Historic Events for Students: The Great Depression. Editor: Richard C Hanes & Sharon M Hanes. Volume 1. Detroit: Gale, 2002.
The stock market crash of 1929 and the following Great Depression left millions of workers unemployed. By 1933 when President Franklin Roosevelt (served 1933-1945) took office the unemployment rate had climbed to 25 percent of the workforce, or over 12 million people. Roosevelt responded to the Depression with the New Deal, a vast array of federal programs addressing a broad spectrum of social and economic issues. A key element of those programs was work relief, putting the unemployed back to work on public projects that would benefit society. A major element of New Deal work relief was massive construction projects. Among these was the construction of major dams that provided thousands of long-term jobs, developed untapped natural resources, and provided a boost to industry and local economies through inexpensive electric power. Dams played a central role in making America what Roosevelt thought it should be in the twentieth century, a society characterized by individual ownership of electrified homes and a developed rural economy. To achieve this goal, Roosevelt promoted development of multipurpose dams that would produce hydroelectric power, provide irrigation water for farmers, flood control downstream, and promote recreation around the shores of the reservoirs.
As head of the New Deal’s Public Works Administration (PWA), in addition to being Roosevelt’s Secretary of Interior, Harold Ickes wielded considerable influence in economic development of the nation. Though nationwide in scope, the water and power projects of the New Deal would exert profound influence on future economic development of the Western United States. Some of the largest dams in the world were constructed during the Great Depression including Hoover Dam, a rare carryover from the President Herbert Hoover (served 1929-1933) administration, and one of Roosevelt’s favorite water and power projects, Grand Coulee Dam in northern Washington State. Besides the key roles of the PWA, the U.S. Bureau of Reclamation, the U.S. Corps of Engineers (COE), and the Tennessee Valley Authority (TVA) in constructing the water and power facilities, the New Deal created the Rural Electrification Administration (REA) to get electricity to rural America, the Bonneville Power Administration (BPA) to distribute electricity in the Pacific Northwest, and the Federal Housing Administration (FHA) to establish modern housing construction standards making homes ready for electrical consumption. Through Roosevelt’s vision, a modernized America emerged from the Great Depression.
With the goal of a steady and abundant supply of water and power, New Deal projects would construct dams, canals, tunnels, reservoirs, power plants, pumping stations, transmission lines, electrical substations, new towns for workers, and pipelines. The projects would spawn camp communities that provided residence for workers and their families. With the high unemployment rates of the Depression, workers would come from all parts of the country and a broad spectrum of backgrounds. The projects would contribute to increased pasture and forage for livestock, extensive crops of vegetables, fruits, and grains, and construction of food processing plants, especially throughout the American West.
Modernizing America through Electrification
President Roosevelt fully believed in electrical modernization of America on a broad basis. He was convinced that only through the fullest possible use of inexpensive electricity could the quality of life for American families improve. To achieve this goal Roosevelt also believed that broad governmental planning at the national level was needed and should be applied to various regions of the nation.
Electrification was also tied to another basic belief of Roosevelt’s, that a society focused mostly on rural life made for a much healthier nation than a predominately urban society. As a result Roosevelt sought to reverse population trends of movement from the farm and small town to the city. This trend had rapidly progressed through the industrialization of America following the Civil War (1861-1865). For the first time in U.S. history most Americans lived in the city rather than in rural areas by the 1920s. Roosevelt wanted to see a shift of the population back to rural areas. Roosevelt believed he could reverse this trend by locating industries away from city centers. This “ruralization” could be achieved by providing local cheap electrical power in the rural areas, power generated by either public utilities or by private industry under government regulation.
Undaunted by such grand schemes Roosevelt believed in adopting social policy designed to improve the lives of the majority of Americans. This belief in government activism was a dramatic departure from perceptions of the role of government held by presidents before him and counter to prevailing U.S. traditions. The vast majority of the public and nation’s leaders had believed that government should be quite limited, dealing with defense and international and interstate trade, and not involved in the daily lives of its citizens.
Roosevelt’s idea of electrical power priorities sharply contrasted with the private utility industry. In 1933 private utilities were primarily focused on better serving the 20 percent of Americans who were already consumers of electricity, Roosevelt focused on the 80 percent of households not electrically modernized. For example by the early 1930s very few farmers had electricity. They were also suffering poverty due to low prices for crops and as a result were deeply in debt. They could not afford to pay high electrical rates, if any at all. Only government intervention could save them.
To Roosevelt the key was modernization. Modernization to Roosevelt meant social justice and a moral improvement of life in addition to the material improvement. This vision of government was well expressed in a September 1932 campaign speech in San Francisco. In the speech Roosevelt described what he thought was a right of all U.S. citizens. That right was that anyone willing to work should have the opportunity to own an electrically modernized home. As he often did, Roosevelt also looked to the needs of children, that they should enjoy food and shelter. The cornerstone of social modernization was the modernization of homes that would provide for public health and greater financial security. Modernized homes would at least meet minimum standards of shelter and hygiene.
This perspective represented a major new national vision. The traditional Jeffersonian belief was that the right to hold private property leads to limited powers of government. Roosevelt’s more progressive philosophy was that the right of property ownership justified larger government to guarantee that the common person could enjoy the right of property ownership. During his 1932 campaign, Roosevelt promoted large water and power projects in every region of the country. America needed a much larger supply of cheap electricity than was currently available. He pointed to opportunities on the St. Lawrence River in the Northeast, on the Tennessee River in the Southeast, on the Columbia River in the Northwest, and continued development of the Colorado River in the Southwest with the ongoing construction on Hoover Dam begun in 1930.
Projects on these rivers could provide cheap electricity, store water for domestic and irrigation use, control floods, and improve navigation for increased commerce. The voting public, desperate for a new approach to solving the economic problems of the Great Depression, voted for Roosevelt in a landslide victory over Republican incumbent Herbert Hoover. Upon taking office in March 1933, Roosevelt launched his plans to solve the Depression by in part modernizing America through his New Deal programs. Much needed to be done to accomplish this goal.
For New Deal water and power projects to have any effect, however, America’s homes had to be readied for the future cheap power. In promoting the National Housing Act in early 1934, Roosevelt identified electrical modernization as a key objective. The New Dealers had already taken action to help homeowners by continuing the Home Owner’s Loan Corporation (HOLC) that refinanced home mortgages between 1932 and 1936. They also had established the Electric Home and Farm Authority (EHFA) in December 1933. The EHFA was initially designed to help private appliance manufacturers market electric appliances in the TVA service area. For this area manufacturers made special models to sell at lower prices than normal.
Roosevelt signed the act into law on June 27, 1934. The act created the Federal Housing Administration (FHA) that would promote private lending for modernizing homes and building new ones. The public, cash-strapped due to the Depression, could not afford to adequately upgrade houses on their own budgets. Because of the strong real estate industry the federal government, through the New Deal, could not establish national regulations set national standards guiding the construction of new houses. So the New Dealers, through this act, saw another route for influencing basic improvements in housing.
The National Housing Act made a major impact in modernizing homes simply through its program of guaranteeing the loans made by banks to prospective homeowners. The federally guaranteed loans took away much of the financial risk out of making loans by banks. Quickly banks became much more active in issuing consumer loans to homeowners. The requirement introduced by the New Dealers, however, was that for a new home to qualify for a loan it had to be modernized, meeting certain standards.
In this way the FHA established a national set of expectations regarding housing design. This standardization marked the biggest change in U.S. housing between the 1930s and 1920s. Electrical modernization was a key element of these new FHA standards. Before 1935 building contractors did not routinely design or build houses to support the use of electrical appliances. The houses were more like shells. The owner was responsible for making any changes necessary to accommodate different uses such as appliances and utilities. This manner of house construction unintentionally served to hold back electrical modernization through the 1920s.
For people to obtain loans for purchasing new homes, the homes had to be designed to receive electrical service. The standards required homes to have outlets for portable electric appliances as well as outlets for lights. No longer would such items have to be fixed in place. Homeowners would enjoy greater flexibility for living. To enforce this and other standards, the FHA issued a National Electrical Code. The code also required each house to have two circuits, one for lights and light appliances and another for appliances that required a greater amount of power. These standards were enforced simply by the availability of FHA loans only if such standards were met. Despite their revolutionary nature for the late 1930s, by 1945 these standards would be taken for granted as nearly every American wanted a house with these features. A national mass market for modernized homes was quickly created. By 1941 New Deal modernization policies had set the basis for a post-World War II (1939-1945) building boom. That boom lasted for many years within the New Deal policy framework of FHA loans and electrical codes.
Home modernization projects also qualified for loans. These projects involved installing wiring in homes and updating kitchens for the use of electric appliances. Nearly half of the loans for home modernization supported kitchen upgrades. In addition over 40 percent of those receiving loans purchased refrigerators.
