Franklin D. Roosevelt

Transmittal to Congress of the Record of the Removal of the Chairman of the Tennessee Valley Authority.

March 25, 1938

To the Congress:

I Transmit herewith for the information of the Congress my opinion setting forth the reasons which impelled me to remove Arthur E. Morgan, and my letter to him removing him, as a member and Chairman of the Board of the Tennessee Valley Authority. I further transmit the opinion of the Attorney General in regard to my power to remove for cause members of the Board of the Tennessee Valley Authority. I also append the transcript of the hearings which were had before me on March 11, 18 and 21, 1938, and which I think merit the serious consideration of all those interested in the T.V.A. I have filed my letter to Arthur E. Morgan and the transcript of the hearings, together with all exhibits marked for identification in the transcript, with the Secretary of State.

It is clearly the right of the Congress to undertake at any time any fair inquiry into the administration of the Tennessee Valley Authority or its policies which the Congress may deem in the public interest. But I cannot in the meanwhile abdicate my constitutional duty to take care that the laws be faithfully executed.

I call the attention of the Congress to the fact that on the evidence presented I was obliged to find that,

(a) Arthur E. Morgan publicly made grave and libelous charges of dishonesty and want of integrity against his fellow directors, and when called upon to sustain them repeatedly refused to do so;

(b) On the face of the record, charges of the other directors that Arthur E. Morgan has obstructed the work of the Tennessee Valley Authority were substantiated by proof, were not refuted, and therefore must be accepted as true;

(c) Arthur E. Morgan was contumacious in refusing to give the Chief Executive the facts, if any, upon which he based his charges of malfeasance against his fellow directors, and in refusing to respond to questions of the Chief Executive relating to charges of obstruction made against him by his fellow directors.

Arthur E. Morgan has repeated the assertion that he will answer questions only to a committee of the Congress. Obviously, there can be no objection to hearings before such a committee. But the Congress will, I am sure, realize that if any member of the Executive branch of the Government, of high degree or low degree, is given the right by precedent to refuse to substantiate general charges against other members of the Executive branch of Government and to insist on disclosing specifications only to a committee of the Congress, efficient administrative management of government would be destroyed in short order.

The letter of removal follows:

Dear Dr. Morgan:

As A result of the hearings had before me on March 11, 18, and 21, 1938, I regret to inform you that I feel obliged to remove, and do hereby remove, you as member and Chairman of the Board of the Tennessee Valley Authority. This removal is to become effective as and from March 23, 1938.

As is more fully explained in the memorandum opinion which I read at the hearing on March 21, and by the record before me, I have been impelled to remove you for the following reasons:

(a) Openly making grave and libelous charges of dishonesty and want of integrity against your fellow directors without reasonable excuse or justification.

(b) Obstructing the work of the Tennessee Valley Authority.

(c) Refusing to submit to the demand of the Chief Executive for the facts upon which you relied in openly making grave and libelous charges of dishonesty and want of integrity against your fellow directors and refusing to respond to questions of the Chief Executive relating to charges of obstruction made against you by your fellow directors.

I have taken note of the fact that you have not presented to me in person or in writing any reason why I should not remove you other than the statement recorded in the transcript of the proceedings before me on March 21, 1938.

A duplicate of this letter is being filed with the Secretary of State.

Yours respectfully,

Dr. Arthur E. Morgan,

Knoxville, Tenn.

The Presidential memorandum on the facts requiring the removal is as follows:

Under the Constitution of the United States, the Chief Executive is directly charged to "take care that the laws be faithfully executed." I have been confronted for some time with a threat to the continued successful functioning of the Tennessee Valley Authority, a great executive agency. And let me say at this point that, on the whole—considering that this was a great experiment in Government, an experiment intended to help the lives and the social conditions under which millions of people live-as such an experiment it has been proved successful. I think we have accomplished great things for the people of the whole Tennessee watershed.

