Chapter 2
The Reform Tradition
Rates and the Failure of Private Electrical Modernization

The Reformers' Charge

For progressive reformers, there was no mystery in the failure of private utilities to bring electrical modernization to the majority of American homes in the 1920s. The utilities charged too much for electricity. Sen. George W. Norris of Nebraska, leader of the public power movement in Congress, put it simply: only when electricity was cheap "would the modern home contain all the appliances necessary to do most of the work and drudgery now done by hand." Reformers divided between two basic strategies to lower electric rates, regulation and public ownership. They trod both paths before 1914, but their efforts remained with municipal and state governments. In 1913, San Francisco's plan to dam the Hetch Hetchy Valley in Yosemite National Park ignited the issue of regulation versus ownership at the national level. Controversy flowed over national utility politics for the next two decades. And it was from this controversy that Franklin Roosevelt gained his political ideology regarding electrical modernization of the home.^[1]

Major issues of electric utility regulation that dominated the 1920s appeared earlier in the progressive struggle to reform railroads. In Wisconsin and California, reform legislation brought water, gas, telephone, and electric companies, as public utilities, within the same framework as the railroads. Reformers could easily redirect issues and analyses from one utility to another. As Robert M. La Follette fought railroad rates, so he fought electric rates. He argued that lowering electric rates increased the sale of electricity. Even with increased taxation due to a progressive income tax and fair valuation of property, greater sales re-

sulted in greater after-tax profits. "After two years of careful investigation, the Railroad Commission, after improving the quality of service, reduced the maximum price of electricity in the city of Madison [in 1910] from sixteen cents to fourteen cents/kwhr/mo, and adjusted the other rates on a lower basis. The result was that the sales of electricity increased 16 percent." California similarly reduced electric rates. Its commission lowered household rates from ten cents to eight cents in northern California and from ten cents to seven cents in southern California. In response, the utilities improved and expanded their service. The commission compelled companies to keep accurate books by a methodology it mandated, and it inspected their books. The new regulations took inflated values out of companies. They could lower rates and still make a fair profit, because they did not have to cover bloated capitalization.^[2]

Commissions regulated service as well as rates. What "service" ought to include depended on the reform camp with which a progressive identified. The individualist progressives said that service must be judged against the "interest of the public"—a narrowly legalistic interpretation of the contractual responsibilities of utility corporations as defined in their charters. At this simplest level, service only obligated a utility to deliver its commodity or technological service safely and at the mandated level. California progressives considered public safety the most important service consideration. A generation of train wrecks and of street railways without crossing guards made safety a highly charged local issue. New York's progressive Republican governor, Charles Evans Hughes, spoke of service in this sense in 1907 when he called for enforcement of "adequate service" from the state's public service corporations, "which they are bound by their charters to render." Closely related to this idea of service was the expectation of responsiveness by the company to consumer complaint. Since individual consumers could not force utilities to amend their service through the marketplace (there were no competing companies for the consumers to take their business to), the state had to ensure a minimum level of service to the customer.^[3]

Other reformers expanded the concept of service to include substantive contribution to the public good. In New York, William Randolph Hearst forcefully put this idea in front of voters by advocating the public ownership of utilities. The utility should deliver a social benefit—what a later generation might call "quality of life." As a congressman (representing a Tammany district in New York City), as a mayoralty candidate in New York City, and as the Democratic party opponent of Charles Evans Hughes for the governorship of New York in the 1906 election, Hearst broadcast this view to the New York voters in his own newspapers. Clearly opposed to this concept of utility service, Governor Hughes told the Republican Club of New York in 1908, "Our government is based upon the principles of individualism and not upon those of socialism.... It was founded to attain the aims of liberty, of liberty under law, but wherein each individual for the development and the exercise of his individual powers might have the freest [sic ] opportunity consistent with the equal rights of others."^[4]

Utilities responded to reformers with three claims. Domestic electric rates

fell steadily after the turn of the century, and utilities lowered rates as much as costs would permit, continually passing efficiencies to the consumer. Rates also had to cover the total cost of providing electrical service, including attracting new private investment capital. They denied that state franchises obligated utilities to provide a social service. Regarding the first thesis, the utilities were correct: rates generally fell. National average prices of residential electricity fell from 10.9 cents/kwh in 1907 to 5.8 cents/kwh in 1937.^[5]

Analysis of the decline in electric rates shows how the utilities could claim to have lowered rates, and how reformers could find the extent of lowered rates inadequate. An operating utility builds its generating capacity to serve all its customers at once, that is, to supply electricity to all connected electrical devices at peak demand. In normal circumstances, consumers (residential, industrial, commercial, and transportation) do not use all devices at once, so the average demand for electricity is less than the peak-load capacity. In 1938, for instance, average load was only 35 percent of peak capacity. Utilities tied the capitalization and finance of building generating capacity to the normal load. The normal load paid the bill. The utility need not make major additional capital expenditures to meet load added to the normal load, as long as additional load did not rise above the peak load. Meeting additional load could simply be a matter of fuel costs—firing up another generator at the steam plant. Marginal demand (i.e., demand above normal load) did not cost the utility as much to meet as normal demand, because normal demand paid for all the generating capability; hence added load brought greater profit. Utilities had a built-in incentive, therefore, to encourage consumers to use additional electricity by lowering the cost of that electricity when their demand rose above the average.^[6]

From early days in the industry, the utilities had a graduated-scale pricing system. They priced electricity in blocks or steps of consumption, with higher blocks of usage carrying lower rates. All domestic customers paid a flat rate for the lowest block, and most consumers did not use enough electricity to jump to a higher block. Consumers who used enough electricity to obtain the lower rate for higher blocks would lower their overall average rate. Average rates could also reduce the mean consumption of a group of customers. In a group of ten homes, for instance, two households might increase their consumption to higher steps with lower rates. Their lower average rates would lower the rate of all ten consumers averaged as a group. Not until we break out the distribution of consumption do we see that eight of the ten homes were still paying the high base rate and had not increased their consumption at all. The utilities could say, accurately, that the average cost of electricity for all consumers had declined. The reformers could claim, accurately, that the cost for most consumers had not declined.^[7]

For reformers, the cost structure of residential electricity raised a serious conundrum. Graduated schedules provided declining prices for electricity, apparently a good thing for everybody, but they carried a built-in bias against households consuming the least electricity. Such households may not necessarily have been low-income households. In the early years of electrification, before elect-

trical appliances were widely available, all households, no matter how well-off, would be consuming little electricity. After 1919, however, when appliances made modernization possible, the industry's pricing schedules worked against the electrical modernization of lower-income households and households in technologically inadequate dwellings. Even setting aside the cost of the appliances and of rewiring a dwelling, the initial block of electricity was expensive. A household had to consume a lot of electricity to get into the sliding-scale range. The pricing structure of electricity before 1933 worked against electrical modernization for the mass of American households. From the reformers' point of view, the households who would benefit most by modernization were least able to jump out of the high base block. To the extent that the pricing structure of electricity reflected the technology and corporate organization of the central station electrical utility, the progressive reformer could say that the very structure of the private electrical utility made electrification possible but worked against electrical modernization.

