Falling Water: The Origins of Direct Federal Participation in the US Electric Utility Industry, 1902–1933

Abstract

The federal government's role as a direct producer in a non‐defense, non‐distressed American industry is unique to electric power. This participation arose during the first three decades of the twentieth century; it was politically controversial then and remains so today. We seek to explain how and why the federal government got into the electric utility business. The convergence of technological, economic, and political forces paved the way for federal participation. The growth of long‐distance transmission networks and the success of the Progressive movement were important factors. Because so many dam sites with hydroelectric potential were on public lands in western states, and because hydroelectricity could help pay for those dams, even conservative Republicans like Herbert Hoover came to accept the involvement of the federal government. After the election of Franklin D. Roosevelt in 1932, the federal government accepted the task with enthusiasm as part of a plan for the economic development of entire river basins.