Rural Electrification Act of 1935 was a transformative governmental program
Many major public improvement programs have proven to be beneficial, but not always
Should government—mainly federal or state—use funds to push certain major public improvement initiatives? Well, it’s a reoccurring debate. And, as they say, ‘the devil is in the details.’
New York Governor DeWitt Clinton was derided by many in the 1820s for his proposal to dig a canal from Albany to Lake Erie, creating a pathway from the Atlantic Ocean (by way of the Hudson River) to the then western frontier. “Clinton’s Folly” they called it. History tells us the Erie Canal, once completed, was an amazing success. However, efforts to duplicate it in other states, including Michigan shortly after it’s admittance into the Union, proved to be financially disastrous.
The creation of the interstate freeway system, started in the 1950s—a large-scale undertaking pushed by President Eisenhower—certainly transformed the nation. Were we to scour the records of those times, I’m guessing there were a few critics. All these years later we can see the various effects it brought, ranging from the easier and more profitable movement of goods to urban sprawl. How you judge these effects, good or ill or a mix of both, is usually a matter of perspective.
In the early 1950s, Republican lawmakers in Michigan opposed using taxpayer dollars to built the Mackinac Bridge. However, there were others in the GOP who favored the project and joined forces with Gov. G. Mennen Williams, a Democrat, to “make it happen. A similar scenario occurred more recently with the proposed international bridge—now named in honor of Gordie Howe—that will link Michigan and Ontario—only it was former Gov. Rick Snyder, a Republican, who got this project going. It’s scheduled to be completed in the fall of 2025.
The current push to bring a “clean energy” future, both to Michigan and elsewhere in the nation, by encouraging the building of solar and wind powered utility plants and the use of electric vehicles is a current example of this debate. Whether this initiative proves to be a wise course of action or a folly remains to be seen.
About ten years ago there was an effort in Fowlerville to solve the lack of high-speed internet in the less-populated, more rural areas of the community—given that private business did not wish to invest in the infrastructure, feeling it would be unprofitable, and federal and state governmental funding was at the time not forthcoming. Certain officials in two of our area townships proposed passing long-term millage levies to cover the installation of necessary transmission lines and other equipment to get the system up and running and then help fund, along with user fees, the on-going operational expenses. While there was support for this bold action, in the end the majority on both boards backed off the idea. Progress has been made to solve the situation since then, in Fowlerville and other underserved rural areas in Michigan and the rest of the nation, but it’s been a patchwork result.
It was this situation concerning the mixed availability of high-speed internet and whether government should step in to create a comprehensive, far-reaching solution that prompted the following article I wrote on the Rural Electrification Act of 1935, an historical examination meant to inform the discussion. While my impetus was this specific issue, it is certainly useful for other proposed, potentially transformative undertakings, including current efforts to mitigate global warming caused by man-made pollutants and the resulting climate change caused by rising overall temperatures.
As a side note, it is not lost on me that the creation of the freeway system may have exasperated the situation with climate change. What impact our actions—individual and collective—will have in future years is, to say the least, hard to predict. As my late father was fond of saying, “The road to Hell is paved with good intentions.” Still, we do—or should try to do—the best we can, making decisions within an ethical and moral framework and with an eye toward how it might impact tomorrow.
* * *
The success of the alternating-current technology for electricity, first demonstrated with the illumination of Great Barrington, Massachusetts, in 1886, was finally settled at the Chicago World’s Fair in 1892 when the bid to install an AC system to light the Columbian Exposition was accepted rather than one offering direct current. After that the availability of electricity for consumer use boomed. Hundreds of utility start-ups opened for business in American cities and large villages. By the 1920s, there were over 6,000 such firms, although most of these were under the control of a few large holding companies.
The story of electricity—a leap forward in human ingenuity that has had a profound impact on American society—is outlined in the book The Men Who United The States. The beginnings and evolution this discovery is one of several inventions and events that the author by Simon Winchester examines.
Iosco County Clerk Dan Delmerico, when he recently proposed that the township install and operate a high-speed internet system, with the goal of making it available to all residents, likened the concept to the Rural Electrification program started in the mid-1930s. That government-inspired effort brought electricity to rural farmsteads at a much quicker pace than would otherwise have occurred.