By guaranteeing loans for purchasing new homes and modernizing existing ones, a major accomplishment of the New Deal was to expand consumer loans to low-income families by the federal government insuring the loans to customers. This meant appliance dealers could now provide long-term finance plans to customers, making appliances affordable to a much larger segment of the population. A long-term national boom in appliance sales resulted. With banks participating in many more consumer loans, the amount of credit for consumer durable goods such as appliances and automobiles increased by 50 percent between 1934 and 1941. Households of a much broader income span were able to participate in the new mass consumption economy. This expansion of purchasing power was a key result the New Dealers were looking for in an effort to lead the nation’s economy out of Depression.
Regulating Private Utilities
While dramatically changing the character of the average home in America based on modernization through electrification, the other major step was to get cheap and reliable power to the homes. This involved reducing the price of electricity already being produced by private utilities and expanding the availability of power.
A crucial step to reducing the cost of electricity supplied by private companies was to resolve the dilemma of multiple levels of holding companies owning private utilities. A holding company is a corporation that owns enough stock in another company to control its activities. In the early 1930s private utilities were the most distrusted by the American public of any industry in the nation. With strong public support, Congress passed the Public Utilities Holding Company Act (PUHCA) in 1935. The act required holding companies controlling private utilities to register with the Securities and Exchange Commission, an agency created by the New Deal in June 1934 primarily to regulate the stock market. The act also placed the interstate transmission of electricity under the authority of the Federal Power Commission, established in 1920 by the Federal Water Power Act, and the Federal Trade Commission, established in 1914. Roosevelt identified the act as key for lowering existing electricity rates and lessening the greed of holding companies.
PUHCA, however, was only a start. It did not necessarily reduce electrical costs though it did remove the high operating expenses posed by holding companies. Other means were needed to lower rates and to provide a much great supply of electricity to American homes and farms. Private utilities had long contended that rural electrification could not be profitable.
Tennessee River Valley
In the 1910s in support of the World War I (1914-1918) effort the government constructed two dams and two nitrate plants at the Muscle Shoals location of the Tennessee River in northwest Alabama. The rapids in the river at that location provided a good potential for hydropower. Not completed in time to aid the war effort, the facilities became the center of controversy between those wanting the government to pursue completion and operation and those, particularly the private utility companies in the region, opposed to further government involvement. U.S. Senator George Norris of Nebraska led the fight for government operation. The Tennessee River was well known for its periodic flooding and irregular water flows. Navigation was risky at best. A series of dams was envisioned for the watercourse to transform the region’s economy by providing cheap power for industry, flood control, and reliable navigation of the river. Norris, however, was not able to get the support of Hoover’s administration.
While campaigning in 1932 for the presidency Franklin Roosevelt was struck by the poverty he witnessed in Tupelo, Mississippi. The community had no electricity and other services such as sewers. This visit was one of several factors that spurred Roosevelt’s interest in the potential of the Muscle Shoals facilities.
As a key part of the New Deal programs created during Roosevelt’s first one hundred days of office, Congress passed legislation establishing the Tennessee Valley Authority (TVA) on May 18, 1933. The TVA was a massive experiment in regional economic planning. The TVA would enhance the region in various ways: provide flood control, improve navigability, assist agricultural and industrial development, operate nitrate plants for fertilizer, and even reforest nearby hills. Tupelo would become the first town to sign a contract with TVA to receive cheap electricity and would become a showcase for the project.
Regarding the goal of producing power, the TVA would build a series of dams and sell the resulting hydropower to rural cooperatives. A three-person board ran the independent agency. The three individuals who served through much of the Depression held very different views on how the program should be operated, particularly in relation to the region’s private power companies. Nine dams would be built on the main stem of the river and others on tributaries. Navigation for ships was established from the confluence with the Ohio River 640 miles upstream to Knoxville, Tennessee. Though highly successful, the program was also highly controversial since it competed with already existing private power companies. These companies took the TVA to court claiming it was unconstitutional for the government to be in the power generation business. After years of court battles the TVA finally won with the Supreme Court decision in 1936 inAshwander v. Tennessee Valley Authority. Competition from the TVA did force private power companies in the area to lower their rates for homeowners.
By 1941 the TVA was the largest producer of electrical power in the United States. It was also instrumental in World War II providing electricity for producing aluminum for aircraft production and other war materials and producing nitrates for munitions. It remained the largest utility in the United States through the remainder of the twentieth century.
Associated with the TVA was establishment by executive order of the Rural Electrification Administration (REA) in May 1935. The REA would provide loans to local electrical cooperatives to build electrical transmission systems and purchase electricity from power companies. Congress made the REA permanent in May 1936 with the Rural Electrification Act and it became part of the Department of Agriculture in 1939. Originally focused on the TVA region, its activity spread nationwide. By 1939 the REA had assisted over four hundred cooperatives and 268,000 households. Importantly both the TVA and REA promoted public cooperatives to purchase and distribute power to the rural homes and farms. This highly successful approach would be applied to other regions by the New Deal.
Developing the West
Until the 1930s the West was an underdeveloped region of the United States. The early years of the Depression had hit farming and mining, the two key industries historically important to the region, especially hard. There was little money available to bring change. The New Dealers, including Roosevelt and Ickes, believed the federal government should most appropriately fund and guide the course of economically development of the West so the benefit to all of society would best be realized. They both envisioned a more prosperous West built on agriculture, industry, and mining. The central element of this development would be massive multipurpose dams, patterned after TVA, located throughout the West. The electrical power would support new industries and new cities as well as small farmers and meet an increased demand for tourism given the recent advent of the automobile. Though President Hoover, an engineer from the West himself, also had such a vision of growth, he did not embrace the role of direct government involvement. He believed it was more the role of private enterprise to lead. As a result little occurred.
The New Dealers looked to the Bureau of Reclamation and the Corps of Engineers to guide the necessary development. Funding would come through the PWA and other relief agencies and through direct project appropriations from Congress. The Bureau of Reclamation was the primary agency concerned with irrigation in the West under the Federal Reclamation Act of 1902. Through the 1910s and 1920s projects had become increasingly complex as the Bureau began looking at developing entire river systems and providing power as well as irrigation. For example in 1920 the Reclamation Service completed a hydroelectric dam and 630-mile canal system on the Snake River in Idaho. The project provided irrigation to 121,000 acres of desert. Idaho farmers formed local cooperatives to purchase power from the government facility. They installed almost three hundred miles of transmission lines to their homes and farms. This provided a good model for Roosevelt and the New Dealers. The private utilities, however, strongly opposed the direct purchases of power by farmers from the government and construction of the power lines.
At the start of the New Deal the Bureau of Reclamation had 26 construction projects underway involving over $335 million. It recommended to new Secretary of Interior Ickes that these projects be completed. By the following year in 1934 the PWA would greatly increase the Bureau’s construction budget amounting to half of what the Bureau had received the previous three decades in that one year. With the Army Corps of Engineers also planning river development, primarily for navigation and flood control as opposed to the Bureau’s interest in irrigation and power, the two federal agencies often clashed over proposals. To better coordinate all of these agencies, Congress passed the Water Facilities Act in August 1937. The act established the PWA’s National Resources Planning Board in charge of the coordination of the various agencies and projects.
To achieve the goals of cheap and plentiful power, the construction of large dams became an important part of President Roosevelt’s New Deal work relief programs. The president would travel widely throughout the West between 1934 and 1938 promoting his New Deal programs including the massive water and power projects. Roosevelt inherited the ongoing construction of Hoover Dam on the Colorado River between Arizona and Nevada. The Boulder Canyon Project Act of 1928 had been approved during the Calvin Coolidge (served 1923-1929) administration and construction actually began in 1930 during the Hoover administration. While initiating the Tennessee Valley Authority in 1933 in the Southeast, Roosevelt turned his gaze to other regions where water and power projects would be operated as public utilities. These water and power projects would not only provide more electricity than private companies were willing to provide, but the New Deal promoted the growth of these public utilities to use as a yardstick to evaluate the performance of private utilities, particularly the prices charged their customers. In 1934 cheap power was a major campaign issue used by Roosevelt in support of Democratic Party congressional candidates across the nation.
The most extensive water and power programs of the New Deal in the West involved the Colorado River in the Southwest, the Columbia River Basin of the Northwest, and the Central Valley of California. In addition to these regions other key water and power projects were also supported by the New Deal elsewhere in the West.
For many years a strong desire persisted by many to build a dam on the Colorado River to serve the water and power needs of Los Angeles and surrounding regions. In 1922 Secretary of Commerce Herbert Hoover helped negotiate the Colorado River Compact in which western states agreed to divide up the waters of the Colorado River. With the project gaining approval of Congress in 1928, in late 1930 President Herbert Hoover authorized the beginning of construction of the dam. An engineer himself, Hoover saw Hoover Dam as the key example of his administration trying to bring economic relief to those suffering from the Great Depression. The project would provide thousands of jobs through the construction firms contracted by the government to build the dam. The Bureau of Reclamation was the lead federal agency for the construction. He also saw the massive construction project as a way of affirming the public’s faith in the existing economic system of private capitalism. The first major federal project with multipurpose goals, predating TVA by several years, Hoover Dam would indeed become a major engineering and construction feat.
