Paul W. Ager Oral History Interview, August 15, 1970, Number 2

Oral History Interview with
Paul W. Ager

Chief Budget Officer, Tennessee Valley Authority, 1940-47.

Hollywood, California
August 15, 1970 Number 2
By Dr. Charles W. Crawford

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This is a transcript of a tape-recorded interview conducted for the Harry S. Truman Library. A draft of this transcript was edited by the interviewee but only minor emendations were made; therefore, the reader should remember that this is essentially a transcript of the spoken, rather than the written word.

Numbers appearing in square brackets (ex. [45]) within the transcript indicate the pagination in the original, hardcopy version of the oral history interview.

This oral history transcript may be read, quoted from, cited, and reproduced for purposes of research. It may not be published in full except by permission of the Harry S. Truman Library.

Opened December, 1981
Harry S. Truman Library
Independence, Missouri

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Oral History Interview with
Paul W. Ager

Hollywood, California
August 15, 1970 Number 2
By Dr. Charles W. Crawford


DR. CRAWFORD: Mr. Ager, I suggest that we start now by dealing with some of the developments in TVA in which you had a part shortly before World War II and during the wartime period when I know you had some budgeting changes. Perhaps a good place to start would be at about the time of the Congressional investigation. Did that produce any changes in TVA?

MR. AGER: Yes. I'm sure that interrelated to the Congressional investigation was the beginning of the really strong general manager type setup in TVA. It may have preceded that a little bit, but it seemed to me that following the Congressional investigation there was less of the individual members of the Board of Directors specializing in one area and another director in another area. More of a united board approach to all areas of the program in TVA was followed by the Board relying on the General Manager to secure from the various specialized staff divisions the type of plans and materials required in


those fields. At least for me it seemed that life became simpler with the type of organization that we had after the Congressional investigation than it was before the Congressional investigation.

DR. CRAWFORD: To go back just a bit, how was the general manager's office established? That started first, didn't it, as coordinator?

MR. AGER: Yes, it did, under Mr. Bock, and then as I recall it, the Board of Directors employed some consultants some time about the time that this friction began to take a look at the TVA management organization. I believe there was a committee called the Draper Committee, or some such committee, that did indeed take a look at it, and it was not long after that, as I recall it, that John Blandford became the General Manager of TVA. And he continued to serve for a few years, and I can't be exact as to those years.

DR. CRAWFORD: Who was responsible for this committee being constituted?

MR. AGER: I can't tell you exactly, excepting that I think it was perhaps Mr. Lilienthal and Mr. Harcourt Morgan.


DR. CRAWFORD: Do you remember what people or what sort of people served on it?

MR. AGER: No, I don't besides the name Draper which is a name that I can't even complete. I don't even remember what his first name was.

DR. CRAWFORD: Was it a committee of outside consultants outside TVA personnel?

MR. AGER: Yes, outside consultants.

DR. CRAWFORD: At what point were you appointed Assistant General Manager?

MR. AGER: About the time that Mr. Blandford became General Manager of the TVA, or shortly thereafter.

DR. CRAWFORD: How were his duties assigned at first?

MR. AGER: Well, I don't recall exactly how they were defined although it seemed to me that they were perhaps in some resolution that was adopted by the Board of Directors. I just don't know. I don't remember.

DR: CRAWFORD: At that time did the General Manager have


operational responsibility for all areas of TVA?

MR. AGER: That was my understanding.

DR. CRAWFORD: Underneath the board, of course?

MR. AGER: Yes.

DR. CRAWFORD: What was your work primarily at that time, under the General Manager?

MR. AGER: My work was program planning, which included the system of project and program authorizations and the budgeting process this is the budget planning process, the getting of the money, not the detailed accounting for the money that was done by our Finance Department. I had all of the progress reporting, the coordination of that operation, including the preparation of the Highlights Report, which was under my jurisdiction. And then as we got into World War II they sort of tacked on to my office the business of securing scarce materials through the material control agencies in Washington, and the Washington representative that worked on this in Miss Owen's office was actually part of my staff.


DR, CRAWFORD: What size staff did you have at that time?

MR. AGER: I couldn't tell you exactly, but it was never more than ten to fifteen people at any time, as I recall it.

