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The Rural Electrification Act was part of the New Deal. It was, as the name suggests, a law that was meant to make it so that more rural areas would be able to get electricity. This was part of the New Deal’s attempt to stimulate the American economy.
One part of the New Deal was an attempt to improve the long-term outlook of the American economy. The New Deal was meant first to get the US out of the Depression, but there were also programs that were meant to make the economy stronger in the long term. This was an effort to prevent economic problems in the future. The Rural Electrification Act was such a program.
In the 1930s, very few farms in the United States had electricity. This was economically problematic because it made it hard for those farms to be very productive. They could not use any electric devices to help them with their farming. This was one of many factors that made it very difficult for American farmers to be prosperous.
The Rural Electrification Act helped bring electricity to many rural areas. This had two main effects. First, it improved the quality of life of farmers and rural people everywhere in the US. Second, it improved the strength of the farm sector of the economy by making it possible for farmers to use more technology in their farming. Both of these were very important impacts of the Rural Electrification Act.
In 1936, President Franklin Delano Roosevelt enacted one of the most important pieces of legislation during the Depression years. The “Rural Electrification Act” (REA) was a part of his “New Deal” program, designed to promote “Relief, Recovery, and Reform” in the United States. The REA made it possible for the federal government to deliver low-cost loans to farmers who had banded together to form non-profit collectives. The REA made brought electricity to rural America.
Roosevelt began trying to get the bill passed on May 11, 1935. He created an executive order which established the REA. The REA was one component of a relief package that was constructed to help stimulate the rural economy, which was still suffering enormously during the Great Depression. A year later, on May 20, 1936, Congress passed the REA, which granted long-term funding to the project. Additionally the REA grated the president permission to appoint an administrator of the program. This administrator was “authorized and empowered’ to give loands to both states and territories of the United States for the purpose of rural electrification. Additionally, funds were provided to allow reports of the progress and conditions of the new electrification efforts and to publish those findings.
The need for the REA was indisputable. In 1935, only about ten percent of rural America had electrical power. Without power, farmers were unable to update their equipment and facilities to modern, faster, more efficient methods. The lack of electricity also had ramifications on a personal level for country people. Many rural Americans suffered poor sanitation and poor heating in their homes. Additionally, few had running water and most had storage issues for their food.
Despite the seemingly inarguable need for rural electrification, arguments indeed ensued. Private utilities which served more populated areas, like towns and cities, were not keen on extending their surfaces to the less-populated regions of the nation. They complained that doing so was not profitable. Rural farming collectives had attempted to go forward with electrification even before Roosevelt’s intervention, but without federal help, and the expertise in implementing wide-spread rural electricity, their efforts were largely unsuccessful.
However, the REA enabled the collectives to change the way they operated. The low-cost loans were perhaps the most important thing in moving electrification forward. Because the farming collectives now had money, they could purchase generators and distribution facilities for the farms. The money also allowed the farming collectives to create assembly line methods of electrical line construction, using standardized hardware. Importantly, the electricity to rural customers was now much more affordable. By 1950, just fourteen years later, ninety percent of rural America had electricity.
After the success of the REA, Congress saw the wisdom in making a significant amendment to the REA which would extend telephone service to rural communities. This amendment passed in 1949.
The REA and its amendment is no longer in existence. In 1994, the United States Department of Agriculture went through a reorganization. The Rural Electrical Act became the Rural Utilities Services Act (RUS). This allowed the federal government to not only improve electric and telephone services to rural areas, but also provide water and sewage assistance. This revised act assisted more than twenty thousand rural communities in modernizing their outdated water systems.
Source: Major Acts of Congress, ©2004 Gale Cengage. All Rights Reserved.
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