full development of that technique
will take time. I strongly favor public ownership projects
7.
which will help in the development of efficient methods, but I
believe that the welfare of public business as a whole will best
be promoted by intensive application to a limited range of public
undertakings, rather than to vast expansion before we learn how.
Neither have we arrived at any clear understanding of
the best ways of administering the power industry in particular.
The present blind and emotional campaign in some regions to
break up large and efficient systems, in order to hurriedly
advance local public ownership, may result in great economic
waste and duplication. We do not yet know how large or how
small distribution systems will be most effective, or how to
organize them. Also the willingness to destroy honest and
necessary private investment by an emotional campaign may levy
a heavy tax in the form of loss of confidence by investors in
governmental integrity. An unnecessary building up of duplicat-
ing personnel may be hard to deflate when public jobs become
vested interests. It is easy to organize a vast expansion of
electrical cooperatives by government grants, but old time
experienced cooperators have misgivings. They know that regard-
less of the excellence of central administration, both managing
skill and the cooperative spirit in local undertakings are of
slow growth, and that an epidemic of failures through inexperience
8.
and bad management may set back the interests both of public
ownership and of cooperatives.
In short, the electric power issue is not just a. glorious
battle which will take one side or the other to victory. It is
a complex technical issue which requires not only fighting blood,
but creative ability and patient building, with a period of
experimental development to discover new governmental forms,
and of education in responsibility for public business. In my
opinion, when effective organization of the power industry is
achieved it may have some of the characteristics of private
organization and some characteristics of public ownership. Perhaps
private investment will be associated with public control. En-
forced cooperation between public and private industry may be the
necessity which is the mother of invention. Part of our energies
should be reserved from fighting over the issue and used to trying
to solve it.
Electric power is not just another product on the market.
It represents a social revolution. For countless centuries men
and women have worn out their lives in physical toil. Now for
the first time comes the promise of a source of power which can
be almost universally available, infinitely divisible, always
waiting at hand, and 80 cheap that for many uses its cost can
9.
almost be forgotten. As hope of that alleviation rises to full
life and expectation, it must not be unnecessarily deferred.
For would-be exploiters to say, "Give us just one more decade
of rich financial returns and we will give up our preferred
position" - is not a tenable attitude. The resentment it would
arouse would be a menace to social stability. However, the
genuine difficulties of economic adjustment should be recognized
by those anxious to eliminate abuses, and there should be on each
side a constant proffering of fairness and reasonableness in
response to any evidence of that attitude on the other side. The
losses due to bitter conflict would be far greater than the loss
of reasonable give and take of honest efforts to find common
ground. Those who should protect the public interest should not
quickly relinquish any of their weapons, but they should use them
to insure the common good, and not in an emotional spirit of
retaliation against past wrong doing. The art of planting the
seeds of reasonableness and of mutual confidence, and of giving
the young plants 8. chance to grow without tramping them down,
is a great art. Most of Europe has not learned it. Let us hope
that we in America may do 80.
PSF: Morris Cooke
cash
fullmal
Gen Drawn
January 5, 1937.
My dear Mr. President:
In accordance with our conversation this is
to ask you to accept my resignation as Administrator
of the Rural Electrification Administration as of about
February 15. As you know Mrs. Cooke and I are planning
to go on an extended trip out of the country. The REA
is now & seasoned organization and fully competent to
carry on along lines you Mr. President have sponsored
from the beginning.
I believe so thoroughly in what is being ac-
complished that this association with your Administration
has been a heartening experience. And for the solid satis-
faction which I have gotten out of my various assignments
and for the inspiration of your support and far-sighted
leadership I shall always be deeply grateful.
Yours very sincerely,
cooke.
Honorable Franklin D. Roosevelt
The White House
Washington
D. C.
PSF: Morris Cooke
THE WHITE HOUSE
file pus onal
WASHINGTON
yen
9/16/37
(n)
MEMORANDUM FOR THE PRESIDENT
I saw Secretary Ickes yesterday in regard to your
proposal and he preferred not to reach a decision about
it pending my presenting the matter to Mr. Delano, which
I did this morning. Mr. Delano gave me the impression
that the plan had merit but he in turn, did not care to
commit himself until he had communicated with Secretary
Ickes. Having done this, he quoted Secretary Ickes as
saying he did not care to reach a decision in this
matter until Mr. Delano had talked to you.
As a matter of fact, the National Resources Committee
has launched a new and seemingly very comprehensive review
of the Drainage Basin studies. They hope to have in your
hands by January first, a new set of conclusions. I
think they probably feel that the budgetary study which
you now propose will be more than taken care of by these
new studies.
My conclusion is that NRC will be unable to get out
an answer to Judge Whittington's request in the six or
eight weeks available and, (2) that with the present
attitude of the National Resources Committee that the
Committee of three which you suggested would be too
seriously handicapped to make any sort of satisfactory
report possible.
I must not give you the impression that anybody
opposes your suggestion, but there is very decided lack
of enthusiasm along the line.