Neighbors Helping Neighbors

The History of the REA

Imagine what rural Alabama must have been like without electricity. Before 1935, electricity was available only to people who lived in or near cities and larger towns. In fact, many people believed that farm families did not want – or even need – electricity. Things began to change rapidly, however, when President Franklin D. Roosevelt signed an executive order on May 11, 1935, creating the Rural Electrification Administration (REA), a branch of the U.S. Department of Agriculture charged with lending money to help get electricity to rural areas.

At first, it was expected that private power companies would borrow money from REA to bring electricity to rural Alabama. But private companies could see little profit in rural areas. It wasn’t long before neighbors joined together to create nonprofit cooperatives in their area; cooperatives could borrow money from REA to build electrical systems. The rural electric cooperative program was born in Alabama. On March 2, 1936, the Clarke-Washington Electric Membership Corp. in the south Alabama town of Jackson became the first electric cooperative to incorporate in Alabama.

Shortly thereafter, on Aug. 4, 1936, 350 members of Cullman Electric Cooperative in north Alabama became the first co-op members to receive electricity in the state. With the help of U.S. Sen. Lister Hill of Alabama, President Roosevelt also created the Tennessee Valley Authority (TVA). Large dams were built on the Tennessee River, which generated large amounts of hydroelectric power. The dams also provided flood control, recreation and aided river navigation. On June 24, 1941, the Alabama Electric Cooperative (AEC) was organized in Covington County to generate and transmit electricity to rural electric co-ops in south Alabama. Now there are 22 distribution and one generation and transmission (AEC) cooperatives in Alabama.

History of Cooperatives Timeline
Significant Dates in Cooperative History
1752	The first successful cooperative was organized in the United States when Benjamin Franklin formed the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire the oldest continuing cooperative in the U.S.
1844	The Rochdale Equitable Pioneers Society opened a cooperative store on Toad Lane in Rochdale, England. Toad Lane is considered the birthplace of modern cooperatives because the principles and practices of the Pioneers assured the success of the cooperative model.
1865	Michigan passed what is believed to be the first law recognizing the cooperative method of buying and selling.
1916	The first national cooperative association was formed – now known as the National Cooperative Business Association.
1920s & 30s	Congress established governmental agencies – the Farm Credit Administration (1929), the National Credit Union Administration (1934) and the Rural Electrification Administration (1936) to provide loans and assistance to cooperatives.
1978	Congress passed the National Consumer Cooperative Bank Act, establishing the National Cooperative Bank.