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"Electricity for all": the electric home and farm authority and the politics of mass consumption, 1932-1935.

"Electricity for All": The Electric Home and Farm Authority and the Politics of Mass Consumption, 1932-1935

With few exceptions, historians have portrayed early New Deal thought and policy as dominated by the vision of "economic maturity" outlined by Franklin Roosevelt in a 1932 campaign address as the belief that

our task now is not discovery or exploitation of natural resources, or necessarily producing more goods. It is the soberer, less dramatic business of administering resources and plants already in hand, of seeking to reestablish foreign markets for our surplus production, of meeting the problem of underconsumption, of adjusting production to consumption . . . of adapting existing economic organizations to the service of the people. The day of enlightened administration has come. (1)

This theme of maturity and economic maintenance became the basis for the twin legislative cornerstones of Roosevelt's first administration, the National Industrial Recovery Act (NIRA) and the Agricultural Adjustment Act of 1933. It was not until the late 1930s, and then only in response to persistent economic stagnation, domestic political difficulties, and growing international tensions, that the Roosevelt administration shifted most of its energies toward an expansionist economic agenda. (2)

Despite the initial prevalence of the notion of economic maturity, the New Deal was also characterized by a diversity of competing ideas and ideologies. Nowhere was this more apparent than in the Tennessee Valley, where Tennessee Valley Authority (TVA) director David E. Lilienthal was developing expansionary policies as early as 1933. Using the TVA's mandate for the distribution of inexpensive electric power and experimenting with new methods of state intervention in the economy, Lilienthal crated the Electric Home and Farm Authority (EHFA), a federal credit agency designed to subsidize and stimulate consumer purchases of electric appliances, primarily refrigerators, ranges, and hot water heaters. For the ambitious young director, the EHFA involved much more than selling a few iceboxes in the steamy Southeast. By increasing sales of refrigerators and other goods through the EHFA, Lilienthal sought to forge a political economy of mass consumption, anticipating in many ways the growth economics that came to dominate the United States in the era following the Second World War. The establishment of the EHFA and its initial operation under Lilienthal in the Tennessee Valley serve to illustrate the nature of business-government relations during the New Deal and to outline the emergence of a new politics of consumption.

"A Potential Mass Market:" Forging the EHFA

When Franklin Roosevelt signed the Tennessee Valley Authority Act on 18 May 1933, he ended fifteen years of debate over the fertilizer plant and hydroelectric dam at Muscle Shoals, Tennessee, but the authority's entry into the electric power business created new controversies. Chartered to sell its power "at the lowest possible rates and in such manner as to encourage increased domestic and rural use of electricity," the TVA quickly drew vocal opposition from the private utilities. Viewing the agency's promise of low rates as unfair competition and claiming that the region already had at least 30 percent excess power capacity, utility executives hoped to limit the agency's production of electricity and thus to control the potential damage to their balance sheets and dividends. (3)

The formidable opposition of the private utilities and the need to create a market for TVA power were uppermost in the mind of Lilienthal as he took charge of the TVA's power program. The youngest and most ambitious of the agency's three directors, Lilienthal had been a student of Felix Frankfurter at Harvard Law School and a former associate in Donald Richberg's Chicago labor law firm. He came to the TVA with a strong background in institutional law and regulatory economics, having won national recognition at thirty-two for his reorganization of the Wisconsin Public Service Commission under governor Philip LaFollette in 1931.

During his tenure as a Wisconsin utility commissioner, Lilienthal became convinced that the best way to build electric load and stimulate consumption was to lower prices. Influenced by the arguments of economists such as Paul Douglas and James C. Bonbright, Lilienthal viewed price imbalances as a major obstacle blocking economic recovery. As wages plummeted and unemployment soared amid the hard times of the early 1930s, price levels remained artificially high, thus dissipating purchasing power and contributing to the underconsumption impasse that Lilienthal believed was the underlying cause of the Depression. (4)

For Lilienthal, fixed rates for electric power were a troublesome source of underconsumption. From his perspective as a utility regulator, Lilienthal saw the power industry's resistance to rate reductions as an obstable to the greater use of electricity. With rates for electricity maintained at what he described as a "luxury basis," most people simply could not afford to increase their power consumption. As Lilienthal explained in a speech before the American Academy of Political and Social Science,

the average domestic consumer throughout the United States uses about 50 KWA [sic; kilowatt hours?] of energy a month, which is a niggardly and parsimonious use of a great resource . . . [because] rates have been too high to permit the general use of electricity. As a result of these rates, the use of electricity has been restricted and has never . . . reached the proportions justified by our sources of electricity, or by the universal need and demand for this service. (5)

The situation was particularly acute at the TVA. Lilienthal accepted the utility industry's claims of 30 to 40 percent excess capacity in the region, but he pointed to an unacceptably high rate structure as the chief culprit in creating the surplus. The burden of proof, however, rested with Lilienthal. He had to create a much greater market for power across the region so that the TVA could justify its hydroelectric production and more readily acquire territory from the private companies. (6) Facing the need to create demand, Lilienthal came to realize that electric rates were only part of the problem. Even if rates were to come down to acceptable levels, most people did not have load-building appliances that would consume the affordable electricity. Like electric rates, appliance prices rested on a luxury basis, which, he believed, was choking off market growth. With the sales of high-priced models, Lilienthal claimed, manufactuters had only "skimmed the cream" off the appliance market. (7) Without more appliances in more homes, the TVA would have no market for its power. The situation placed the TVA's power program in a double bind from Lilienthal's viewpoint. The utility and appliance industries would not lower rates and prices until consumer demand grew. Consumers could not use more power until both rates and appliance prices fell. As Lilienthal declared in his American Academy speech, "here we have a picture of a complete business stalemate." (8)

In the fall of 1933, facing formidable market barriers blocking the distribution of TVA power, Lilienthal developed a proposal for a federal finance agency that would provide low-interest loans directly to consumers for the purchase of electric appliances. First outlined in a letter to presidential assistant Marvin McIntyre, Lilienthal's plan argued that the proposed agency not only would provide political relief for the TVA, but it would also serve as a mechanism for national economic recovery by generating much-needed consumer purchasing. Appliance manufacturers would step up production and put people back to work. Industrial suppliers would have new orders to fill. Local commerce would enjoy renewed vigor as sales increased. Such a program appealed to Lilienthal, because it could serve the TVA's political goals while aiding the New Deal's recovery effort. (9)

As Lilienthal began moving forward with his proposal in late 1933, he turned for advice to two close associates, his former boss Donald Richberg and the social engineer Morris Llewellyn Cooke. Lilienthal had met Cooke in the late 1920s, while editing a serial publication on utility law. The leading advocate of Gifford Pinchot's "Giant Power" plan for Pennsylvania and a long-term supporter of stricter regulation of utilities, Cooke expressed immediate support for the proposal, noting in a letter to Lilienthal that the the plan seemed "generally workable." Cooke did add that the agency might have problems persuading most private utilities to lower their rates. "In the Tennessee Valley of course you have them [the utilities] backed up against the wall. But take Minnesota and the Dakotas," Cooke wrote, "you will probably only get a pitying look from the service company when you begin to talk the kind of rates you have in mind." (10) Cooke continued to wield great influence after the agency went into operation; as head of the Rural Electrification Administration (REA), Cooke was a director of the EHFA in 1935-36.