But of late we have all of us been confronted with certain conditions which threaten the continued successful operation of this great experiment. I go back fourteen months to January, 1937, when in a public speech and articles in the public press one of three members, the Chairman of the Board of Directors of the Authority, seemed to intimate—but without specifications or supporting evidence—that he doubted the integrity of his fellow members.

Largely as a result of questions raised at that time, questions relating primarily to the administrative setup of the Authority, I asked a committee of three, all of them experienced in administrative affairs, to go to the Tennessee Valley and report to me on some of the questions that had been raised, including the question of the appointment of a general manager, which I think in the first instance had been suggested by Arthur E. Morgan in a letter to me. A report of this committee approved the appointment of a general manager, and indeed one had already been appointed as acting general manager.

Historically, the next difficulty arose in the Board of Directors over the choice of a permanent general manager. Things dragged on through the summer of 1937.

At the end of August, again in the public press—but again without specifications or supporting evidence- Arthur E. Morgan used language intimating that he doubted the integrity of his fellow members. I wrote him at that time:

"that there is a very definite obligation on you either to withdraw what your colleagues believe to be an impugning of their integrity or that you present whatever specific facts you may have, if any, to justify your statements."

In reply, Chairman Morgan informed me that while he was highly critical of the work of his colleagues, he had no intention of impugning their good faith or personal integrity. He complained about the internal organization of the Tennessee Valley Authority and requested me to intervene in his behalf. I urged him to return and to try to complete the internal reorganization in harmony with his fellow directors. And on my calling their attention to his statement that he did not have access to records, his fellow directors denied this statement categorically and stated that all records were and would be open to the inspection of the chairman.

Things went on until December, 1937. The constitutionality of the TVA Act was at stake in a law suit that had been brought by eighteen utility companies. I think it was a matter of almost public record—the record of the time—for it was mentioned in the press and in the record that has been brought out last week and the week before—that during this litigation Chairman Morgan widely disseminated within the Authority's organization charges of unethical professional conduct against counsel for the TVA who were in charge of the litigation-again without specification or evidence.

On January 18th this year, the majority members submitted to me, without publicity—and it was, in fact, not published in any way—an official memorandum complaining of certain specific kinds of unpermissible conduct on the part of Arthur E. Morgan, including the making of unsupported charges, including an unwillingness to cooperate in carrying out decisions of a majority of the Board, and including serious interference with the work of key members of the Authority's staff in the performance of their duties. In contrast to Arthur E. Morgan's charges against them, the complaint of the majority against him did not charge him with dishonesty or lack of integrity. I think that is a fact that directly bears on the pro's and con's of this inquiry.

On March 3 and on March 5, 1938, Arthur E. Morgan made extensive and unequivocal charges of dishonesty and lack of integrity in public office on the part of the majority members again in the public press—and again without specifications or evidence.

Despite my long personal friendship for Arthur E. Morgan and my appreciation of his many public services in the past, this action by him compelled action by me.

As Chief Executive constitutionally responsible for the faithful execution of the Tennessee Valley Authority Act, I could not ignore charges of dishonesty, bad faith and conspiracy in its administration.

In fairness to Dr. Harcourt Morgan and Mr. David Lilienthai—in fairness to them as public officials and as American citizens—I had to make public their accusations of obstruction against Arthur E. Morgan because, without notice to me, he had made public his accusations of dishonesty against them. I could not wash my hands of these grave and libelous charges against men whose alleged guilt had not been proven, any more than I can today wash my hands of these charges because of the possibility or the probability that at some later date they may be investigated by another branch or branches of the Federal Government.

Therefore, I summoned the three members of the Board of the T.V.A. to appear before me on March 11, face to face with each other, to present such facts as they might have to support the serious charges which they had made. It was not a formal court proceeding, but a simple and fair way to get the truth-to let each confront the other and tell his story in straightforward non-technical words.

I informed the-members that I was concerned at this particular inquiry, not with the pro's and con's of TVA policy, but with their charges of dishonesty on the one hand and misconduct on the other.