The simplest regulative reform turned out to be impossible. Why not reduce the rates for upper blocks of consumption less and reduce the base rate more? Reformers did not expect this strategy to work. Utilities would not lower general domestic rates, because domestic rates subsidized industrial rates. Utilities charged industries far less (per kilowatt-hour) than domestic consumers. They did so because industrial plants and other large consumers, such as hotels and department stores, could threaten to withdraw from central station service and install a small generating plant for their own, in-house power. They could reverse the process of central station electrification that brought the utilities easy money.

For progressives, a rate structure that assigned the highest rates to ordinary households prevented a social revolution in the American standard of living. Here is H. S. Rauschenbush and Harry W. Laidler's indictment, published by the New Republic in 1928:

The power industry has for some years had a startling differential rate structure, favoring the power consumers over the domestic light consumers.

This is a form of social control which the industry has the power to exert. When a rate structure is built on high domestic rates, when the benefits of the industry go mainly to the large power consumers, something is being done to determine the standard of living of the people. Reversibly, when a rate structure is built on low domestic rates, when the greater electrification of various forms of domestic toil are encouraged, something else and different is being done to the living standards and culture of a people. This is especially true of the farms. When light and power reach them, they are different places, for work, for men and women to live in, than when light and power are absent or may be obtained at a rate they do not feel they can afford.

For those interested in the development of a homogeneous civilization in this country, in a natural and easy growth rather than in a development proceeding by a series of explosions caused by a head-on collision of different racial and cul-

tural heritages, the development of power on a large scale and its long distance transmission have been of immense importance. These reformers expect the re-birth of small towns, not located as before, of necessity, on a watercourse or at a waterfalls, but wherever the soil, timber and other mineral resources are best, drawing their power by wire, able at last to exist economically independent of the great industrial centers which have, in the main, put the small towns and the economic independence and cultural unity they were developing, out of competition.^[8]

The first reason, then, for the peculiar price schedule of the electric utilities: their social vision of America differed fundamentally from the progressives' vision. The progressive vision as represented by Rauschenbush and Laidler, of socially modernized American homes, with electricity lifting the standard of living of small towns and farms, of the dispersion of industry out of the industrial centers, of social harmony for a heterogeneous population, found a responsive audience in the newly elected governor of New York, Franklin Roosevelt, who made it his own.

The second reason reformers found for utility resistance to subsidizing modernization of the lower block of domestic consumption related to holding companies, which created a vast debt in their consolidation of the industry. Their debt to capitalization ratio (including bonds and stock in the debt) exceeded that of American industries generally. In 1927, the utilities held $51 of debt in bonds for every $100 of investor shares and funded debt. Manufacturing corporations averaged only $13.4 per $100 of capitalization. Corporations had to pay this debt. Court decisions regarding rates required that return on investment be paid to investors at the next quarter of the corporate year. Utilities could not forgo profit now for greater profit a few years later. This restriction prevented utilities from using profits to lower rates to consumers. Utility reformers asserted, however, that holding companies created much of their debt fraudulently to fatten banks and a few directors' purses. Consumers should not pay false debt. Fighting for public electric power at Muscle Shoals, George Norris charged in 1925 that electric rates were high, because rates paid not only for electric current but also for "premiums on watered stock, profits on fictitious values." Holding companies also extracted huge fees for management services from the operating utilities, thereby raising the operating costs of the industry. Reformers thought the service fees far exceeded the value of the management advice rendered. The fees virtually constituted extortion. They bloated operating expenses of the utilities, expenses that utilities met with higher domestic rates.^[9]

The rise of the holding company in the electrical industry in the 1920s effectively neutralized the power of the state regulatory commissions. Operating electrical companies (the companies that built and managed the electrical generating plant and the distribution lines) before World War I were local and regional, given corporate charters by their host states for operations inside state boundaries. Consequently, state commissions could effectively regulate operating utilities (given sufficient political will). Holding companies, by contrast,

were often interstate. Frequently, the holding company was headquartered outside the state where it conducted most of its operations. For example, the holding company that owned Southern Sierras Power Company, a private utility operating out of Riverside, California, was headquartered in Denver, Colorado. Since a regulatory commission of one state could not open the books of a holding company in another state, the holding company could effectively hide the financial details of the operations of its group of utilities and thereby deny the commission the information needed to determine whether local rates were fair. Clearly, only national-level regulation could reach the holding company.^[10]

At every turn, private utilities thwarted the progressive reformers' efforts to obtain social benefits through regulation. In addition, the conservative side of the progressive ideology, stressing individualism and competition, made it difficult to stretch the justification of reform enough to include the social welfare of the household. Some influential progressives believed the time had come to have publicly owned power and avoid the problem of regulation altogether.

The Public Power Movement

Until 1913, the movement for public power did not have a unified national leadership. The sentiment for municipal ownership developed locally, and only at the local level did voters have an opportunity to vote directly on public power questions, as when a ballot proposition called for municipal purchase of a private utility. Municipalities sponsored electrification as a last resort when local markets or local capital failed to attract private investors. Many reformers turned to municipal ownership well before it became a last resort, however, because it held the promise of lower electric rates. By 1913, these pressing problems led reformers to establish 1,833 municipally owned electric systems around the nation. After 1913, the movement jumped to the federal level. Municipalities began to reach across state boundaries, which required the concurrence of the federal government and therefore involved Congress. The effort of the City of San Francisco to dam the Hetch Hetchy Valley in Yosemite National Park set off the controversy that drew federal involvement. The city sought legislation in 1913 to permit it to dam the valley to impound drinking water and to generate hydroelectricity. Pacific Gas and Electric Company, in northern California, opposed the legislation, because it would strengthen San Francisco's municipally owned electric utility and weaken the private utility's chances of bringing the bay city back into the private sphere. Los Angeles substantially repeated this episode in the 1920s, when the city sponsored the Boulder Canyon project, to provide water and power to southern California's municipally owned utilities. Again, the private power interests, principally Southern California Edison, vigorously opposed the project.^[11]

