ELECTRICITY IN THE
AMERICAN HOME
Rapid
Developrnent of Household Appliance
Industry in the
United States
Use
of electrical
appliances in the home dates back only comparatively few
years, but during that time its rate of growth has been amazing. The
first electric lamp was marketed about 1880, and the
domestic appliance
industry proper had its beginning about twenty years ago. In
1924 trade
estimates place total sales of appliances, fixtures and other
electrical merchandise used by retail consumers (as contrasted with
commercial and industrial users) at well over a billion dollars. Sales
of electricity to all consumers, residential, commercial, power and
other public utilities amounted to $1,270,000,000 in 1923 and are
estimated at $1,335,100,000 for 1924. Of these totals about 50
per
cent represents sales of electricity for domestic consumption.
Conditions
resulting from the war are mainly responsible for the rapid advance in
the household appliance industry since 1914 as previous to that time
the industry showed only moderate gains. Probably 90 per
cent of all
goods bought at retail in the United States are purchased by women, and
the remarkable increase in sales of domestic appliances which has taken
place since 1914 may be said to reflect the economic and industrial
changes that have affected the average home. Between 1910 and 1920 the
population of the United States increased 15 per cent.
During the same
period, the number of domestic and personal servants,
including cooks,
chambermaids, laundresses and maids, decreased nearly 25 per
cent,
although the number of women in gainful occupations increased by 6 per
cent. Thus there were available one-fourth fewer domestic
workers for a
population 15 per cent larger. Restricted immigration made
the problem
more acute. The labor-saving electric appliance helped to
fill the need
thus created. The great increase of wealth in the
United States from
$1,965 per capita in 1912 to $2,689 in 1920 also served to
stimulate
the sales of electric household appliances during this period.
Other
causes, however, have been contributory. Within the past two
or three years the tremendous building that has been going on has been
reflected in the rapid increase in the number of domestic customers.
The growing popularity of apartment dwellings and small
houses has favored the use of electric appliances because of their
convenient size and operation and their special advantage in the summer
time. Willingness of the American public to try new things,
comparatively low rates of operation, effective advertising by both
light and power companies and manufacturers of appliances, all have
helped advance the use of domestic appliances in the average American
home.
The use of household devices improves the load
factor for the electric light companies and the expansion of the household
appliance field came in part from the companies' efforts to eliminate
the expensive off-peak periods that occur during the greater part of
the day. Central station equipment must be sufficient to
handle maximum requirements imme- diately since current must be
generated as it is needed; storage is impracticable under present
generating methods. The amount of energy consumed by domestic users
ordinarily reaches its highest peak in the morning and evening when
lights are required and falls to low levels the greater part of the
day. Use of most electric appliances increases the amount of current
consumed between morning and evening.
More than half
of the cost of electric power is based on labor, equipment
and overhead charges and goes on whether rent is used
or not, so that increased use of energy by many customers has made it
possible to reduce operating costs to each consumer. Rates are based on
the cost of giving service as well as on the amount of energy used and
if current is used constantly the rate per kilowatt hour for each
consumer is naturally lower. Between 1914 and November, 1924 the price
of electricity decreased 9 per cent. in contrast to conspicuous
increases in food, clothing and fuel.
In view of
these facts it is understandable why the electric light and
power companies were the first to sell electric appliances
and why in the beginning the companies even gave them away to the
customer. Gradually, however, the companies ceased to sell directly to
the consumer, but in the past two or three years they have again become
an important factor in retailing appliances.
Consumer
rates to some extent govern the kind of appliance that is used. For
instance, 85 per cent of all electric ranges in the country are found
west of the Rockies since rates for electricity are relatively
favorable there and few gas companies operate.