At the peak of construction 5,200 men worked on the dam around the clock seven days a week. When the project office first opened it received 12,000 job applications given the dire employment conditions of the Great Depression. Because of the size of the undertaking, several large construction companies joined to form a giant business combination that would later tackle large New Deal projects. The companies included Morrison Knudsen Company of Idaho, Utah Construction Company, J.F. Shea Company and Pacific Bridge Company of Portland, Oregon, MacDonald and Kahn and W.A. Bechtel Company of San Francisco. The combination became known as Six Companies even though more than six companies were actually involved in the project. Morrison Knudsen company, leader of the business combination for Hoover Dam, would become one of the leading construction companies in the world.
At first workers on the Boulder Dam project lived in a number of tent settlements scattered around the construction area. Eventually a whole new town would be constructed for project employees and their families called Boulder City. The town would hold seven thousand residents at the height of construction in 1934. Following the decline in the number of workers on the project by 1935, two companies of another New Deal program employed the nation’s young men in conservation projects, the Civilian Conservation Corps (CCC), used Boulder City as a camp.
As with many projects during the Great Depression, the dam project promoted racist policies. Those policies were in part resulting from the increased competition over jobs brought by the Depression. The original Boulder Canyon Project Act prohibited the hiring of “Mongolians” in reference to people of Asian descent. Scandinavians were favored with their reputation as skilled construction workers. The government did hire Apache Indians due to their acclimation to the desert conditions. Racist policies, however, were primarily aimed at black Americans. Few blacks worked on the project, and those who did were prohibited from living in Boulder City. They had to live in Las Vegas and commute from there to work. Boulder City restaurants even refused to serve black workers. The employment office opposed the hiring of blacks fearing their presence would create on-the-job tensions. These racial policies changed little as the Roosevelt administration took over the project.
The workers who were hired enjoyed the relative stability of employment on the project with it lasting four years. Work, however, was hard and dangerous. Fifty workers died during construction. In order to get started on the dam construction, the Colorado River had to first be diverted. Four giant tunnels had to be dug through solid rock formations and five million tons of dirt would be removed from the proposed location of the concrete dam. By the spring of 1933 the forms to hold concrete for the dam began to be constructed. Twelve million tons of sand and gravel were needed for the concrete mix. Unskilled workers made 50 cents an hour and skilled workers such as carpenters made 75 cents an hour. Less than half of the five thousand workers had any prior construction experience.
The PWA provided $38 million in 1934, contributing to the total cost of $114 million. The resulting structure was 726 feet high—similar to a 50-story building—and 660 feet thick at its base. It was the world’s largest dam at the time. The dam began storing water on February 1, 1935, and began producing electricity in September 1936. It remained one of the highest dams in the world into the twenty-first century. Though employing thousands of workers, the project in itself did little to ease the Great Depression as President Hoover had originally envisioned. Until the New Deal added many more water and power projects, it served more as a symbolic effort at economic recovery. The dam project would prove to be unique in being a rare thread of continuity between the Hoover and Roosevelt administrations. Near its completion, President Roosevelt traveled to the project in September 1935 to make a dedication address.
The 115-mile long reservoir behind the dam, the world’s largest man-made lake, was named Lake Mead after Elwood Mead, director of the Bureau of Reclamation from 1926 to 1934. By 1939 waters from Lake Mead were irrigating over 2.5 million acres for agricultural production. Much of the acreage was in the Imperial Valley of Southeastern California. It also provided water to Los Angeles through a 260-mile long aqueduct. The hydroelectric power went to Los Angeles and Southern Arizona. Perhaps most importantly for the Great Depression, the Hoover Dam project set the precedent for more giant water and power projects through the 1930s.
The Hoover Dam project also set precedents in other ways, too. It was the first occasion in which multiple construction companies would work together and with the federal government. This strategy would become much more common in the future. Other Great Depression heavy construction projects would follow with various combinations of this group of companies including Bonneville and Grand Coulee dams on the Columbia River, foundations for the Golden Gate Bridge and Bay Bridge in San Francisco, and many other kinds of projects including tunnels, canals, pipelines, shipyards, subways, factories, and medical facilities. They all had a major affect on the economic development of the American West.
The large construction firms supported the New Deal’s policy of large deficit spending to spur employment and the economy. Extensive public works projects were a key element of this policy. Marriner Eccles, who assumed the position of president of Utah Construction Company, was a leading industry spokesman in this regard and became a key figure in the New Deal. Eccles became the assistant secretary of the Treasury in January 1934 in the Roosevelt administration.
The continuity of the project between the two administrations did not lead to a continuity in the name of the dam. In 1930 the secretary of interior under President Hoover proposed the name Hoover Dam because Herbert Hoover had served as chairman of the Colorado River Commission in 1922 and then eight years later authorized construction of the dam. Public support for Hoover, however, plummeted over the next few years as the Great Depression worsened. With Roosevelt assuming office in March 1933, the new Secretary of Interior Harold Ickes proposed the name change to Boulder Dam in May. It remained Boulder Dam until 1947 when Congress restored the name Hoover Dam.
Hoover Dam was not the only New Deal water and power project on the lower Colorado River. In 1935 Ickes pressed Congress for authorization to build Parker Dam 150 miles downstream of Boulder Dam. Approved by Congress the dam was a Bureau of Reclamation project. Funds came from the Metropolitan Water District of Southern California with money from bonds sold to the Reconstruction Finance Corporation (RFC), a federal agency created by Hoover and adapted by the new Deal to help finance New Deal programs. The dam was for water storage for Los Angeles as well as flood control and irrigation water to much of central Arizona. Power was also sold to Central Arizona Light and Power Company.
Further diversion of Colorado River waters to the Imperial and Coachella valleys of California resulted from construction of the Imperial Diversion Dam and All-American Canal. The vast agriculturally rich region of interior Southern California had experienced $10 million in crop losses in 1934 due to a severe drought. The PWA provided initial funds amounting to $9 million to the Bureau of Reclamation for construction of an 80-mile main canal from the Colorado River to the Imperial Valley and a 103-mile long branch to Coachella Valley. Total cost of the project was $24 million and irrigation began in October 1940.
The headwaters of the Colorado River also received attention from the New Deal. Ickes proposed a massive project for the state of Colorado known as the Big Thompson Project. The proposal was to divert Colorado River water from its headwaters in southwest Colorado and transport it through the Rocky Mountains by canals and tunnels to the dry farming region of southeast Colorado. Congress authorized the project in 1937 under authority of the Bureau of Reclamation. The PWA provided funds in 1938 to begin construction. The project consisted of five power plants and complex tunnels including a 13-mile long tunnel through the mountains. The Big Thompson Project would become one of the largest Bureau projects providing irrigation water to 615,000 acres of farmland and power from five power plants for regions of Colorado. It would take 20 years to complete.
The Columbia Basin Project
A comprehensive study of the nation’s potentials for dam construction by the Corps of Engineers, begun in 1925 and completed in 1931, included a plan for a system of 10 dams on the Columbia River. The Columbia River in the Pacific Northwest was recognized as a vast, unharnessed power source. It was estimated that the Columbia offered 40 percent of the nation’s hydropower potential with a flow 10 times the Colorado River. The Grand Coulee Dam, to be located in northern Washington, was designated by the 1931 report as the primary project on the upper Columbia and the Bonneville Dam was the most downriver dam of the system. Spurred by the New Deal, this plan would ultimately guide development of the Columbia River for the next 40 years. At the time of completion of the report in 1931, however, the resulting response from the Hoover administration was to encourage private companies, states, or local governments to pursue the identified projects. The federal contribution would be limited to the U.S. Army Corps of Engineers providing funds for navigation locks and various stream channel improvements.
With the deepening of the Great Depression and the arrival of President Roosevelt to the White House, the proposed Columbia River projects were now looked upon as a great opportunity to provide work relief on public projects that would greatly benefit society for years. With Hoover Dam construction well underway, proposals for large dams on the Columbia River increased.
The Bonneville was the first project to begin. The site for the dam was about 40 miles east of Portland, Oregon. The Bonneville Dam would make the Columbia River available to navigation 48 miles further upstream for ocean-going vessels as well as abundant cheap power to the region. The Bonneville project presented a major engineering challenge. It would have to not only deal with a wide variation in stream flow through a year but also with a much more powerful volume of water than the Colorado River at Hoover Dam. Insurance consultants even advised that the project was too dangerous. While waiting for Congress to approve a dam project on the Columbia, the New Dealers decided in 1933 to help in the meantime given the high unemployment of the Pacific Northwest. They began issuing construction contracts through the PWA to start some preliminary preparation work. The PWA provided $20 million in 1933 to the Corps of Engineers. Representing the first federal project on the Columbia River, construction of the cofferdam began in October 1933. A flood in December, however, revealed problems with the original dam site location. The site was moved four miles upstream. In 1934 PWA provided another $11 million for contracts to construct the main spillway, the powerhouse, and the navigation lock. Excavation work started in February 1934 by the J.F. Shea Company on the powerhouse and in June 1934 by the Columbia Construction Company on the spillway dam. Work on the navigation lock began in July by Shea. With construction well along in August 1935 Congress authorized use of regular federal appropriation funds for completion of the dam through passage of the River and Harbor Act. The project thus became funded outside the New Deal relief programs.
