The Role of the Rural Electrification Administration in Overcoming the Great Depression
The Great Depression, a period of extreme economic hardship, began with the stock market crash of 1929 and lasted through the 1930s. Many of the social and economic programs implemented during this time aimed to provide relief and recovery. One such program, the Rural Electrification Administration (REA), played a crucial role in providing electricity to rural communities and stimulating economic growth.
Background of the Great Depression
The Great Depression was a prolonged period of economic decline, leading to widespread unemployment and poverty. During this time, the federal government sought to address these issues through various programs, including Social Security and the Rural Electrification Administration. However, it is important to note that Social Security did not come into effect until the late 1930s and did not contribute to overcoming the Great Depression.
Introduction to the Rural Electrification Administration
Rural Electrification Administration (REA) was created in 1935 under the New Deal programs as part of President Franklin D. Roosevelt's initiative to lift America out of the Great Depression. The REA aimed to provide electricity to rural areas, which were largely underserved by private utility companies.
At the time of the Great Depression, the United States lagged behind Europe in providing electricity to rural areas. Only 11% of farms had electricity in 1934, while in France and Germany, nearly 90% of farms had it. This disparity was substantial and the REA sought to address it through support for rural electrical cooperatives and municipal power utilities.
Impact of the Rural Electrification Administration
The REA's efforts were groundbreaking and highly successful. By 1937, hundreds of new municipal power utilities were created nationwide. In 1939, 288,000 households were receiving electricity from rural electric cooperatives, which had received loans from the REA. By 1942, nearly half of all US farms had electricity, and by 1952, almost all US farms had access to electricity.
The REA not only provided electricity to rural areas but also encouraged the formation of electrical cooperatives that were owned and operated by the community members. This approach not only brought electricity into rural areas but also empowered local communities by giving them control over their energy needs. These cooperatives helped to distribute the cost among the members, making it more affordable for them.
The REA was a key component of the New Deal programs that aimed to boost the economy and provide relief to those affected by the Great Depression. Its success in rural areas helped to stimulate agricultural productivity and contributed to overall economic recovery.
Evolution of the REA to RUS
Initially, REA operated as an independent agency, but it eventually came under the Department of Agriculture. In 1949, the REA was authorized to provide loans to rural telephone cooperatives, expanding its role into telecommunications. Finally, in 1994, with the Department of Agriculture Reorganization Act, the REA was abolished and its operations were merged into the Rural Utilities Service (RUS).
The transition from REA to RUS reflects the enduring importance of rural infrastructure, particularly with the added functions of telephone services. The legacy of the REA, now part of the RUS, continues to serve remote areas and promote development in rural America.
Conclusion
The Rural Electrification Administration (REA) played a significant role in overcoming the Great Depression by providing electricity to rural areas. Unlike Social Security, which did not have an immediate impact, the REA's initiatives helped to stimulate the economy and empower communities. Its success in bringing electricity to the countryside can still be seen today, with the Rural Utilities Service (RUS) continuing its mission to serve rural America.