Elsewhere
rates are too high, proportionately, for the average man to afford an
electric range. The load factor that appliances such as ranges and
refrigerators furnish lowers the rate per kilowatt hour but despite
this the average cost of using them is high in most localities. Up to a
certain point the tendency is for rates to decrease as the number of
customers and the amount of electric current they purchase increases;
this in turn brings about the installation of better equipment, another
factor operating to reduce rates. In 1923, residential
customers used approximately 30 per cent of all energy consumed but
they paid about half of the total gross income received by the electric
light and power companies because of the differential rates paid by
this class of customer. The stability of domestic consumption
accounts in large measure for the continuous increase in gross revenue
which the electric companies have enjoyed over a long stretch of years
even during periods of general depression.
Aside
from its basic application to lighting, the wide field of utilization
in the home which electricity has already won for itself is indicated
by the list of domestic appliances in common use.
These include not only such well-known articles as the electric
fan, electric iron, the washing
machine, percolator and vacuum
cleaner, but curling irons,
toasters, immersion heaters, refrigerators,
ranges, player pianos, electric
toys, grills, heaters,
and numerous others of a constantly increasing list. One of the most
recent and already one of the most important developments in the
electrical field is the radio. So far, unlike other
devices used in the home, radio is a negligible consumer of central
station current, although experiments are under way to perfect
receiving sets to be connected with the lighting circuit.
The
household appliance field has shown a most striking
development within the`past decade, and a great part of the
expansion has occurred since the end of the war. Some
indication of its expansion is shown in Table A, which gives trade
estimates of sales of some of the more impor-tant devices. This table,
as well as several other sales estimates, is based on compilations made
by the Electrical World.
Probably the real
forerunner of the modern domestic appliance was the electric fan,
introduced about 1895. Its simplicity of operation and dependable
performance did much to popularize the use of electricity in the
average home. Today the electric iron stands far ahead among domestic
electrical appliances in use, with the vacuum cleaner next and the fan
third. The first practical electric iron appeared on the market about
1905 or 1906, the vacuum cleaner and washing machine coming out about
the same time. It is estimated that electric irons in use in the United
States at the close of 1923 represented a total investment of
$42,500,000 for eight and a half million irons with an average value of
$5 each. Three-fourths of the residential users of electricity owned
irons. These estimates must not be confused with the figures in Table
A, which cover only the annual sales of appliances in the years
indicated. In addition to its convenience and comparatively small
initial cost, the low operating cost of the iron which averages' 3 to 6
cents an hour, has been a factor in extending its use.
Vacuum
cleaners stand next, $215,000,-000 worth or 4,300,000 machines having
been in use at the close of 1923. This rep-resents an average of 44
vacuum cleaners per 100 wired homes.: Operating costs of cleaners are
about one cent per hour. Next in popularity come electric fans, found
in one-third of the wired homes and averaging about one-third cent per
hour to operate. As electrical energy is converted into power and light
more econom-
tial customers used
approximately 30 per cent. of all energy consumed but they paid about
half of the total gross income received by the electric light and power
companies because of the differential rates paid by this class of
customer. The stability of domestic consumption accounts in large
measure for the continuous in-crease in gross revenue which the
electric companies have enjoyed over a long stretch of years even
during periods of general depression.
Aside from its
basic
application to lighting, the wide field of utilization in the home
which electricity has already won for itself is indicated by the list
of domestic appliances in common use. These include not only such
well-known articles as the electric fan, electric iron, the washing
machine, percolator and vacuum cleaner, but curling irons, toasters,
immersion heaters, refrigerators, ranges, player pianos, electric toys,
grills, heaters, and numerous others of a constantly increasing list.
One of the most recent and already one of the most important
developments in the electrical field is the radio. So far, unlike other
devices used in the home, radio is a negligible consumer of central
station current, although experiments are under way to perfect
receiving sets to be connected with the lighting circuit.
The
household appliance field has shown a most striking development within
the` past decade, and a great part of the expansion has occurred since
the end of the war. Some indication of its expansion is shown in Table
A [-- below--] which gives trade estimates of sales
of some of the more
impor-tant devices. This table, as well as several other
sales estimates, is based on compilations made by the Electrical World.