Lilienthal turned to Richberg, now general counsel for the National Recovery Administration (NRA) and a close advisor to Roosevelt, to secure the creation of the agency. Lilienthal wanted the president to establish the finance agency by executive order and to fund it through the $3.3 billion appropriated under Title II of the NIRA. Lilienthal advocated this tactic in part so that he could capture some of that $3.3 billion before it was exhausted, but also because he wished to circumvent Congress, where he feared his program "would be sterilized by extensive legislative hearings." (11) Having helped draft the NIRA and then steer it through Congress, Richberg thought that the maneuver was possible, but he knew that Lilienthal would need to cultivate a base of political support in order for Roosevelt to authorize the agency's creation.

Richberg quickly arranged a meeting between Lilienthal and Gerard Swope, the influential head of General Electric (GE) and a member of the NRA's Industrial Advisory Board. In early December 1933, Lilienthal met with Swope and explained his plan. A well-known advocate of cooperative ties between business and government, and a wily entrepreneur who recognized the possibility of opening up previously untapped markets, Swope expressed immediate interest in the project. Having supported industrial rationalization through an expansion of trade association activities during the 1920s, Swope was able to put Lilienthal in touch with his industry's trade association, the National Electrical Manufacturers' Association (NEMA), but Swope also secured an autonomous link for General Electric by placing Lilienthal in personal contact with T. K. Quinn, vice-president of GE's manufacturing division and chairman of the corporation's new credit arm, the General Electric Contracts Corporation. (12)

Many other manufacturers were initially less cooperative. They harbored doubts about the profitability of increased low-end sales, fearing that customers might turn away from higher-priced models, and they were also reluctant to enter into such an intimate relationship with a federal agency whose powers were not yet clearly defined. But when Westinghouse joined GE in support of the sales program, the others had to follow, for they could not risk being cut out of what Business Week described as a "potential mass market." (13) With T. K. Quinn providing technical advice and examples of private-sector finance plans, Lilienthal drew up a proposal that he presented to the president in mid-December.

Lilienthal's plan reflected both the characteristic strengths and the flaws of its author. Diligently constructed with a careful attention to the possible political ramifications of the program and well-stocked with data, the document was also grand in its vision and extremely optimistic in its assessement of the new agency's potential economic impact. Along lines suggested by Quinn, Lilienthal proposed a cooperative arrangement among utilities, manufacturers, local appliance dealers, and the new agency. The manufacturers would provide dealers and utilities (most utilities sold electric appliances at this time) with low-priced, agency-approved refrigerators, ranges, and hot water heaters. Participating dealers and utilities would encourage moderate-income customers ot use the EHFA plan, enticing people to buy with both low prices and the program's below-market finance rates. The EHFA would finance the purchase, with a monthly payment added on to the customer's electric bill.

To provide a clear example of how the agency would work, Lilienthal offered the president a hypothetical case. "Mrs. John Jones of the little town of Sparta, Wisconsin, will get the benefit of this plan," Lilienthal wrote. After hearing of the plan through news releases and other publicity, Mrs. Jones will go to her dealer, and find models produced by "a well-known manufacturer--[such] as General Electric" and approved by the new agency. Instead of $100 for base-priced models, she will find refrigerators for "as low as $35," and easy credit terms. Also discovering that electric rates are coming down, Mrs. Jones will inform her husband, who will then go down to the dealer, order the equipment, and sign the note. The Joneses will have a new refrigerator, and their monthly payment will become part of a revolving fund used to advance credit to more families. (14)

The major innovation that the EHFA offered in the field of installment finance was a liberalization of credit terms. Automobile financing had fueled a major expansion of consumer credit during the 1920s, breaking down long-standing moral canons that previously had left most people reluctant to go into debt to purchase household goods. (15) Utilities and local finance companies began to offer terms on everything from radios to refrigerators, but these finance plans required down payments of up to 50 percent and limited contracts to twenty-four months in some cases and to twelve months on average. Lilienthal's proposal lowered down payments to 5 to 10 percent, and extended contracts from thirty-six to forty-eight months.

Lilienthal estimated that the program, operating nationwide, would generate sales of over 2 million refrigerators, 1.2 million ranges, and 1 million hot water heaters. He went on to request $200 million in credit from the NIRA appropriation, but he added that the funds would be replenished by loan payments and that increased business activity resulting from the sales would approximate $600 million for the year 1934. Finally, Lilienthal noted that appliance manufacturers "have indicated a keen desire to participate," as he hoped to convince Roosevelt that the program was politically expedient as well as economically sound. (16)

As proposed by Lilienthal, the EHFA reflected one of the first attempts to implement a growth-oriented economic agenda within the New Deal. Historian Alan Brinkley has recently argued that pro-growth forces did not coalesce until the 1940s, after the conservative resurgence of the late 1930s killed the regulatory-interventionist wing of the New Deal, and after the Second World War demonstrated that fiscal policy could in effect subsidize private profit, high employment, and economic growth. (17) It seems clear, however, that a network of business people, economists, and social planners began forging an agenda during the 1920s that was directed toward both mass consumption and economic expansion. Coming out of commercial sectors such as the garment industry and urban mass retailing, men such as E. A. Filene formed alliances with Morris Cooke and other planners around organizations such as the Taylor Society, the Russell Sage Foundation, and the Twentieth Century Fund, shaping a blueprint for sustained economic growth well before the events of the Second World War institutionalized expansionary fiscal policies. (18)

Cooke had been moving toward an ideology of growth since the early 1920s. Expressing his belief in the efficacy of growth to labor leader Sidney Hillman, Cooke stated in 1920 that, "in itself any increase in the production of essential commodities is a desirable social end." (19) By the end of the decade, these planners had a clear vision, entailing, in the words of one historian, "planned, expanded production and state-sanctioned redistribution of income in the interests of security and consumption." (20) Until the New Deal, however, this coalition lacked the political power necessary to implement its agenda.