Five hydropower projects shaped public power policy at the national level from 1913 to 1928: Hetch Hetchy Valley, Great Falls on the Potomac, Muscle Shoals on the Tennessee, Boulder Canyon on the Colorado, and the St. Lawrence

River. Muscle Shoals eventually led to the New Deal's great public power experiment in regional development, the Tennessee Valley Authority. Boulder Canyon led to the pathbreaking public-private power partnership for southern California's regional industrialization. At the end of the 1920s, congressional investigations of the electric "Power Trust" (dominated by General Electric companies) led to a demand for a federal policy on the holding company. This demand did not culminate in a national power policy, but it set the stage for the public power reforms and policies of the New Deal. In Hetch Hetchy, Great Falls, and Muscle Shoals, Senator Norris led the progressive forces of the Senate toward publicly owned power. In Boulder Canyon, he joined California's Sen. Hiram Johnson. Muscle Shoals cut the political edge in public power questions through the entire decade of the 1920s and later became the nucleus for TVA. In the Muscle Shoals fight, Norris developed the social benefit argument for public ownership.

In World War I, the national government built two nitrate plants at Muscle Shoals, Alabama, on the Tennessee River. The plants used electricity to remove nitrogen from the air for the purpose of making gunpowder. At the end of the war, Congress had to decide how to dispose of the plants. Despite the attraction of the site, no industry stepped forward with a plan to lease, purchase, or use it, perhaps because of the postwar depression. A bill to have the United States operate the second nitrate plant passed the Senate in May 1920 but failed in the House of Representatives. No consensus existed on the disposal of Muscle Shoals. In 1921, Henry Ford broke the stalemate with an offer to purchase and develop the plants. He also set up a new stalemate. His bid called for the United States to sell the site at a price much lower than its cost of construction, and at a price that did not reflect its productive value. The Senate sent Ford's offer to its Agriculture and Forestry Committee, because it considered the potential agricultural value of Muscle Shoals greater than its usefulness for defense. Norris, chair of the committee, took responsibility for evaluating the offer from America's great automobile manufacturer. The more Norris reflected, the more he convinced himself of its inadequacy and of the importance of maintaining public ownership of Muscle Shoals. Because of the initial publicity surrounding Ford's offer and of the mythic reputation of the man himself, the issue of Muscle Shoals' disposition dominated the public power debate in the 1920s.

Boulder Canyon created another controversy. Los Angeles's effort to build a dam at Boulder Canyon brought the municipal power movement to the national level, because Congress had constitutional authority over the nation's navigable rivers. As with San Francisco's earlier project at Hetch Hetchy, Boulder Canyon dam would support the growth of a major city. The Los Angeles project also focused national debate on public power for the benefit of households. Senator Johnson introduced the Colorado River project in the Senate in 1924. Norris strongly supported it. Norris's biographer, Richard Lowitt, says that this project excited Norris more than Muscle Shoals did. Both were similar and would further the cause of public power. But Boulder Canyon was more dramatic, with

bigger players. Los Angeles played a big stakes game with political cunning. The booming city provided more muscle for public power than had any of Muscle Shoals' sponsors.^[12]

The political rhetoric of the public power movement differed significantly from that of regulatory reform. Public power advocates denied the efficacy of rate regulation by itself to secure the public good out of privately owned utilities. They denied that electric power ought to be privately owned in the first place. Norris, who led the Senate fight that transformed Muscle Shoals into the TVA program in 1933, put the matter bluntly: "Every stream in the United States which flows from the mountains through the meadows to the sea has the possibility of producing electricity for cheap power and cheap lighting, to be carried into the homes and businesses and industry of the American people. This natural resource was given by an all-wise Creator to his people and not to organizations of greed."^[13]

David E. Lilienthal, who administered the Tennessee Valley Authority, succeeded Senator Norris in the mid-1930s as the leading ideologist of public power. Lilienthal's TVA: Democracy on the March (1944) represented the most popular expression of the public power ideology. A Harvard Law School graduate of 1923 who studied under Felix Frankfurter, Lilienthal practiced law in Chicago, specializing in labor law, and edited a public utilities review. In 1931, Governor Philip La Follette of Wisconsin appointed Lilienthal to the Wisconsin Public Service Commission. Here Lilienthal developed his national reputation as a progressive regulator that prompted Frankfurter to recommend to Roosevelt his appointment to the TVA. Lilienthal's participation on the Wisconsin board gave him personal contact with the Wisconsin progressive tradition that had developed the social benefit concept of utility service. He would in turn bring this ideal to the TVA. Lilienthal's vision combined the Enlightenment belief that material progress brought moral progress with the American progressive's faith in the power of government to change society for the better through law. Lilienthal believed that improvement of the physical conditions of life enhanced persons' spiritual and moral lives. Material abundance makes "men's lives richer, fuller, more 'human.'" That "extreme poverty is an evil" does not necessarily imply that "a high material standard of living" is good of itself. Material abundance is good, because it gives persons the opportunity to exercise choice:

A Tennessee Valley farm wife who now has an electric pump that brings water into her kitchen may . . . be more generous of spirit, less selfish, than when she was forced to carry her water from the spring day after day. A once destitute sharecropper who now has an interesting factory job at good wages and lives in a comfortable house in town may . . . be more tolerant, more rational, more thoughtful of others, more active in community concerns.^[14]

The TVAs' great purpose was social modernization. Electrical modernization brought the material means for "greater individual and spiritual growth."

For Lilienthal, material technology enabled individuals to escape the material and cultural constraints of the past. It placed them in the position of being able rationally to reform their social relations and to choose to develop their individual potentialities and desires. The purpose of electrical modernization was to provide a sufficiently abundant material life that "individual personality can flourish."^[15]

For a public power advocate such as Lilienthal, the enabling framework of public power provided the distinctive New Deal contribution to social modernization. The TVA did not command "social planning" as the fascist governments of Europe had in the 1930s, compelling "complete reconstitution of our social system." The TVA "planned," argued Lilienthal, in that it brought to individuals the resources—primarily cheap electricity—they could use, if they chose, to develop themselves, their homes, and their enterprises.^[16]

Residual populism provided one source for this public power ideology of electrical modernization as social modernization. Populists did not focus on consumer interests and did not put forward a household ideology, but they remained an influential political force in scattered agricultural regions. In Norris's senatorial district, populism counted many voters in the 1880s and 1890s, and populist sentiment remained strong through the 1920s. Norris's political career made him a lonely Republican in an area long dominated by the Democratic party or by local fusion politics between the populist remnant and the Democratic party. Norris could not have stayed in office had he played the stand-pat Republican. Publicly owned electrical systems were more popular in Nebraska than in any other state. When the number of municipal electrical systems peaked nationally in 1923 at 3,083 systems, Nebraska peaked three years later at 282 systems. Norris's national leadership of public power, therefore, stood on a local populist base.^[17]