Probably
the real forerunner of the modern domestic appliance was the
electric
fan, introduced about 1895. Its
simplicity of operation and dependable
performance did much to popularize the use of electricity in the
average home. Today the electric iron stands far ahead among
domestic
electrical appliances in use, with the vacuum
cleaner next and the fan
third. The first practical electric iron appeared on the
market about
1905 or 1906, the vacuum cleaner and washing machine coming out about
the same time. It is estimated that electric irons in use in the United
States at the close of 1923 represented a total investment of
$42,500,000 for eight and a half million irons with an average value of
$5 each. Three-fourths of the residential users of electricity owned
irons. These estimates must not be confused with the figures in Table
A, which cover only the annual sales of appliances in the years
indicated. In addition to its convenience and comparatively small
initial cost, the low operating cost; of the iron which averages' 3 to
6 cents an hour, has been a factor in extending its use.
Vacuum
cleaners stand next, $215,000,-000 worth or 4,300,000 machines having
been in use at the close of 1923. This rep-resents an average of 44
vacuum cleaners per 100 wired homes.: Operating costs of cleaners are
about one cent per hour. Next in popularity come electric fans, found
in one-third of the wired homes and averaging about one-third cent per
hour to operate. As electrical energy is converted into power and light
more economically than into heat, appliances requiring heat
have a somewhat higher average cost per kilowatt hour.
Twenty-nine
out of every hundred wired homes are estimated to have electric washing
machines, making a total of 3,300,000 machines, worth $412,500,000, in
use at the end of 1923. The average value of each machine is
estimated
at $125. Estimated ratios per hundred wired homes for the other
best-known and most widely used appliances are: Electric heaters,
thirteen out of a hundred; toasters, twelve out of a hundred; sewing
machines and percolators, five out of a hundred ; ironing ma-chines,
two out of a hundred; dish washers, one out of a hundred. Data are not
avail-able for other appliances.
Of all branches of
the
electrical appliance industry, radio has shown the most rapid rate of
expansion in the past four years. Since November, 1920, when the first
radio broadcasting for entertainment took place, it has become one of
the most important branches of the electricalfield, although not of
particular significance prior to that time.
Sales of
apparatus
are estimated by the trade to have jumped from around $2,000,000 in
1920 to $120,000,000 -- $150,000,000 in 1923 and $240,000,000 or more in
the last year. The number of receiving sets in use has grown, according
to rough estimates, somewhat as follows:
Over 300,000
farms in
1924 were equipped with receiving sets, according to a recent estimate,
more than twice the number so equipped in 1923. There are considerably
over five hundred broad-casting stations in operation at present. About
seventy-five stations broadcast crop reports, the markets and the
weather, in addition to the regular programs provided.
Use
of
electricity has naturally developed more slowly on farms than in urban
communities. Out of the 6,500.000 farms in the United States
about 300,000 have isolated electric lighting plants, that is, plants
in which the energy used is generated on the farm, and central station
service is used on 200,000 to 300,000 farms. Of the remainder, it is
estimated that 4,000,000 farmers are potential customers, while the
purchasing power of the remaining 1,900,000 is too low to put them into
the potential customer class. The heavy expense of rural
electrification and resultant high cost of current are the reason for
the small proportion of electrically equipped farms connected with
central station lines. A mile of distribution line can serve 50 to 200
customers in a city; in the country the average is three customers to a
mile. High voltage lines can be tapped to serve individual farms but
the equipment necessary is too expensive to make this plan feasible.
In
western states where irrigation is carried on on a large scale
electrical energy is supplied by central stations, since the large
amount used enables the companies to quote a fairly low rate per
kilowatt hour. The proportion of electrified farms is much larger on
the Pacific Coast, particularly in California, than in any other
section of the country. Hydroelectric plants predominate in the Pacific
and Mountain States, a natural development since nearly three-fourths
of the available water power of the country is located there. In
addition to the extension of cen- tral station lines in rural
communities, the number of isolated electric plants on farms is
increasing.