The parallels are not exact between wiring the remote countryside with electricity, and the current progress (or lack thereof) in connecting households and businesses located in geographically isolated or less densely-populated areas of the country to high-speed, fiber optic internet services. However, after reading the history of electricity, I thought the resemblance was close enough to offer this historical retrospect.
Winchester noted that within a short time the sale of electricity had proven to be a profitable business. “Power companies sprung up like weeds,” he wrote.
This sort of situation, of course—as history has shown time and time again—draws in the “big boys” and, eventually, squeezes out most of the smaller operations.
The multitude of conveniences invented as a result of electricity—many of which soon evolved into necessities—proved irresistible to the common man, and more importantly the common woman. By the 1930s, nearly 90 percent of urban residents were hooked up to the grid.
The easy money for private utility companies came from generating electricity within a small geographical area with a dense population, namely cities. Supplying the power to smaller, out-of-the-way hamlets, or to isolated rural farms, was another matter.
The companies, when they did put in the necessary infrastructure for the smaller towns, charged a much higher rate to these costumers than their city brethren. As for the rural farmsteads, they were pretty much ignored. Only 10 percent had electricity nearly 50 years after the switch was turned on at Great Barrington.
Why?
Well, quite simply put, the main business of business is to generate a profit. The utility companies argued that, first of all, it was too expensive to string lines to the farmsteads. In addition, with the nation in the midst of the Great Depression, they felt that many farmers couldn’t pay for the service.
The situation appeared to be at loggerheads. Given the stance of private business, it appeared unlikely rural residents would get access to this utility in the foreseeable future. This meant they would continue farming without the economic and labor-saving benefits of electricity.
At a moment in history when all of the cards seemed stacked against rural families—when men (young and old) were leaving the farm to search for work, when the land was being lost to foreclosures or tax sales due to the lack of sustainable profits, and when massive wind storms were creating walls of dust on the drought-stricken Great Plains, enter into the picture President Franklin Roosevelt.
If the private sector could not or would not provide this service to the people, then government should… and would.
The Rural Electrification Act of 1935 was one of many federal programs designed to lift the nation out of its economic freefall, to give people a hand up, and to put American labor back to work.
The REA (as it came to be known) would provide federal loans for the installation of electrical distribution systems to serve rural areas of the United States. And it would do so without costing the taxpayers any money.
Morris Llewellyn Cooke, an engineer, championed the idea. In a document sent to the U.S. Secretary of Agriculture, he wrote: “There are currently six million farms in America, and of them only 650,000—one in ten—is connected to electric power from the national grid. However, it would be possible to electrify almost all of these farms quickly and at almost no cost to the American taxpayer, providing that a network of cooperatives is set up, which farmers would pay to join. Each one (co-operative) would buy power from existing makers on a wholesale basis, and the co-op, with government help, would build the (transmission and distribution) lines to supply its farmer members.”
Cooke not only convinced the Agriculture Secretary, and ultimately Roosevelt (who issued the executive order creating the REA), but he was hired to direct the program.
The Piqua Municipal Light Plant in Miami County, in western Ohio, was the first such cooperative to implement the plan.
In his 1935 article “Electrifying the Countryside,” Morris Cooke explained the need for government help by noting that, “In addition to paying for the energy he used, the farmer was expected to advance to the (private) power company most or all of the costs of construction. Since utility company ideas as to what constituted sound rural lines have been rather fancy, such costs were prohibitive for most farmers.”
The cost for joining the co-operative was initially put at $5.
The program, as mentioned, also had the added benefit of employing workers. REA crews fanned out across the American countryside, accompanied by teams of electricians. While the crews put in the necessary poles and strung the lines, the electricians installed the fuse panel, wiring, and various outlets in the houses and barns so the newly available power could be utilized.
The program was not universally embraced. As might be expected, the utility companies believed that the government was unfairly competing with private enterprise (even though they were not planning to supply the power to the rural areas.) Some members of Congress, then as now, opposed this sort of government involvement in the economy, or felt these cooperatives were socialistic. Still others thought that farmers simply did not have the skills needed to manage local electric companies.