I first called on Arthur E. Morgan to substantiate with facts the several charges of dishonesty and want of integrity which he had made against his fellow directors. I called his attention to the fact that the gist of his complaint in regard to the handling of the Berry marble claims appeared in his own words to be that "the real difficulty has been in the effort to secure honesty, openness, decency, and fairness in Government." And I pointed out to him that common decency toward his fellow directors called for utter frankness and candor on his part.

At the hearing on March 11th, Arthur E. Morgan flatly refused to submit to me any evidence in support of his charges. He read a prepared statement to the effect that the "meeting is not, and in the nature of the case cannot be, an effective or useful fact-finding occasion. To properly substantiate the charges is not the work of a morning." When asked whether he had any reason to believe that the hearing would be confined to a morning or whether he would be prepared to submit facts if given one week or two weeks to do so, he failed to reply.

The majority members explained the action which they had taken in the Berry marble claims case, as well as their action on the Arkansas Power and Light Company contract, and on the Aluminum Company contract, to which Arthur E. Morgan had referred in his public statements. I could not expect a more adequate explanation than that which they made, especially in view of the failure and refusal of Arthur E. Morgan to submit the facts on which he relied to support his charges.

I then asked the majority members to present the facts in support of their charges against Arthur E. Morgan.

The majority members first referred to a number of his published articles and speeches during 1937 which, they contended, contained unsupported and unsupportable statements impugning their honesty and integrity. Whether or not these articles or speeches were intended to impugn the motives of the Directors, it is, unfortunately, clear that the more recent public statements of Arthur E. Morgan, to which the majority members also referred, do without question assail the personal honesty and integrity of the majority members in unmistakable terms.

But Arthur E. Morgan refused, although I pleaded with him and gave him repeated opportunity, to present any facts in justification of his attacks upon the integrity of the majority of the Board.

The majority members also proffered facts tending to show that in the course of delicate and important conversations between the Authority and private interests, Arthur E. Morgan had private conferences and communications with one or more utility executives, with a large prospective power purchaser, and with an electric equipment manufacturer, which conversations and conferences might well have hampered the Government in carrying out the decisions of the majority of the Board.

As a matter of law and common sense, when there is dissension within a multiple-headed executive agency, it is difficult to draw the line where dissent becomes obstruction. I have serious doubt as to the propriety of a number of things which Arthur E. 'Morgan did in an effort to create a situation in which he could force an acceptance of his own ideas. But just so long as we have multiple-headed administrative boards we ought to allow considerable latitude for human discretion and not frighten a minority into acquiescence. Therefore, I have sought to resolve every doubt in favor of Arthur E. Morgan. Nevertheless, significance does attach to the multiplying of these instances in which he trespassed into doubtful territory.

For example, the majority members proffered facts tending to show that Arthur E. Morgan did not send a telegram to me as directed by the Board. Although here in this case Arthur E. Morgan may have committed only a technical wrong, he having testified that he had changed his mind, an instance of this sort, standing alone, would have no significance; but, taken in the light of many other acts, the chain, the whole chain, must be given significance.

The majority members also offered facts tending to show-and I think I should say fairly show—on the face of them that Arthur E. Morgan interfered with and obstructed the Tennessee Valley Authority Counsel in vitally important constitutional litigation which affected the very life of the Authority, a litigation to which I have previously referred.

To the demands of the counsel under accusation that Arthur E. Morgan should give evidence and specifications the latter refused to make reply. The interference reached such a point that special counsel for the TVA, Honorable John L. O'Brian, formerly the Assistant to the Attorney General of the United States under the previous Administration, an independent lawyer of great experience and wide reputation, felt impelled to write to the Chairman as follows:

Dear Dr. Morgan:

I have your letter of December 30, 1937.

Prior to the trial and during the trial I have actively participated in and have closely observed the preparation and presentation of the testimony. Since receiving your recent letter, I have again gone over the file of material concerning the preparation and presentation of the engineers' testimony in the case now on trial, and have talked with the attorneys and also with a number of the witnesses. As a result, I am more than ever confirmed in the opinion which I previously expressed to you that the case has been handled with unusual ability and in accordance with the highest standards of integrity.