Construction of the Bonneville Dam provided much needed work relief to the Depression-weary Pacific Northwest. Total cost of the project was $80 million with the PWA contributing $42 million. The project employed three thousand workers. The resulting dam is 122 feet high and originally produced over 86,000 kilowatts. The spillway dam was closed to begin filling the reservoir in September 1937 as President Roosevelt arrived for dedication ceremonies of the project. After restating his policy of seeking the widest possible use of electricity, the president pushed a button lighting a string of lights. The first power from Bonneville’s generators was produced by March 1938 and operation was well underway that summer.
With demand for more power to operate aluminum production plants and shipbuilding yards for World War II, work expanding the powerhouses was completed in December 1943. By the 1990s the power generation increased to over 518,000 kilowatts. As with TVA, critics of Bonneville claimed unfair competition between the federal government and private companies in providing electric power to the Northwest. The first powerhouse constructed would produce enough electricity to meet the needs of a city three times the size of Portland in 1935.
As the early difficult work on the Bonneville Dam began in 1934 talk increased regarding a proposed giant project—Grand Coulee Dam—upstream in northern Washington. A goal was to irrigate one million acres in the dry central Washington region to boost development of a major agricultural region. The State of Washington had committed $377,000 to begin the project in 1933. Federal funding for the Grand Coulee Dam project however was mired in controversy. Proponents for public power wanted a high dam that would generate a large amount of electricity. Private utility companies argued against government involvement in power generation and contended that a high dam would produce an oversupply of electricity for the region. At first Roosevelt chose a compromise keeping the dam low enough in height to keep power companies satisfied that power generation would be somewhat limited. Roosevelt would provide $14 million through the PWA in late 1933 for the project under the responsibility of the Bureau of Reclamation. Excavation at the dam site began in December.
As initial work began the high dam proponents resumed a campaign for a larger dam. By 1935 Roosevelt changed the government design and adopted a high dam design. On August 30, 1935, in the River and Harbor Act, Congress approved funding for the high dam. With the expansion, Grand Coulee would become the largest dam in the world. Roosevelt regarded the Grand Coulee Dam as the model project of the New Deal’s dam-building program further showcasing the potential of dams in regional economic development programs. He visited the construction site in 1937 to further stress his support. By 1941 a total of $69 million had been provided and construction of the dam was completed. Construction of the powerhouses and pumping plant was underway. The first power generated by Coulee Dam was transmitted on March 22, 1941. The project had employed six thousand workers laboring day and night.
At the end of the twentieth century Grand Coulee remained the largest concrete structure in the United States made of 12 million cubic yards of concrete. It was the third largest hydroelectric facility in the world.
The reservoir created by the dam, Lake Roosevelt, extended 150 miles upstream to the Canadian border. As initially envisioned in the 1931 Corps report, it was the major provider of electricity to the Pacific Northwest, producing 6.5 million kilowatts of power. The dam also irrigated over a half million acres of land in central Washington and provided flood control for the river and towns downstream.
Bonneville Power Administration
In June 1937 Roosevelt lobbied Congress to create “seven little TVAs” including: (1) the Great Lakes and Ohio River Valley region; (2) the Missouri and Red River region; (3) the Arkansas and Rio Grande River region; (4) the Colorado River; (5) the Columbia River Basin; (6) streams in Northwestern California; and, (7) the Tennessee and Cumberland region. Having seen such great success with the TVA, Roosevelt was eager to duplicate such broad planning programs elsewhere. The increasingly conservative Congress, however, was staunchly opposed. Seeing little chance for Congress to approve the projects on the same grand scale as TVA the New Dealers responded with somewhat scaled-down plans.
With power soon to be produced by Bonneville Dam, Roosevelt sought a means to market (sell) the electricity directly to the public. The Bonneville Power Act of August 1937 created the Bonneville Power Administration (BPA), patterned after parts of the TVA, to sell and distribute electricity generated by the Bonneville and later Columbia River public dams such as Grand Coulee Dam to the public. One key role of BPA was to avoid the monopolization of Columbia River power by private interests. Preference would be given to publicly owned distribution systems and systems operated by private cooperatives. The BPA revenues would repay the U.S. Treasury for the costs of construction, maintenance, and operation of the hydropower facilities. In 1935 only 31 percent of Oregon farms were electrified. The BPA, using PWA funds and in some cases WPA labor, constructed transmission lines and substations around the region. To promote the widest possible use of electricity in the region and attract manufacturers, BPA decided to charge a single rate for all users, regardless of how much power they used and how far they were located from the power facilities. BPA became the primary provider of electricity in the Pacific Northwest. Like TVA, the BPA marketing prices, which must be approved by the Federal Power Commission, provided a yardstick to measure the prices of private utilities operating in the Northwest. The demands for electricity brought by World War II led to rapid growth of BPA.
To spur public support of the New Deal dams of the Columbia River the BPA hired songwriter Woody Guthrie in May 1941 to travel the Columbia River region for 30 days and write a song a day about the New Deal efforts. Guthrie ended up writing 26 songs including “Grand Coulee Dam,” “Roll on Columbia,” “Jackhammer Blues,” and “Pastures of Plenty.”
With the New Deal spurring substantial water and power development in the Columbia River region, a problem of land speculation arose. Speculators were buying out small farmers in anticipation of receiving cheap federal electricity to run large farming operations. In addition there already existed some large dryfarming operations. The New Deal strongly favored assisting small farmers in the West. Therefore in 1937 Congress passed the Columbia River Basin Anti-Speculation Act on May 27. The act limited irrigated farms to 80 acres in size. Roosevelt and the New Dealers wanted the region to be one of small farms.
California Central Valley
In California the Bureau of Reclamation in cooperation with the State of California undertook a massive water and power project in the central part of the state involving flood control, irrigation, navigation, domestic water supplies, and hydroelectric generation.
A key element was the transport of water from Northern California to the southern part in the San Joaquin Valley, a distance of over four hundred miles. A series of dams including the large Shasta Dam on the Sacramento River, the last of the giant dams proposed by the New Deal, were planned in addition to power plants, canals, and a large system of transmission lines. The state had been interested in the project for years and received some federal funds in 1935 to start. A final site was chosen in January 1937 for Shasta Dam on the northern end of the Sacramento Valley. Congress passed the Central Valley Project Act in August 1937 to provide full funding for the project.
Construction of Shasta Dam, a concrete dam second in size to Grand Coulee Dam, began in 1938. The first concrete was poured for the dam in July 1940. The Central Valley Project would also involve some PWA funds and CCC labor. Slowed by World War II, the project was not completed until 1947 at a total cost of $2.3 billion. Two million acres of farmland in the San Joaquin and Sacramento River Valleys were irrigated by the project. The project was one of the costliest of the Bureau’s amounting to $2.3 billion. Contrary to the general goals of the New Deal, this project benefited the large corporate farm operations more than the small farmer.
Other Water and Power Projects
Though the Tennessee River Valley, the Colorado River, California Central Valley, and the Columbia River Basin were highlights of the New Deal water and power policies, many other projects were funded as well. Two notable projects were the Fort Peck Dam in Montana and the Pine View Dam in Utah.
The Corps of Engineers originally proposed the massive Fort Peck Dam project in 1933 to improve navigation of the upper Missouri River in Montana. Ickes accepted it for a public works project adding irrigation and flood control goals as well. The PWA provided $25 million to begin construction in spring of 1934. President Roosevelt paid a personal visit to the construction site on August 6 of that year. The Fort Peck Act of 1938 added hydroelectric production under the guidance of the Bureau of Reclamation. The Fort Peck Dam, one of the largest earthen dams in the world at 250 feet in height, was completed in 1939 at a total cost of $108 million. The resulting Fort Peck Reservoir behind the dam is the fifth largest man-made lake in the United States. The PWA had provided $49 million. The project employed seven thousand workers, irrigated 84,000 acres, and produced 182,000 kilowatts by the late 1990s.
Pine View Dam was a Bureau of Reclamation project designed to provide irrigation water as well as storing water for the city of Ogden, Utah. Funded by the PWA, construction began in September 1934 using in part CCC labor. The dam and canals were completed in June 1937 with water channeled to 17,000 acres of farmland. Pine View was noted as one of the only single-purpose water and power projects of the New Deal era.