But the program went forward, and gradually accomplished its main mission.
“By 1939, the REA had helped to establish 417 rural electric cooperatives, which served 288,000 households,” it was noted in an article by the New Deal Network, an internet site that provides a history of the Roosevelt Administration. “The actions of the REA (in turn) encouraged private utilities to electrify the countryside as well. By 1939 rural households with electricity had risen to 25 percent.”
During the ensuing World War II years, half of all American farms were connected to the grid and within another 10 years nearly all of them had access.
The program also changed the perception of electricity, wrote Simon Winchester. “It was swiftly accepted that electricity was a public good—a marketable public good, to be sure, a good with a price tag, but something that should be accessible to all as a hallmark of a civilized society.”
In his book, Winchester examined other events, inventions, and public works projects that altered our country in a way that “brought us closer together.” These included the Lewis & Clark Expedition that explored the nation’s newly-acquired land holdings (the Louisiana Purchase), the Erie Canal, steam-powered boats, railroads and the building of the transcontinental railroad line, the telegraph, the telephone, automobiles, the interstate highway system, radio and television, and most recently the internet (a technology invented and perfected by the U.S. Defense Department and then turned over to the private sector).
The relationship between government, individual initiative, and private enterprise, during the nation’s long history, is an interesting one. With many of these advancements, government (as it did with rural electricity) has served as the catalyst, both in initiating the effort and funding it. The Erie Canal, the transcontinental railroad line, and the interstate freeway system are examples of this.
In other areas, including inventions like the phone system, radio, and television, government has had a regulatory role, along with serving as a referee of sorts to insure that the technology benefits the citizenry, but otherwise the main thrust of application has come from the private sector.
Often the invention or technological improvement remains in private hands, but the ensuing consequences have required public work’s projects. The invention and then proliferation of the automobile is one example: the manufacturing has been done by automakers, but the outcry for improving existing roads and bridges and then expanding the system became a governmental responsibility.
How high-speed internet evolves remains to be seen. More and more, though, it’s becoming a necessity (like our electric-powered conveniences) and less and less a recreational play toy. Many businesses (including this newspaper) rely heavily on it. For numerous occupations, the use of the internet is as essential as a carpenter’s hammer and saw.
The availability and reliability of high-speed internet more and more determines where people decide to live, and where businesses locate. At one time, in the infancy of electricity, the technologies of direct current and alternating current were at war. AC won because it did a better job of providing the service. From what I understand, fiber optic lines, rather than signals from high towers or satellites, will likely become the prevailing technology for this same reason.
However, telecommunication companies have taken a stance similar to the one the utility firms took back in the early part of the 20th Century, deciding, for the time being, that expanding this service to the more sparsely populated hinterlands, or even to areas located near large urban centers and a major transportation corridor, is not cost effective. The capital outlay and operational expenses versus the desired profit margin does not equate. The better choice, they seem to feel, is adding more bells and whistles for existing customers, allowing them to charge added fees. They see this as a better business model.
That’s certainly their prerogative. However, the Rural Electrification Act of 1935 shows that an alternative exists, if the public wishes to pursue it.
Steve Horton is a mid-Michigan journalist and editor-publisher of the ‘Fowlerville News & Views’—a weekly newspaper.
Like that 1935 act Biden's Infrastructure Act brings rural communities the needed resources to allow them to attract people who would otherwise move to more populated areas. Having high speed internet is necessary for many jobs and for students. Our commissioners opted to use the money finally but for providers to bring the lines part way to homes and left the residents to pay for hookup.
I was in Ireland in the mid 1960s when electricity came to rural farms and made all the difference to families. Many US relatives sent money to buy their parents a refrigerator!! It's all about quality of life!
“something that should be accessible to all as a hallmark of a civilized society.”
While I'm not sure that we are actually living in a "civilized society," I would hope that most of us would still recognize a public good--as well as its opposite--when we see it. The digital divide is a clear public evil that creates an unfair and insurmountable barrier between critical information/services and the poor and marginalized.