wanted it or could afford it. Even the Bell people admit that 55 percent of the farmers have no service at all. A survey we have just completed in the areas served by our member systems shows that only 16 percent of the rural establishments in their areas have adequate and reliable telephone service.

Objection No. 2. Farmers cannot afford telephones.-Same old propaganda. Farmers don't usually put up a howl for things they can't afford, and it seems to me they are making quite a howl for this telephone legislation. It furthermore seems to us that they are practically unanimous in their pleas.

Objection No. 3. The telephone industry is doing the job and will continue until "adequate coverage" is achieved.-We don't know what "adequate coverage" means. We do know what "area coverage" means the kind our electric system developed and fostered. We do not believe the existing telephone companies will ever provide area coverage unless this bill is passed.

Objection No. 4. H. R. 2960 and S. 1254 would permit unregulated competition, duplication of telephone facilities in areas "which already have complete and adequate rural telephone coverage,' " and will destroy the 6,000 independent telephone businesses. -Nonsense. While most of the independent companies do not at this time seem to agree that they would be destroyed, the bills speak for themselves— and there could not possibly be unregulated competition and duplication of facilities.

Objection No. 5. The RFC Act rather than the REA Act better be amended to authorize low-interest, long-term telephone loans or loan guarantees, because REA is "electricity-minded" and because of REA conditions and controls.-—I want to digress here to point out that, prior to the establishment of REA, several electric cooperatives had been set up around the country, but by the time REA came along, they were practically all out of existence for two reasons: (1) lack of adequate low-cost, long-term financing, and (2) lack of technical guidance and assistance. The independents know that RFC would not provide either of these. If the big independents which seem to control USITA are serious in such propaganda, why haven't they sponsored some reasonable legislation? Back as far as September 18, 1945, the United States Independent Telephone Association in its printed "Report of Finance Task Group of Rural Telephone Service Committee" started off with this pungent statement: "The problem of financing for the small telephone company to provide funds necessary for plant replacement and extension and improved equipment is one of major importance in the independent industry."

BELL OBJECTIONS ANALYZED

The Bell objections are typical monopoly objections: "The proposal isn't needed; we will do the job." Yes, they want to do the job their way-the creamskimming way. As we understand it, A. T. & T.'s Bell empire has allocated 20 percent of the country unto themselves, but they have taken the cream. According to the Justice Department, Bell controls 85 percent of all telephone facilities for local telephone communication in this country, and 98 percent of the longdistance facilities. Therefore, that leaves 80 percent of the country with only 15 percent of the facilities. That's bad.

The Bell people have been doing a lot of boasting about recent construction. This, too, is a typical monopoly practice. I hold in my hand one of their recent publications entitled "A Million More Bell Telephones for Rural America." On page 4 they make this amazing statement: "Carrying forward this program has required the efforts of an army of engineers and rural telephone specialists, and vast amounts of materials and equipment. It has so far required about one and a quarter million telephone poles and the stringing of about half a million miles of telephone wire-enough to stretch around the world 20 times." When we analyze these figures, look what we get: One and one-fourth million telephone poles at the usual 20 to the mile would give us 62,500 miles of line to serve a million subscribers or approximately 16 subscribers to the mile. That is not country, gentlemen, that is city. Bell officials have disagreed with our analysis of these figures but they have never shown us it is incorrect. This is proof that the Bell people are doing what we all know they're doing. They're building principally to the people who are constructing new homes just outside the city limits. Bell classes them as rural, but they are not farms. Our density along the rural electric lines runs around two consumers to the mile, villages included.

SUGGESTED AMENDMENT

We suggested to the House committee a strengthening amendment which the committee did not adopt. We would still like to see it placed in the bill. What

our people want is area coverage and they would like to see it spelled out in the law. We suggest that, if the committee reports out H. R. 2960 it insert the following amendment: "After the word 'users' and before the period in line 10, page 4, add the words 'on an area coverage basis.'" If you report out S. 1254 we hope you will incorporate in it a similar amendment. We just don't think loans should be made under this bill to permit anybody to do cream skimming, thus leaving a lot of our farm people perhaps forever stranded and isolated.

CONCLUSION

In conclusion may I say on behalf of our people that they realize fully the menace of the two great enemies of democracy: Monopoly and communism. Surely no one would argue that there was ever a monopoly more complete in America than that of the A. T. & T. empire and they seem to us to dominate the big independents too. Our farm people want neither the economic dictatorship of monopoly nor the political and economic dictatorship of communism. They orly want an opportunity to live as free individuals enjoying the comforts, conveniences, and efficient tools of production to which folks in towns have access. Every farm is a free competitive enterprise. In this case, the farmers want the existing telephone companies to do the job whenever and wherever they can and will. When and where they fail the farmers want the opportunity to provide their own telephone service. Surely nothing could be more American than that. We hope, gentlemen, you will be able to vote this bill out favorably and without any crippling amendments in time for it to be passed at this session of Congress.