Your charges, coming while the case was actively on trial, have had a disrupting and demoralizing effect upon all the attorneys and upon the conduct of the Authority's case. After careful review of the matter I am convinced that the charges must have originated in some misunderstanding and have no real foundation in fact. The matter ought to be definitely cleared up in justice to the lawyers and also in justice to the Authority's case which needs the best efforts of all of the attorneys. As all the attorneys are now under great strain in the stages of this trial I am writing to ask whether you will not clear the record and set the members of the legal staff free from a very heavy and, I think, unwarranted burden of anxiety at this critical time.

It is a matter of record that the TVA had intrusted the conduct of this important litigation to highly competent counsel. Its unusually capable General Counsel had the assistance of an able, independent special counsel. Whatever differences there may have been within the Board as to the conduct of this litigation no evidence has been submitted to me which would have justified the minority member at a most critical stage of the proceedings in openly charging reputable counsel with unethical conduct, thereby, consciously or unconsciously, prejudicing the case of the government. In spite of all this Arthur E. Morgan, when given the opportunity by me, has offered no explanation for this reckless and astounding conduct.

I concluded the first hearing on March 11 as follows:

"I have now heard the charges and countercharges of the T.V.A. Board. I have endeavored to give each side the opportunity of answering the complaints of the other side. Frankly, I am disappointed that Chairman Morgan has not answered by giving any factual answers to the questions which I have put, but I hope that in the course of the next week Chairman Morgan will realize that it is of the utmost importance to the continuation of the work that he should reply to very simple factual questions.

"He should have every opportunity so to do. And, therefore, if it is agreeable to him and to the other two members, who also may want to present additional facts, I will set a resumption of this hearing for a week from today, Friday morning, at eleven o'clock, and if you care to appear in person at that time it will be entirely agreeable to me. If you prefer to submit any factual report in writing without appearing, use your own judgment.

"A second hearing was accordingly held on March 18th.

At this second hearing, Arthur E. Morgan persisted in his refusal to participate in any inquiry to ascertain facts regarding his charges of dishonesty and want of integrity, although in a prepared statement he referred "by way of illustration" to certain facts and circumstances tending to show that the Berry marble claims were worthless and that there was reason to suspect the bona fides of the claims. But there is absolutely no evidence before me that the majority members of the Board ever contended either that these marble deposits had any commercial value or that they themselves had no reason to suspect the bona fides of the claims.

The evidence shows on the contrary that claims aggregating millions had been filed against the Government; that the majority of the Board were as deeply concerned about them as was Arthur E. Morgan; and that the Board's counsel was endeavoring to obtain all available evidence to oppose the claims on the ground that the marble was commercially valueless and that the claims were not advanced in good faith.

The majority members, acting on the advice of TVA counsel, believed that it would tend to protect rather than hurt the Government's case if an independent expert under a conciliation agreement made a report on the value of the marble deposits without binding either the Authority or the claimants in any way.

When this procedure was proposed at a Board meeting, Arthur E. Morgan objected to it. As a member of the Board he had a right so to do. He believed, apparently, that, despite the express terms of the agreement, it would in some way adversely affect the rights of the Authority to contest the claims. The majority members, conscious of the hazards of any litigation and not having as yet unearthed any legal or direct evidence of the bad faith which they nevertheless suspected, were equally within their rights in voting to adopt the procedure that had been suggested by the Authority's counsel. There is not the slightest basis for Arthur E. Morgan's imputing bad faith to the majority members because they and the Authority's counsel differed with him on technical points of legal procedure. It seems strange and, I think, unwarranted for Arthur E. Morgan on the one hand to complain that as a layman he cannot adequately explain to me why his colleagues acted improperly and, on the other hand, as a layman to take it upon himself to accuse his colleagues of gross misconduct in the handling of a lawsuit.

