The Dixon–Yates contract was a 1954 contract between the

United States Atomic Energy Commission The United States Atomic Energy Commission (AEC) was an agency of the United States government established after World War II by the U.S. Congress to foster and control the peacetime development of atomic science and technology. President Harry ...

(AEC) and two private energy companies,

Middle South Utilities Entergy Corporation is a Fortune 500 integrated energy company engaged in electric power production and retail distribution operations in the Deep South of the United States. Entergy is headquartered in New Orleans, Louisiana, and generates and ...

and the

Southern Company Southern Company is an American gas and electric utility holding company based in the Southern United States. It is headquartered in Atlanta, Georgia, with executive offices located in Birmingham, Alabama. As of 2021 it is the second largest ut ...

, to supply 600,000 kilowatts of power to the AEC for their Tennessee plant. The power would replace power from the

Tennessee Valley Authority The Tennessee Valley Authority (TVA) is a federally owned electric utility corporation in the United States. TVA's service area covers all of Tennessee, portions of Alabama, Mississippi, and Kentucky, and small areas of Georgia, North Carolin ...

(TVA), which could be used instead for the growing power demand of the city of

Memphis Memphis most commonly refers to: * Memphis, Egypt, a former capital of ancient Egypt * Memphis, Tennessee, a major American city Memphis may also refer to: Places United States * Memphis, Alabama * Memphis, Florida * Memphis, Indiana * Mem ...

. The TVA had asked for federal funds to build additional generating capacity for Memphis, but President

Dwight D. Eisenhower Dwight David "Ike" Eisenhower (born David Dwight Eisenhower; October 14, 1890 – March 28, 1969) was the 34th president of the United States, serving from 1953 to 1961. During World War II, he was Supreme Commander of the Allied Expeditionar ...

opposed using taxes to provide tax-free low-interest financing to benefit one metropolitan area. The contract, actually with the Mississippi Valley Generating Company to build a coal plant, was named after its two signatories: Edgar Dixon, the President of Middle South Utilities, and Eugene Yates the chairman of the Board of the Southern.

Kenneth Nichols Kenneth David Nichols CBE (13 November 1907 – 21 February 2000) was an officer in the United States Army, and a civil engineer who worked on the secret Manhattan Project, which developed the atomic bomb during World War II. He served as Deput ...

, AEC general manager, told AEC Chairman

Lewis Strauss Lewis Lichtenstein Strauss ( ; January 31, 1896January 21, 1974) was an American government official, businessman, philanthropist, and naval officer. He was one of the original members of the United States Atomic Energy Commission (AEC) in 1946 ...

that replacing the power the TVA was contracted to supply would cost an extra four to six million a year, and that he preferred that the TVA procure the power directly. However, Strauss and Eisenhower favoured the proposal, which was approved by the Joint Committee on Atomic Energy (JCAE) when it was still controlled by Republicans. However, in the 1954 Congressional elections, the Democrats, who had made an issue of Dixon–Yates, won control of the House and Senate and in 1955 they gained chairmanship and majority control of the JCAE. The new chairman, Senator

Clinton Anderson Clinton Presba Anderson (October 23, 1895 – November 11, 1975) was an American politician who represented New Mexico in the United States Senate from 1949 until 1973. A member of the Democratic Party, he previously served as United State ...

, reopened the Dixon–Yates hearings to force the AEC to cancel the contract. Most of the issues between the TVA and the AEC were resolved while Nichols was general manager, but under a plan developed by Walter von Tresckow, a New York financial consultant, eventually the city of Memphis came up with an alternative solution to its power needs and the contract was cancelled. Dixon–Yates claimed damages, but lost because of a conflict of interest involving a

Bureau of the Budget The Office of Management and Budget (OMB) is the largest office within the Executive Office of the President of the United States (EOP). The office's most prominent function is to produce the president's budget, while it also examines agency pro ...

consultant. Nichols said that "The AEC was absolved of any involvement in the conflict of interest. Thus ended a time-consuming political fiasco."

References

* {{DEFAULTSORT:Dixon-Yates Contract 1954 in the United States 1955 in the United States 20th-century scandals Entergy Political scandals in the United States Southern Company United States Atomic Energy Commission