Chapter 2: Flood Control

CHAPTER 2 Flood Control The various estimates of the total cost of TVA to the taxpayers range from the TVA acknowledged $884 million on up to $1200 million.1 This higher figure includes the interest and tax costs of TVA production (discussed in chapters 5 and 6) that are not paid by TVA. Although TVA officials have claimed in the past that the entire cost of TVA could be repaid out of income, they usually confine these self-liquidating claims to the supposed costs of power production — without interest or federal taxes. The costs of navigation, flood control and other projects are charged to the taxpayers on the assumption that the taxpayers receive benefits equal to, or greater than, the cost to them. Let us examine the correctness of this assumption. In 1938 TVA made an estimate of flood damage in the Tennessee Valley. Then it estimated its own value in stopping this flood damage. The estimate was based on the dollar value of yearly flood damage before the TVA flood control project. TVA decided that $1/2 million was a fair estimate of the average yearly flood damage that it would stop in the Tennessee Valley. Then 1 The source of this reference, as well as all other numerical references, is found on page lOlff.

14 FLOOD CONTROL TVA arbitrarily increased this estimated value by 50$ to cover "intangible benefits." The vital part of this TVA estimate is quoted here: "The estimate of gross annual benefits in the Tennessee Valley thus becomes $2,250,000. If these benefits be capitalized at 4 per cent, the value of complete protection is determined at $56,250,000. However, the Authority's storage reservoirs will not furnish such complete control as to eliminate all the damage. It will be necessary for Chattanooga and other communities to invest considerable sums in local floodprotection works in order to gain full protection. Such local works will cost on the order of $20,000,000. If this be deducted from the above total figure, the remaining $36,250,000 may be said to represent the contribution of the Authority's development toward flood benefits."2 Thus TVA estimated the capital value of its total contribution to flood control in the Tennessee Valley at $36M million. But by July of 1947, TVA had allocated $153 million in construction costs to flood control.3 The yearly interest cost to the taxpayers on this amount is at least $3& million. Yet TVA estimated the average yearly flood damage it would prevent in the Tennessee Valley at only $1/2 million.

TVA has since materially increased this estimated flood protection value. But this increase is due primarily to increased prices and to economic growth in the Tennessee Valley. Thus this TVA claim of additional flood protection value is misleading. The existence of TVA has resulted in some sections of the natural flood plain of the Tennessee River being used as sites for new homes and factories that would otherwise have been built outside the flood plain. TVA now adds a large part of the value of this property to its flood protection figures. By this same logic, TVA could add many of its own structures to the property it now prevents from being flooded. TVA is on firm ground when it claims that it has MISLEADING CLAIMS; LAND FLOODED BY TVA 15 stopped a portion of the flood damage that occurred before TVA was built. But it is on questionable ground indeed when it adds to that figure the value of industries that would have been located elsewhere had not the bargain rates of TVA electricity and other inducements caused the investors to build in the Tennessee Valley.

Let us examine this flood control picture from another angle: According to a report by the Corps of Engineers of the United States Army, a flood that would cover 666,154 acres of land may be expected in the Tennessee Valley once in 500 years.4 Yet, in the name of flood control and navigation, TVA has acquired 1,131,286 acres of land.5 This is an area Vk times the size of the entire State of Rhode Island. Not counting the normal river channel, 463,000 acres of this land are now submerged below the normal level of the man-made lakes that TVA has created as a part of its flood control program.6 An additional 128,000 acres are held for flooding when the reservoirs are full.6 In other words, once every 500 years the Tennessee River might flood as much land in Tennessee as TVA has permanently flooded or set aside for flooding in its flood control program. As the Chairman of the House Committee on Flood Control Projects said: ". . .