DR. CRAWFORD: Did you have difficulty, or rather I suppose -what sort of difficulty did you have getting critical materials during World War II?

MR, AGER: Just about the same sort of difficulty I imagine most agencies of the government had. It was simply a matter of getting into the right schedules at the right time with your requirements for material of various sorts, And, of course, copper was one of the hard items to get, and steel was a hard item to get; some classes of lumber were hard to come by. There is one incident that I recall distinctly because of the shortage of lumber in connection with one of our reservoir clearing operations where we were building what is now referred to as, I think, Cherokee Dam. We had to cut quite a few beautiful black walnut trees from the property and because of the shortage of lumber we had set up a sawmill to saw up the trees that were being cut in the reservoir to make the construction cribbing that we needed in connection with


the construction of the dam. And a Mr. Harold Smith, who was Director of the Bureau of the Budget at this particular time and who was formerly from Michigan, happened to visit the TVA and I took him out to this Cherokee Dam; we went by this sawmill operation, where he saw them sawing up walnut into crib size lumber and was very shocked that we were doing such a thing. It developed that Mr. Smith's hobby was woodworking and one of the things he was hurting for was some good, well cured walnut. So when we got back to Knoxville, I got in touch with the head of our forestry division, Mr. Richards, told him what my problem was and that the Director of the Bureau of the Budget was shocked at our using green walnut for cribbing out at Cherokee Dam and that he wanted some well cured walnut in connection with a boat that he was trying to build, and could he give me some suggestions? He said he certainly could, and a few days later I got the names and addresses of some farmers who had some cured walnut and proceeded to secure some walnut for the Director of the Bureau of the Budget, which I had shipped to him. But this is just a sidelight on the fact that the material problem was serious with us, but not devastating. I mean it never held up any project, and when the famous controversial dam on the--let's see, not the Little Tennessee . . . There's the


Holston, and what's Douglas Dam on?

DR. CRAWFORD: Is it south or north of the Holston?

MR. AGER: It's east, around the corner a little bit.

DR. CRAWFORD: Is there one on the French Broad or Watauga?

MR, AGER: Yes, the French Broad the dam or. the French Broad which is the dam that was to flood out the bottom land that belonged to the canning interests that were closely associated with Senator McKellar. When we made our commitment to build this dam in fifteen months and have power on the line, everybody thought we were crazy. No one had ever heard of building a dam in such a short period of time and especially of getting power on the line that fast. It just so happened that the generators that we had on order for the dam on the Holston were exactly the same size generators that were needed for the dam on the French Broad because the head of the two reservoirs was going to be essentially identical, so that what our engineers had come up with was a scheme of building this dam in a great hurry and of diverting one of the turbines and generators that we had already on order for the Holston Dam to go into the


powerhouse of the French Broad Dam, which produced firm power to make aluminum whereas in the other powerhouse, it would not have been firm power. As you recall, this is the project that brought on the bitter antagonism between Senator McKellar and the Tennessee Valley Authority, and it was strongly supported, the whole project, by the War Production Board and by Mr. Bill Batt, who was the specialist in the War Production Board who had to worry about power matters at that particular time and about aluminum supply at that particular time. It is my understanding that during the course of the opposition to this project by Senator McKellar that Senator McKellar even drew a knife on Mr. Batt. Now I don't care whether that's in the record or not, but that's the story that I heard.

DR. CRAWFORD: He did feel very strongly about it, certainly, considering the interests involved in the valley.

MR. AGER: An additional sidelight on this battle over the authorization of funds to start the construction of French Broad Dam, which is now called Douglas MacArthur Dam or something of that sort, is that after I had resigned from TVA to take my position with the Atomic Energy Commission, which I did


without any prior knowledge of Mr. Lilienthal because I was invited by Herb Marks to meet with Carroll Wilson, who was the first general manager of the Atomic Energy Commission. When I agreed to take this position I had no idea of what was going to come with respect to the confirmation of Mr. Lilienthal as Chairman of the Commission or Mr. Clapp as Chairman of the Tennessee Valley Authority or what was going to happen to me. But in the course of a bitter debate and controversy that ensued, I was described on the floor of the Senate along with Mr. Clapp and Mr. Lilienthal and Jim Rainey,another member of the Atomic Energy Commission as notorious Communists by Mr. McKellar.

