REA, better known as the Rural Electrification Administration was created by the Roosevelt Administration in 1935. The purpose of creating this administration was to bring electricity to rural areas like the Tennessee Valley and to farms. It allowed the federal government to make low-cost loans to non-profit cooperatives. Although nearly 90 percent of urban dwellers had electricity by the 1930’s, only ten percent of rural dwellers did. Many farmers could not afford this.
The REA sought to make loans available to rural communities to establish electricity cooperatives. Nevertheless, privately owned utility companies, which provided power to most of the country, were not eager to serve the rural population. They said it was too expensive to string electric lines to isolated rural farmsteads. They argued that this would not be profitable. The REA also helped farmers develop assembly-line methods for electrical line construction with uniform procedures.
But, without the government's assistance, these organizations lacked the technical and financial expertise they needed to succeed. The result was that more and more rural Americans could afford electricity. By 1950, 90 percent of American farms had electricity. On October 28, 1949, Congress made an important amendment to the Rural Electrification Act. This amendment authorized the REA to make loans for the purpose of furnishing and improving rural telephone services.
This made it cheaper as well. By 1939 the REA had helped to establish 417 rural electric cooperatives, which served 288,000 households. By 1939 rural households with electricity had risen to 25 percent. The REA no longer exists in its original form. With the reorganization of the United States Department of Agriculture (USDA) in 1994, the REA became the Rural Utilities Service (RUS).
In addition to helping provide rural areas with electric and telephone service, the RUS took over the USDA's water and sewage programs and helped more than 20,000 rural communities obtain modern water systems. REA made things much cheaper for people during the great depression. Even though it is not used in its an original form, it still made a big impact on today and how we run our electricity.
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