Rural Electrification in America

A poster by Beall for the Rural Electrificatio...

Image via Wikipedia

I hope you find this to be an interesting post. I’m going to be writing here about something FDR’s government got right. How’s that for unusual for me? We’re going to talk about electrifying the farm and todays implications thereof.

In the 20′s and earlier it became possible to electrify almost any town village or city in the United States. this was often accomplished by building a local ‘light plant’ which would provide reasonably adequate service, although they were often quickly outgrown. These local small businesses were often unable to raise the financing they needed to expand and as dissatisfaction spread they were often sold to other companies who consolidated them and built subtransmission line between them and could finance much larger plants. This obviously occurred over time and in an uncoördinated manner as befits capitalism.

The thing about this is, this method worked OK for towns but farmers were feeling pretty left out, especially when they came to town on Saturday and saw all the toys of the new age. They talked to these new utilities and tried to get service.

The utilities did a little work in the area. Northern States Power and the University of Minnesota jointly conducted the Red Wing Project in the twenties where farmers were furnished with everything available for farm use and NSP installed power to a group of farms. This proved economic except the farmers couldn’t have afforded all the appliances and such (at one time, anyway) and these farms were relatively close together. Anyway it was influential on progress in rural electrification.

Lots of farmers had 40 Volt generators attached (often) to windmills. These were the famous Delco plants which provided some lighting and maybe a radio but, were really not very satisfactory. Actually a lot like the limitations and compromises you have to make with solar and wind today. Better than nothing but not good enough.

So as we go into the thirties, here’s the situation. Towns (and cities) have good dependable central station electric power and all the conveniences that go with it. A lifestyle not all that different from now really.

Now the problem, go a mile (or less) outside of town and the farmers are living with kerosene lamps, outhouses, no running water, no refrigeration, and generally still in the 19th century. They might have retired some of the teams of horses and bought a tractor but, that’s about the extent of progress.

Farming was very hard physical work in those days, clean water was rarely available and sundry other problems you and I will never know. These farms were quite labor intensive and farmers found that there was no way that their kids were going to farm under these conditions. Yeah, I know, lazy ungrateful kids; just like now. (sarc off)

Farmers then as now (maybe more) were politically active and had lots of champions in Congress. They also had their groups and associations; such as the Grange and the Farm Bureau, so this wasn’t going to last. We all know Roosevelt won the election in 1932 and that also meant something was going to happen, particularly when it became clear that he liked spending other people’s money as much as Obama does.

President Franklin Delano Roosevelt issued Executive Order 7037 on May 11, 1935, establishing the Rural Electrification Administration. This was proposed by Rep. John Rankin (D, MS) and Senator George Norris (R, NE). Do note that Norris was not a republican that we would recognize, he was a Nebraska special, very liberal (or progressive). We should also note that while it was proposed to be, REA was never a WPA type program to provide work. Somebody realized that skilled power line work couldn’t be done by somebody just because they didn’t have a job. This Executive Order was codified into law as The Rural Electrification Act of 1936.

At that point things began moving pretty quickly. REA was organized as an independent agency (it was incorporated into the Department of Agriculture just before World War II). For instance, Indiana Statewide REC was formed in 1935 to help Indiana farmers form coops. During the early years they provided project superintendents and engineering help. if memory serves the startup was partially funded by the Indiana Farm Bureau.

The energization of the first house on Kankakee Valley REMC in 1939; courtesy KVREMC

Strangely enough, this is where this story gets personal for me. My dad was one of their project superintendents. In fact, the men in that picture above, I knew all of them. He staked most of the original systems, got easements and built what was called the A system of most of the systems in Northern Indiana. His last assignment was at Kankakee Valley REMC, in Wanatah, IN which started on 01 August 1939, he retired from there in 1968.

What did it mean to those farmers? Let’s let them tell it. The video is from Middle Tennessee EMC.

It was much these same all over the country.

Coops are really just another corporation, except that the consumers are also the investors. It’s a great model, especially where high fixed costs are prohibitive for a highly desirable service.

One of the results even in the early days was the freeing up from a lot of the drudgery of farm work. I also freed a considerable number of young men for military service in World War II.

These coops often became the largest employer in the small towns where they were headquartered, and often had the best paying job there too. Win, Win, and Win.

Rural Electrification ran differently from most government programs. REA made loans available to all comers as they complied with the rules, most ended up being coops, in Nebraska and a few other places they are public power districts, a few loans went to private utilities. The thing is; REA required certain engineering standards, certain operating standards and such, basically acting like a responsible banker, and provided low-interest loans.

My Dad’s comment when he decided to remove the REA logo from their building in the early 50′s is instructive. He said, “Farmer Jones doesn’t put the logo of Farmer’s National Bank on his barn, why should we?” Basically REA acted as a project manager, assured proper standards and helped local people build a robust business.

We will continue this later but the main takeaway is this: Government can do things to help the economy and create jobs, if, and only if, it is constructed properly. This is the only government program that I know of that worked anywhere this well with very few adverse consequences. Could it have been done privately? Maybe, but not in the middle of the great depression when it was needed.

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