DR. CRAWFORD: Did he offer anything in support of that allegation?

MR. AGER: None whatever, and Mr. Rainey's father, who was a very prominent Democrat politically in the State of Illinois, wrote to Mr. McKellar protesting this statement. Mr. McKellar wrote back saying that he was glad to hear that his son wasn't a Communist. That was all there was to that particular episode.

DR. CRAWFORD: Why did Mr. McKellar say that about you? I can understand why he didn't like Dave Lilienthal.


MR. AGER: I don't know. It just came out of the blue. Lilienthal was accused of bringing in some notorious Communist into the AEC, I guess, although my security clearance was the number one AEC clearance. There might be some relationship to the fact that my wife at one time was president of the New Mexico League of Women Voters who strongly supported certain civil service reforms that Senator McKellar was bitterly opposed to.

DR. CRAWFORD: Do you think his opposition was able to hamper TVA's development in any way?

MR. AGER: It didn't at the time, and I don't think it ever did. No. It certainly didn't delay the construction of the dam on the French Broad River very long.

DR. CRAWFORD: Well, you certainly did complete the work during World War II in an unusually rapid time. It didn't seem to have been slowed . . .

MR. AGER: There was another little sidelight that I can tell you about. In the House Appropriations Committee for several years a certain Mr. Dirksen of Illinois had been a sort of thorn in our side with critical


comments about our trying to extend navigation up the hillsides of Tennessee and things of this sort.

Along about the time that Watts Bar Dam and Steam Plant were about halfway completed I had a call one weekend from an assistant superintendent at Watts Bar project, reporting to me that a Mr. Dirksen, Congressman Dirksen of Illinois, with some friends from Sweetwater, Tennessee, had just left the project. And he said, "If I'm any judge of character, the man was impressed with what he saw."

Not long after that we appeared before the House Committee on Appropriations for another appropriation for a new fiscal year, and as we were gathering for the hearing in the House Appropriations Hearing Room, the TVA people seated at one side of the table and the Appropriations Committee people seated at the other and at the ends, in walked Congressman
Dirksen with a very large stack of papers under his arm. He leaned over and spoke to the chairman of the committee, who was Congressman Woodson of Virginia, and proceeded to his seat at the end of the table. Mr. Woodson convened the hearing and rather than following the usual procedure of calling on Mr. Lilienthal, who was then Chairman of the Board of


TVA, for a statement, he said, "Mr. Dirksen would like to make a statement before the hearing gets underway." Mr. Dirksen said, "Gentlemen, I'm awfully sorry that I'm not going to be able to stay here for this hearing. I have a conflicting engagement, but I have permission to say a few words about a visit I made to one of your projects. I was in Tennessee this last winter visiting friends at Sweetwater, Tennessee, and they took me over to visit the Watts Bar Project. I've been in the construction business most of my life, and this was the best managed job I ever saw. And I just wanted to tell you gentlemen that I was very, very favorably impressed. Thank you." This was off the record, unfortunately.

DR. CRAWFORD: Did you have any more criticism from Representative Dirksen?

MR. AGER: Never, and it wasn't long after that that he dropped out of politics for a while because of his eyes, took a trip around the world and then later ran for United States Senator. As far as I know, he never did oppose TVA matters after that. He may have, but I didn't know if he did. Of Course, Mr. Baker turned out to be his son in law from Sweetwater, Tennessee.


DR. CRAWFORD: What government officials were easiest to work with in your experience in budget work when you had to go to Washington?

MR. AGER: Well, my work normally was with examiners who are lower echelon personnel in the Bureau of the Budget. The bulk of my work was with these examiners and with the people that added and put the budget together. But of the top budget directors that we dealt with I would rate the two most outstanding ones as Daniel Bell, who I believe was the second budget director that we ever had to deal with under the Roosevelt administration, and Harold Smith as the highest. There was a short period before Daniel Bell that this Lou Douglas, or some such Douglas, and then there was, I think, a man ahead of Harold Smith, after Daniel Bell, but I can't recall his name.

DR. CRAWFORD: How long after World War II did you remain with TVA?

MR. AGER: Well, I left the TVA in early November, 1946, and as I recall it, World War II really ended around August of 1945.