New Deal and Other Federal Agencies
A key New Deal program that funded construction of dams and hydroelectric facilities was the Public Works Administration (PWA). The PWA was created as part of the National Industrial Recovery Act to provide work relief programs for the jobless. Key supporters of the PWA were Secretary of Interior Harold Ickes and Secretary of Labor Frances Perkins. Ickes was appointed administrator of the PWA. The PWA provided loans to towns for building public electric systems. By 1935 the PWA had supported 274 public power systems that competed with private electric power companies. The PWA provided $6 billion for a wide range of projects in addition to water and power projects including public buildings, roads, bridges, sewage systems, and tunnels. As part of the $6 billion distributed, $1.8 billion was provided to federal agencies including the Bureau of Reclamation for water and power projects in the West between 1933 and 1941. Another $1.6 billion went to the six Great Plains states for a total of over $3 billion for water and power developments. Because of the slowness of the PWA to plan and construct large projects support wavered through the years with emphasis in work relief on more modest construction projects shifting to the newly formed Works Progress Administration (WPA) in 1935. Grand Coulee Dam would be one of the model projects tackled by the PWA that reflected high quality in design and construction. The WPA would also provide funds and work relief on public construction projects building such facilities as utility plants. The PWA, however, continued its course through the later 1930s completing its large projects.
Throughout the years of the New Deal the Bureau of Reclamation provided an average of $52 million a year to water and power projects. Previously it averaged less than $9 million a year. The National Reclamation Association, a private organization supporting Bureau of Reclamation projects, were active throughout the New Deal pushing projects through the administration and Congress. By the end of 1936 the Bureau had 19 dams under construction and employing thousands of workers. Economic benefits went beyond the immediate employment of construction workers with the large amounts of steel, cement, machinery, and other products used in the construction. The year 1937 was a particularly active year with 72 projects totaling almost $88 million. By 1940 near the end of the New Deal the Bureau had 23 power plants in operation throughout the West and 15 more still under construction. Aside from the large projects, the Bureau has constructed many small earthen dams to store water from smaller streams and provide more flood control.
By 1934 after the first year of New Deal programs, numerous federal agencies and programs had roles in public water and power projects, often with overlapping roles. For example the Farm Security Administration was mounting irrigation projects in the Great Plains for tracts purchased by the Resettlement Administration that was busy relocating farmers to better lands. To provide some coordination of activities by the PWA, TVA, Bureau of Reclamation, Federal Power Commission, and the Federal Trade Commission, Roosevelt created the National Power Policy Committee on July 5, 1934, under authority of the PWA. The committee helped coordinate electric utilities increasing generation capacities and standardizing generator equipment. Its work also led to the Public Utility Holding Company Act of 1935.
Meanwhile the efforts of New Deal agencies in upgrading existing homes continued. In August 1935 the Electric Home and Farm Authority (EHFA) was transferred to the REA. By 1938 the EHFA had provided over $15 million of loans in 33 states. The Farm Security Administration between 1937 and 1946 provided almost 900,000 rehabilitation loans. Homeowners were able to purchase refrigerators with loans from other New Deal agencies as well. Half of those receiving loans under the EHFA to purchase appliances purchased refrigerators. Almost half of those receiving funds from the REA purchased refrigerators. By 1940 over 44 percent of homes had refrigerators.
Flood Control Act of 1936
By the mid-1930s major damaging floods were still occurring throughout the United States. With industrial and residential development spreading increasingly out onto flood plains near rivers, a more comprehensive program of flood control was needed to protect property. Destruction was estimated to be amounting to millions of dollars a year from seasonal floods. The act represented another milestone federal policy over water resources. Navigation had been recognized a federal responsibility in 1824, reclamation of lands through irrigation in 1902, and now flood control in 1936. Declaring that flood control on navigable rivers was a federal responsibility, the Corps of Engineers was assigned responsibility for constructing flood control projects.
In addition to all the tangible benefits of the massive dam projects, a major intangible by-product was also realized. The dams offered a hope in the future for those demoralized by the Great Depression. The projects reestablished the public’s faith in the U.S. capabilities and private business and were a great boost for modernization of the American home in the regions where they were built. The dams at least in part fulfilled Roosevelt’s vision of cheap electricity for rural America.
Waterpower has been crucial to the U.S. economy since the early days of independence from Great Britain. The American colonists had previously used small streams to power sawmills and gristmills. By the early nineteenth century larger streams and rivers were powering factories. For example textile mills, powered by waterpower from waterwheels placed directly in a swift moving stream or waterfall, were a key part of the early U.S. industrial economy of the nineteenth century.
Early dams were primarily constructed for navigation purposes diverting water into canals to assist river traffic around rocky stretches in waterways. The U.S. Army Corps of Engineers began improving waterways for navigation by the mid-nineteenth century. The establishment of industrial centers in the United States following the Civil War (1861-1865) led to the construction of much larger dams to provide drinking water for the growing urban populations. San Francisco began receiving its water from a reservoir by 1887 and New York City by later in the 1890s.
In addition to navigation and water storage, dams assumed a new function in the 1890s providing hydroelectric power to the urban centers. Generators were situated along stream courses replacing the use of falling water to power mills. With less access to coal to generate power in the West, hydroelectric use grew quicker there. The Folsom River Dam in California was completed in 1895 to transmit electricity to Sacramento located 20 miles away. Orchards along the route became prosperous being able to tap into the electrical transmission lines to operate irrigation pumps. Electrical irrigation pumps began replacing steam and gas-driven pumps in limited areas. The electrical industry in the late nineteenth century was the most dynamic growth sector of the U.S. economy replacing the railroad industry as the lead industry. Stiff competition grew among companies to gain the upper hand in power generation and delivery. By 1892 only General Electric and Westinghouse survived to control the industry. The most noted early hydropower plant was built at Niagara Falls in the 1890s to drive industrial plants in Buffalo, New York. The amount of hydropower generated in the United States between 1902 and 1907 more than tripled with the focus primarily being the nation’s population centers.
Yet there were signs of concern as hydropower development progressed. By the 1920s practically all of the electrical generating capacity was privately owned. It was reported that one-third of the water-power in the United States was controlled by only 13 companies. Fears mounted that a monopoly over U.S. water resources was emerging that would control all future hydropower development as well as other uses of America’s rivers.
Another national water issue arose. Flood control of rivers had become a bigger issue through the late nineteenth century as more and more industries were locating near water sources for power. In fact industrial cities were all located on rivers. Congress passed acts in 1917 and 1923 addressing the Mississippi River. Highly destructive floods hit the Mississippi River Valley in 1927. In 1928 the Congress adopted a Corps of Engineers’ plan to construct levees and reservoirs, make channel improvements, and stabilize riverbanks along the Mississippi. The Sacramento River valley in California also received the attention of Congress in 1917. Various small flood control projects had been approved along the river. The New Deal would eventually fund more of these projects for the Mississippi, the Sacramento, and many other areas through work relief programs.
Urban electrification would be a major driving force in the rapid industrialization of America. Electrification of factories was a primary factor behind development of assembly line production in the 1910s that transformed American industrial production. The growth of industry in turn led to the growth of cities and a demand for electric lighting and electric trolleys. Mass media industries grew as well including films, radio, and phonograph recordings. By 1920 the demand for electricity was escalating as more and more homes had electric stoves, radios, vacuum cleaners, and washing machines. The primary energy source of America particularly in the East was shifting from coal to electricity.
Though electrical power to urban industrial areas quickly developed, the agricultural industry was the last to see electrification. Attention began to shift to supplying rural areas in the United States during the 1910s. Some utilities that were interested included General Electric, the Samuel Insull utilities in the Chicago area, and several in the West such as the Mount Whitney Power and Electricity Company in southeastern California and the Northern Colorado Power Company. General Electric even promoted the all-electric farm. One of the earliest private water and power projects was Laguna Dam in Southern California, completed in 1907, to provide water and electricity to the California desert area near the Mexican border, an area that would become known as the Imperial Valley.
However the economic prosperity enjoyed by farmers during World War I actually stymied much interest in electricity. The farmer seemed to be doing just fine without regional electrical power supply systems. The prosperity did lead some forward-thinking individual farmers to install their own generating systems using waterpower from small dams on their property or any many cases, windmills. Tens of thousands of farmers used gasoline and kerosene-driven systems that included use of glass-jar batteries.
When President Theodore Roosevelt (served 1901-1909) was assessing the needs of rural America only two percent of farmers had electrical service. Gains over the next 20 years were modest. By the late 1920s 90 percent of farmers in the United States had no electrical service and those that did paid high rates, often double what urban homeowners paid because of their low density in rural areas. In actual numbers only 600,000 of the 6.5 million U.S. farms had electricity. Half of those were supplied by isolated generating systems and the other half by utilities and interurban lines. These electrically supplied farms were concentrated in the Northeast and Far West. Interurban power lines were lines transmitting power from one town to another. The farmers along the route could receive the electric current from these lines. Those receiving this service often enjoyed improved roads to city markets as well that greatly changed their manner of farming. They often would begin growing fruit and dairy products for city consumption.
By the 1930s the electrification gap between rural and urban areas was substantial. This gap would only grow more through the early 1930s. Urban residents enjoyed electric lights, washing machines, vacuum cleaners, irons, and running water driven by pumps, while farm families still had outhouses and kerosene lamps. Ice would be cut and hauled in the winter and stored in sawdust for use into the summer. Instead of farmers representing the Jeffersonian ideal of moral purity as they had always represented before, now they represented social backwardness.
