Evening star., 1940-02-23

The annual report of the r. E. A.
has just come to hand. 1t con-
tains some remarkable facts and
figures. I don't see how any fair
minded person can read this re-
port without coming to the con.
clusion that even If some Of the
loans which the r. E. A. has made
in thin" areas 60 into default, the
cost of its operations will have been
negligible as compared with the
benefits. The r. E. A. is deservedly
popular in Congress, and you can
search the Glenn Frank report from
end to end without finding any
suggestion that it should be abol.
| ished.
Even more noteworthy is the fact
that active opposition from the pri-
vately owned utilities has about
faded out. There is still friction
here and there, but by and large
the private companies and the farm
co-operatives financed by the R. e.
A. are getting along comfortably to-
gether and in some cases there is
cooperation between them. The
Georgia Power Co., for instance,
has gone out of its way to be helpful
to the r. E. A.-financed systems.
Exploits New Markets.
What explains this friendlier atti.
tude on the part of the utilities. Of
course, is the simple fact that the
r. E. A., through its pioneering
work. has created or inspired the
creation of vast new market In
rural areas which the utilities had
left untouched.
The figures in the current report
tell the story. Prior to the establish
ment OF the R. E. A. four and half
years ago, only about 10 per cent Of
the farms Of the country were re-
celving electric service. BY the end
OF 1888 this percentage had jumped
to 20.6, and 1t is now 25. This means
that 100000 farms are now getting
electricity, with all that this implies
IN the way of added comfort and
efficiency, as compared with TAO
before the Government went into
the business of offering loans to
self-help enterprises.
With these loans, first on a 20-year
and now on 25-year basis, 500 new
rural systems serving about 400 600
farm families or other rural users
have been established. In these
systems are 10000 miles of lines,
and the new lines are being built at
the rate of about 500 miles a day.
Through November, 1899, the allot.
ments to borrowers totaled about
S267 100000 and the demand for
loans continues. Nine out of 10 of the
borrowers are cooperative societies.
Early Moratorium on Payments.
Since time is required for a system
to become profitable "a fact which
accounts for the reluctance of the
private companies to 60 into new
f1eld0, the r. e. A. suspends in
terest payments for two and a half
years and payments on principal till
the end of the fourth year. Whether
the more venturesome loans of the
r E. A. will pay out depends in
large measure, as Administrator
Harry Slattery says in his report, on
the general economic condition of
the American farmer during the
next 25 years. Some of the older Of
the cooperative systems, however,
are already proved success-11 Of
them to the extent that they have
made substantial advance payments
of interest and principal.
What does all this mean to private
enterprise? When the R. E. A. was
created in 1885, some of the utility
executives declared that rural elec-
trification was going forward as
fast as economic conditions would
permit. In the words of Admins.
traitor Slattery, Rural electrifica.
ton was dead on its feet, begged in
sheer lethargy." But as the Gov.
ernment program got into operation,
the private utilities began EXTEND
ing their lines, with the result that
in the succeeding four years "they
found rural electrification so far
sound and profitable that they in
creased the number of the farms
they served by more than half q
! million
Co-operatives Supply Other Outlets.
But this tells only part of the
story. Not only have the utilities
added to their business over their
own lines. but they have found q
new outlet for their current over
the lines built by the co-operatives.
For only q few of these-less than
per cent-have their own generat-
ing plants and less than 80 per
cent get their electric energy from
municipal and other publicly owned
plants. Sixty-seven per cent of the
concerns financed with Government
money through the r. e. A. buy
their current from the private util-
tiles. That makes them such q
good customer that 1t Is not sur.
prising to find the utilities in some
places taking advertisements In the
cooperative publications and join
Ing the country bankers and mer-
chants in community festivities
when q new cooperative line Is put
into service.
The gains to the utilities from in.
creasing rural electrification are
apart from the incalculable bene.
fits to the electric appliance indus
try. A tremendous new market for
appliances, ranging all the way from
vacuum cleaners to milk-cooling
equipment, has been created and
the manufacturers are going aggres.
sively after the business. A touring
farm equipment show put on by the
r. E. A. was accompanied during
the 1899 season by the trailers Of Il
manufacturers.
It looks, on the whole, as II the
Government has achieved through
the r. E. A. . happy wedding Of
private and public enterprise, With
fortunate results for the consumer.