DR. CRAWFORD: Did you notice changes after the war ended?


MR. AGER: Oh, yes. We had a tremendous layoff, cut back, reduction in the program, reorientation of emphasis, and it was sort of a period of stock taking and slowing down.

DR. CRAWFORD: How did you change your emphasis after the war?

MR. AGER: Well, there was obviously less activity in the engineering construction field, more emphasis on the recreational, forest resource, and conservation fields.

DR. CRAWFORD: Then you didn't go back to where you were in 1940?

MR. AGER: Not precisely, no, not by a long shot. Of course, by the end of World War II and shortly thereafter there came this tremendous demand for power from the Atomic Energy Commission, and of course by this time I was on the other side of the fence. I was working for the Atomic Energy Commission when this came along.

DR. CRAWFORD: Did you feel any change in governmental attitude toward TVA at the death of Franklin Roosevelt?

MR. AGER: None that I can recall. No.


DR. CRAWFORD: Your budgetary situation didn't suffer any?

MR. AGER: No, none whatever. Of course I wasn't really in there very long after the death of Roosevelt, and Harry Truman, of course, was President until after I had moved from Washington to Los Alamos, New Mexico, in 1948 and was reelected that year although I couldn't vote for him because I had lost my residency in Tennessee and I hadn't established residency in New Mexico.

DR. CRAWFORD: What was your position or title at the time you left?

MR. AGER: The same as it had been since 1937, Assistant to the General Manager and Chief Budget Officer.

DR. CRAWFORD: Why did you decide to leave TVA and accept the other offer at that time?

MR. AGER: Well, I guess I'm kind of a visionary and somehow or other I had dreams that this Atomic Energy thing was going to lead into an international development body of great significance. I had great faith in the world of the Acheson- Lilienthal report and somehow or other I thought an accommodation could be


made that would bring about the significant, peaceful progress with this new power resource.

DR. CRAWFORD: Did you anticipate the production of electrical power with atomic energy at the time?

MR. AGER: Oh, yes. Yes, I definitely anticipated that and I have friends who tell me that I told them, in connection with the recruitment work I was doing to get young, capable budget officers in the various field offices of the AEC, that here was the place where the real progress was going to be made on the development of breeder reactors that would make nuclear power a low cost source of energy, with a minimum of contamination and what have you. I had great faith in what I'd heard from people like Wally Zinn and Norris Bradberry. And in connection with reaching my decision to come with AEC, one of the people I met with was the controversial Oppenheimer. I had lunch with him and he gave me such a tremendous lift that I haven't gotten over it yet although I have been very disillusioned about world progress in the field of atomic energy.

DR. CRAWFORD: Was your work with AEC comparable in many ways with that for TVA?


MR. AGER: It was for the first two years, and after that it was completely different in that after I left Washington and my position as Chief Budget Officer of AEC, I took on this role of coordinating weapons production where, while I had some concern with production budgets, my major concern was on the selection and negotiation of contractors, the development of facilities to produce the new types of weapons that were being developed by the laboratories, and of getting the facilities, including test facilities, that our laboratories needed to carry forward their work, both in the field of nuclear weapons on continent and off continent, as well as other development activities such as reactor development including nuclear rocket propulsion reactors. It was quite a different ball of wax, with much more emphasis on planning, collaboration with scientists, and a lot less emphasis on the routinely considered budgeting process, although I never have considered myself a routine budget officer.

DR. CRAWFORD: What training or examples helped you most in your budget planning for TVA? What you had studied before, what you learned from other agencies, or what had you acquired from some other source?


Well, that's a very hard question to answer. I like to think that part of it came out of my own head, How much that came out of my head and how much of it came out of books that I read or people I talked to, or ideas that other people threw into the hopper as we were batting the problem around, it's almost impossible for me to be specific. It certainly was not a textbook approach to budgeting that we established in TVA. I give Eric Kohler a lot of credit for simplifying the accounts to the point where we could have the budget system and I give our general manager, John Blandford, credit for a lot of help; Colonel Parker was a definite inspiration in the field of budgeting and planning for engineering and construction, and the people who worked with him; Harry Wiersema and his assistants; people in my own staff made very significant contributions. Jim Ramey, John Oliver, and, of course, in the reporting field, Sandy Brant, who left the TVA to go with the AEC at Oak Ridge about the time I left TVA to go with the AEC in Washington.