careful estimates aver that substantially all the lands that were [formerly] overflowed [by flood waters] are now condemned as bottoms for reservoirs."7 Was this land which TVA took out of cultivation merely wasteland — marshes and swamps, or barren hillsides? On the contrary, much of it was rich valley land, among the best and most productive in Tennessee. A committee of Tennessee Farm Bureau presidents, for example, in 1941 estimated the annual crop loss due to TVA flooding of bottom lands along the Tennessee River at $13% million.8 This was at prewar prices for agricultural commodities. The President of the University of Tennessee estimated the annual crop loss at $1M million for the area flooded by 16 FLOOD CONTROL Douglas Dam alone.9 Dr. W. V. Howard, in his penetrating analysis, Authority in TVA Land, concludes that the average annual loss of farm products for the entire TVA holdings should be placed at $27 million — prewar prices.10 This loss, plus the capital investment of $150 million and the annual costs of operation, interest, depreciation and maintenance, are to be compared with the original TVA estimate of an average yearly preventable flood damage of $1/2 million. And TVA did not claim that it could prevent more than a part even of this. For instance, in discussing the flood problems of the Tennessee River, a study by the Army Corps of Engineers reports that "The greater part of the average annual damages ... is caused by floods at Chattanooga."11 As pointed out before, TVA itself concluded that it would be "necessary for Chattanooga and other communities to invest considerable sums in local floodprotection works. . . . Such local works will cost on the order of $20,000,000/' Mr. E. N. Munns of the United States Forest Service recently stated before a congressional committee that".. . there have been numerous floods in the tributaries in the Tennessee Valley. Such cities as Asheville, for example, have experienced quite often serious floods because the flood protection works in the main stem do not provide flood protection to the higher elevations or the tributary areas. The TVA has asked us in times past to help them out in some of their flood problems in such rivers as the Flint in Alabama and the French Broad [in North Carolina-Tennessee]."12 By and large, many of those tributary sections will shift for themselves during flood seasons just as they did before TVA arrived on the scene.

At this point, however, defenders of TVA claim that TVA flood control is worth many millions of dollars in flood control benefits in the Ohio and Mississippi valleys. TVA estimates, for example, that under certain conditions its flood control works could reduce the flood height on sections of the Ohio and Mississippi as much FLOODS NOT STOPPED; AID TO MISSISSIPPI 17 as two feet. But even if this claim is correct, the "certain conditions" are not always present. The tributaries of the Ohio, Missouri and Mississippi are not necessarily all in flood stage at the same time. There can be destructive floods on the Mississippi even when the flow of the Tennessee River is relatively normal. And it is also possible for the Tennessee River to be in flood without causing any appreciable damage along the Mississippi. Even if the Tennessee River drained east into the Atlantic, destructive floods on the Mississippi would still continue.

On the other hand, as TVA claims it did for Cairo, Illinois, in the spring of 1945, the holding back of the Tennessee could mean the difference between extensive damage and relatively minor damage. During that flood, TVA estimates that its flood control efforts reduced the flood gauge at Cairo by 0.7 to 1.7 feet.13 Since the river at Cairo rose to within six inches of the top of the levees, TVA claims that it kept the flood waters out of the city. But how much credit should go to TVA for reducing by some 9 or 10 inches a flood that gauges from 50 to 60 feet? Would it not be both safer and cheaper for the residents to raise the levees another foot? On this subject of TVA flood control value to the Mississippi Valley, the United States General Accounting Office in its 1948 report to Congress stated: "We believe that there is considerable question as to the ability of the Authority to reduce effectively all the floods and thus increase the land values in the lower Mississippi River Valley, and that, as a result, it has not conclusively substantiated the flood control benefits/'14 So, while TVA does contribute in some degree to flood control on the Mississippi, it is doubtful that the total property saved will ever equal the estimated annual loss from lands which TVA has permanently flooded and withdrawn from production.

Nevertheless, it is this flood control program that TVA uses as its main excuse for expanding. And much of the cost of its electricity 18 FLOOD CONTROL production is charged off to the supposed gains from its flood control program. TVA already has complete ownership and control of an area 1% times as large as Rhode Island. That is merely the amount so far. The law does not prevent TVA from taking, in the name of flood control, as much land as it deems necessary for its various other projects. Furthermore, besides flooding large areas of productive land in the name of flood control, TVA has been known to sacrifice flood protection in favor of electricity production. For instance, consider the implications behind this quotation from a TVA annual report: "During the period of emergency war power demand, Cherokee, Chatuge, Nottely and Douglas, although multiple-use dams, were considered separately from the remainder of the system, and their costs were assigned entirely to power purposes. Since February 1,1945, the entire system has been operating in conformity with its normal multipurpose functions, and the costs of these dams have been allocated accordingly."15 This means that for a considerable period of time those four dams were used exclusively for the production of electricity. They were of little or no value for flood control purposes. But TVA still maintains the fiction — necessary to keep within the United States Constitution — that its power program is incidental to flood control which, in turn, is secondary to navigation.