Arthur E. Morgan's whole attitude toward this inquiry in itself gives credence to the charge that he has been unwilling to cooperate with his fellow directors in the administration of the Act and that he is temperamentally unfitted to exercise a divided authority. His fellow directors have responded as a matter of course and have given specifications to support their grievances. With the exception of a few fragmentary questions and answers on the Berry marble claims, Arthur E. Morgan has stood aloof and refused to cooperate in this proceeding or even to supply the simplest facts asked of him by his own administrative superior, the Chief Executive. The contrast is obvious. The contrast is disheartening.

I have tried to be mindful of the debt the public owes to Arthur E. Morgan for past services, of his sense of the righteousness of his own convictions, and of the patience with which the public interest demands that a situation of this kind be worked out if possible. I have therefore struggled with this problem for over a year, and, in its present acute form, for six months. I have been patient.

But, as I have said before, there is a limit to patience. I must greatly consider the position in which Dr. Harcourt Morgan and David Lilienthal find themselves. Some decision on this record is due to them, in all fairness. If there should be no decision after Arthur E. Morgan has refused to substantiate his grave and libelous charges against them, they would be definitely, seriously and permanently injured in their rights and standing as citizens and as public officials.

Furthermore, I must greatly consider the continuing operations of an important government agency. It would violate my constitutional duty to take care that the laws are faithfully executed if I should leave unsupported charges hanging indefinitely over the heads of two officials who have cooperated in the difficult task of divided authority and thereby permit a recalcitrant non-cooperative official further freedom to sabotage Government operations at a crucial time.

Finally, I must also consider the consequence of permitting the establishment of a precedent whereby any subordinate in the executive branch of the Government can refuse to give to his superior or to the Chief Executive himself facts sought in order to straighten out difficulties which he charges exist in his own departmental work; can refuse accountability to the Chief Executive for his actions as a member of the executive branch, even though he be charged with misconduct in office; and can insist that orderly executive functioning and discipline be maintained only through the processes of legislative committees. It is worthwhile to consider what would happen to the efficiency of Government if this suggestion were made the general rule. Obviously the Congress has full power of investigation; but, obviously also, the Constitution of the United States declares that "the executive power shall be vested in a President of the United States." Under such circumstances indulgence of my personal wish to continue my patience with Arthur E. Morgan would be unfair to his colleagues, to his Government and to the public. I there-fore feel obliged to act upon the evidence now before me.

On that evidence I am obliged to find that:

(a) Arthur E. Morgan has failed to sustain the grave and libelous charges of dishonesty and want of integrity which he has made against his fellow directors; his conduct in this respect is legally and morally unjustified;

(b) On the face of the record, the charges of the other directors that Arthur E. Morgan has obstructed the work and injured the morale of the organization of the Tennessee Valley Authority must be accepted as true; he has refused to offer testimony in denial of the charges;

(c) Arthur E. Morgan is guilty of insubordination and contumacy in refusing to submit to the Chief Executive's demand for any facts upon which he based charges of dishonesty and want of integrity on the part of his fellow directors, and in refusing to respond to questions of the Chief Executive relating to charges of obstruction made against him by his fellow directors.

Under these circumstances, I feel myself under the painful duty of requesting Arthur E. Morgan at once publicly to withdraw the charges that he has made impugning the honesty, good faith, integrity, and motives of his fellow directors, and to give to them and to the country assurances that he will, in the future, loyally cooperate with his fellow directors in carrying out the provisions of the Tennessee Valley Authority Act.

I make this request of him.

If he cannot accede, it is his duty to resign.

I hope—I deeply hope—that Arthur E. Morgan will not make it necessary for me to take further action. He has had ample time and ample opportunity to make his decision. If he determines to follow neither of these courses, I will give him until tomorrow, Tuesday, 2:30 P.M. on March 22, to present to me in person or in writing any reason why, as Chief Executive, I should not take further action in the case as a necessary result of the findings which I have just read to him.

Franklin D. Roosevelt, Transmittal to Congress of the Record of the Removal of the Chairman of the Tennessee Valley Authority. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/209535

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