Lilienthal's new agency provided a rural counterpart to the more urban-oriented measures, such as state support for industrial unionism and federal income guarantees like Social Security, that were supported by the growth coalition. The countryside was a vast and untapped market, which would de much more than absorb the industrial capacity that lay idle because of the Depression. Integrating these under-developed regions into the national economy would create new sources of consumption-driven growth. Lilienthal continually referred to Henry Ford's marketing strategies as the keys to growth. "What had proved to be a good business principle for Henry Ford in the pricing of his first automobiles," Lilienthal wrote, "what was good business in the mass production field generally, would be good business in electricity supply." (21)

Despite Lilienthal's grand assurances, the program was not without its critics, Arthur Krock of the New York Times launched biting attacks on the EHFA, just as he had continually dogges the TVA from its inception. Krock compared the promise of the EHFA to the malarial Eden promoted by the Charles Dickens character Martin Chuzzlewit. He warned that people would be drawn in by the allure of material prosperity, only to be disappointed by the empty reality behind the New Deal's promises. (22)

Roosevelt paid close attention to his political opposition, but Krock's criticism would not dissuade the president from taking action. As a result of the efforts of Lilienthal, Richberg, and the appliance manufactures, Roosevelt signed an executive order establishing the Electric Home and Farm Authority on 19 December 1933, and the EHFA was chartered as a Delaware corporation in January 1934. However, the president was not prepared to authorized $200 million for a national program. Instead, Roosevelt ordered the EHFA capitalized with $1 million from the NIRA funds, with an additional $10 million in credit for the agency from the Reconstruction Finance Corporation. The president also limited the program to a trial run within the confines of the Tennessee Valley. The EHFA became a de facto subsidiary of the TVA, with the TVA board of directors serving as the new corporation's trustees and executive officers. (23)

With a charter secured, Lilienthal then turned to putting the program into operation. To ensure the agency's success, Lilienthal needed both to convince the manufactures to produce affordable appliances and to secure lower electric rates from the utilities. With these goals in mind, Lilienthal carried on extensive negotiations with the two groups. Meetings with a special NEMA committee begain in December 1933 and continued through the following spring. With advice from Quinn and GE production specialists as well as from government engineers andhome economists, Lilienthal provided the NEMA with sets of technical specifications that the models had to match to be acceptable for EHFA financing. Further, although Lilienthal did not set definitive price levels for the appliances, he made it clear that the program would not succeed without "drastic price revisions," and that retail prices would be as important as technical reliability in determining acceptability for EHFA financing. (24)

The NEMA distributed the criteria, and the manufacturers sent prospective models to the EHFA for review. Home economists from the Department of Agriculture tested the performance of the various models, and, with only minor reservations, department personnel approved almost all of the appliances as technically sound and within EHFA specifications. (25) Final acceptance of all models, however, depended on Lilienthal's approval of retail prices, and in this matter he adeptly used manufacturer competition to the EHFA's advantage. Hoping to avoid collusion and confident that none of the companies wanted to be excluded from the program, the TVA8EHFA director ordered the manufacturers to submit prices in sealed bids. Lilienthal would announce the EHFA's findings at a March meeting and press conference at the NEMA's New York offices.

Scheduled to publicize the EHFA program and to highlight the agency's cooperation with the business community, the New York meeting provided media exposure that Lilienthal used to pressure the manufacturers into further price reductions. All of the prices were "higher than expected," he told the press. And, though all of the ranges and heaters were accepted for financing, none of the refrigerators was acceptable. The EHFA was disappointed, Lilienthal explained, by the lack of innovative new designs and by prices that ranged from $80 to $120, far from the #35 price Lilienthal had quoted to Roosevelt in December. What people needed, and what the EHFA expected, he insisted, were not just no-frills versions of existing models. What was needed was "a new base price for industry," and perhaps "another [Henry] Ford" to achieve that breakthrough. (26)

Lilienthal was convinced that refrigerators offered the greater sales potential of the three appliances, and he was adamant that greater price decreases were necessary. To effect further reductions, Lilienthal continued to pit the manufacturers against each other, but he also held a weapon in reserve. Under the EHFA's articles of incorporation, the agency was authorized "to manufacture, buy, sell, deal in, and to engage in, conduct and carry on the business of manufacturing, buying, selling, and dealing in electrical appliances and equipment . . . of every class and description necessary or useful for the operations of the Corporation." If Lilienthal failed to get satisfactory prices from the manufacturers, he could bring the EHFA into the appliance business. With the government then entering the power business through the TVA, and with unused industrial capacity still at Depression levels, the possibility of such a move did not seem remote in 1934. Indeed, the threat seemed real enough for the New York Times to publish a headline story, reporting that, "through six government-controlled corporations, the Roosevelt administration is enabled to engage in virtually any form of business enterprise." (27)

Lilienthal never had to move forward with this threat to private enterprise. By May, the sides reached a compromise whereby the EHFA approved the proposed models on a temporary basis at slightly reduced prices, around $75, and the manufacturers agreed to submit newly designed refrigerators by August. (28) With independent sets of estimated production costs provided by Quinn and by economic consultants at the TVA, which corroborated the manufacturers' claims that they could not afford steeper reductions, Lilienthal realized that the anticipated "drastic price revisions" would fall far short of his $35 goal. The struggle over refrigerator prices reveals that each side was attempting to lay out more sharply defined rules and limits that were to its own advantage before the precise nature of the business-government relationship became clear.

Lilienthal also moved to lower electricity rates. Convincing the utilities to cooperate with the EHFA would not be easy. The power corporations were already engaged in a war with the TVA, and they would not readily be won over to a venture run by David Lilienthal as an adjunct to the TVA. Because the utilities held monopolistic franchises, these companies could not be drawn into the EHFA program by a fear of losing market share to competitors, as were the appliance manufacturers. But with very little territory as yet receiving TVA power, Lilienthal realized that he had to sell the EHFA program to the private companies. If he did gain their cooperation, Lilienthal knew that increased power consumption across the region would make TVA's acquisition of further territory a much simpler task, for the utilities would have greater sales despite smaller markets. As Lilienthal had noted in his first letter to Marvin McIntyre, the EHFA presented "some means of increasing the demand for electricity so as to make room for the existing systems as well as the system which we are creating." (29)

By either enticement or coercion, Lilienthal intended to bring rates down and to draw the utilities into the EHFA plan. The shiny lure he cast out was the load-building promise of the EHFA. Lower your rates and join our program, and your bottom line will improve, Lilienthal promised. Resist, he warned, and the yardstick of lower rates and increased appliance sales in TVA territory will win over the public to an increasingly aggressive expansion of public power throughout the Southeast and, ultimately, across the nation.