Private industry constituted an ironic source of the vision of social revolution through electricity. Enterprises promoted an inherently conservative vision of electrical modernization, by prescribing appliances to preserve a bourgeois style of life. Reformers could, however, cut and paste images of machines being used in the home into an ideology of social revolution. Reformers needed an instrument and an occasion to do this. Muscle Shoals and, later, TVA provided both. A fanfare of publicity accompanied Henry Ford's bid in 1921 to purchase Muscle Shoals. Ford voiced the ethos of private capitalism that combined individual profit with social benefits from private investment. Fordism brought the social blessings of technology to the ordinary man. In rhetorical promotion of his Muscle Shoals bid, Ford and his spokesmen did not directly emphasize electrical modernization of the home. They proposed the social modernization of the Tennessee and Mississippi River valleys through cheap electricity for industry and urban development. While on a personal tour of Muscle Shoals, in late 1921, Ford excited reporters with his vision of a linear city running seventy-five miles along the river, with cheap electricity powering industry and illuminating homes. Ford's ideas ignited a year of real estate speculation that ul-

timately rebounded negatively against the new city concept, but also revealed how widely the general public believed in Ford personally. He would use the electricity of Muscle Shoals to create a social transformation of the Tennessee River region as profound as the national transformation brought by his inexpensive mass-produced automobiles. Few Americans would deny, especially in the 1920s, that the automobile revolutionized American life. Newspapers, many owned by the electric utilities, trumpeted Ford's potent mystique. Ford's "millennial imagery" stimulated rural America to envision electricity transforming their lives. It beguiled even Franklin Roosevelt. Years later, as a new president embarking on the visionary program of TVA, Roosevelt invited Ford to visit him at Warm Springs, Georgia, to talk over plans of rural modernization through electricity.^[18]

Ford's Muscle Shoals proposal promised to be a public relations steamroller, flattening the public power movement. It ignited a fight for cultural symbols. In the advertising age, mass symbolism could win the hearts and minds of voting consumers. The private advertising during the 1920s of household appliances implicitly made social claims. It reinforced a socially conservative, upper-income vision of American domestic life. It focused on the materially comfortable suburban family with a housewife performing housekeeping chores, who wished to use appliances to replace servants or to lighten her own labor. The imagery symbolized the notion that domestic electricity would better enable upper-class households to maintain the lifestyle they already enjoyed. Ads emphasized the connection between the affluent consumer and the private market and subliminally worked against cooperative housekeeping arrangements. They did not suggest that women could use the time saved in housekeeping to enter the wage labor force. They did not suggest that if consumers wanted to use these new gadgets, they might lobby regulatory commissions to lower electric rates. Private advertising represented one facet of a multimedia political campaign waged by an electrical industry unified in trade associations. Through these organizations, utilities, manufacturers, retailers, and holding companies denied the claims of municipal power advocates, deflected criticism of pyramiding holding companies, and masked economic fraud, in order to minimize criticism of U.S. Senate committees investigating the power trust. Advertising was just one battlefield for the struggle between private utilities and public power over the nation's social agenda.^[19]

As a leading advocate of public power, Senator Norris had to defuse the political threat of Ford's proposal for private development of Muscle Shoals by convincing voters that public development would bring greater social benefits. Ford promised interclass mobility for farmers and rural workers, industrialization of the countryside, modernization of personal health, and revitalization of community relations. To counter this vision, Norris argued that only public power necessarily led to social modernization. Forgoing profit transferred the benefit of public power to households through lower rates. Utility rates tied together consumer, utility, and government interests in electricity. Public power advo-

cates detached Ford's powerful imagery from private enterprise and attached it to public control of electrical modernization through public ownership. Norris contended that if Henry Ford got control of Muscle Shoals, its benefits would flow to a private corporation, rather than to the public. Private utilities would put Muscle Shoals' power rates high, because of the necessity to pay for their watered stock and for the propaganda with which they deceived the public. Only public ownership would guarantee a new "Electrical Age."^[20]

The rational housekeeping movement provided a third source of the ideology of social modernization through electricity. Calling for electrical modernization to reorganize the family in the name of freedom for all its members, the movement had the potential to provide a powerful moral theme to the politics of public electrical power. By the early 1920s, rational housekeepers fastened on electrical modernization as the key to household reform. Nearly all public power advocates illustrated the social possibilities of electricity with the example of social modernization of the home. The rational housekeepers' call for transformation of the home moved electrical modernization beyond the Progressive Era's simple focus on efficiency in housework. They emphasized a new conception of the household economy as based on assets, rather than simply wages or salary. Assets protected family economic security against the vicissitudes of the wage labor market. Assets also made possible social transformation of family relations. When adopted by New Deal policy makers, the conception of electrical technology as assets for the home distinguished the public power vision of the New Deal. The rational housekeeping movement did not propose that its program be accomplished by governmental action, but the public power movement did.

Major figures of Roosevelt's New Deal electrical policies, such as Morris Cooke of the Rural Electrification Administration (REA) and David Lilienthal, directly drew on the rational housekeeping movement. Cooke, a mechanical engineer who directed Philadelphia's Public Works Department, earned a national reputation as a progressive when he forced the Philadelphia Electric Company to reduce rates. Though not trained in electrical engineering, Cooke's reputation enticed Gov. Gifford Pinchot to appoint him as chair of the Giant Power Survey of Pennsylvania in 1923. Influenced by the Regional Planning Association, Pinchot hoped electricity would make possible revitalization of country life, including community and family, as well as industry. Despite their efforts, the Pennsylvania state legislature failed to pass Pinchot's Giant Power proposal. After a stint in private consulting, Cooke accepted Governor Roosevelt's appointment in 1931 to the New York State Power Authority, with which Roosevelt hoped to develop rural power in upstate New York. Cooke synthesized the rational housekeeping movement, with its emphasis on transformation of the household, and the progressive power movement. In his edited anthology, Giant Power (1925), he and his contributing authors systematically developed an alternative economic and social organization for regional electric systems to the "Super Power" arrangements being created at that time by the rapid consolidation of private electric utilities by holding companies.^[21]