DR. CRAWFORD: With which of the directors of TVA did you work most effectively?

MR. AGER: This is also a hard question to answer in that


I insisted whether we had a coordinator plan or a general manager plan of working through the principal administrative officer of the TVA in my dealings with the Board of Directors on budgetary matters. And I was not any director's man, if you please. I found it was a lot easier after Mr. Lilienthal became chairman of the TVA to get our budget defense prepared and presented to Congress than it had been before that. And Gordon Clapp, although not a budget minded man, was one of the most marvelous men to work with that I ever knew in my life, and he had that unique talent of turning something you were having difficulty with into something that was easy more than almost anyone I ever knew.

DR. CRAWFORD: This is one of the difficult parts of the TVA story to piece together Gordon Clapp's part, inasmuch as he is deceased at this time. What were his other administrative strengths?

MR. AGER: Well, he was brought into TVA as an assistant personnel director under Floyd Reeves, and not long after that Floyd Reeves left the TVA and so then Clapp became Personnel Director, which he continued to carry on with for a number of years, until John Blandford left the TVA, at which time I believe the


Board made Gordon Clapp the General Manager of TVA. It was during the years as Personnel Director that Gordon did so much to help the General Manager and the Board to establish sound relationships with labor. And while Mr. Reeves had pioneered a major part of this in principle, I give Gordon much of the credit for the soundness of what ultimately emerged. Although he had some able assistants working with him and I don't want to take anything away from them, and I certainly was not close enough to it to say who did what for whom I don't know that much about it--but I was always very impressed with the opening remarks that Gordon would make at the beginning of the labor negotiations and the summing ups that he would give when I was able to attend these negotiations. The man just had a remarkable capacity for choosing the right words to use at the right time. In my own field, after he became General Manager and I had much more intimate working relations with him on matters relating to program authorizations, budget adjustments, things of this sort, I found that I was given a very free hand; that about the only guidance I received, if any, was occasionally subtle suggestion that maybe if this particular long, winded diatribe was shortened, it would read better--something of that sort. It was


just a wonderful experience to work with Gordon Clapp and I think most TVA people felt the same about him. I knew very few, if any, that ever resented Gordon Clapp. He had such a remarkable capacity for seeming to be listening to people. I think he was actually listening to them, but very few men in busy positions demonstrate it as he did. I think he's just in a class by himself. I can't think of anyone in all the years of working for and with people who had that same unique capability of seeming to really sincerely be making an effort to understand what you were trying to say, despite the fact that he may have had many other much more important things on his mind at the time you were trying to talk to him.

DR. CRAWFORD: Of all of your work with TVA, Mr. Ager, what part was most satisfying? What did you feel was your greatest contribution to it?

MR. AGER: I wish I knew. I somehow feel that my greatest contribution was in somehow establishing both, within the TVA, a money and budget consciousness that was constructive and sincere, and establishing in our dealings with the "controllers of purse strings in Washington" the feeling that TVA was not in the business


of trying to pull the wool over anybody's eyes with respect to what our requirements really were. We had a reputation, I think, of presenting honest-to goodness, solid, firm budgets, with no padding, no frills, anything of that sort an understandable budget. And this, I think, is all I can say, and I give a part of this credit to my first boss at the University of Oregon, Arnold Bennett Hall, who was a political scientist, and who said that he would not look at any financial statement that covered more than one piece of paper. And I had the job of getting this man to understand the problems of the University of Oregon on one piece of paper.

DR. CRAWFORD: Thank you, sir.

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List of Subjects Discussed

    Atomic Energy Commission (AEC):

      and electric power, 14-16
      and weapons production, 17

    Batt, William,: 8
    Bell, Daniel, and TVA, 13

    Dirksen, Senator Everett, and TVA, 10-12

    French Broad Dam, 7-10

    Lillienthal, David, 9, 10, 19

    McKeller, Senator Kenneth, and TVA, 8, 9

    Oppenheimer, J. Robert, 16

    Smith, Harold, and TVA, 6

    Tennessee Valley Authority (TVA):

      budgeting and control, 18
      congressional investigation of, 1-2
      and postwar cutback, 14
      and World War II, 5-6

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