As industry expands and the demand for TVA power increases, it becomes more and more likely that the reservoirs will be kept filled for extra power production. Then, if TVA misjudges the flood season, or if there should be an unexpected flood, or if any of the multipurpose dams are ever again used exclusively for the production of electricity, the results could be disastrous. A recent incident showed that this doubt of the infallibility of bureaucratic authority is not unfounded. This incident was the 1948 Columbia River flood disaster. Many of our politicians refer to FLOOD VS. ELECTRICITY; COLUMBIA FLOOD 19 this disaster as a further argument for applying the TVA idea in other regions. But before accepting this solution, it might be an excellent idea to see who was responsible for building Vanport City, Oregon on a flood plain. The following extracts are taken from a summary story by reporter Sam Stavisky in The Washington Post of June 13,1948: "Early in 1942, Henry Kaiser began to seek housing for his expanding shipyards. ... In September of 1942, the Federal Public Housing Authority signed a contract whereby Kaiser was to build the houses and Uncle Sam finance them. . . .

Within 30 days all interested governmental agencies — Federal, State, county and city — had agreed on the site [Peninsula Drainage District No. 1, or Vanport City]. . . . The advantages of the site were overwhelming, despite the recognition that the lowlying tract — bounded and criss-crossed by rivers, sloughs and lakes — was ever in danger of seasonal floods. Still, the site was girdled by four walls of earth, and the authorities, Federal and local alike, agreed the dikes would hold back the anticipated floodwaters. ... In 1940, United States Army Engineers had rebuilt the north and south dikes. . . . When the U. S. Army Engineers completed their levee project, the dikes were turned over for management to Peninsular Drainage District No. 1,... (alocal administrative unit). . . . After the war . . . some 18,000 persons were living there On May 20, the Columbia was running at the 15-foot flood stage level. . . . The danger was now at hand. ... An emergency council was formed in Vanport to plan for any eventuality. Engineers of the housing project, drainage district, railroad, etc., kept in constant communication. The Army Engineer Corps assigned two officers to the area. Heads of the Portland Housing Authority, a local body which managed Vanport City for the Federal Government, joined in the 24-hour vigil and consultations. Close watch was kept for leakages, seepages, and sandboils as the water steadily rose about a foot a day around the ring of dikes The emergency 20 FLOOD CONTROL council met Saturday, and decided that if anything the situation appeared favorable. It was agreed, nonetheless, to issue a bulletin. ... 'The flood situation has not changed since the prediction made last Thursday that highest water would come next Tuesday, that the dikes were high enough and strong enough to withstand the crest, and that barring unforeseen developments, Vanport is safe.'. . . Within two hours after the breakthrough, Vanport City was drowned in story-high flood waters. . . ."

So there we have it. In the final analysis, Vanport City was primarily planned and managed by government — federal, state, county and city. All of them approved the flood-plain site for the government housing project. The dikes and levees to control the floods were built or approved by government. The government subsidized new industries to move onto the flood plain. The government supplied these industries with "cheap" government produced electricity. From beginning to end, the whole project was planned and built by government; or was built under government supervision; or was approved by government — and paid for by the taxpayers. Then the floods came — earlier, bigger and of longer duration than the government planners had expected. A railroad fill that the government had approved as adequate flood protection gave way under pressure from the flood waters. The government-built multipurpose dams were of no value whatever in controlling the floods. The government-planned city that was built on a flood plain was inundated. The government-approved housing projects were washed away. The government-subsidized industries were flooded.

Property damage ran into the millions. Lives were lost. Many of the survivors appealed to government to "save and protect" them from "this disaster that was caused by free enterprise"! Apparently they were completely unaware of the fact that government planning was primarily and directly responsible for GOVERNMENT FAILURE; GOVERNMENT'S ANSWER 21 getting them there in the first place. As a result of that disaster, there is increased pressure for a complete Federal Authority on the Columbia River as on the Tennessee River to control floods and to bring the "blessings" of government planning and authority to an entire region. Thus more government planning is proposed as a remedy for the mistakes of government planning. Now it is true that disasters have also occurred because of the failure of dams built and operated by private enterprise. But these failures have never been used as reasons for repudiating government. So why should government's mistakes and failures be used as excuses for repudiating freedom? Why doesn't government admit its blunders instead of blaming them on innocent parties?

Most Americans are compassionate and charitable persons. These are excellent virtues in themselves. But under improper leadership, these virtues could be used to mislead us into embracing destructive socialism in the guise of beneficent flood control.