In his contribution to Giant Power , Pinchot expressed the basic assumption of the public power movement, that electricity would transform society as fundamentally as had the steam engine in the industrial revolution. "The change from muscle, wind and water to steam as a source of energy was an epochal change. The change from steam to electricity which is now upon us will not be less so." Pinchot explained that because steam power had to be used at the site of its generation, it forced the geographic concentration of industry and the enlargement of central cities. Urban concentration led to "a decline in country life, the decay of many small communities, and the weakening of family ties." Since electrical power could be distributed and used miles from its site of generation, electricity would make possible "the decentralization of industry, the restoration of country life, and the upbuilding of the small communities and of the family. In this hope of the future lies the possibility of new freedom and the great spiritual enrichment of individual life." President Roosevelt repeated this argument ten years later when justifying his New Deal electrical programs.^[22]

To discuss the possible effects of electricity on the home and family for his volume, Cooke turned to prominent writers in the rational housekeeping movement. Both Martha Bensley Bruère, associate editor of Survey Graphic , and Mary Pattison emphasized that electric home appliances would greatly reduce labor and drudgery in housework. Both envisioned that they would bring about radical transformation. Bruère thought distribution of electricity to rural communities would have dual effects. Women could use electric appliances to reduce the time required to accomplish their housework. Electricity would also allow manufacturing industries to locate in rural areas. With freedom from housework, women would have leisure; they could enter the labor force and earn money. Following a reference to the radical feminist Charlotte Perkins Gilman, Bruère envisioned electricity enabling women to leave their limiting roles as housewives, earn money, and develop their personalities. Then they could return to their families on the new basis of "life born of her own wider participation in it." Pattison thought that full development of women and children required a total transformation of the home. "There must be some big fundamental changes in this home of ours if it would be the social unit it gives promise of being." Though she thought of the transformation in terms of modeling homemaking labor on the factory, this analogy represented only the limited range of social alternatives the Progressive Era gave her. In her vision, electrical modernization would sever the home from its past and enable it to transform itself. Electrical modernization was not social conservation; it was social modernization. Electrical modernization radically transformed consanguineous relations. Each member of the family could have control over her own destiny and could have the health, wealth, and opportunity to fulfill her own individual potentiality inside and outside the home. The new era should be one of "domestic independence."^[23]

Bruère's and Pattison's themes expressed broad currents in the rational housekeeping movement, shared by the movement's popular literature: Helen

Campbell's Household Economics , Isabel Curtis's The Making of a Housewife , Lucy Salmon's Progress in the Household , Bertha Richardson's The Woman Who Spends , Georgie Child's The Efficient Kitchen , Mary Pattison's The Principles of Domestic Engineering , Christine Frederick's Household Engineering , and Lillian Gilbreth's The Homemaker and Her Job . The desire to make the new electrical household technologies into assets for effective freedom for family members appears in three major homemaking concerns: the functional architecture of the dwelling, the labor of housekeeping tasks, and the expenditure of money. The movement's program started with the architectural redesign of the house. The shift from farm to city had given rooms new functions. Farm kitchens of the past were large for good reasons, but the kitchen of the urban house needed to be small and compact. "We can foresee the time when ... the equipment necessary to feed a family shall be beautiful in form and portable in simplicity, when the odors of fat and steam shall have vanished and the cook's apron shall have become a forgotten weapon." To replace the rambling farmhouse and the Victorian mansion, rational housekeepers promoted the "bungalow." The bungalow synthesized English and American nineteenth-century cottage architecture, Arts and Crafts design, and standardized tract housing. Books on bungalow architecture stressed the virtues of necessity. Houses were smaller because high costs drove conventional housing beyond the reach of the middle-income household; but, architects said, smaller was better anyway. In the search for ways to economize housing construction, "standardization" produced not only cheaper but better houses. To save space, cabinetry should be "built-in." As Robert Jones explained, writing for the New York-based Small House Service Bureau of the American Institute of Architects, kitchens should be "efficient" and convenient. He meant by this, very small. Rational housekeepers did not disagree. Georgie Child went so far as to recommend, for servantless homes, the "kitchenette," seven by eleven feet.^[24]

The labor program of the rational homemaking movement centered on the reorganization of housekeeping tasks on principles of industrial efficiency. Eventually, Frederick Taylor's scientific management, which became popular among progressives after the Eastern Rate Case of 1907, provided the form in which the rational housekeepers articulated their scientific analysis of housework. Marion Talbot and Sophonisba Breckinridge's The Modern Household , Child's The Efficient Kitchen , Pattison's Principles of Domestic Engineering , Frederick's Household Engineering , Martha Breùere's Increasing Home Efficiency , and Gilbreth's The Homemaker , all popular and much referenced texts, espoused Taylorism. Scientific management provided analytical techniques and a useful model for the organization of housework. Taylorism research required time and motion studies to determine the most efficient means of performing tasks and reorganization of the administration of the work environment. The main thrust of Taylorism was reform of work organization, not the reassignment of work to machines. Following Taylor, reformers organized housework generally on the principles of specialization and standardization of function. Housewives should

perform housework in areas architecturally designed for a specific category of tasks.^[25]

As oil, gas, and electric stoves and furnaces replaced coal stoves and heaters (at the end of the century), airborne soot decreased and housecleaning became less burdensome. Meal preparation and laundry now took the most time and effort. Women used to do laundry in the kitchen, because the kitchen stove provided the hot water used in washing. With centralized, hot water service, however, pipes could deliver the hot water to a separate laundry area, permitting the removal of clothes washing from the kitchen. The kitchen and the laundry thereby became the two major work centers in the house. So separated, kitchen cabinetry could be designed and appliances grouped for ease and efficiency of the housewife working in the center. These were the keys to increasing labor efficiency: "This principle of arranging and grouping equipment to meet the actual order of work is the basis of kitchen efficiency."^[26]

The rational homemaking movement produced instructional manuals on keeping household budgets to explain how consumption and appropriation of household technology should take place within the new world of salaries and mass markets. Making a household economically viable over the long run and maintaining a healthy standard of living necessitated control over the expenditure of money. Control was crucial. Frederick stated, "The health of the family, its education, its savings, are determined, not by the amount of ... income, but by the distribution, or the spending of that income." As a program of reform, rational homemaking came down to the handling of family finances. Industrialists defined efficiency in accounting terms: less input, more output—measured and counted. Reformers expected the same efficiency at home. "It is clearly evident that domestic economy, or household management, is very largely a matter of money and money's worth." Budgeting, and the full accounting apparatus it implied, provided the basis for comparing expenditure of money, time, and effort toward one purchase with the money, time, and effort toward another purchase. This was the only means by which the household could know that they were getting the most for each dollar spent. The budget texts taught mastery of commodity capitalism and consumerism.^[27]