Power companies had always been interested in building their domestic load. As early as 1909, the power magnate Samuel Insull employed salesmen to sell electric appliances. Most utilities had showrooms that extolled the virtues of electric living, and promotional campaigns were commonplace. The companies also devised rate structures that they believed encouraged greater domestic consumption, offering substantially reduced rates to heavy users of current. (30) However, many industry executives continued to resist any attempt to lower rates for more moderate consumers, especially to the EHFA's recommended levels of three to four cents per kilowatt hour--50 to 200 percent below existing rates. As one executive stated in the utility industry's trade journal, Electrical World,

privately owned and operated utilities can lower residence rates materially only as load is built. . . . We cannot, like the government, establish highly unprofitable, low residential rates that it is hoped some day will be profitable when adequate consumption has been obtained. (31)

Wendell Willkie fully appreciated the implications of Lilienthal's message, however. As chief executive of Commonwealth and Southern (C&S), the giant holding company that owned the four major utilities in the Tennessee Valley, Willkie hoped to profit from a joint venture, and he quickly came to terms with the EHFA, even while continuing his legal and political struggles against the parent TVA. C&S agreed to bring down rates to EHFA-specified levels and to "use their utmost endeavors" to promote appliance sales. The agreement drew harsh criticism from some utility executives, but the more pragmatic utility leaders supported C&S, noting that lower rates might initially cut profits but held the potential for increased load. Given the political situation, moreover, few alternatives existed. As an Electrical World editorial stated, "the lower rates are coming. It is written on the wall." (32)

Having secured the participation of the utility and appliance industries, Lilienthal initiated a promotional campaign designed to coincide with an anticipated mid-May starting date for the program, and the EHFA hired the Madison Avenue firm of Young and Rubicam to plan the campaign. The advertising executives expressed a great deal of skepticism about the EHFA's chances for success, noting that much of the region's population was extremely poor and uneducated, but they nonetheless charted a campaign strategy. Their proposal called for heightning EHFA's visibility through permanent and mobile display showrooms, direct mail efforts using the government frank, and door-to-door canvassers in selected areas. Young and Rubicam also devised an emblem for use by both the TVA and the EHFA, depicting a blue fist grasping a red lightning bolt, with "TVA" written in block red letters and the slogan "Electricity For All." (33)

"A fully electrified nation is the goal": The EHFA in Action

The EHFA began operating in May 1934 in the small town of Tupelo, Mississippi. As one of the first municipalities to receive TVA power, Tupelo was selected by the EHFA more for its symbolic value than for its particular market strength. For a few weeks Tupelo was besieged by EHFA canvassers, the media, and hundreds of curious onlookers. The EHFA set up a permanent showroom in the town, with the various agency-approved appliances arranged in mock kitchens. EHFA and TVA literature, slogans, and pictures were a constant and vivid reminder that these public agencies were ushering in the modern age of comfort and convenience. One brochure stated, "the EHFA is interested in a constantly greater use of electricity in all American homes. A fully electrified nation is the goal. Added leisure and comfort, lighter and briefer tasks . . ., a merging of all classes of American eople in a common understanding and a common well-being, such are the benefitis of electricity." (34)

Agency personnel continued their intensive promotional campaign as the EHFA program slowly expanded across the Tennessee Valley during the first summer of operation. Showrooms were set up in Chattanooga and Knoxville, with the Chattanooga exhibit embellished by one of the newly designed emblems lit up in neon, with the lightning bolt, the TVA letters, and additional EHFA letters flashing on the off in sequence. (35)

But despite these promotional efforts, EHFA sales lagged. By July, the agency had financed only 142 contracts worth just over $14,000. (36) Searching for a sales breakthrough, the EHFA renewed its efforts to convince manufacturers to design new refrigerators. Once again, GE led the way, submitting a model that met the agency's criteria for the lowest possible price combined with technical reliability. The new design was a four cubic foot chest-type refrigerator, opening from the top rather than the front. Compared to a cabinet model refrigerator, the chest model was distinctly inferior in user convenience and made less efficient use of space, but the EHFA believed that the chest's low cost outweighed its disadvantages. Citing the GE design, the EHFA stated in July that "we [the EHFA] are of the opinion that the other manufacturers would be distinctly benefited by developing new models at this particular time." (37) The other others did follow suit, and EHFA-approved chest models went on sale during the fall of 1934.

However, the chest models did not generate a sales boom. Most people who could afford refrigerators wanted larger models; the three or four cubic feet of space in the chests was too small. Since the EHFA financed only the base-priced model of each manufacturer, customers had to turn to private financing or forgo their purcase. Manufacturers and dealers pressured the agency to change its policy. A dealer from Mississippi plainly stated the sentiments of many others when he wrote to inform the EHFA:

we have several people today that would buy larger boxes than the T.V.A. models if they could get E.H. & F.A. terms. We can't see why you are limiting us to T.V.A. appliances. We wan't [sic] this business and our customers want refrigeration, but the T.V.A. models are too small. Won't you please grant us authority to sell these larger appliances. (38)

It seems that most dealers never considered the chest models, with their narrow profit margins, worthy of any serious sales push. As an editorial in Electric Refrigeration News stated, dealers "intent to use the chest model as a 'nailed-to-the-floor' refrigerator, employing its low price as a bait to draw in store traffic." (39)

Though Lilienthal had maintained that the chest model would become the Model T of refrigerators, establishing "a new base price" for the industry, he was able to recognize a sales flop. In November 1934 he sought authorization from President Roosevelt to change EHFA policy. Lilienthal recommended extending EHFA financing to include all models from manufacturers that produced EHFA-approved base-priced models. The new policy went into effect the following springs. (40)

While the EHFA was working through its sales problems, organized opposition to the program began to grow. Since the agency's formation, local dealers had been dissatisfied with its intimate ties to the utilities, as power companies competed with the dealers for consumer applicance purchases. Coinciding with the EHFA's start-up in Tupelo, ten dealers in Georgia field suit in federal court against the agency, charging that by coercing the applicance manufacturers and utilities into joining the program, the government was creating a monopoly that would destroy the dealers' businesses. They sought an injunction preventing the Georgia Power Company (one of the four Commonwealth and Southern subsidiaries) from selling EHFA applicances. (41) The dealers failed to secure to secure an injunction, their suit was ultimately unsuccessful, but over the next year dealer resistance stiffened, and new allies joined the struggle against the EHFA.

