A few days ago, on October 13, the Federal land bank, a bank for cooperatives, and the Production Credit Administration officials of the eastern part of the United States, asked four of our rural electric cooperatives to meet them in Pennsylvania for a dinner. Two of the officials went. The whole evening was spent propagandizing them on the value of accepting the Hoover Commission reports. It was not lending-agency reports that they were talking about. But my point is, the administration is giving us the Hoover Commission reports now, and in doing so it is my opinion in part it is flouting the will of Congress, to use the Attorney General's own words. That is in my opinion. Here is another very brief example of it. Out in Montana the Canyon Ferry Dam is being wrecked today. We advocated it because we needed the power and have not been able to get the power because Interior would not advocate and ask for and build the transmission lines necessary for us to get it. Consequently the power that was engineered to sell at 5.6 mills, the Bureau rate in that area, is being dumped, and has been for more than a year, to the Montana Power Co. The Federal Government is losing more than $1 million a year on that dam. Somebody has to make it up for them. And all just because the power company will not pay any more than that because it holds a monopoly position in the area. That is the sale at the bus bar as recommended by the Hoover Commission reports. The REA bills were introduced, as you know, to put the lending agencies into law just before the Congress adjourned." Now, back to the reports. What is the motive? The motive, in my opinion, is now very clear. It is absolute monopoly. And yet those who oppose the actions which we are taking in supporting this Federal power program, including Under Secretary Davis, are going about this country saying that those of us who do support the Federal power program are socialists. And so is Aandahl in a different sort of way, who says TVA is socialism. I am getting close to the end, but I want to quote you from the last letter Thomas Jefferson ever wrote, on June 24, 1826, just a few days before he died. He wrote it to Roger C. Weightman, referring to our form of Government, where he said: The general spread of the light of science has already laid open to view the palpable truth, that the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately, by the grace of God. I want to refer you to a veto message of Theodore Roosevelt in his veto of the James River bill. He said in that message: The great corporations are acting with foresight and singleness of purpose and vigor to control the waterpowers of this country. I esteem it my duty to use every endeavor to prevent this growing monopoly he means power monopoly the most threatening which has ever appeared, from being fastened upon the American people. One of the things they say is that public ownership is wrong. Public ownership is American as anything else is American. Let me read you some of the history, just a couple of paragraphs, on the Development of American Waterpower, by Fanning: Public ownership and operation of hydroelectric power sites along the rivers of this country existed long before the establishment of the United States. The Hoover Commission reports, Mr. Chairman and gentlemen of the committee, would destroy the Federal power program of the United States. If adopted into law they would destroy TVA; they would destroy REA in many sections, and so weaken the rural electrification program that in my opinion the whole would be destroyed. Senator Norris said if it had not been for TVA there would not be an REA, and I say if you destroy REA in these sections there probably will be no TVA. We believe in the free-enterprise system in this country and we are against monopoly in any form. I want to quote one sentence from a speech that Admiral Moreell made recently, on October 21, titled "What Price Public Power," in an address before the Association of Illuminating Companies at White Sulphur Springs, W. Va., where he said: Specifically with respect to Federal power I believe it promotes the growth of the social cancer of avarice in our body politic; that it is a fraud and a delusion fraught with danger to the whole system of free enterprise. That is his opinion. It is my opinion that the Moreell task force, the task force on water resources and power, was itself a fraud; that it was stacked to get the results which it did get. My answer to those who would kill these programs is that if America's rural electrification program and the Federal wholesale power program, on which about a third of the rural electric distribution systems depend for part or all of their supply-if that be socialism, then make the most of it. Gentlemen, if the Congress of the United States gives us these Hoover reports in law, it will give us death. Mr. JONES. That you very much, Mr. Ellis and Dr. Cochran. (No response.) Mr. JONES. Without objection, the prepared statement of Mr. Ellis will be made a part of the record at this point. (The statement referred to is as follows:) STATEMENT OF CLYDE T. ELLIS, GENERAL MANAGER, NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION, WILSON DAM, ALA. Mr. Chairman and members of the subcommittee, my name is Clyde T. Ellis. I am general manager of the National Rural Electric Cooperative Association which is the national association of the rural electric systems of this country. Over 900 rural electric systems are dues-paying members of our association and these member systems serve over 3.5 million farms and other rural establishments. Our membership is made up entirely of cooperatives and public power districts, mostly cooperatives. SECTION I Mr. Chairman, the farmers who own their own electric systems are grateful to you for the program of hearings you have planned on the Reports of the Task Force on Water Resources and Power and the Report of the Hoover Commission on Water Resources and Power. We are grateful because the savage and unprincipled attack these reports make upon the Federal power program and upon the rights of our people-indeed of all citizens-who chose to be served by a power enterprise not being milked in New York and Boston, must be answered, and publicly. The Hoover Commission spent $430,000 on the five volumes which make up these reports, which is an indication of the importance of this subject to the Commission and its Chairman. The rural electrics, the public utility districts, the cities which own their own electric plants-and certainly the personnel of the Federal power agencies-cannot hope to raise the