Beneath the text of the budget manuals lay a radical subtext—reformation of social relations between household members. In terms of what feminists proposed to do, an agenda of household politics took precedence over consumer decisions. If the wage earner of the household refused to participate in budget management, then all other planning for the household fell apart. It would not do for the wage earner to hand over a portion of the wage income as an allowance for the housewife's household expenses. An allowance was fatal to the concept of the household as a unit of planning. The allowance was, Frederick said, "un-businesslike, and makes impossible the satisfactory carrying out of any uniform 'budget' plan of expenditures for the whole family." It simply did not work: "Nothing is done as it should be done." No man was "serene and steady" in the confidence that an allowance provided adequately for the family's living. But

the main failure of the allowance system was moral. It denied the housewife equality with the male wage earner. It denied the marriage partnership. It denied self-respect to the housewife.^[28]

Faithfully carried out, a budget mapped a household's passage through life. To set up a budget, a family first decided on its largest goals—its life projects. The budget transformed all sources of income and savings into household community property, symbolizing and implementing cooperative living, directed toward the project. The budget became an intellectual technology to enable the household to transcend the salary or the wage. Dependence on the weekly paycheck put life in a precarious position. The household lived from paycheck to paycheck without being able to transform income into assets of any kind. If a family saved income, or invested it in education, or spent it on permanent improvements to the home, they transformed income into assets. Assets reflected a life plan. Assets secured future income, as, for example, by enhancing the future earning capabilities of family members. Security represented freedom. The budget, mundane as it may seem, exemplified a technology that brought effective freedom. For this reason, Child insisted that all income, "whether it is salary or dividends, an unlooked-for windfall, or merely a birthday present," must be deposited in a common bank account and managed through the household ledger. Isabel Lord took income accounting one step further, including labor income. Labor income always represented the substitution of family labor for paid services and consequently had a monetary value that the budget should include.^[29]

The budget made adults equal partners, gave children dignity, and enabled their real participation in the household. "If marriage is a full partnership, then husband and wife are contributing alike to the family resources. They decide together on the best use of each division as seems best." It transformed self-sacrifice into savings that another person's extravagance would not fritter away. It became the mechanism by which all members of the household participated in defining goals for the family. It ensured that the family financial program incorporated each family member's personal goals. As a cooperative group based on the budget, the family could foster "the greatest individual development." For Gilbreth, the heart of "scientific management" was "personnel supervision." Each member of the family had a role to perform for the household. Behind her personnel chart of functions and jobs, of staff levels, of lines of authority, which made a household look as complicated as the Pennsylvania Railroad, there was a tacit agreement by all the household members. This agreement was Gilbreth's goal. Gilbreth desired, as nearly all the rational homemakers desired, the moral renovation of the social relations of the household. Without a cooperative budget, family life became "humiliating" and "demoralizing." By "demoralizing," Lord did not mean discouraging or fatiguing; she meant stripping family members of moral relations, literally un-moralizing them. For rational homemakers, the budget was a Lockean contract as a liberal community. All social, labor, and property relations rose out of it. Economics flowed from a political agreement. This agreement provided the moral foundation for a prescriptive program of ful-

fillment for the family, both as individuals and as members of the household community. It provided the moral basis for reform of household relations. Toward this goal, technology—whether budgets, or smaller kitchens, or vacuum cleaners—was an instrument. Pointedly, the household budget was the only instrument for the urban household to provide equality and dignity for all household members.^[30]

The goals of social equality and full development of individual potential defined rational homemaking as social modernization. The writers of the rational homemaking movement saw the issue clearly: "The whole family must plan together: No other question is so important to the happiness of the home as the mutual understanding of finances by all members of the family.... [T]he ideals, standards and plans must be equally shared by both husband and wife, and understood by the children, in order to have happy united 'pulling' toward a definite aim." The long-term security of the family, attainment of a measure of independence from the week-to-week vagaries of wage labor or salary, in a word, effective freedom, required social modernization.^[31]

Enter, Franklin Roosevelt

Before the Great Depression became the nation's ranking problem, many liberals and many of Franklin Roosevelt's advisers considered public electric power to be the most important political issue. Norris said that public power "is one of the greatest issues presented to the American people in the last century." Liberal magazines, such as the New Republic , pressed hydroelectric power as the most urgent issue before New York State, before its governor, and before the American people. The American Academy of Political and Social Science, representing the nation's scholars, declared that "one of the most important economic and political questions before the country . . . is the relations between our public utility companies and the public." The nation's philosopher of progressivism, John Dewey, identified public power as "the most weighty single issue in the political field." According to Felix Frankfurter, who became one of Roosevelt's chief advisers on regulation of public utilities, "Hydroelectric power raises without a doubt the most far-reaching social and economic issues before the American people, certainly for the next decade." Roosevelt, too, believed this. During his two terms as governor of New York, he made electric power his chief issue in campaigns for election and in his unending row with the Republican-dominated legislature.^[32]

Martin Sklar's analysis of the trust issue enables us to categorize power issues, from regulation of utility holding companies to public ownership, in the liberal tradition of the Progressive Era. Sklar distinguishes between three progressive ideological orientations toward trusts. The "statist-tending" orientation, with Theodore Roosevelt as its symbolic spokesman, called for state direction of large corporations, compelling them to serve public policies, such as promotion of equality of wealth. Publicly owned corporations were compatible with

this orientation, because public ownership involved society using the state to wring public benefit out of the corporate form of economic organization. The "regulatory corporate" orientation, represented by Woodrow Wilson, accepted the existence of corporations, but not their direction by the state. This centrist ideology called for governmental regulation, but not administration, of corporate capital. The "minimalist regulatory" orientation, associated with William Howard Taft, sought to preserve the private property contract in capitalism in its strongest form by reducing governmental regulation of corporations to the lowest level compatible with simply preventing the existence of monopolies. Positions on the power issue coincided with this larger topology. Each played in presidential politics. Business or stalwart or conservative Republican, progressive or insurgent republican, and new freedom democrat considered themselves progressives. The business Republicans, from the smoking barbecue of President Ulysses Grant's administration to the new era of Harding-Coolidge-Hoover, spoke for the loosely fettered freedom of the private enterprise corporation in the marketplace. The gentlemen of this orientation tended large financial corporations, drove the cartelization of American manufacturing and finance after 1893, and concentrated the electrical industry in the 1920s into holding-company pyramids of power. The well-known private power industrialist, Martin Insull, an early associate of Thomas Edison, typified the business Republican. Insull built the central station industry in Chicago and the Midwest. In 1929, he controlled the third largest electric utility holding company in the nation. The crash of Insull's empire in 1932, amid corruption and his flight to Europe to escape prosecution, became a key event building public support for Franklin Roosevelt's efforts the following year to control holding companies. New freedom Democrats, led by Woodrow Wilson, called for the dismemberment, rather than the regulated existence, of the holding companies. During World War I, when governmental boards controlled the wartime economy, Wilsonian democracy espoused national planning, without public ownership, to replace the marketplace in the development of national resources and natural monopolies, such as utilities.^[33]