During 1935 the merchants' trade association, the National Retail Dry Goods Association, joined with two associations from the credit industry, the National Association of Sales Finance Companies and the National Retail Credit Association, to lobby against the agency. Believing that the EHFA-utility relationship "deprived local dealers of the opportunity of making a sale," and that "the invasion of the field of instalment credit by the Federal Government . . . was operating to demoralize sound credit practices," these associations used legal action, political pressure, and public relations to weaken or destroy the program. (42)

Lilienthal exhibited little fear of these efforts. When he was developing his EHFA proposal the previous December, Lilienthal had not even considered it necessary to consult the merchant and credit groups as he had the NEMA and utility interests. The appliance and utility industries were oligopolies, composed of large-scale corporations wielding enormous political and economic power. The larger firms were central to Lilienthal's vision for integrating the Tennessee Valley into the national economy and for sustaining consumption-driven economic growth. The retail credit and dry goods business sectors possessed neither the national scale nor the political clout held by corporations such as General Electric and Commonwealth and Southern. The smaller trade associations did have allies in Congress, but as long as the EHFA remained insulated from the legislature by an executive order, their opposition was ineffectual.

Arthur Morgan, the first chairman of the TVA, also voiced reservations. Morgan expressed the traditional antipathy toward installment sales, calling such financing "a very questionable process at best." He feared that the TVA was abusing its "unique prestige" among valley residents to sell appliances that people could not afford. Morgan's critizue never went beyond an exchange of memos with Lilienthal, and the program continued to operate under Lilienthal's director. (43) Whereas Morgan saw consumer debt as a burden and a morally questionable activity, Lilienthal believed that credit expansion and price reductions would create economic development and generate jobs, income, and wealth across the country as well as within the Tennessee Valley.

The EHFA's trial run in the Tennessee Valley lasted fifteen months. Lilienthal had always intended the EHFA to be a national program, with its initial restriction to the valley serving only as a temporary measure aimed at resolving any operational flaws. But when the agency finally did expand in August 1935, the national EHFA bore only a superficial resemblance to Lilienthal's creation.

As envisioned by Lilienthal the EHFA's expansion would not have significantly altered the agency in purpose or structure. The EHFA would retain its liberally drawn Delaware charter. The board of directors would change to reflect a more national scope, including one director from the TVA (presumably Lilienthal) along with one representative each from the Treasury, Interior, and Agriculture departments, and one member from the Federal Power Commission. As planned, the expansion would mean business as usual, but on a larger scale. (44)

Before the national program went into effect, the Supreme Court decision striking down the NIRA undermined Lilienthal's plan. Without the NIRA, Roosevelt's executive order establishing the EHFA was invalid, and Lilienthal could no longer avoid going before Congress to seek enabling legislation. The "extensive legislative hearings" Lilienthal had feared now occurred, and, despite the steadfast support of public power advocates in Congress, the legislature did indeed sterilize the EHFA. Compromise followed compromise. The EHFA received a new corporate charter in the District of Columbia that removed all of the broad discretionary powers of the Delaware corporation corporation. More important, Congress removed the agency from Lilienthal's control, establishing the new EHFA as a subsidiary of the Reconstruction Finance Corporation (RFC), with a seven-member board of directors drawn exclusively from the RFC with the exception of one representative from the recently formed Rural Electrification Administration. (45)

Under the RFC, the EHFA greatly expanded its territory, eventually including areas such as Los Angeles County, California, Austin, Texas, and Hartford, Connecticut, but its organizational character was significantly different. The RFC completely abandoned promotional activities. The showrooms closed; the neon signs were turned off and taken down. Business Week, the journal that had kept the closest watch over the EHFA since its inception, noticed the transformation. "The difference was largely one of attitude," the magazine reported. "Back in the Valley, the movement had been a crusade. Moved to Washington, it became just another of RFC's many activities . . . and fell heir to the conservatism normally associated with the banker, rather than the promoter." (46)

The RFC's pronounced conservatism exerted an increasingly powerful influence over the EHFA. Morris Cooke served as the first chairman of the newly reconstituted agency, but as the sole representative on the board of directors from outside the RFC, he was unable to control EHFA policy; he resigned his post in 1936. A dispute in 1938 reveals how conservative the agency had become. The REA field representative for the Puget Sound area was repeatedly stymied by regional EHFA officials in his attempts to get local REA cooperatives signed onto the EHFA program. The regional EHFA office operated out of space freely provided by the Portland Gas and Electric Company in Portland, and EHFA personnel used vehicles owned by the private utilities to travel through the area. Reluctant to anger their local patrons, who were also the source of most of their contracts, the EHFA representatives showed little interest in working with the REA cooperatives. The private utilities had many more customers than the co-ops, and since the new EHFA was much more interested in contracts than it was in social goals, it ignored the co-ops until federal REA officials raised enough objections to force the EHFA to accommodate them. As R. C. Brummer, the EHFA representative, explained the incident in a report to Washington, "I told him [the REA official] that we were not interested in any of the political affairs, that we had kept out of the squabbles, [and] that we had to operate in a business way." The EHFA continued to operate until 1942, when wartime restrictions on credit and appliance production led to its dissolution. (47)

The EHFA and the New Deal: Toward A Political Economy

of Mass Consumption

Judged solely on the number of sales financed by the program, the EHFA was never more than a minor-league operation. During its fifteen months in the Tennessee Valley, the agency purchased just under 5,000 contracts, amounting to almost $760,000. At the end of 1940, its last year of significant activity, the EHFA's cumulative total was 254,000 contracts worth $36.1 million, which was less than 2 percent of electrical appliance installment paper and less than 0.1 percent of all consumer credit in that period. (48)

Joseph Coppock, an economist who studied the EHFA for the National Bureau of Economic Research in the late 1930s and wrote a retrospective assessment of the program in 1964, attributed its marginal impact to the bureaucratic conservatism of the RFC and to the bewildering series of contractual arrangements among utilities, manufacturers, dealers, consumers, and the EHFA. In order to minimize the oppositiion of private lenders and Congressional opposition Coppock claims, the RFC administrators were unwilling to publicize the program aggressively, and they maintained real annual percentage rates at 9 to 10 percent, only one or two points below private-sector rates, rather than the 3 to 4 percent that would have induced significantly greater consumption. The utility agreements, rate reviews, approved appliance lists, and dealer participation requirements further inhibited expansion. (49)

Certainly, lower real interest rates would have created greater demand for EHFA financing, but the lack of publicity and the administrative obstacles that Coppock cites as sources for the agency's marginal impact do not explain the dismal sales performance during the fifteen-month trial run in the Tennessee Valley. Under Lilienthal's guidance, the EHFA conducted a major advertising campaign and also had the cooperation of the four major private utility companies in the region, yet the agency still financed very few sales. Even expanding the number of models eligible for financing following the chest model's low sales generated only a modest increase in contracts.

The EHFA's greatest limitation while linked to the TVA was regional underdevelopment. As a whole, the Tennessee Valley was one of the poorest and most rural regions in the United States. In 1932, per capita retail sales in the region were one-half the national average. Only 3 percent of the farms had electricity, compared to a national average of 11 percent, and rural electrification programs took years (and for some areas, decades) to string wire across America's rural landscape. (50) Despite lower electric rates and slightly moderated finance charges and appliance prices, many people of the Tennessee Valley still could not afford refrigerators or electric ranges.