money to pour out thousands of pages of the true facts to offset the deliberately preconceived dishonest statistics and misleading arguments included in these reports. Our only hope is that you and the Congress with the aid of the press will help in getting the true story across. I would hope, when the Congress reconvenes, that you can secure funds for a detailed study of the recommendations of the task force and the Commission as regards water resources and power. The monumental brain-washing job which Mr. Hoover and his task force members and his staff are attempting cannot be offset by your limited staff or voluntary witnesses. And we certainly hope that you will not be swayed by arguments that the task force reports are not before your committee. The report of the Hoover Commission is based upon those task force reports, both in terms of biased facts and perverted logic. Your task in exposing these matters must necessarily embrace all five documents. OUR EARLY CONCERN From the very passage of the act establishing the new Hoover Commission, we were concerned. The broad language of that act was not accidental; it was public knowledge in Washington that Mr. Hoover had chafed under the language of the earlier act which limited him and his earlier Commission to making recommendations to improve the efficiency of the executive branch of the Government. We knew that he had already made a public address at the Case Institute in which he had urged that a commission be established to investigate the Federal power and related programs, with language broad enough to permit him to author a "Magna Carta for special privilege." (See appendix A of this statement for speech by Herbert Hoover, April 11, 1953, before the Case Institute of Technology, Cleveland, Ohio.) We knew from the attacks upon certain parts of our program in his earlier reports what the slant would be if his field were widened. We knew that he had vetoed the TVA bill in 1931 denouncing it as "degeneration." And many people remembered that in his Memoirs (p. 174) he had denounced Senators Norris, La Follette, and Borah, together with Gifford Pinchot and John Dewey, as "exponents" of "socialism," and we knew that all of these men were great names in the war against utility monopoly with the exception of Dewey. (I don't know how John Dewey offended Mr. Hoover.) We also knew that on March 8, 1928, at the first hearing of the Federal Trade Commission investigation of utilities, Chief Counsel Judge Healy had placed in the record as exhibit 65 a list of the publications of granddaddy of all the monopoly propaganda fronts, the National Electric Light Association from 1924 to 1927; and we knew that in the years 1924-25 this propaganda front had printed a total of 745,000 copies of the addresses of Mr. Hoover, of which 500,000 copies were of the address in Madison Square Garden where he attacked Senator Norris and others as creeping Socialists "who sought to limit and not expand the freedom of men." Knowing all this, once the Commission was established and manned our only hope was to be heard by the people. So we immediately asked for public hearings by the Lending Task Force and the Water Resources and Power Task Force. We were denied a hearing before the Lending Task Force, but hearings were finally announced on water resources and power. All over the country our people asked to be heard. They went to the hearings—and all over the country they wrote us that the power company spokesmen were given plenty of time to testify and were helped along with leading questions, but that when the farmers' time came, he got a few minutes to summarize what he had to say and then was either disregarded or was subjected to loaded questions which showed all too clearly the bias and prejudice of the members of the task force. I testified in New York. All day the power company spokesmen read longwinded denunciations of the Federal power and resource programs, but when I spoke I was told to limit myself to a summary and given about 15 minutes. The rest of the routine was the same. In the morning there had been friendly, leading questions-friendly to the power company spokesmen, that is. For menot as Clyde Ellis, but as the spokesman for 3.5 million rural families-they were only unfriendly questions. I have practiced law in my day and seen unfriendly juries, but never in my life have I appeared before a jury as obviously packed against me as that task force headed by Ex-Admiral Moreell. But there was so much in our statement that day, Mr. Chairman, that I would like to quote from it. Indeed, my prepared statement today is divided into three sections,1 (1) these introductory remarks, (2) quotations from my statement to the task force in New York, and (3) comments on the nature of the reports and the impact the recommendations will have upon the Nation and the farmers' electric systems if they are adopted. My purpose in quoting at length from our statement to the task force is to make it clear to you and the Congress that the task force was quite aware of our problems and needs but that they saw fit to proceed with their preconceived program of crippling or destroying our program. In opening our presentation, we expressed our concern over the work of the task force, touched on the nature of the Commission's assignment as we saw it, and tried to give the background of our viewpoint: SECTION II (Following excerpt from NRECA statement to the task force, New York City, June 4, 1954 :) "I am appearing before you because the subject of your investigation, Water Resources and Power, is so vital to the welfare of rural people and to the rural electric cooperatives and power districts from which over 54 percent of all farm families receive their electric service. Our members requested permission to be heard by resolution adopted unanimously at our national annual meeting at Miami, January 1954. (See exhibit 1.) "THE IMPORTANCE OF ABUNDANT SUPPLIES OF LOW-COST ENERGY "Rural people and our association are interested in abundant supplies of lowcost energy not only because we are immediately affected by supply and price, but also because we are quite aware of the importance of an abundant supply of electricity as an essential to industrial growth, to reasonable prices of industrial products, and to the costs of industries from which we purchase equipment and supplies. Moreover, we are quite aware of the absolute necessity for abundant supplies of electricity for the protection of the Nation. "The primary characteristic of a modern industrial society is that its productive processes are dominated by the use of machines