Theodore Roosevelt led the progressive Republicans' strenuous struggle to subdue the cartels. Roosevelt's appointed chief of the Division of Forestry of the Department of Agriculture, Gifford Pinchot, became a leading spokesman for progressivism and won the governorship of Pennsylvania in the 1920s on the issue of controlling the private utilities. The left wing of the progressive Republicans, including Sen. George Norris, called for public ownership of electrical power. Both Pinchot and Norris would be important sources of inspiration and counsel for Franklin Roosevelt when he was governor. The important contribution made by Sklar's classification of progressives is to place public ownership of utilities in the same category as the statist regulation of private utilities. Public ownership was not, as Gov. Charles Evans Hughes inflammatorily charged, a socialist program outside progressivism. Socialists, such as the famous General Electric scientist, Charles Steinmetz, audibly sounded their note

in the potpourri of American political opinion. Socialism as a tradition of collectivist social theory hostile to capitalism did not, however, significantly motivate the leading statist progressives. They approached public ownership as an expedient in their political fight with utilities, or as a special case of natural monopoly, rather than out of Marxist doctrine. Through Sklar's classification, we can see an unbroken tradition of ideological orientation toward society, the state, and corporations from T. R. through FDR. Though a member of the Democratic party, who served in the Navy Department in World War I under Woodrow Wilson, Franklin Roosevelt came near the end of this line of "statist-tending" liberals.^[34]

The new freedom of Wilson and the new nationalism of Theodore Roosevelt both inspired Franklin Roosevelt. Biographers agree that Theodore Roosevelt's vigorous advocacy of natural resource conservation and the outdoor life decisively shaped FDR's views. FDR listened to Theodore Roosevelt's lieutenants, such as Pinchot. FDR also served as assistant secretary of the navy during World War I. The national planning of the War Industries Board and other boards favorably and strongly impressed the young public servant. As governor of New York, Roosevelt wanted to put planning for New York on a regional basis. Through this political practice ran sotto voce an interest in regional planning as advocated by urban planners in the City Beautiful movement and later in the American Planning movement. Historians see in these political experiences the source of President Roosevelt's support of national planning in solving the problems of the Great Depression, which he likened to a war. When tested with the political litmus of ideological purity, Roosevelt's amalgamation of eclectic views and political experience therefore lacks consistency. Roosevelt looks like a man without a coherent vision, an opportunist "guided" only by political pragmatism—another president in the line of American presidents who saved the nation by eschewing doctrinal rigidity and pragmatically serving the Union and its conservative middle.

In the 1920s, the kaleidoscope of political ideologies and the contest of competitive economic interests produced pure stalemate in the electrical power industry. New era Republican presidents did not want to control the holding companies. Deprived of executive power, reform in both political parties halted. The Federal Power Act of 1920, which mandated the Federal Commission to regulate all stream-produced electrical power in the nation, ostensibly gave the commission the authority to deal with domestic rates. However, commissioners appointed by the Republican presidents did not invoke powers at their command. The failure of the Federal Power Commission to act, and the refusals of Harding, Coolidge, and Hoover to press for change in the act, pushed energy politics down to the state level. Divided government locked electric power politics into ineffectualness. States could not regulate the holding companies, even if they wanted; the federal government would not, even though it could. Stalemate did not disrupt the status quo, of course, so industrialists supported no action, when their internal divisions prevented support for a new policy direction.

Traditional political language, from the era of Theodore Roosevelt and Woodrow Wilson, available for public discourse on energy and electricity policy, bore little relation to government and industry administrative struggles. Politicians' electoral rhetoric winged higher and higher on thermal currents of frustration. This was the political situation when Franklin Roosevelt became governor of New York in 1929.^[35]

Roosevelt's ignorance of economics initially limited his capability to participate in the progressive reform tradition on electric power. Walter Lippmann lacked confidence that Governor Roosevelt mentally grasped the problems he addressed when he picked up the policies of his popular predecessor, Al Smith. Roosevelt's lack of academic knowledge of economics occasionally astounded his early advisers. When bleak depression settled over the nation in late 1930 and 1931, for instance, Roosevelt seemed unresponsive to innovative economists who argued for federal deficit spending to stimulate consumer spending. Instead, Roosevelt talked about balancing the federal budget as late as 1932.^[36]

Two qualities enabled Roosevelt to overcome his limitations in a way that Herbert Hoover, the pertinent historical contrast, could not overcome his. Roosevelt responded with compassion to individual suffering. He thought in terms of anecdotes of real persons, rather than abstractly, as did Hoover. Knowledge of suffering reinforced his pragmatism and experimental attitude. He relinquished doctrines when they did not lead to solutions, solutions defined as improvement of individual lives. Roosevelt willingly, even studiously, learned about what he did not know. As governor, he diligently studied electric power issues. Frank Freidel, one of his biographers, claimed that "there was no other area, even that of agriculture, in which Roosevelt undertook such intensive study." He used his expert advisers not only for advice but also as teachers. They proposed books and articles for him to read and prepared explanatory issue papers. They introduced him to new authorities, with whom he conversed late at night at the governor's mansion in Albany (until Ray Moley, his political chief of staff, broke meetings off so visitors could take the last train back to New York City). His "Brain Trust" gave him so much "'homework'" in 1932, that Roosevelt virtually "'went to school."' Egotism did not drive his confidence that he would be president and egotism did not lead to inflexibility. As a result, Roosevelt's views evolved continually after 1928. He grew toward the presidency.^[37]

Different approaches to the presidency of Roosevelt produce different impressions of the president's vision and pragmatism. Looking backward from today, from the perspective of institutions created in the 1930s toward their organic origins in legislation, we must puzzle our way through thickets of New Deal bureaucratic power struggles amid local and national politics. So viewed, we glimpse President Roosevelt's electric power "policy" as disconnected legislative initiatives, addressing different economic and political problems. So viewed, our impression would be of politics that failed, without our quite knowing what failed, of fragments without our having seen the fabric. Yet, approaching Roosevelt's presidency historically, by tracing his path forward from public ser-

vice in the Wilson administration and two terms as governor of New York, we see his social vision of America raveling itself together with the different threads of electrical power issues. If the carpenters of congressional politics failed to build every pillar and post of Roosevelt's hopes into the house of the New Deal, his vision yet provided architectural sketches for major achievements of the 1930s.