As a national program, the agency faced insurmountable structural economic barriers that prevented it from becoming the engine of national recovery that Lilienthal had intended it to be. Lilienthal believed that price reductions and credit expansion would be enough to fuel mass consumption. However, cheap prices for consumer durables were not the primary obstacle blocking economic recovery. Job and income insecurity due to wage cuts, unemployment, short work weeks, and the absence of social insurance legislation stifled popular consumption by limiting the amount of debt that families were willing to incur.

Even if he had come closer to appreciating the broader set of constraints limiting consumption, Lilienthal could not possibly have reconciled those limits within his bureaucratic agenda. The reorganization of America's economy was not simply a product of technocratic tinkering. The consumer revolution of the postwar era emerged out of a long process in which contending social forces struggled to assert their interests. The rise of industrial unionism, the war-induced economic resurgence, and the ideological discipline imposed on the New Deal state during the 1940s provided the foundation for a new set of institutional ground rules whereby the state mediated an uneasy truce between industry and organized labor. Labor received higher wages and relative job security; business received higher profits through increased productivity, reduced labor militance, and carefully prescribed state intervention directed toward smooth operation of foreign and domestic markets. (51) Lilienthal could neither foresee nor control the events that shaped this order, and the EHFA could not realize his goal of initiating a broad-based economic recovery.

As a measure for national recovery and as a finance agency the EHFA met with little success. (52) As one component in the TVA's efforts to increase electric consumption through lower rates, however, the EHFA was successful in easing the authority's political situation. As rates declined, people who could not buy items such as refrigerators or electric ranges nevertheless used more electricity, by turning on lights for longer periods and by purchasing less expensive items such as fans, radios, and irons. (53) The results of lower rates were clear and unmistakable. In both TVA territory and in regions supplied by private companies that had lowered rates to EHFA-specified levels, consumption increased dramatically. Even without heavy appliance buying, consumption was up 83 percent after six months of low TVA rates. More illustrative of the role that the EHFA played in generating power consumption is the increased load among the Commonwealth and Southern subsidiaries. In 1935, for all utility companies east of the Rocky Mountains, the top three utilities for average customer consumption were the three C&S companies in Georgia, Alabama, and Tennessee. These companies' rates were slightly higher than the national average in 1933, but when they topped the consumption rankings in 1935, their rates of 3.63 cents per kilowatt-hour were more than 25 percent lower than the national average. By 1939, utilities using the EHFA plan and thus meeting the agency's low rate requirements averaged over 60 percent greater per-customer consumption than did companies not on the EHFA plan. (54)

Ultimately, the EHFA's minimal impact on appliance sales and its greater influence on electric load were secondary to its role in the process of experimentation during the 1930s and 1940s, resulting in a reconstituted political economy in which the state helped mediate the formal juncture of mass production and mass consumption. Needing to create a market for TVA power, and believing the Depression to be a crisis of underconsumption, David Lilienthal designed a program aimed at expanding, not simply maintaining, the economy.

Influencing the appliance trade through product design, retail prices, electric rates, and credit terms, the EHFA in Lilienthal's vision was to be a catalyst for business, opening up new markets to private enterprise while enlarging the state's responsibilities as the broker among the various interest groups within the marketplace. The young TVA-EHFA director forged alliances with manufacturers such as Gerard Swope, who recognized the benefits of closer business-government cooperation and who stood to gain from revitalized consumer purchasing.

The Electric Home and Farm Authority reflects the vision of a political network that supported an activist state and expansionary economic policies. (55) Even as the EHFA was proving to be loss successful than planned, Lilienthal remained convinced that the New Deal must turn to other expansionary measures, and he understood that there were other means of achieving this goal. In mid-summer 1934, Lilienthal wrote to Felix Frankfurter:

One angle of the New Deal which I wish could be made clear to the public mind and carried out in action, is the necessity of reestablishing and maintaining a stable purchasing power among the masses of the people. NRA may have stopped the downward course, but it is obvious that it has not, and certainly if NRA is to be self-government, will not reestablish an adequate purchasing power. . . . I wonder if it would be sound to frankly face the issue of reestablishing purchasing power, not through credit expansion but through a sustained, ambitious program of public works. (56)

Whereas agencies such as the NRA, shaped by the vision of economic maturity, proved unworkable and increasingly unsatisfactory, the EHFA was one of the first, halting steps toward a new role for the American state.

(1) Franklin D. Roosevelt, "New Conditions Impose New Requirements upon Government and Those Who Conduct Government," in Roosevelt, Public Papers and Addresses, comp. S. I. Rosenman (New York, 1938-50), 751. A. A. Berle wrote the Commonwealth Club speech, but the economic maturity theme was shared by many of Roosevelt's advisors. See, for example, Rexford Guy Tugwell, "Design For Government," Political Science Quarterly (Sept. 1933): 321-32. For analyses of the speech, see, Arthur M. Schlesinger, Jr., The Age of Roosevelt, vol. 1: The Crisis of the Old Order (Boston, Mass., 1956), 425-26; and Jordan Schwarz, Liberal: Adolf A. Berle and the Vision of an American Era (New York, 1987), 78-79.

(2) The literature on New Deal politics and economic thought is vast. For a useful sample of the material, see, William E. Leuchtenberg, Franklin D. Roosevelt and the New Deal, 1932-1940 (New York, 1963); Theodore Rosenof, Dogma, Depression, and the New Deal (Port Washington, N.Y. 1975); Ellis Hawley, The New Deal and the Problem of Monopoly (Princeton, N.J., 1966); Ellis W. Hawley, "The Corporate Ideal as Liberal Philosophy in the New Deal," in The Roosevelt New Deal, ed. Wilbur J. Cohen (Austin, Texas, 1986); Dean L. May, From New Deal to New Economics: The Liberal Response to the Recession (New York, 1981).

(3) United States Code (Washington, D.C., 1983), Title 16: Conservation, chap. 12A, p. 885; Leuchtenberg, FDR and the New Deal, 54-55; Thomas K. McCraw, TVA and the Power Fight (Philadelphia, Pa., 1971), 61-62.

(4) David E. Lilienthal, correspondence with A. A. Berle and James C. Bonbright, correspondence 1932, box 55, Seeley G. Mudd Manuscript Library, David E. Lilienthal Papers, Princeton University [hereafter cited as Lilienthal Papers]. Acting on Berle's advice, Lilienthal hired Columbia economist Bonbright as a consultant for the Wisconsin PSC's attempts to lower the state's telephone and electric rates. For useful surveys of the underconsumption school, see Joseph Dorfman, The Economic Mind in American Civilization (New York, 1959), vol. 5; and, Theodore Rosenof, Patterns of Political Economy (New York, 1983), esp. 17-46, "Explanations of Depression."

