Senator HOLLAND. My point, Mr. Chairman, is this: We have been dealing with the REA a long time. Most of the REA's have been rather struggling organizations for periods of years but the situation is changing. I do not know how many are in the sounder position. Senator TALMADGE. Senator Ellender made a request the first day of this hearing that information be submitted with respect to every cooperative throughout the country, as I understood it. Senator ELLENDER. Yes. Senator TALMADGE. And also their finances, and that information I requested of Mr. Clapp to make available for the committee. So, we will have as the result of his request the detailed information on every cooperative in America which is an REA as to the amount of money that they have borrowed and what they still owe and so on. Senator HOLLAND. I think that it might be well to insert into the record at this time this information that we have here, and I so ask permission, that table 3, pages 27 and 28 of the report of the Administrator for 1965, the table that has been referred to by the witness be so inserted. Senator TALMADGE. Without objection, it is so ordered, and it will be made a part of the record at this point. Г (The table is as follows:). Number of electric borrowers with energized systems, miles energized and consumers served,' by States, as of June 30, 1965 1 For jointly financed systems, includes only data estimated for the portion of the system financed by REA. 2 State figures are data for REA borrowers incorporated within the State. 3 Represents latest available information at time of repayment of loan. 4 In addition to these 60 borrowers, there are 40 other borrowers whose loans have been repaid; these 40 borrowers include locker plants and a few electric borrowers whose systems were not constructed. Senator HOLLAND. Incidentally, it shows that in the State of Georgia that three of the cooperatives Senator TALMADGE. Paid off. Senator HOLLAND. Paid off all of their indebtednesses, yes, sir. Four in Indiana, four in Iowa. Let me see if I can find Florida-two in Florida. None in Kentucky up to this time, Senator Cooper. Senator ELLENDER. How about Louisiana? Senator HOLLAND. I am looking for Louisiana. Two in Louisiana. Senator ELLENDER. I did not know that. Senator HOLLAND. They have paid off all indebtednesses. This may mean that. And it may mean that they have repaid the original loans. Senator TALMADGE. And incurred further indebtedness of new loans. Senator ELLENDER. Or it may be they sold out. I think that there were at least two that sold out years ago. It may be that. Senator HOLLAND. We had hearings in another committee that one had sold recently to an investor-owned cooperative, having paid itself out of indebtedness. I do not know how many of such there are. Mr. LYNN. I am not sure. Senator HOLLAND. I am not sure that this figure of 60 means that there are 60 entirely out of debt. Senator ELLENDER. Or that they are operating. Senator HOLLAND. Wait a minute. There is a footnote here, and I will quote this for the record: "In addition to the 60 borrowers, there are 40 other borrowers whose loans have been repaid; these 40 borrowers include locker plants and a few electric borrowers whose systems were not constructed." That note may be explanatory, at least in part, of the table which has been inserted in the record. Senator ELLENDER. I wish to say that this hearing is, certainly, beneficial to me, because I thought that these cooperatives were limited. I have had the privilege of attending several meetings in Louisiana. They have regular board of directors selected by the membership; they have yearly meetings, and I guess it would stun quite a few of these cooperative members to find out what they do not own the cooperative in which they are members. Senator HOLLAND. I think most of them are membership cooperatives and that they do own the assets but they have nothing salable. A membership is not like a fixed stock ownership in my State. I happened to have piloted the first REA cooperative legislation through the legislature, and at that time it provided for membership cooperatives. It may have been changed since that time, but the membership cooperative does not vest in its members the salable assets or the negotiable assets such as one has who invests in a fixed share of stock in a stock organization. Senator ELLENDER. When one cooperative pays out all of its indebtednesses, who owns the assets? Senator HOLLAND. The members, if it is membership cooperative. Mr. LYNN. It is not clearly established. Senator HOLLAND. It is not clearly established. Senator ELLENDER. It strikes me that this ought to be cleared up somewhat. Mr. LYNN. This is what we are suggesting. Senator TALMADGE. That is what we have suggested should be determined. Senator ELLENDER. This ought to be looked into, in all of the States, whether they are operating under State laws or under the act itself. Senator HOLLAND. In my State, more and more of the cooperatives, not speaking of the REA cooperatives, because I do not have the late information on that are going from the membership to the stock ownership basis. I am speaking of the production and marketing cooperatives in the citrus and vegetable industries because of the very point that has been made by this witness that vests in the membership the assets which are taxable and differs as between the members, depending on the use that they have made of the facilities, whereas that does not exist in the case of the membership cooperatives. That difference does not exist there. Senator TALMADGE. Committee counsel has just handed to me the latest quarterly statistical summary of the U.S. Department of Agriculture, regarding the Rural Electrification Administration. This is No. 290, dated June 1960, and there is quite a lot of data in here that I think would be of interest to the committee and the Senate, and without objection I will insert it into the record in its entirety. (The tables referred to follow :) U.S. DEPARTMENT OF AGRICULTURE, RURAL ELECTRIFICATION ADMINISTRATION, QUARTERLY STATISTICAL SUMMARY, RURAL ELECTRIFICATION PROGRAM TABLE 1.—Authorization, loans approved, and funds advanced to borrowers 1 Includes $51,529,769 of the $60,000,000 reserve authorization provided in fiscal year 1966. |