During his two terms as governor of New York, FDR developed the vision and policies for electrical power that he would implement in the nation during the New Deal. He began his governorship in 1929 wearing the mantle of Al Smith's hydroelectric power proposals and left the governorship in 1933 with a new vision he would unveil to the nation in the TVA. In his four terms as governor (1919–1929), Al Smith wrested important, progressive victories out of an unremittingly hostile Republican legislature, including the reorganization of the executive branch and the state's budgeting arrangements. The legislature did not put hydroelectric power among Smith's victories. Smith favored retaining public ownership and development of the valuable hydroelectric sites in New York (which had the third most sites among the states). The Republican legislature refused to agree with this program and kept regulatory power over electric rates in the Public Service Commission. This tactic favored the private companies, because endless court cases restrained the rate-setting effectiveness of the commission. In response, Smith proposed establishment of a new commission with authority to negotiate construction of power facilities on the St. Lawrence and to control the bookkeeping methodologies involved in establishing rates.^[38]

Governor Roosevelt reintroduced Smith's St. Lawrence River proposal in 1929. The proposal failed. In the ensuing struggle with the legislature, Roosevelt's electricity program moved left. He endorsed the possibility of public distribution of electricity. He favored providing authority to New York communities to own their local electric utilities. Some of this shift came in the political dialectic. When Roosevelt began to win his battle over the Republican legislature, the private utilities countered by merging. The bank of J. P. Morgan arranged the merger of New York's three largest power utilities. Combined into one corporation, there would be no competition in bidding to distribute publicly generated power. The state would finance and build generating stations, saving the utilities the trouble. Then the utilities, organized into a cartel, would distribute and sell the electricity at a high price, taking large profits. It seemed a clever move. The move forced Roosevelt to threaten the industry with public distribution of power, in part as a ploy to get the regulatory powers of an electric commission sufficiently strong that it could keep down the rates that the cartel would, presumably, charge. The utilities were ready for this countermove, too. Court cases established that the utilities could use "replacement cost" as the basis for determining fair profits and rates. This rule permitted the utilities to bloat their capitalization, because the costs of electric plants in the future would be higher (if only because of general inflation). Roosevelt in turn pushed for statutory determination of "cash cost" as the basis for determining profit and

rates. Profit ought to be determined on the basis of the actual cash capitalization made by the companies in building their electrical plants and distribution system. This, after all, was the real debt being paid. Court permission to base profit on future replacement costs meant that companies could calculate profit on fictitious sums they had not really spent. Rates were correspondingly higher.^[39]

During the twists and turns of this political dialectic, it did not occur to Roosevelt to drop the issue and find something else on which to build his political reputation. With it, he had little to lose and much to gain at the polls. As an issue, hydroelectric power transcended upstate New York parochialism and reached out to all middle-class Republicans. High New York electricity rates irritated middle-class New Yorkers. Roosevelt hoped to use the issue of high rates, and his program to lower them with stronger regulation of power, to pry some upstate voters out of the Republican bailiwick.^[40]

To transform irritation over high electric rates into votes, Roosevelt had to explain his program to upstate Republicans. This would not be easy. Upstate newspapers were uniformly Republican and hostile. Roosevelt's behind-the-scenes organizer and strategist in New York City, Louis Howe, resurrected the New York State Democratic Committee and began a mailing campaign. But selective mailing was not mass mailing, and Roosevelt's message seldom reached Republican voters without being accompanied by contradictory Republican editorials. Roosevelt sagaciously turned to the new medium of radio, which had been widely adopted only in 1928, when it could operate off house current. In 1929, FDR broadcast his first radio report, paid by the state democratic committee, to New York voters, evaluating the legislative session then ending. He resorted to radio broadcasts frequently thereafter. By 1930, listener response proved he had leaped over the editorial wall raised by Republican newspapers. By 1933, he was an accomplished radio orator and had transformed his New York governorship "fireside talks" into major ideological instruments in the nation as a whole.

Roosevelt's fireside chats and his campaign speeches in 1928, 1930, and 1932 fill in the detail of his vision for electricity. In his address accepting the Democratic nomination for governor, Roosevelt made public ownership the first of four issues on which he intended to base his campaign. (The other issues were the inefficiency of the justice system, the lack of progress of New York agriculture, and reform of local government.) Recent technological advances made electric power more important for homes than it had been before World War I. As a resource now crucial to progress in the home, the public's interest in it had to be protected. He called for a constitutional law to keep New York State-owned hydroelectric sites in state ownership. He labeled as theft the effort of private utilities to obtain fifty-year, free leases of public hydroelectric sites.^[41]

In his inaugural address, Roosevelt opened a second theme. Despite the "great change of economic conditions in regard to the use of power," there had not been commensurate progress in domestic and rural power use. Private utilities charged consumers too much, prohibiting full utilization of electricity in homes.

He developed this theme more fully in 1930. The claim reflected reality. Electrification had not brought social modernization, despite the promises of private industry.^[42] Roosevelt laid out the history of electrical diffusion, basically correctly, in a campaign speech in Syracuse, New York, in October 1930:

We all know that the great magic of electricity was originally used for lighting purposes only. It then spread to the factory for industrial uses. Now, however, the time has come when electricity should be carried right into our very homes so as to lighten the drudgery of housekeeping. You and I know that scores of electrically operated household appliances have been invented. Of course, the housewives of the State cannot enjoy these new inventions as long as the rates for current continue to run as high as they now do.^[43]

He compared rates in New York to those in Ontario, Canada, where the provincial government generated and distributed electricity. In Canada, an electrically modernized house (with electric lights, cooking, refrigeration, ironing, toasting, vacuum cleaning, radio, washing machine, fan, waffle irons, chafing dish, and other appliances—following Roosevelt's language) cost only $3.40 a month in energy charges. But it would cost $25.63 in Westchester County, $19.95 in New York City, and $13.50 in Rochester.^[44]

In the 1920s, the private utilities preferred selling to industry over selling to the consumer. Franklin Roosevelt, like many other progressive leaders, believed that utilities should serve the home owner first. "I have stressed the fact that the home user is one to be given first consideration, because today the small home owners and storekeepers are carrying a relatively far greater burden [in the rate structure] than the industry." The 1931 St. Lawrence River hydroelectric power bill reflected Roosevelt's priorities: "The primary purpose ... is the benefit of the people of the State as a whole, and particularly the domestic and rural consumers of the State so that the houses and farms of the State may receive cheap electricity." Of secondary importance was "the furnishing of cheaper electricity to factories and industrial establishments." He carried these priorities into the New Deal.^[45]