are completed, more than 606,000 rural families will be getting modern telephone service from them.

Up to January 1, 1956, 198 companies and cooperative associations had placed 719 REA-financed dial telephone exchanges in actual service, and REA barrowers reported completion of 53,700 miles of pole line.

MARCH 4, 1955.

Hon. LISTER HILL,

United States Senate.

DEAR SENATOR HILL: Information about the REA rural telephone program is enclosed in response to a request of your office on March 2. We shall be pleased to be of further help to you.

Sincerely yours,

FRED H. STRONG (For Ancher Nelsen, Administrator.)

INFORMATION FOR SENATOR HILL

The Farmers Telephone Cooperative has headquarters at Rainsville, Ala. President of the organization is O. M. Johnson. Other officers are: G. C. Austin, vice president; L. D. Dalton, secretary; Ted Johnson, treasurer. Other members of the board of directors are: C. H. Romberg, Derrick Wheeler, and Truman Maples.

On September 30, 1953, REA approved a loan of $1,543,000 to the Farmers Telephone Cooperative for the purpose of providing modern dial service in De Kalb and Jackson Counties. The borrower at that time announced plans to acquire with its own funds the telephone properties of the Crumley Telephone Co. at Geraldine, and the Sand Mountain Telephone Co. at Henagar. These companies had 428 rural subscribers.

The cooperative proposed to construct 665 miles of new line, and rebuild the entire 120 miles of old line purchased from the two existing companies. The rehabilitation and expansion, when completed, will provide dial telephone service to 2,930 subscribers, including 2,502 who have not had telephones.

A total of $882,073 has been advanced the cooperative for construction costs incurred to date. In addition, the cooperative raised $127,000 of its own. Of these equity funds, $37,970 has been used. Dial central offices have been constructed in Geraldine, Fyffe, Rainsville, Henagar, and Flat Rock. These exchanges are being cut over to the new service April 30, 1955.

MAY 9, 1955.

Hon. MELVIN PRICE,

House of Representatives.

DEAR CONGRESSMAN PRICE: In response to your letter of April 27, we are pleased to send you the enclosed information about the rural electrification program nationally and in your State.

Sincerely yours,

R. G. ZOOK

(For Ancher Nelsen, Administrator.)

INFORMATION FOR REPRESENTATIVE MELVIN PRICE, 24TH CONGRESSIONAL

DISTRICT OF ILLINOIS

Today, May 11, is a landmark in the economic and social progress of rural communities in my home State of Illinois and throughout the United States. Today is the 20th anniversary of the Rural Electrification Administrationthe agency which has helped more than 4 million rural consumers escape from the dark ages of the kerosene lamp into the modern era of electric farming. Less than 11 farms out of every hundred in America had electric service back in 1935, the year REA was established by Executive order. Now, two decades later, better than 92 out of a hundred farms are electrified. And a little over half of the electrified farms of the Nation are served by the 1,300,000 miles of power line built with REA financing. In Illinois, the growth of rural electrification has been equally rapid. Today almost 96 percent of its farms have electricity as compared to 12 percent in 1935.

This is a splendid and amazing record. Yet the full measure of REA's accomplishment goes far beyond a mere tabulation of the total consumers served or the miles of power line built with REA loans. Nor would any estimate of all the work done by electric servants to release rural people from drudgery and to increase farm production and profits begin to tell the story. Yet it is well to remember that the average output per hour of farm labor is almost twice what it was in the days before World War II, and to recognize that electric power has made a major contribution to the efficiency of the modern farm plant.

Rural electrification has also been a powerful stimulus to business in towns which depend heavily on rural trade for their prosperity. Rural electrification has helped bring prosperity to the big cities, too. But of that I will speak more later.

The REA record is one of which borrowing electric systems and REA have reason to be proud. Up to the beginning of the year, REA had approved nearly $3 billion in electric loans to more than 1,000 rural electric systems. At that time, these borrowers had made about $193 million in interest payments and repaid about $376 million in principal payments on their REA loans. This includes nearly $79 million paid ahead of schedule as a cushion against future interest and principal payments. Only about $307,000 in loan payments was overdue more than 30 days. In other words less than one-tenth of 1 percent of payments due are delinquent. I doubt if this splendid record can be matched anywhere in the history of American banking.

The rural power systems which have chalked up this enviable record are all locally owned and managed. This makes the record all the more impressive. For the most part they are privately owned business enterprises, including 983 cooperatives and 25 commercial companies. A smaller number-73-are operated by public power districts or other public bodies.

None of these systems was built by Uncle Sam. All of them are the product of grass root initiative and hard work. REA did finance the building of the systems. But before any electrification loans were made, local groups had to develop feasible plans and rally sufficient community support for the enterprise to assure repayment of the Government loan.