An experiment to test the use of
electricity on
the farm under actual conditions, the first of its kind to be
attempted,is now being made in northern Minnesota through a cooperative
agreement by the Federal Government, several farm organizations and an
electric power company. Most of the farms on a six-mile power line have
been supplied with electric cur-rent, and power and domestic appliances
have been installed free of charge by the manufacturing companies. The
current consumed and service are paid for by the farmers and accurate
account of the operating costs is being kept. The University of
Minnesota Agricultural College as a neutral agency has complete charge
of the experiments which will aim to deter-mine the economic uses of
electricity on the farm. So far no results have been published but the
experiment has led to a number of changes in design of equipment used.
Similar experiments have since been started in other states.
A
recently completed survey of domestic market possibilities for
electric household appliances shows that New York stands first as a
potential buyer, Pennsylvania, Illinois, California and Ohio coming in
the order named. Taking into consideration the various factors
influencing the "inclination to purchase," New York with 10 per cent.
of the country's population is regarded as a potential buyer of 11 per
cent of domestic appliances. The corresponding percentages of the
other states mentioned are, respectively: Pennsylvania, 8 and 9 per
cent; Illinois, 6 and 7 per cent.; California, 3 and '6 per cent.;
Ohio, 5 and 6 per cent. It has been found that this ratio of
prospective purchasing to population is lowest' in the South and
highest on the Pacific Coast. Newly built houses are usually wired as
built and domestic appliances are quite likely to be
installed at once. This is what has happened on the Pacific Coast. On
the other hand, in older sections where houses were built before
electricity was as commonly used as today and were therefore not wired,
the tendency is to postpone installation, even when electricity is
available. Giving due weight to heavier industrial use in the East,
California stands first in the relative amount of current generated.
New York, Pennsylvania and Illinois follow in the order given.
The
electric light and power industry in the United States has shown an
amazing development during the comparatively short space of its
existence. The first electric lamp was marketed about 1880 and by 1885
the capitalization of commercial systems amounted to about $55,000,000.
Capital and gross revenue from 1885 to 1924 are shown in Table B.
Normally
about 1,000,000 new residential customers per year are secured,
although in 1923 the number was approximately 1,750,000. This,
however, was a reflection of the building boom and not precisely a
normal growth. The total in-crease in all new customers in 1923,
2,185,-000 or 18 per cent., was the largest ever re-ported. Residential
customers have shown a far greater rate of increase for several years
than power or commercial customers. The former increased 80 per cent.
between 1919 and 1924, and power and commercial customers 44 per cent.
The
use of electricity by the average domestic consumer does not decrease
during periods of depression to such a degree as that used by
commercial or industrial customers. The figures in Table C give the
total energy consumed for lighting and for power in the different
sections of the country for 1923 and 1924. They show a marked increase
in the amount consumed for lighting in 1924 in all divisions as against
1923 and either a much smaller in-crease or a decrease in the amount of
energy consumed by power or industrial consumers, with a net decrease
for the country as a whole.
Although
a large amount of energy
is generated on the Pacific Coast transmission losses there average
about one-fourth of the total amount produced on account of the long
distances the current must be carried. For the country as a whole this
loss is 19.3 per cent. Total kilowatt hours generated by electric light
and power companies increased from 5,862,000,000 kilowatt hours in
1907 to 11,569,000,000 in 1912, more than doubled by 1917 when amount
generated totaled 25,438,000,000 kilowatt hours, and again doubled by
1924, when output aggregated 53,937,000,000 kilowatt hours.
Public
ownership of electric light and power plants is not growing so rapidly
as private ownership. While municipally owned plants have increased in
number, they have not increased in importance or in the number
of customers served at the same rate as the commercial plants. There
were on January 1, 1924, 5,826 operating companies in the United
States, of which 3,701 were commercial systems and 2,125 municipal.
Between 1907 and 1924 municipal plants increased from 27 to 36 per
cent. of the total but between 1917 and 1923 the number of their
customers de-creased from 15 to 10 per cent. of the total.
