created this and nobody objected to it. Only 3 or 4 plants were affected. This is the only increase we have had.

Mrs. GRIFFITHS. In order to increase those rates, whose consent do you have to get, or where do you have to get it?

Mr. EDDENS. It is an agreement between us and TVA. That is good for this reason: I happen to be an old power-company man and I know something about rates. To develop a rate, or develop an increase or a decrease, you must study 2 years, so that you can follow all of the uses and not be unfair to one class or the other of users. If we did not have this and if we developed these rates without experts and specialists developing these formulas either up or down, then we would get in bad trouble if we just said that we will increase it 10 or 11 percent.

This is a good thing to have because a lot of us might do something silly if we did not have that system.

Mr. JONES. You think that contributes to good management of the municipal distribution system, as well as to the supply of TVA?

Mr. EDDENS. I definitely do. Of course, we have read the TVA Act. This is some of the philosophy I told you we had. We had read it carefully and we believe in it in Decatur, and we are trying to carry it out to see to it that the domestic user gets the electricity as cheaply as possible. Of course, that is without sticking somebody else in order to do that.

We believe electricity in the home improves the standard of living faster than anything else could. We do not care, as you might say, about making money. We are making 10 percent now. We just naturally do it because the cheaper it is the more you sell and the more you make. We are anxious to give 100 percent service at the lowest possible rate, and we are not interested in anything else.

Mr. JONES. Mr. Eddens, you have been on both sides of the fence, in a so-called private utility and a public utility. Is it your observation that the Tennesee Valley Authority's power operation is operated with efficiency?

Mr. EDDENS. Definitely. Definitely. I have had business with TVA and their power contractors and their power engineers for all these 17 years. Naturally large outfits have a little bit larger overhead than a smaller outfit. It is a natural thing.

There is this so-called creeping socialism. But TVA is as efficient as any large transmission system in the United States, I am sure. So far as we are concerned, they seem to have the best engineers and the best technicians we have ever run into. They know their business and they manage well. They do not try to tell us how to manage ours. Mr. JONES. They have made accurate estimates of their production costs?

Mr. EDDENS. They have never failed, so far as I can see. They have been just a little ahead all the time. All the time they have been constantly ahead of this game. You cannot be behind in serving electricity. You just cannot do it. I know I can't. They will tar and feather me and run me out of town if I get behind. I had better be up there.

Mr. JONES. If I didn't get some TVA appropriations I would have a longer way to run. You just have to run out of town, but I have to run 130 miles out of this district.

Mr. EDDENS. That is right. You just cannot plan too big when you are talking about electricity. Naturally we are growing because we have wide open spaces and this is the age of decentralization. I think a lot of our Yankee friends-and we have a lot of them in Decatur-have been getting to like us pretty well. I think we will keep on growing, and I think we have something that they want besides cheap electricity.

Mr. JONES. We have to have that electricity if we are going to have a growing economy.

Mr. EDDENS. We have to, or else stop dead. We just will not grow otherwise. What would we tell a fellow when he walks in there and says he wants some power in order to establish a plant? Will we tell him you cannot have it? I do not have it and you cannot have it because TVA does not have it? It is a silly situation.

I do not care where it is. You ought to be able to build whatever it takes to make power.

Mr. JONES. And the utility that does not make ample provision for its future growth is jeopardizing the whole institution.

Mr. EDDENS. We might as well stay dead. You are backing up and deteriorating.

Mr. LIPSCOMB. You have said you have been in Decatur for 17 years?

Mr. EDDENS. Yes, sir.

Mr. LIPSCOMB. When you went in there you were hired to run a private utility out of the city. Is that what you said?

Mr. EDDENS. I was hired as manager of the Electric System, and I didn't have a dime nor a customer. I borrowed $5,000 and created a staff and, yes, sir, we competed him out. He would not sell out, but the people wanted it, so we built a plant across the street and competed him out.

Mr. LIPSCOMB. How did you do that? On what basis?

Mr. EDDENS. We had a little cheaper rates. They thought we would be unsuccessful, but we gave them the same service they got. You give me cheaper rates and I will get some of their kinfolks.

Mr. LIPSCOMB. What do you suppose made their rates higher than you were selling it for?