powered by inanimate energy; i. e., energy from coal, petroleum, natural gas, and hydro power. (Very shortly the principal source of inanimate energy may very well be atomic.) Much of this energy reaches the production line and the farm or urban home in the form of electricity. "One need only look at the Comparison of Gross Inland Consumption of Commercial Sources of Energy, the United States, and Other Areas, 1950 (see exhibit 2) to grasp the significance of the use of nonhuman, nonliving sources of energy in affecting productivity and levels of living. Since this type of energy cannot be consumed by human beings or livestock, it must be fed through machines, through mechanical robots in the production process. In our exhibit 3 we have reproduced for the benefit of the committee a graphic illustration of the relationship of people, machines, and energy. "Reference is made to these exhibits for the primary purpose of indicating to this Commission our understanding of the vital nature of the power aspects of your study. We are aware of the close relationship between the supply of inanimate energy and living levels, productivity, and national security. Toiling as farmers do from year to year, no group in this Nation is more conscious of the fact that productivity is dependent upon energy input, a point which those less close to the productive process may tend to slight in their considerations of the basis for decent living and our power to defend ourselves. "We have a dual interest in the work of the Commission: (1) The narrow interest of our rural electric systems in adequate supplies of power at the lowest possible costs and (2) the interest of all Americans in an abundant supply of low-cost power. An abundant supply of low-cost power is dictated by the interest all Americans have in national defense, national income, sound regional development, expansion of the economy, full employment and levels of living, maximum development of resources, expansion of vital industries, the right of communities to choose their means of providing electric service, introduction of an element of competition into an otherwise monopolistic industry, and stimulation of monopoly to better service, lower costs of operation, and lower rates to consumers. 1 Secs. 4 and 5 are exhibits. "In most of these areas, there is a community of interest among rural people and most of all of the other groups of people in the Nation. There are some areas where in the normal course of development and utilization of resources there must be both understanding and compromise, as, for instance, between those who have an emotional attachment to the remote wilderness areas as contrasted to those whose primary interest is in the utilization of water resources of such areas for irrigation and power. "THE INTEREST OF THE RURAL ELECTRICS IN THE WORK OF THE COMMISSION "Many of the areas of your investigation are remote from the interests of the rural electric systems and this presentation will be limited to areas of interest to us. We hope to touch on all of the areas which are of concern to our people, give you our considered viewpoint, and recommend policies to be maintained or adopted. "Section 1 of the act creating the Commission reads as follows: effi "It is hereby declared to be the policy of Congress to promote economy, ciency, and improved service in the transaction of the public business in the departments, bureaus, agencies, boards, commissions, offices, independent establishments, and instrumentalities of the executive branch of the Government by― "(1) recommending methods and procedures for reducing expenditures to the lowest amount consistent with the efficient performance of essential services, activities, and functions; “(2) eliminating duplication and overlapping of services, activities, and functions; 66 6 66 6 '(3) consolidating services, activities, and functions of a similar nature; '(4) abolishing services, activities, and functions not necessary to the efficient conduct of government; "(5) eliminating nonessential services, functions, and activities which are competitive with private enterprise; 66 6 '(6) defining responsibilities of officials; and, 66 6 '(7) relocating agencies now responsible directly to the President in departments or other agencies.' "In view of the flood of propaganda which the private power companies have poured out in recent years, we are concerned primarily with paragraph 5 of section 1. This paragraph "eliminating nonessential services, functions, and activities which are competitive with private enterprise" is of interest to us not only in the water resources and power field, but in the field of activities of the Rural Electrification Administration. We are submitting a statement to the Task Force on Lending Activities in regard to REA to which we refer you. We would like to say to you directly that we are emphatically opposed to any change in the name, organization, operations, policies, procedures, or appropriations for REA with one minor exception which relates to the outmoded formula for the allocation of loan funds. (See exhibit 4.) "We are greatly concerned with the work of the Commission in the field of water resources and power because next to the Rural Electrification Administration itself, our people are most concerned with the development of water resources and the availability of power at the lowest possible cost from that development. Indeed we are interested in the entire Federal power program as it relates to resource development; the use of falling water for the generation of power; the use of Federal thermal plants for firming; the construction, financing, and operation of transmission lines; the preference clause; and all matters affecting power rates. "THE DEVELOPMENT OF RURAL ELECTRIFICATION AS A FEDERAL-LOCAL PARTNERSHIP "Farmers are late comers to the use of electrical energy. Our exhibit 5 is a graphic illustration of the tardiness with which central station electric service was extended to rural areas. It indicates that the private power companies had done little to bring electric service to rural areas prior to the establishment of the Rural Electrification Administration in 1935.2 Prior to the establishment of REA, the power companies had labored and brought forth a mountain of propaganda as to why farmers either did not want electric service or could not be served on any feasible basis; during the same period the same power companies had brought electric service to a piddling 10.9 percent of the farmers, and 2REA was established by Executive order in 1935 and Congress passed the original REA Act in 1936. |