Since the establishment of the Rural Electrification Administration in 1935, the number of American farms receiving power-line service has increased from less than 10 per cent. to more than 22 per cent. of the total in the United States, partly by extension of pri-vote or public lines but mainly through REA-financed ce-operatives. The problem is simple enough—the solution simple, too, in theory, but not always in practice. All over the country are sparsely settled rural areas which the private companies have not found profitable for extension of their lines, Yet these areas do offer a market for electric energy, provided the cost is not prohibitive.
So the REA steps into the picture. A group of farmers, perhaps covering several counties, applies for a loan to finance the construction of a generating plant and distribution system. The REA surveys the field, determines when ther enough consumers will agree to sign up and pay the monthly minimum to make the system pay for itself, and, in general, decides whether the project is economically feasible. If it is, a 25-year loan is made and the work of actual construction begins. The average REA. loan has been about $348,000, and the total disbursed has been $215,887,931.
The REA does not stop with lending money. Once a ce-operative group has been formed, the Federal agency assists with the engineering problems, helps enlist new consumers, and, in general, does its best to assure success for the project. This is not merely philanthropic interest—the money is lent, not given outright, and ihe Government hopes and expects to get it back. One way to insure that outcome is to see that the ce-operatives are soundly established and intelligently operated.
Text read from the printed page and cleaned; old type leaves the occasional error.