History of Cooperatives
The first known cooperative in the United States was formed in Philadelphia in 1752 by Benjamin Franklin. It was a fire insurance company and still operates today.
The modern cooperative movement traces its roots to a town of Rochdale England in 1844 where a group of factory workers created a cooperative. The Rochdale cooperative was incorporated on October 24, 1844 and is why October is Co-op Month in the United States.
The Rochdale Cooperative set up business guidelines which today are still followed as the "Rochdale Principles". They include:
One of the reasons co-ops exist is to provide a service not available from other sources. Rural Electric Cooperatives provide that service.
Thomas A. Edison oversaw the construction of the first central electric generating station in 1882 in Manhattan, New York City. By 1929 electricity was readily available and affordable in most metropolitan areas. However the rural areas were still without electricity because the private power companies would not build electric lines for economic reasons.
The private power companies in Pennsylvania charged farmers $2,000 to $3,000 per mile of line to build electric lines to their homes and then charged higher electric rates than those charge in the city. In many areas electric power was not available at any cost.
On May 11, 1935, President Roosevelt signed an executive order forming the Rural Electric Administration (REA). The REA program was initially intended as an inducement to the private power companies to begin serving rural areas. But even with the low interest loans available, the private power suppliers refused to build electric lines to the rural areas of Pennsylvania.
Farmers had long experiences with cooperatives. In fact, the co-op was the business structure rural people adopted when confronted with a task too large for any family to handle it by themselves. Farmers started inquiring to REA about creating Electric Cooperatives. In 1939 Congress put REA under the U.S. Department of Agriculture and loans to start local electric cooperatives commenced.
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