(5) Lilienthal, Draft Copy of "Philadelphia Speech," 30 Dec. 1933, 4, Lilienthal Papers, box 62; reprinted as "Business and Government in the Tennessee Valley," in Towards National Recovery, The Annals of the American Academy of Political and Social Science 172 (March 1934): 45-49.

(6) For a general survey of TVA's relations with the power industry, see McCraw, TVA and the Power Fight.

(7) "TVA Appliances," Business Week, 17 March 1934, 10-11.

(8) Lilienthal, "Philadelphia Speech," 5.

(9) Lilienthal to Marvin McIntyre, 21 Nov. 1933, Lilienthal Papers, box 62; also cited in McCraw, TVA and the Power Fight, 62.

(10) Morris L. Cooke to Lilienthal, 11 Dec. 1933, Cooke Papers, franklin D. Roosevelt Presidential Library, Hyde Park, N.Y., box 53, folder 23 [hereafter cited as Cooke Papers].

(11) Lilienthal to Donald Richberg, 30 Nov. 1933, Lilienthal Papers, box 62.

(12) Lilienthal to Richberg, 30 Nov. 1933; and T. K. Quinn to Lilienthal, 4 Dec. 1933, Lilienthal Papers, box 62.

(13) "TVA Demonstrator," Business Week, 19 May 1934, 11.

(14) T. K. Quinn to Lilienthal, 4 Dec. 1933, Lilienthal Papers, box 62; Lilienthal correspondence with Quinn, Nov. and Dec. 1933 in Records of the Electric Home and Farm Authority, National Archives, Record Group 234, Reconstruction Finance Corporation/Electric Home And Farm Authority, Manufacturers Files, box 85 [hereafter cited as RG 234, RFC/EHFA]; Lilienthal memorandum to Franklin D. Roosevelt, "National Home and Farm Electrification Program Proposed by Tennessee Valley Authority," n.d. (c. early Dec. 1933), Lilienthal Papers, box 60.

In a technical sense, the EHFA's rates were not "below market," for the agency's rates actually became part of the market. I use the phrase "below market" to denote rates that were lower than those offered by sales finance companies at that time. I thank Martha Olney of the University of Massachusetts, Amherst, Economics Department, who pointed out the need for this clarification.

(15) A useful overview of the development of installment financing is Martha Louise Olney, "Advertosomg, Consumer Credit, and the 'Consumer Durables Revolution' of the 1920s" (Ph.D. diss., University of California, Berkeley, 1985). For a study of credit and appliance purchasing in England, see Sue Bowden, "Credit Facilities and the Growth of Consumer Demand for Electric Appliances in England in the 1930s," Business History 32 (Jan. 1990): 52-75.

(16) Lilienthal memo to Roosevelt, c. Dec. 1933.

(17) Alan Brinkley, "The New Deal and the Idea of the State," in The Rise and Fall of the New Deal Order, 1930-1980, ed. Steve Fraser and Gary Gerstle (Princeton, N.J., 1989), 85-121.

(18) Two studies amply illustrate the development of this growth-oriented network and its agenda. See Steve Fraser, "The 'Labor Question'" The Rise and Fall of the New Deal Order, 55-84; and Peter Friedlander, "The Origins of the Welfare State: The Keynesian Elite and the Second New Deal, 1910-1936" (unpub. MS, 1987)

(19) Cooke to Hillman, 15 April 1920, as cited in Fraser, 'Labor Question,'" 60n9.

(20) Fraser, "The 'Labor Question,"' 62.

(21) David Lilienthal, TVA: Democracy on the March (1944; New York, 1953), 23.

(22) New York Times, 20 Dec. 1933, 33, col. 1. Leuchtenberg notes that the Times eventually became a strong supporter of the TVA. See Leuchtenberg, FDR and the New Deal, 55n39.

(23) Franklin D. Roosevelt, Executive Order No. 6514, 19 Dec. 1933, RG 234, RFC/EHFA, box 5; "Certificate of Incorporation of Electric Home and Farm Authority, Inc.," 17 Jan. 1934, copy in RG 234, RFC/EHFA, box 4.

(24) Lilienthal-Quinn correspondence, 1 and 4 Dec. 1933, RG 234, RFC/EHFA, box 85; V. D. L. Robinson, TVA administrative assistant, to W. J. Browne, Gibson Corporation, 2 Feb. 1934; H. W. Newell, Frigidaire Corporation, to Lilienthal, 5 March 1934, RG 234, RFC/EHFA, boxes 84 and 80, respectively.

(25) EHFA correspondence with Manufacturers, Feb.-March 1934, RG 234, RFC/EHFA, boxes 80-85. The EHFA denied approval based on technical consideration for only one company, the Rutenber Electric Company of Marion, Indiana. The wiring in its stoves was deemed inadeuqate; the first refrigerator it sent for testing leaked coolant, and the second failed to maintain a satisfactory internal temperature under extreme external conditions (external temperatures over 100 degrees Fahrenheit). See correspondence with Rutenber Co., box 83.

(26) "TVA Appliances," Business Week, 17 March 1934, 10-11.

(27) "Certificate of Incorporation of Electric Home and Farm Authority, Inc.," 17 Jan. 1934, copy in RG 234, RFC/EHFA, box 4; New York Times, 25 March 1934, 1, cols. 4 & 5. The other five corporations were: Commodity Credit Corporation, Public Works Emergency Housing Corporation, Federal Surplus Relief Corporation, Susbsistence Homesteads, and Tennessee Valley Associated Cooperatives. The report characterized Delaware incorporation laws as "easy" and also reported that the charters were drawn up "by officials now assisting in the administration of their [the corporation'] activities."

(28) EHFA Correspondence with Refrigerator Manufacturers, March-July 1934, RG 234, RFC/EHFA, boxes 80-85.

(29) Lilienthal to McIntyre, 21 Nov. 1933.

(30) Thomas P. Hughes, American Genesis (New York, 1989), 231-38; Glenn Weaver, The Hartford Electric Light Company (Hartford, Conn., 1969), 98-99; "Appliance Bargain," Business Week, 17 Sept. 1938, 27.

(31) George E. Whitwell, "Only Industry Selling Will Beat Yardsticks and Taxes," Electrical World, 24 March 1934, 427.

(32) "T.V.A. Effects A Deal with Southern Utilities," Electrical World, Jan. 1934, 120; "Federal Spending Compels Utility-Selling," ibid., Feb. 1934, 209.