Mr. EDDENS. I do not know. I studied it a lot. Recently I studied some figures that came from the Federal Power Commission, and I cannot get it into my thick skull what is the difference there. I noticed their operating costs are twice as high as ours, taking the average of all of the private utilities in the United States, and taking the different categories and breaking them down as to distribution, management, accounting, and so forth. So their operating cost is twice as high as ours. When I speak of "ours" I speak of us as a municipality integrated with TVA. And I don't understand it; and I know Federal taxes are not the only answer, because there is too much of a margin there.

I don't know what they do with that money. They have to take it away from the customer.

Mr. LIPSCOMB. Who pays your employees' benefits in your plant? Mr. EDDENS. We do.

Mr. LIPSCOMв. The TVA?

Mr. EDDENS. No. We in the Electric System. The Municipal Electric System of Decatur. You mean, such as retirement and annuities?

Mr. LIPSCOMB. And compensation.

Mr. EDDENS. Yes. We pay that out of our operating expenses.
Mr. LIPSCOMB. Does TVA do that also?

Mr. EDDENS. Yes; they have a retirement plan.

Mr. LIPSCOMB. I mean, employees' compensation.

Mr. EDDENS. I do not know. I think so. Incidentally, they have about $50 million in their group annuity plan- the TVA employees have. Do you know where it is invested? In private utility stocks. It's a sure bet. You can't lose when you are guaranteed 6 percent on your money, regardless of how inefficient you are and how much you waste your capital.

Mr. LIPSCOMB. If TVA sold their own bonds, do you think they would invest in the TVA stock too?

Mr. EDDENS. I believe they would. Because they believe in making 4 percent on their money, on their investment.

Mr. JONES. There are bills pending in both the House and Senate that would permit the TVA to borrow its own money without coming to the Congress, except in extraordinary circumstances, to finance the construction of new generating capacity.

Mr. EDDENS. There would be one advantage to that. We would get out of this football class, being kicked around every year. Mr. LIPSCOMB. You have to expect that when you are dealing with 435 Members of the House of Representatives.

Mr. EDDENS. That is right.

Mr. LIPSCOMB. They all do not think alike.

Mr. EDDENS. That is right. We try to convince you, though. Mr. LIPSCOMB. Do you have any comments to make on the Hoover Commission recommendations?

Mr. EDDENS. I did not study that. All I know about it is what I heard from Senator Hill this morning.

Mr. LIPSCOMB. You heard plenty.

Mr. EDDENS. Mr. Jones, we believe in the economics of the TVA, and its allocation of cost to the powerplants. We believe they are making 4 percent on their money. We know what they have done. At one time I was making 17 percent before the Korean War, and the inflation ate us up.

Is there anything else I can answer?

Mr. LIPSCOMB. No; thank you.

Mr. JONES. Thank you very much, Mr. Eddens. We appreciate your coming here.

Mr. EDDENS. We don't want you to mess us up. We want you to get back up there and stop this business.

Mr. JONES. Mr. Leonard Beard, mayor of the city of Sheffield, and also a member of the Citizens for TVA. He is making his presentation today as President of the Alabama League of Municipalities and mayor of Sheffield.

We are glad to have you, Mayor.

STATEMENT OF HON. LEONARD BEARD, MAYOR, SHEFFIELD, ALA.

Mayor BEARD. Thank you, Congressman Jones and disinguished members of your committee.

First of all, we are sent to welcome your colleagues to the State of Alabama and to the city of Sheffield, to Muscle Shoals and the TriCities. As Senator Hill said this morning, this is the birthplace of TVA. We, the people of this section of this State, have fought for the development of Muscle Shoals and the erection of Wilson Dam and the nitrate plants right here where you are meeting today. We have been fighting for this movement for many, many years.

Mr. JONES. Mayor, I believe the first bill ever presented to Congress for the improvement of the Muscle Shoals rapids section was in 1824. Mayor BEARD. I think it was. It was dated way back. The principal reason was for providing river transportation. Is that right, Congressman?

Mr. JONES. That is right.

Mayor BEARD. I would like to say I not only speak for the people of the Tri-Cities here today, some 65,000 urban people of the Tri-Cities, and some 130,000 or 140,000 in 2 counties here, but also I speak for about 250 cities of the State of Alabama, of the Alabama League of Municipalities, of which I am the president, which represents these cities.