With this broad community base to build on, REA power systems have grown far beyond their most optimistic early planning. Many of them are now among the leading business enterprises in the areas they serve. They have sizable payrolls and make a big contribution to the local economy generally.

One important factor contributing to the growth of rural power systems has been the steady increase in farm power consumption. During 1954, the average farm consumer served by REA-financed lines used 226 kilowatt-hours of electric energy per month as compared to 134 kilowatt-hours in 1949. My own State of Illinois has witnessed a similar increase in the amount of power used by the average farm consumer. Farms connected to REA systems averaged 262 kilowatt-hours a month in 1954. This was about 57 percent above the 1949 average monthly consumption.

Here again, dry statistics cannot tell the full story of progress under the rural electrification program.

Translated into human terms, increased power consumption means that farm homemakers have more electric washing machines, ranges, and water systems to spare them the drudgery of bending over washtubs, and endlessly carrying wood, coal, and water. Increased use of electricity means that farmers have milking machines, automatic livestock watering equipment, pig and chick brooders, hay dryers, hoists, and feed mixers. These are only a few of the many farm uses of electricity. The experts say they number in the hundreds. All together they add up into a big saving in farm labor and at the same time help to boost production and improve the quality of the goods the farmer has to sell. Milking machines, coolers, and barn ventilators are helping dairymen produce more and better milk. Poultry house lights are coaxing hens to lay more eggs during the winter season when production is noramally off and fresh egg prices are higher, and more little pigs and chicks live to go to market because of electric brooders.

I am sure the St. Louis national stockyards in my home district has benefited tremendously from this program.

In emphasizing what REA electric loans have accomplished for farm families, there is always the danger of inadvertently slighting the important contribution which rural electrification has made to urban people.

Take the wiring contractor and electric appliance dealer, for example. These groups benefit directly. It is estimated, perhaps conservatively, that for every

dollar invested in rural power facilities, rural families spend $3 to $4 in farmstead wiring, plumbing, and electrical appliances. On the basis of the nearly $2.5 billion of rural electrification loans invested in power systems to date, this means between $7.5 billion and $10 billion in new business for Main Street. A more accurate estimate probably would be $12 billion to $15 billion.

Looking closer home, I find that about $81 million in REA loan funds has been advanced to borrowers in my home State of Illinois for investment in rural power systems. This means between $243 million and $334 million in new business to Illinois businessmen as a direct result of REA electric loans. And so it goes in other States.

It all adds up to big business for Main Street dealers throughout the country. But the sums I have quoted represent only the initial investment-farm families like their own rural electric systems keep adding new equipment in order to make effective use of electricity.

Though difficult to estimate in specific figures, the indirect benefits to townspeople from rural electrification are undoubtedly greater.

By helping farmers increase their profits, rural electrification enables them to spend more money on goods and services supplied by city residents. Farm power helps pay the doctor bill, buy new furniture, finances the education of the farmers' children. It means more business for the butcher, the baker, and the candlestick maker-not to mention the manufacturer of electrical appliances for the home and electrical equipment for the farm. That, in turn, means more work and bigger pay envelopes for workers employed in manufacturing and retailing industries, and more prosperity all around.

Still another way that the rural electrification program contributes to the common welfare of town and country people: REA-financed electric systems contribute to the support of their communities and the Nation by paying taxes. In fact, many electric cooperatives are among the biggest taxpayers in their communities. But that's only part of it. Their employees pay taxes like everyone else. Also, by increasing farm incomes and adding to the value of farm property, rural power systems make an important indirect contribution to tax revenues needed for our national defense and for schools, roads, and other essential expenses of government. How much additional income taxes farmers have paid as a result of increased income from the use of electricity cannot be estimated. But the amount is substantial and more than enough to offset any claim that the rural electrification program has been a drain on the National Treasury. The excellent repayment record of REA borrowers plus the benefits of electricity in rural area makes the rural electrification program one of the outstanding programs of our time.

Because of the success of the rural electrification program and the great need for more and better telephone service in rural areas, Congess in late 1949 authorized REA to make loans for the purpose of extending and improving rural telephone service. The program is young, but like the electric loan program, it is already making a significant contribution to agriculture and the business life of the Nation.

The 20th anniversary of REA is an occasion for rejoicing-not only on farms but in the towns of America.

(Charts, tables, and printed reports which were submitted are not reproduced herein, but are in the subcommittee files.)

Mr. PINCUS. I have no further questions.

Chairman DAWSON. You think there were others of this same nature prepared?

Were they prepared during this same period?

Mr. STRONG. The question that was put to me: Were there any others or how many others were prepared during the period of Mr. Davis' employment?

I said that would be an extremely difficult question to answer offhand with any degree of accuracy, but that I would check into it, if wanted.

Chairman DAWSON. And that would require the use of how many experts?