Water and Power for the West
With the rise of industrialization in the East, the demand for raw materials of the West increased. With its small population and limited political influence, the West became like a colony to the East Coast with its resources being increasingly tapped to fuel East Coast industry. In 1900 only ten million people lived in the West, amounting to only 12 percent of the nation’s population. Goods needed by Westerners were largely imported from the East Coast. To counter its loss of resources to Eastern companies, the West sought to develop economically and industrialize. Vast amounts of money, however, were needed to construct much needed transportation networks and water projects. No single organization or state government had sufficient funds.
The federal government had already played a key role in the opening of the West. The government had subsidized construction of the railroads and provided land for agricultural settlement through homestead laws. The transcontinental railroad was built between 1869 and 1887 that opened up new markets and made the West potentially part of the nation’s economy.
The American West had little coal to produce electricity and insufficient available capital to build hydroelectric dams. The demand for dams for agricultural purposes in the arid West began gaining momentum at the end of the nineteenth century. President Theodore Roosevelt promoted development of water resources as part of his Progressive political agenda. He pushed for a national policy to plan the development of water resources. This led to conflicts between private electrical companies and Roosevelt over the proper role of the federal government in constructing dams and developing power systems. Under the leadership of Roosevelt the federal government became involved in 1902 with the creation of the U.S. Reclamation Service. The agency immediately began building small dams and canals in the west to irrigate the desert lands as well as provide power. By the 1920s small hydropower systems were operating throughout much of the West.
In response to push for increased hydroelectric development, Congress passed the Water Power Act in 1920. The act created the Federal Power Commission to guide further development of hydroelectric power. Little, however, would result from the act for much of the 1920s. The key development during the decade was increased standardization of existing electrical networks. Farmers and others who had electrical power found substantial incompatibility between various electrical systems. It was very difficult to install new motors or other devices into an existing system because of the lack of standardization. Often motors were too powerful for the existing electrical supply systems. By the late 1920s larger interconnected systems began evolving that could more efficiently make use of any new power generating plants.
The failure of private utility companies to deliver electricity to most American homes in the 1920s including much of the American West was very disappointing to the progressive reformers. Those pushing for widespread electrical modernization of America also strongly believed utility companies were charging too much for electricity. Influenced by big business wanting cheap electricity rates, utility companies sold electricity on graduated schedules that actually charged lower-income households higher electricity rates than larger users. With the initial block of electricity very expensive, households had to use a lot of electricity to qualify for lower rates. In essence the domestic electricity users were subsidizing industrial users who paid lower rates than households. The industrial users had economic clout to seek another power source if they could not get the rates they wanted from the utilities.
A movement for public power had little leadership until 1913 when controversy over the City of San Francisco’s proposal to build the Hetch Hetchy Dam in Yosemite National Park stirred the national debate over public versus private power utilities. At that time the public power movement grew with Senator George W. Norris of Nebraska one of its leaders in Congress. They firmly believed power could be provided much cheaper. This would enable people to purchase the many new electrical appliances being produced and significantly reduce the amount of work needed to maintain a household. By the 1920s the manufacture of new electrical appliances made modernization of the home a real possibility.
Another factor was also causing high electrical rates. The rise of holding companies in the utility industry during the 1920s was also another key economic factor standing in the way of cheap power. Before World War I electrical companies were local or regional businesses that could be more easily influenced by state commissions to keep prices reasonable. Holding companies were much more extensive in their operations, covering many states. These holding companies were able to raise, or pyramid, their stock values with each business combination they created. Samuel Insull of Chicago created one of the most noted holding company empires in the utility industry. After becoming president of Chicago Edison in 1892, Insull built a vast network of five corporate systems in the Midwest composed of 150 companies worth $2.5 billion and serving over four million customers. The two companies heading the holding company scheme were Insull Utility Investments and Corporation Securities Company of Chicago. Because of their interstate character, holding companies like Insull’s were less susceptible to state regulation. They also substantially raised the operation expenses of the utilities by taking a good part of their profits for payment of the management services they provided to these holdings. This meant that the utilities had to maintain high rates to its customers to pay what were increasingly multiple layers of holding companies. As the public became increasingly aware of these business combinations they became angry, demanding that something be done to control them and lower energy prices.
Demand for Dams Increases
The push for federal support of water projects was increasing in the late 1920s. One key proposal that was a part of the debate was the desire by Southern California to dam the Colorado River to provide drinking water, irrigation water, and hydropower. In 1928 Congress passed a bill authorizing $177 million to build a 726 foot-high dam, known at first as Boulder Dam.
The Columbia River had long been recognized as having vast potential for power generation. Prior to 1930 various state and local organizations in the Pacific Northwest advocated development of the Columbia River, often offering competing proposals. In addition the State of Washington lobbied for a major irrigation project for the central Washington area transected by the upper Columbia River. Advocates for a dam in the Grand Coulee area began organizing in 1917 leading to feasibility studies in the 1920s. The primary goal at that time was irrigation for the semiarid region. The project was supported by the 1931 Corps of Engineers study and a January 1932 Bureau of Reclamation report.
The lack of modernization of U.S. farms persisting into the 1930s was in part philosophically justified by Jeffersonian agrarian ideals. These ideals were that farmers are self-sufficient and their lives are oriented around the natural cycles of the growing seasons. Many contended that electrical power would corrupt this relationship and undermine the independence of the farmer. Electric lights, heaters, freezers, incubators, fans, and pumps would disrupt the harmony and growing cycles. In reality sanitation, comfort, and increased productivity were sacrificed to maintain this antiquated ideal. In addition this argument ignored previous major improvements that had greatly changed farming through the nineteenth century into the early twentieth century. Fertilizers, steel plows, barbed wire, mechanical reapers, canals, hybrid seeds, windmills, new markets opened by railroads, and improved breeding of stock had already greatly altered farm production. In fact these improvements spawned chronic overproduction that lead to persistent low prices for farm products. In addition the perceived independence of farmers had already been shaken by greater reliance on banks and foreign markets because of the overproduction and falling prices. Farmer debt was mounting. In addition many of the rural houses were not technologically designed and built to consume much electricity. Farmers could not afford to upgrade their houses given the economic problems of agriculture. A bigger solution was needed to modernize the American home and farm.
In reaction to their being ignored by the power industry, farmers organized granges and cooperatives, and joined Populist political movements. The Ford Motor Company, owned by Henry Ford who grew up on a farm in Michigan, produced a series of films, Electricity for the Farm, which highlighted the benefits of electrification for farms. It demonstrated washing and ironing clothes, shelling corn, pumping water for irrigation, churning butter, and lighting for nighttime.
The electrical cooperatives were to provide their own electrical service. Such electrical distribution systems grew in Pennsylvania, Oregon, and Washington. The private utilities spent considerable time and energy fighting such developments. Their strategies included construction of zigzagging lines through the countryside tapping into more lucrative localities. Where this was done greatly undercut the ability for farmers to organize cooperatives in an economically effective way.
With lack of service by private utilities farmer support for nationalization of utilities was growing. Thomas Burton wrote the book Bloodbird that described the struggle of a group of farmers fighting to stop a utility company from taking their land and constructing a hydroelectric power complex. Not only were farmers fighting for their land, but control of the waterpower so that monopolies would not form.
The fight against public utilities extended into the 1930s as private utilities strongly lobbied Congress and tried to sway public opinion against the New Deal water and power projects. Not only did they argue it was wrong for a government financed utility to complete with private utilities, but they also claimed there was little need for the electricity that would be produced by the massive projects President Roosevelt was processing. They believed there was no market for that amount of electricity in the foreseeable future. Even during their construction, the federal dams were called “white elephants” and concrete monuments to the New Deal.
During the 1920s and first years of the New Deal private utilities argued that building power distribution lines to thinly populated rural areas was too costly. Besides, they argued the U.S. population was shifting to the cities anyway leaving fewer potential customers in the farmlands. Whereas each mile of distribution lines in cities could serve between 50 and two hundred customers, in rural areas it would serve only three. Even in Pennsylvania where waterpower was less abundant, a proposal to build a large coal-fired generating plant with distribution lines brought opposition from utility companies and was ultimately defeated in Congress.
The reformers seeking electrification saw two avenues available to them-through regulation of private utility companies or through public ownership. The controversy over public power became a national issue after 1913 when the city of San Francisco proposed to build a dam in the Hetch Hetchy Valley in Yosemite National Park. Private companies took strong opposition to the public involvement in such a project denouncing the prospect of competition between private and public utilities. Senator Robert M. LaFollette of Wisconsin who had fought for government regulation of railroads to reduce railroad rates also took up the fight to lower electrical rates. He, like others, argued that the more widespread use of electricity at lower rates would actually increase the profits of private utility companies.
