Cooperative Story

On May 11, 1935, President Franklin D. Roosevelt issued Executive Order 7037, which established the Rural Electrification Administration, popularly known as the REA. On May 20, 1936, Congress passed the Rural Electrification Act promising long-term funding for rural electricity. The act also permitted the president to appoint an administrator for the REA who was “authorized and empowered to make loans in the several States and Territories of the United States for rural electrification and the furnishing of electric energy to persons in rural areas who are not receiving central station service.”

The Rural Electrification Act would prove to be one of President Roosevelt’s most important pieces of legislation during the New Deal era. For the first time, the federal government could make low-cost loans to non-profit electric cooperatives. These loans allowed cooperatives the ability to acquire the necessary facilities to bring electricity to farms and other rural areas.

1. VOLUNTARY AND OPEN MEMBERSHIP – Cooperatives are voluntary organizations open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.
2. DEMOCRATIC MEMBER CONTROL – Cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions. The elected representatives are accountable to the membership. In primary cooperatives, members have equal voting rights (one member, one vote), and cooperatives at other levels are organized in a democratic manner.
3. MEMBERS’ ECONOMIC PARTICIPATION – Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing the cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.
4. AUTONOMY AND INDEPENDENCE – Cooperatives are autonomous, self help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.
5. EDUCATION, TRAINING, AND INFORMATION – Cooperatives provide education and training for their members, elected representatives, managers, and employees so that they can contribute effectively to the development of their cooperatives. They inform the general public, particularly young people and opinion leaders, about the nature and benefits of cooperation.
6. COOPERATION AMONG COOPERATIVES – Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional, and international structures.
7. CONCERN FOR COMMUNITY – While focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their members.