According
to latest data available the average rate charged by municipal plants
is about twice that charged by commercial companies, for municipal
plants are generally more expensive to run, using on the basis of value
over 10 per cent. of the fuel consumed to generate electricity, hiring
more than 10 per cent. of all electric light and power employes, but
making only 4 per cent. of all current sold. Company systems own 95 per
cent. of the generating capacity in the country, the municipal plants
the remainder. Many buy part or all their current from commercial
systems.
Customer ownership of electric light and
power stock,
an innovation in public utility financing introduced ten years ago, has
grown rapidly in that time. Begun in 1914 by several companies in
California,which sold shares of stock to 4,044 customers, the movement
gained tremendous impetus after the war. During 1923, 185 companies
sold 1,806,300 shares to 279,186 of their customers. Table D, based on
figures compiled by the National Electric Light Association, gives
similar figures for the past ten years.
It
is estimated that
about one-third of the $750,000,000 required in 1923 for construction
programs was raised through customer investment. This method of
marketing electric light and power securities has been effective in
establishing popular confidence in these public utilities. For this
purpose electric light and power corporations aim to sell shares to the
small stockholder rather than to the capitalist.
The
United
States and Canada stand far ahead of the rest of the world in household
use of electrical energy. Based on 1920 figures, about
two-fifths of the United States' population live in electrically
lighted homes, and approximately the same proportion in Canada. New
Zealand stands next with 31 per cent., followed by Japan with 30,
Denmark and Ice-land with 30, Switzerland with 26, Norway with 21,
Belgium with 20, and Australia with 18 per cent. In the generation of
cur-rent per inhabitant the figures are as follows : Switzerland, 700
kilowatt hours per inhabitant ; Canada, 612; Norway, 493; United
States, 472; Sweden, 364; Union of South Africa, 199; France, 147;
Germany, 141 Great Britain and Ireland, 139.
Canada's
waterpower resources are extensive and, out of a potential 18,250,000
horse power available, 3,227,000 horse power has been developed. The
extent of central station development in Canada parallels that in the
United States and standards of living are about the same as in the
United States. The appliance industry there is well developed, but
imports of household appliances from the United States are still
considerable. Hydroelectric development is advancing in Europe,
especially in France, Norway and Italy. The Scandinavian countries are
encouraging the use of electricity, especially in the rural sections,
and its use is fairly general in France, Belgium and Rolland. The
underdevelopment of the electric industry in Great Britain results in
part from restrictive regulations, that have hampered the growth of
central stations, and the high price of current to consumers.
Water-power development has advanced considerably in Japan and the use
of electric appliances has increased. A high percentage of its
population lives in wiredhouses, but the average installation is small.
A
great part of the world, however, can scarcely be considered potential
customers for the present. Primarily because of its high price
electricity is still beyond the means of many Europeans. Coal and fuel
oil are expensive and power-plant development and equipment in Europe
are considerably behind American plants in efficiency and operation.
Factors that affect the expansion of the foreign field for household
appliances are: Climate, prejudice against trying new things, a cheap
and plentiful labor supply, limited purchasing power of people, general
characteristics and temperament of people, and the possibilities for
industrial use of current.
These same reasons, of
course,
limit the sale abroad of American appliances, al-though the domestic
market is such that manufacturers prefer to give it most of their
attention. In many foreign countries where the demand exists, American
appliances are usually preferred. Domes-tic heating and cooking
appliances ex-ported from the United States in 1923 were worth $984,471
against $596,895 in 1922 and a maximum valuation of $1,801,-127 in
1920. Exports of electric fans and motor-driven household appliances,
which are not included in the first-mentioned classification,
aggregated $1,724,906 in 1923 and $1,457,724 in 1922. During 1924
exports have kept up quite well, total shipments of these goods for
eleven months showing an increase over the year's trade in 1923. The
best markets for American goods are Canada, the United Kingdom, Japan,
Australia and Mexico.
J. B. C.
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