Another spokesman for public ownership of utilities was New York newspaper owner William Randolph Hearst who broadly distributed his views through his newspapers. He argued utilities should serve a public need. In reaction New York governor Charles Evans Hughes claimed that such ownership was in opposition to the American spirit of individualism and would bring socialism to the United States.
Because individual electricity users and potential users had little influence over utility company practices, state governments established public commissions to provide some oversight. Their effectiveness, however, was primarily limited to safety issues. As a result policies of private power companies, including their rate schedules, acted against electrical modernization of American households, particularly those most in need. By the late 1920s the progressive reformers believed the utility companies were holding back a major social revolution in the United States that would be triggered by electrical modernization of homes. They wanted to raise the standard of living in small towns and farms, and wanted to disperse industry more out to these towns rather than concentrated in major urban centers. Governor Franklin D. Roosevelt of New York joined this “back to the land” crusade.
The main controversy focused on who should get water and electricity. Utilities did not oppose the dams themselves because of the large amount of funds needed to construct them. Utilities were primarily interested in the power generated by the dams. Besides hydropower the government was also interested in flood control, irrigation, navigation, and recreation that would be served by the dams. Therefore the private companies wanted the government to build dams, but let the private company operate the power generators. Many questioned whether it was appropriate for utilities to make money off of dams built with public funds. Utilities opposed such efforts as TVA building transmission lines directly to farms and communities. Roosevelt countered with his claim for a need for a yardstick to measure the performance of utilities. Roosevelt was accused by some newspaper editorials of promoting socialism. In addition they claimed the New Deal was producing electricity that nobody wanted or needed.
European governments adopted rural electrification as important national programs much earlier than the United States. The Electrical Exhibition of 1881 in Paris, France, highlighted the benefits of electricity for farming. By the late 1920s two-thirds of farms in Germany, France, Holland, and Scandinavia had inexpensive electrical service. In 1929 the United States remained well behind most other developed nations.
Roosevelt took the charge in advocating public water and power developments on behalf of rural America. Unlike Europe, the U.S. government primarily left electrification to private farmer cooperatives. By 1935 only 10 percent of the rural public in the United States had access to electricity. In contrast 90 percent of farms in France and Germany had electricity, 85 percent in Denmark, and 95 percent in Holland. Electrical service to American homes and farms would dramatically improved through the later 1930s due to the expansive New Deal water and power programs.
Back to the Land
A combination of movements and proponents encouraged electrification of rural America in the 1930s. Many had become disillusioned with the crowded, dirty industrialized cities. The glamour that cities did offer through the 1920s diminished even further as the Great Depression set in. The economic boom turned into breadlines, shanty towns (referred to as Hoovervilles due to the President’s lack of response), and sidewalk apple sellers. The population shift to the city that had been ongoing through the industrialization period, especially following the Civil War, had lost its appeal. Social critics began advocating getting “back to the land.” Ralph Borsodi wrote two influential books on the subject, This Ugly Civilization and Flight from the City. The author himself had left the city in 1920 and become a successful subsistence farmer. Adding to this movement was a Southern Agrarian movement denouncing industrialization and calling for a return to rural life. A key part of the shift would be decentralization of industry that could be accomplished by rural electrification. Small scale factories and subsistence farming was considered the ideal goal for a new society. Other advocates for emphasizing a rural life was the National Catholic Rural Life Conference and architect Frank Lloyd Wright. A common theme of these various groups was that big business was morally bankrupt. Electrification was the key element to make the return shift to rural life possible.
In addition to the Back to the Land movement, another crusade to irrigate the West also took off between 1900 and 1918. Advocates envisioned millions of self-sufficient small farmers. Elwood P. Mead participated in the National Irrigation Congress to lobby for extensive federal aid. William Smythe authored The Conquest of Arid America in 1905 that raised public attention of the needs and potentials of the West. One proponent was President Theodore Roosevelt who supported passage of the National Reclamation Act in 1902 creating the Bureau of Reclamation. The act allowed money made by the United States through land sales to be used of irrigation projects in the West.
These inclinations toward rural life meshed well with president Franklin Roosevelt’s personal thoughts. Roosevelt believed in the benefits of rural life over city life. He essentially embraced those trends through his New Deal water and power policies that transformed many rural regions of the United States.
Largely due to New Deal water and power programs, by 1945 most of the nation was electrified. The New Deal showed that even low-income Americans could enjoy electrical modernization and participate in the mass consumer economy. As a result what were considered luxury commodities of the 1920s, such as refrigerators, became necessities of U.S. society by the late 1930s. Private utility companies also learned they could see increased profits with mass consumption of electricity. This was in contrast to their commonly held beliefs before the 1930s that focused only on high-density residential areas and industry. Through the New Deal’s housing programs longer terms for loans through FHA made house payments as low as monthly rent payments and all but guaranteed the houses would be electrically modernized. Due to New Deal water and power policies, public power programs became accepted by industry and the public.
The New Deal played a major role in the modernization of the West’s economy. No other source of such large capital was available to build the massive infrastructure necessary. The western states benefited the most from the New Deal spending on water and power.
World War II brought a huge demand for electrical power for the factories to produce war materials including aluminum production for aircraft and other war materials. Boulder City at Hoover Dam enjoyed another boom period during the war. At TVA 12 dams were under construction at the same time in 1942 in another burst of construction. The TVA system of dams produced 2 billion kilowatt hours of electricity in 1939, 12 billion in 1945 following the war expansion, and 20 billion in 1973. In the late 1940s President Harry Truman tried to revive the multiple TVA idea of Roosevelt’s with regional planning agencies. Like Roosevelt he was not successful in selling the concepts to Congress. Truman offered another need for cheap power. He firmly believed that cheap electricity was necessary for racial minorities to enjoy modern housing comforts. Still urban home ownership for non-whites increased from 20 percent in 1940 to 36 percent in 1960.
Another outcome of New Deal water and power projects was the growth of large construction companies that would become internationally known. In addition the federal government and large private business had formed a partnership partly focused around large construction projects. The giant construction company combinations spurred by New Deal water and power projects would continue through World War II and the post-war years. During the war they enjoyed huge profits through government guaranteed profit programs for defense related projects during the Depression. Following the war they operated steel mills, cement factories, and developed mines.
Federally funded construction of large dams continued as a major part of the U.S. economy in the post-war years and greatly increased the generating capacity. In fact several of the projects begun by the New Deal were not completed until late in the 1940s. Many local economies benefited first from the jobs created by the large construction projects and then from the benefits after completion. For example to the Columbia River system were added numerous dams including The Dalles Dam (1957) just upstream from Bonneville and John Day Dam (1968) and McNary Dam (1953) further upstream.
The New Deal’s push for electrical modernization also contributed to a major building boom in the post-war period. The federal government insured the loans for over 50 percent of home loans. By the mid-1950s over three-fourths of American households lived in electrically modern homes in both urban and rural areas. The pre-1933 two-class system based on access to electrical modernization had been erased. This radical change in just 22 years represented a major redistribution in national wealth. Home ownership opened up availability to loan opportunities and an accumulation of wealth for the mass public. Refrigerators, washing machines, and other appliances offered greater leisure time. Electrification made recreational activities in the home much more feasible including televisions and later computers. In total electrical modernization spurred by the New Deal opened up new freedoms for the average American household.
The availability of inexpensive and a reliable supply of electricity continued into the 1990s when efforts to deregulate the power industry brought major changes including higher costs and less reliable supplies in the early twenty-first century.
By the 1970s thousands of dams had been constructed and various concerns arose regarding their effects on migrating fish and other aspects of the environment. By the late 1970s the dam building era had drawn to a close. Some dams were even targeted for demolition. Hydroelectric power constituted 16 percent of the nation’s electric power by the late 1970s. The Columbia River dams were accused of being the primary factor of the major decline of fish in the Columbia River system, historically an important economic resource in itself. By the late twentieth century ten dams and thousands of miles of irrigation canals had made the Colorado River, like the Columbia, one of the most intensively managed rivers in the world. Cities and farms sprung up in what was once desert. The New Deal projects brought an end to the annual cycle of flooding, good from the farmer’s perspective but the biological renewal of the river and its biological productivity of the region declined. Wildlife numbers dropped, as clam-rich tidal flats near its mouth in Mexico disappeared as did a lush river delta, due to by the dramatic decrease in the amount of water reaching the river’s mouth at the Gulf of California. Decades later some were arguing that he New Deal’s water and power projects may have provided abundant power that was cheap for its rate payers, but eventually expensive for its impacts on the environment.