(33) Forrest Allen to George D. Munger, EHFA Commercial Manager, 26 June 1934, RG 234, RFC/EHFA, box 15; "TVA Demonstrator," Business Week, 19 May 1934, 12.

(34) "TVA Demonstrator," 12; "Budget for Promotional Division for Fiscal Year Beginning July 1, 1934," RG 234, RFC/EHFA, box 15.

(35) "Chattanooga Exhibit," RG 234, RFC/EHFA, box 15.

(36) EHFA Statement of Operations, Installment Contracts Purchased through 31 Aug. 1937, RG 234, RFC/EHFA, box 4.

(37) George D. Munger, to H. W. Newell, Frigidaire Corporation, 2 July 1934, RG 234, RFC/EHFA, box 80.

(38) D. K. Galtney, Galtney Motor Company, to EHFA, no date (c. fall 1934), RG 234, RFC/EHFA, box 34.

(39) Electric Refrigeration News, 8 Aug. 1934, 8.

(4) Lilienthal Memorandum to Franklin Roosevelt, 21 Nov. 1934; Lilienthal to G. D. Munger, 29 Jan. 1935, both in RG 234, RFC/EHFA, box 34.

(41) New York Times, 9 May 1934, 35, col. 2.

(42) For a report on the coordinated efforts of the three associations, see R. E. Baylis, "Liberalized Credit--Its Disadvantages and Its Effects on Buying Power," Proceedings of the Silver Anniversary Convention of the National Retail Credit Association (1937), 94; for the quotes, see NASFC News, June 1935, 1. The NRCA Proceedings and the NASFC materials are located in the Baker Library of Harvard Graduate School of Business Administration, Boston, Mass. I am indebted to Martha Olney for informing me of the existence of these records.

(43) A. E. Morgan to Lilienthal, 7 Sept. 1934, and G. D. Munger for Lilienthal to Morgan, 20 Oct. 1934, RG 234, RFC/EHFA, box 5.

(44) Lilienthal to Roosevelt, 3 Dec. 1934. Lilienthal Papers, box 63.

(45) Material on this shift can be found in several different EHFA files. See Executive Order No. 7139, 12 Aug. 1935, ending the Delaware corporation; Lilienthal to Roosevelt, 26 July 1935; and, Congressional File, RG 234, RFC/EHFA, boxes 4, 5, and 31, respectively.

(46) "EHFA Pussyfoots Successfully," Business Week, 15 Aug. 1936, 37.

(46) "EHFA Pussyfoots Successfully," Business Week, 15 Aug. 1936, 37.

(47) EHFA-REA Relations, Correspondence, Oct. 1938, RG 234, RFC/EHFA, box 32; Executive Order No. 9256, 13 Oct. 1942, liquidating the EHFA, RG 234 RFC/EHFA, box 4.

(48) "Memorandum. Re: Operations of Electric Home and Farm Authority," no date, c. 1938, RG 234, RFC/EHFA, box 5. Joseph D. Coppock, "Government As Enterpriser-Competitor: The Case of the Electric Home anf Farm Authority," Explorations in Entrepreneurial History 1 (1964): 190-92.

(49) Joseph D. Coppock, Government Agencies of Consumer Instalment Credit (New York, 1940); Coppock, "Government As Enterpriser-Competitor," 188-98.

(50) "Expenditures for Electrical Appliances by Workers in 42 Cities," Monthly Labor Review 46 (Feb. 1938): 447-54; Ted Lietzell, "Uncle Sam, Peddler of Electric Gadgets," New Outlook 164 (Aug. 1934): 51-52.

(51) For studies of the emergence of this mass production-mass consumption synthesis, see Michel Aglietta, A Theory of Capitalist Regulation: The US Experience, trans. David Fernbach (1976; London, 1979); Mike Davis, " 'Fordism' in Crisis: A Review of Michel Aglietta's |Regulation et crises: L'experience des Etats-Unis,' " Review 2 (Fall 1978): 207-69; and Mike Davis, Prisoners of the American Dream (New York, 1986), 52-117.

(52) A recent study of the RFC during the New Deal by James Olson asserts that the EHFA was "an instant success," financing the sale of over 70,000 refrigerators during 1934. This estimate appears greatly inflated, as agency records in the National Archives indicate a total of 4,886 contracts financed from the EHFA's start in 1933 through the end of June 1935. Given the small number of contracts, Olson's figure of 70,000 refrigerators seems quite impossible. For Olson's appraisal, see James S. Olson, Saving Capitalism: The Reconstruction Finance Corporation and the New Deal, 1933-1940 (Princeton, N.J., 1988), 142. My appraisal is based on reports made by the EHFA. See. Untitled Statement of Operations, through 31 Aug. 1937, RG 234, RFC/EHFA, box 4.

Fiscal Year No. of Contracts Amount of contracts

1933-34 142 $ 14,290.75 1934-35 4,744 745,421.02

(53) During House debates on power policy, Mississippi cosngressman John Rankin, whose district included Tupelo and other TVA and EHFA territory, read excerpts from letters written to him by his constituents that described how they made use of more power due to reduced rates. He read fifty or more of the accounts, noting that he had many more in his office. Some letters listed a wide array of appliances and electric tools, all of them listed at least three basic items--lights, fans, and radios. For examples, see Speech of John Rankin, 25 March 1936, Cosngressional Recond, 4346-50.

(54) McCraw, TVA and the Power Fight, 75-76; and EHFA Statement of Operations. 1939, 5-6, and chart 1, RG 234, RFC/EHFA, box 31.

(55) For studies of the growth-oriented coalition that shaped America's postwar economy, see Robert Collins. The Business Response to Keynes (New York, 1981); Kim McQuaid, Big Business and Presidential Power (New York, 1980); and alan Wolfe, America's Impasse: The Rise and Fall of the Politics of Growth (New York, 1981). For a provocative study of which industrial sectors joined the New Deal coalition, see Thomas Ferguson, "From Normalcy to New Deal: Industrial Structure, Party Competition, and American Public Policy in the Great Depression," International Organization 38 (Winter 1984): 41-94.

(56) Lilienthal to Frankfurter, & Aug. 1934, Lilienthal Papers, box 63.

GREGORY B. FIELD is a research associate with the Thomas A. Edison Papers, Rutgers University, and a doctoral candidate in history at the University of Massachusetts, Amherst.

I would like to acknowledge the advice of Bruce Laurie, Larry Owens, Carlos Pabon, Jack Tager, and Larry Zacharias, all of the University of Massachussets, Amherst, and of Robert Griffith of the University of Maryland, College Park. Tab Lewish at the National Archives, and Nancy Bressler and the staff at the Seeley G. Mudd Library, Princeton University, provided invaluable research guidance. This article is a revised version of a paper delivered at the annual conference of the Society for the History of Technology, October 1988.
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