Even though, as Senator Sparkman said this morning, when the TVA Act was written it comprised some 13 counties-even though we have just 13 counties here in Alabama that are in the TVA region or area and with Tarrant City and Bessemer over in Jefferson Countyall of the towns and cities in the State of Alabama are behind TVA. I think that is very unique. They know what it has meant to the valley and they know what it has meant to their sister cities up here. Here in Alabama we have another unique situation, or condition. As you recall, a few months ago the Alabama Power Co. petitioned Congress to allow them to develop the Coosa River. It so happens I was chairman of the Committee on Federal Legislation representing the league, and the committee that worked directly with our Members of Congress from Alabama. The Alabama League went on record supporting the Alabama Power Co. developing the Coosa River. We requested of all of our Congressmen that they allow that.

We people up here in northern Alabama and the Tennessee Valley did not take exception to that because we knew, as Senator Sparkman said here this morning, we had our area and they had theirs. We know there is a place here in Alabama for both private and public power. We recognize that. We are very proud of TVA and very proud of the record of TVA.

We people who have lived here the last 30 years came in here before TVA, and we have seen TVA come into being. We know what we had before and we know what we have now, and we know we have not only our physical resources greatly developed, but our people have been developed along with it.

As Senator Sparkman said this morning, the amount of income tax our people pay now has more than doubled over what it used to be. The thing we appreciate of Congress is that you have loaned us this money and we are now paying it back. We appreciate that. We are glad we have been able to pay this money back and pay a little better than 4 percent interest.

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We are greatly indebted-not only the people of Alabama and the people of this area, but also the people of the Nation are greatly indebted to George W. Norris, a great Republican, and Franklin Roosevelt, and to Senator Hill, who is here today, who were in my opinion the fathers of TVA. I am not forgetting that there are other Members here today who have had a part in helping to provide for and to build TVA, but I think it is most remarkable that we have here with us today Senator Hill, who at the time was in the House as chairman of the Military Affairs Committee. He is here today even though he was there then and had helped to plan the bill and get it through Congress to set up the TVA. We are certainly indebted to Senator Hill, along with Senator Norris and Franklin Roosevelt, for the vision that they had, and to the fact that they dedicated themselves to seeing to it that the pople did get this program which they now have, and which means so much to us.

We also want to express our appreciation to the other Members of Congress who have had a part in providing this and to the other folks who are helping us today.

As I said, we appreciate what they have done. It has meant a tremendous lot to us and we hope and pray that you folks, when you go back to Congress, will not allow anything to happen to our yardstick.

It has been proven that where people can buy power and buy it adequately and at the right price, they will use it. The Congresswoman from Michigan asked a while ago how the additional appliances have been used. I think you will find that the people in the valley are the greatest market in the United States for appliances which people in the other sections of the country, like Michigan and Illinois, and the other great industrial centers, are shipping into our area down here. They are shipping millions and millions of dollars' worth of appliances.

I think that is something that other sections of the country ought to remember. As we grow and as we increase in wealth we are going to share our wealth with other sections of the country. I think that is one of the most important things to think about.

As you know, I did not make any formal statement. I was asked to come primarily to welcome you good people to our section of the State and show you what we have. It has certainly been a pleasure and an honor to me to come and be here with you today, and to extend a welcome to you.

Mr. JONES. Thank you for your cordial welcome, Mayor, and also for the very fine statement you have made. I think you have stated within a few short sentences the real accomplishments of TVA and what it has meant to the people who enjoy the immediate benefits of the Tennessee Valley Authority. Also its significance as a national institution. What is has contributed to the general welfare of the entire Republic has been pointed out by you in your statement. I want to thank you for that.

Mayor BEARD. Thank you, Bob. It has been a pleasure to be here. We are indebted to you people in Congress whom we are so dependent upon to keep this program going.

Mr. REUSS. Mr. Mayor, on the question of the tax contributions to the Federal Treasury by the people in this part of the country, I think you said that that has doubled in the period that TVA has been in operation. Actually the figure cited by Senators Sparkman and Hill shows an even more dramatic increase.