Electric Home and Farm Authority (1934)

President Franklin Roosevelt created the Electric Home and Farm Authority (EHFA) on December 19, 1933, with Executive Order 6514 [1]. The EHFA was a federally-owned corporation, established under the laws of Delaware (and later, Washington, D.C.), and was created to increase sales of large electrical appliances, such as refrigerators, stoves, and hot water heaters, to Americans of low and moderate income. To achieve this goal, it offered government-backed financing that was much more generous and affordable than private loans.

The Board of Directors for the Tennessee Valley Authority (TVA)—Arthur E. Morgan, Harcourt A. Morgan, and David E. Lilienthal—were the first board of directors for the EHFA [2], and it was Lilienthal who was the true architect of the EHFA [3]. Lilienthal’s career as an attorney and public official revolved around public utility issues, and he was “passionate about providing affordable electricity to the residents of Tennessee and the surrounding states” [4]. Through the EHFA and its financing power he sought to coax private industry into creating a mass market for low-cost electrical appliances. Both Lilienthal and FDR felt that expanding electric power to more parts of the American south was vital to its modernization and improved quality of life.

Historian Michelle Mock describes the EHFA’s complicated financing process: “… customers living in the service area of any cooperating utility could purchase an eligible appliance at an approved dealer’s showroom on the government’s installment plan. With a small down payment, usually 5 percent, customers had up to thirty-six months to pay off most major appliances….[D]ealers were responsible for determining a customer’s eligibility for financing but then sold the contracts to the local utility….The EHFA then reimbursed the utility for the amount it paid the dealer. Consumers conveniently paid their monthly installment to the power company as an add-on to their electric service bill. The utilities then forwarded payments back to the EHFA, less a collection fee” [5].

There was of course criticism of the EHFA, usually in terms of government overreach or unfair competition to private lenders, but the agency continued to expand its services, both geographically (setting up services in states as far away as California) and in the number of appliances sold by its approved dealers. For example, the EHFA accepted 39,901 installment contracts in fiscal year 1938; 57,438 in fiscal year 1939; and 91,011 in fiscal year 1940 [6]. 

An interesting component of the EHFA was its promotions division, where the goal was to increase the public’s interest in electric appliances. Among its tools were attractive appliance showrooms. One of these showrooms was described in 1934 by a newspaper in Chattanooga TN (where the EHFA was headquartered): “The many persons who visited the Electric Home and Farm Authority’s showrooms in the James Building last night were greatly impressed with the use of color throughout the rooms… Thirty-five models of washers, heaters, ranges and refrigerators were on the floor of the main showroom… An electrical house… built to scale and completely furnished and wired, is mounted on a counter” [7].  

Though the EHFA was a relatively small New Deal agency, it had a significant impact. It contributed to lower consumer utility rates by helping to create a mass market for electricity so large generators could realize economies of scale; it improved sales for the appliance industry; it assisted the TVA and the Rural Electrification Administration in bringing electric power to the people; and it helped hundreds of thousands of Americans, especially in the South, modernize their homes and farms with “refrigerators, ranges, water heaters, room coolers, water pumps, conversion oil burners, coal stokers, gas furnaces, milk coolers, cream separators, electric motors, milking machines, feed grinders, washers, ironers, space heaters, dishwashers, waste disposal units, attic ventilating fans, vacuum cleaners and radios” [8].

The Second World War brought an end to the EHFA, as President Roosevelt steered the nation away from installment purchases towards buying war bonds [9]. FDR terminated the EHFA with Executive Order 9256, October 13, 1942 [10].

SOURCES

(1) “Executive Order No. 6514,” American Presidency Project, University of California Santa Barbara (accessed August 25, 2021).  (2) For a description of the EHFA’s complex and changing administrative structure, see “Records of the Electric Home and Farm Authority,” National Archives and Record Administration (accessed August 26, 2021).  (3) Michelle Mock, “The Electric Home and Farm Authority, ‘Model T Appliances,’ and the Modernization of the Home Kitchen in the South,” The Journal of Southern History, vol. 80, no. 1 (February 2014), pp. 81-82.  (4) “David Lilienthal (1899-1981),” Living New Deal (accessed August 25, 2021).  (5) Note 3, p. 81.  (6) Electric Home and Farm Authority, “Fifth Annual Report to Congress, Covering Operations from July 1, 1939 to June 30, 1940,” (Google Books, accessed August 25, 2021).  (7) “Attractive Color Scheme Offsets Glistening White of E.H.F.A. Goods,” Chattanooga Daily Times, September 20, 1934, p. 5.  (8) Note 6, pp. 5-6.  (9) Note 3, p. 108.  (10) “Executive Order 9256 Terminating the Electric Home and Farm Authority,” American Presidency Project, University of California Santa Barbara (accessed August 26, 2021).

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