Maurice Cook (1872-1960)
Born in Carlisle, Pennsylvania, Cook graduated from Lehigh University in 1895. He became a consulting engineer specializing in electric power and public works. After serving as director of the Philadelphia Department of Public Works in the 1910s, he worked with the War Industries Board and U.S. Shipping Board during the war. Afterwards he served as economic advisor to Pennsylvania Governor Gifford Pinchot. Impressed with his ideas, Governor Franklin Roosevelt of New York appointed Cook to the New York State Power Authority in 1929. With Roosevelt winning the presidential race in 1932, Cook became part of the New Deal in 1933 when Roosevelt appointed him to a position in the Public Works Administration (PWA). Cook was a key advocate for national economic planning. Cook was also appointed to the National Power Policy Committee. In 1935 Cooke became head of the Rural Electrification Administration (REA), a New Deal agency promoting cheap electricity to rural farm areas through partnership with private farm cooperatives. With the Great Plains suffering from a long-term drought he became chairman of the Great Plains Drought Area Committee established to restore the economy and environment of the Midwest. Cooke’s influence continued through the 1940s as President Harry Truman appointed him in 1950 to chair the President’s Water Resources Policy Committee.
Harold Ickes (1874-1952)
Born in Franktown, Pennsylvania, Ickes graduated from the University of Chicago in 1897 and became a newspaper journalist. In the 1920s he practiced law in Chicago and fought the influence of the utilities empire built by Samuel Insull. He was also president of the Chicago chapter of the National Association for the Advancement of Colored People (NAACP). Ickes was politically progressive and disliked big business domination of local politics. In 1933 President Roosevelt appointed Ickes Secretary of Interior. With creation of the Public Works Administration (PWA), Roosevelt named Ickes head of that organization as well. Ickes campaigned for national planning, conservation of natural resources, and regulation of private power companies. Ickes was personally involved in the design and acceptance of all PWA projects. As both head of the PWA and Secretary of Interior, Ickes held much power in matters relating to unemployment relief and construction of public works projects. With his control of PWA funds for major projects, Ickes was the dominant figure and shaped a lasting influence on the economic development of the West.
Samuel Insull (1859-1938)
Born in London, England, Insull attended private schools by the age of 20 began work for the European representative of the Thomas A. Edison electrical power industry in the United States. In 1881 after only two years Insull was transferred to the United States and soon became head of the Thomas A. Edison Construction Company. By 1892 Insull had become president of Chicago Edison. Over the course of the next three decades, Insull developed a vast system of holding companies controlling electrical service over a broad area of the Midwest. The stock market crash of October 1929 caused the collapse of the Insull empire. By 1932 Insull resigned and returned to Europe. Politicians including Franklin Roosevelt in 1932 used Insull as an example of corporate corruption that led to the Great Depression. Backlash against the holding company empires such as Insull’s led to a number of New Deal reform legislation including the Banking Act of 1933, the Tennessee Valley Authority Act of 1933, the Securities Exchange Act of 1934, the Public Utility Holding Company Act of 1935, and the Rural Electrification Act of 1936 among others.
George Norris (1861-1944)
Born in Sandusky Country, Ohio, Norris received a law degree in 1833 and began a law practice in Nebraska two years later. Norris became legal counsel to the Burlington and Missouri Railroad. With business down during the 1890s economic depression, Norris began public service as a prosecuting attorney and state judge. In 1902 he won nomination to Congress. In Washington Norris became a progressive Republican, supporting railroad reform. In 1913 he won election to the Senate where he served for the next 30 years. During the 1920s he opposed the Republican administrations’ favoritism toward big business and fought hard for public ownership and operation of the hydroelectric facilities at Muscle Shoals, Alabama. He unsuccessfully presented a series of bills to have the government develop the region through a series of dams that would provide inexpensive hydroelectric power. Norris was also pro-agriculture and passed bills in favor of small farm operators. Though still a Republican, he endorsed Franklin Roosevelt for president in 1932 with whom he became close friends. Norris was the chief author of the bill creating the Tennessee Valley Authority in 1933 and he sponsored the Rural Electrification Act in 1936. Norris was a leading advocate of regional power projects around the nation, but had little success in getting their authorization through Congress. The first dam build by TVA was named after him as was a new community, Norris, Tennessee.
On July 5, 1934, President Franklin Roosevelt established the National Power Policy Committee. Purpose of the Committee was to coordinate the New Deal’s policy related to the production of electrical power. The following statement was provided in a letter to the Secretary of Interior Harold Ickes (from Roosevelt, pp. 339-340).
I wish to establish in the Public Works Administration a Committee to be called the “National Power Policy Committee.” Its duty will be to develop a plan for the closer cooperation of the several factors in our electrical power supply-both public and private-whereby national policy in power matters may be unified and electricity may be made more broadly available at cheaper rates to industry, to domestic and, particularly, to agricultural consumers.
Several agencies of the Government, such as the Federal Power and Trade Commission, have in process surveys and reports useful in this connection. The Mississippi Valley Committee of Public Works is making studies of the feasibility of power in connection with water storage, flood control and navigation projects. The War Department and Bureau of Reclamation have under construction great hydro-electric plants. Representatives of these agencies have been asked to serve on the Committee. It is not to be merely a fact-finding body, but rather one for the development and unification of national power policy.
As time goes on there undoubtedly will be legislation on the subject of holding companies and for the regulation of electric current in interstate commerce. This Committee should consider what lines should be followed in shaping this legislation. Since a number of the States have commissions having jurisdiction over intrastate power matters …
The Committee is to be advisory to the President. I hope that you will accept membership on this Committee and act as its Chairman.
Dedication of Bonneville Dam
President Roosevelt traveled to the Pacific Northwest in 1937 to promote several New Deal projects including construction of Bonneville Dam. The following remarks were delivered in a speech at the dam on September 28 (from Roosevelt, pp. 387-392).
“Today I have a feeling of real satisfaction in witnessing the completion of another great national project, and of pleasure in the fact that in its inception, four years ago, I had some part. My interest in the whole of the valley of the great Columbia River goes back to 1920 when I first studied its mighty possibilities. Again, in 1932, I visited Oregon and Washington and Idaho and took occasion in Portland to express views which have since, through the action of the Congress, become a recorded part of American national policy …
The more we study the water resources of the Nation, the more we accept the fact that their use is a matter of national concern, and that in our plans for their use our line of thinking must include great regions as well as narrower localities.
If, for example, we had known as much and acted as effectively twenty and thirty and forty years ago as we do today in the development of the use of land in that great semi-arid strip in the center of the country which runs from the Canadian border to Texas, we could have prevented in great part the abandonment of thousands and thousands of farms in portions of ten states (later referred to as the Dust Bowl) and thus prevented the migration of thousands of destitute families from those areas into the States of Washington and Oregon and California. We would have done this by avoiding the plowing up of vast areas, which should have been kept in grazing range, and by stricter regulations to prevent over-grazing. At the same time we would have checked soil erosion, stopped the denudation of our forests and controlled disastrous fires.
Some of my friends who talk glibly of the right of any individual to do anything he wants with any of his property take the point of view that it is not the concern of Federal or state or local government to interfere with what they miscall “the liberty of the individual.” With them I do not agree and never have agreed because, unlike them, I am thinking of the future of the United States. My conception of liberty does not permit an individual citizen or group of citizens to commit acts of depredation against nature in such a way as to harm their neighbors, and especially to harm the future generations of Americans …
Coming back to the watershed of the Columbia River, which covers the greater part of the States of Oregon, Washington, Idaho and a part of Montana, it is increasingly important that we think of that region as a unit …
That is why in developing electricity from this Bonneville Dam, from the Grand Coulee Dam and from other dams to be built on the Columbia and its tributaries, the policy of the widest use ought to prevail. The transmission of electricity is making such scientific strides today that we can well visualize a date, not far distant, when every community in this great area will be wholly electrified …
Your situation in the Northwest is in this respect no different from the situation in the other great regions of the Nation. That is why it has been proposed in the Congress that regional planning boards be set up for the purpose of coordinating the planning for the future in seven or eight natural geographical regions …
To you who live thousands of miles away in other parts of the United States, I want to give two or three simple facts. This Bonneville Dam on the Columbia River, forty-two miles east of Portland, with Oregon on the south side of the river and Washington on the north, is one of the major power and navigation projects undertaken since 1933. It is 170 feet high and 1,250 feet long. It has been built by the Corps of Engineers of the War Department, and when fully completed, with part of its power installations, will cost $51,000,000. Its locks will enable shipping to sue this great waterway much further inland than at present, and give an outlet to the enormously valuable agricultural and mineral products of Oregon and Washington and Idaho. Its generators ultimately will produce 580,000 horsepower of electricity.
Truly, in the construction of this dam we have had our eyes on the future of the Nation. Its cost will be returned to the people of the United States many times over in the improvement of navigation and transportation, the cheapening of electric power, and the distribution of this power to hundreds of small communities within a great radius.
As I look upon Bonneville Dam today, I cannot help the thought that instead of spending, as some nations do, half their national income in piling up armaments and more armaments for purposes of war, we in America are wiser in using our wealth on projects like this which will give us more wealth, better living and greater happiness for our children.
Suggested Research Topics
- The movement to generate electrical power by publicly owned utilities met strong opposition from private power companies. Review the various arguments posed by the proponents of both public and private power generation.
- Explore the history of water and power projects in your region. Is the power to your power generated by hydroelectric, coal, nuclear, or some other source? Is it a publicly or privately owned power company? Did the New Deal influence the development of power sources for your community?