Rural Utilities Service

An REA lineman at work in Hayti, Missouri in 1942.

The Rural Utilities Service (RUS) is an agency of the United States Department of Agriculture (USDA), one of the four federal executive departments of the United States government charged with providing public utilities (electricity, telephone, water, sewer) to rural areas in the United States via public-private partnerships.

Overview

The RUS is one of three agencies (the other two are Rural Business-Cooperative Service and the Rural Housing Service) that are part of the USDA's Rural Development Bureau. The three agencies are headed by administrators, who each report to the Under Secretary of Agriculture for Rural Development

The RUS administrator makes the primary policy and program decisions for the agency and is assisted by a borrower and program support staff that includes a financial services staff, an administrative liaison staff, and a program accounting services division. Because of the financial nature of the agency's work, the administrator and associated staff work closely with two other agencies that are not part of the USDA, the Federal Financing Bank (FFB)--and the former Rural Telephone Bank (RTB), which was dissolved in 2006. These banks provide the funds for many of the loan programs administered by the RUS.

The program functions of the RUS are divided into three operating units: water and waste, electric, and telecommunications, each led by an assistant administrator. The administrator and staff concentrate on the financial details of individual RUS projects, and these three operating units provide the engineering and technical personnel to plan and execute projects.

History

Rural Electrification Administration (1935-1994)

Rural Electrification Administration (REA) erects telephone lines in rural areas

RUS traces its roots to the Rural Electrification Administration (REA), one of the New Deal agencies created under President Franklin Delano Roosevelt. The REA was created on May 11, 1935, with the primary goal of promoting rural electrification.^[1] In the 1930s, the U.S. lagged significantly behind Europe in providing electricity to rural areas due to the unwillingness of power companies to serve farmsteads.

Private electric utilities argued that the government had no right to compete with or regulate private enterprise, despite many of these utilities' having refused to extend their lines to rural areas, claiming lack of profitability. Private power companies set rural rates four times as high as city rates.^[2] Under the REA there was no direct government competition to private enterprise. Instead, REA made loans available to local electrification cooperatives, which operated lines and distributed electricity.

In 1939, 288,000 households had their electricity provided by rural electric cooperatives; most of these electric coops had applied for and received loans from REA. Harry A. Slattery was the administrator of REA from 1939–1944. In 1944, he resigned after a conflict with the Secretary of Agriculture.

In 1934, less than 11% of US farms had electricity. In comparison, nearly 90% of farms in Germany and France had electricity in that same year. By 1942, nearly 50% of US farms had electricity, and by 1952 almost all US farms had electricity.^[3]

In 1949, the REA became authorized to provide loans to rural telephone cooperatives.^[4]

Administrators of the Rural Electrification Administration as an Independent Agency^[5]

Name	Dates of Service
Morris L. Cooke	May 20, 1935-Feb. 22, 1937
John M. Carmody	February 23, 1937-June 30, 1939

Under the U.S. Department of Agriculture^[5]

Name	Dates of Service
Robert B. Craig (Acting)	July 1-Sept. 25, 1939
Harry A. Slattery	Sept. 26, 1939-Apr. 10, 1945
William J. Neal (Acting)	Apr. 11-June 30, 1945
Claude R. Wickard	July 1, 1945-Mar. 16, 1953
Ancher Nelsen	Apr. 29, 1953-May 15, 1956