Mr. STRONG. For the preparation of such releases as that?

Chairman DAWSON. Yes.

Mr. STRONG. That is, as we are now talking about?

Chairman DAWSON. Yes.

Mr. STRONG. I don't know that the actual preparation of those releases would require very many experts.

The research that went into some of those releases would require expert work.

Mr. PINCUS. Was any of the material in his releases the type that requires expert work?

Mr. STRONG. Possibly portions of it were. I would have to read those over.

Mr. JONAS. May I ask Mr. Pincus: Are these samples that have been furnished replies to inquiries by Members of Congress?

Mr. PINCUS. All we have before us is what the department sent to us, Mr. Jonas, in response to our request for the work that was done. We have done this in many cases for these experts or consultants. I have no knowledge

Mr. JONAS. I assumed that is what it was and, if it is so, I can give some testimony on that myself.

I recently had a meeting of the REA directors in the whole western part of my State and they invited me to attend the meeting. Knowing they wanted to talk about REA matters, I promptly wrote a letter as soon as I received the invitation-to the REA Administrator and asked him to assemble all the available information on the REA program in North Carolina and told him I would like to have it by a certain date.

Now, that required some work on the part of somebody in the office, but he got me the information. It is not exactly the same as that, but it was on that

The CHAIRMAN. That required the work of somebody in his office, certainly. But here you are going out and getting somebody not in the office and giving him a job that could have been prepared by any of the regular employees, and maybe this man's job could have been done by the regular employees, and there may have been no reason at all to employ him in the first place.

Those are the things we are looking into, and I would say if it became known that William Dawson, my son, had any connection with anything I had to do with it would be the logical thing to find out if he were related to me.

Mr. JONAS. If you run across a man by the name of Dawson working for the Government in any way, we want to know about it.

Chairman DAWSON. If it is anything I am interested in, I know it will be investigated. That is just human nature, and not with any ulterior motives other than to get the information.

Mr. PINCUS. Would you also submit for the record a list of the names, grades, and salaries of the other employees in the office where Mr. Davis was employed during this period of employment?

I believe it was the Office of Information in REA.

Mr. STRONG. Mr. Davis was employed as an assistant to the Administrator in the Office of the Administrator.

Mr. ROBERTS. There were no other such positions.

Is that right?

Mr. STRONG. There were no other positions.

Mr. PINCUS. That raises an interesting question. It gets into another area.

He was employed as an assistant to the Administrator.

Mr. STRONG. I am not referring to the specific job title now. as an assistant to the Administrator.

I say,

Mr. PINCUS. I see, but his work was reviewed by your supervisorsor at least cognizance was taken of it by the supervisors in the Information Office; is that correct?

In

Mr. STRONG. That is correct, because a portion of his duties—there was a cross line between some of his duties and other of his duties. other words, a portion of his duties involved activities in the field of information services, based upon his research and findings in that field. So, there was a crossover there. For that reason, the director of the Chief of the Information Services Division had, at times, some authority over his activities.

no.

Mr. PINCUS. He wouldn't be a publicity expert; would be?

Mr. STRONG. I would doubt that. I wouldn't classify him as that;

Mr. PINCUS. In that connection, we might like to know whether the Department has any definition of publicity expert. There is a statute, I believe, that prohibits the employment of such people.

Mr. ROBERTS. I don't know what definition the committee would have of a publicity expert.

Mr. PINCUS. Well, we are not after

Mr. ROBERTS. I think you would have a wide difference of opinion on what is a publicity expert. Certainly many of the information people in the Department of Agriculture are doing essential information work and, after all, the Department of Agriculture was set up to make available information on agriculture in the broad sense of that word, and I am quoting from the Organic Act of 1862. Thus we have many people who are developing information for use, direct use, of the public, and for the use of officers and staff members of the Department, but I don't believe you would construe them or interpret them to be publicity experts in the sense you are using the term now.

Mr. PINCUS. I have reference, to begin with, to the statute which states:

No money appropriated by this or any other act shall be used for the compensation of any publicity expert unless specifically appropriated for that purpose.. I wonder if the Department had made any attempt to define or set standards under that act or whether any other agencies, such as the Civil Service Commission, had suggested any to the Department.

Mr. ROBERTS. Do you know of any effort on the part of such

Mr. REID. NO. To my knowledge, that has not come up, nor has it been specifically included in the agreements as a prohibited classification, Mr. Pincus. I think we have had casual conversations from time to time with the Civil Service Commission, and I am not aware that they have ever taken the position that it would be improper to employ a person with expert knowledge in the field of informational mediums, for example.

Mr. KOEBEL. I might offer on that point: The general authority and responsibility for informational work in our Department, as you probably know, is in our Director of Information.

He is a staff officer, secretarial level, and I know he exercises continuous effort both inside his own unit and in the various information