The CHAIRMAN. The committee will stand recessed until 10 o'clock tomorrow morning, at which time we will resume the hearing and hope to make progress as rapidly as possible.

(Whereupon, at 1 p. m., the committee recessed to reconvene in the same room on Thursday, August 4, 1949, at 10 a. m.)

RURAL TELEPHONES

THURSDAY, AUGUST 4, 1949

UNITED STATES SENATE,

COMMITTEE ON AGRICULTURE AND FORESTRY,

Washington, D. C. The committee met, pursuant to adjournment, at 10 a. m., room 324, Senate Office Building, Senator Allen J. Ellender presiding. Present: Senators Ellender, Hoey, Gillette, Thye, and Hickenlooper.

Senator ELLENDER. The meeting will be in order.

Mr. Ellis, I understand you have some witnesses to present this morning.

Mr. ELLIS. Yes, Mr. Chairman.

The problem is this with us: We think it is more important that each of our people and the independent telephone companies be heard from very briefly, than that the time be taken by two or three witnesses. We have listed here 19 people. If it is agreeable with you, we would like for you to limit the time of their appearance. That is the consensus of the group. We suggest it be limited to 5 minutes each and then stop them, so that the rest can be heard.

Senator ELLENDER. I will appoint you as timekeeper. Whenever the time is up, you let me know and I will cut them off.

Mr. ELLIS. Very well.

Senator ELLENDER. Who is your first witness?

Mr. ELLIS. Mr. Baggett.

Senator ELLENDER. Mr. Baggett, step forward. Your time starts. now. Give us your name, in full, for the record.

STATEMENT OF C. E. BAGGETT, DIRECTOR, PEACE RIVER VALLEY ELECTRIC CO-OP, SEMINOLE GENERATION CORP.; AND FLORIDA DIRECTOR, NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION; FORT GREEN, FLA.

Mr. BAGGETT. My name is C. E. Baggett, and my home address is Fort Green, Fla., a very small place.

Senator ELLENDER. Have you a prepared statement?

Mr. BAGGETT. No, but I have a small map, which I would like to leave, showing the number of customers that we are serving, and also marked on this map is the area which we serve, and, also, to the best of our knowledge, the total number of telephones which are used in that area.

Senator ELLENDER. Have you an independent telephone system? Mr. BAGGETT. It is independent; yes. It is a very small one of which I am not a party. I am a director of an electric REA system

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there, but we do have a small telephone system, which is serving only a very small portion of our area.

Senator ELLENDER. What is your connection with the telephone system?

Mr. BAGGETT. There is no connection at all. I am not even a customer. I have not been able to get service. Senator ELLENDER. Proceed.

Mr. BAGGETT. We find it very difficult for our people to get telephone service, and the few that do get it we find are having to pay exceedingly high prices for the mileage of lines built to them."

One of our customers, who received service just a short time ago, Mr. Francis Roberts, receiving it from the Avon Park exchange, which is different from the one at my home town, had to pay approximately $1,500 to get this line put into his ranch. Senator ELLENDER. What distance is that?

I

Mr. BAGGETT. He must have come in there, Senator, 8 miles. have never measured it. It is quite a way off, and I am not sure of the total miles they had to build.

He wanted a private line all the way from Avon Park, and that may have increased his mileage. The reason he needed a private line is because he is a cattle broker, and he said it was just impossible for him to carry on his business without more or less a private line. So, he does have it at the present time.

Senator ELLENDER. No other customers on that line but this man? Mr. BAGGETT. I believe that is what he stipulated he wanted. There are others on private lines where there are seven or eight to the line.

Senator ELLENDER. Could he have obtained service from this other system that was serving these other people where he was residing? Mr. BAGGETT. I think he may have if there were not too many on the individual line. It seems it reached eight, and I have heard men say they do not put more than eight on the line.

In the area in which we are serving is part of five counties. The larger of the counties we are serving is the county of our Florida Senator, Mr. Holland, and we are very sparsely scattered with homes in that entire area.

We are now serving 1933 electric consumers, and to the best of our knowledge, checking it carefully with my engineer the day before I left, there were approximately 23 phones in that area, that entire area, and leaving as much as 40 miles without any means of telephonic communication.

We have in our electric system at the present time radios, but that is merely a means of trouble-shooting, after we have once located the trouble. So, these people who live in these areas have to drive 25 miles oftentimes in either direction-it would not make much difference to get to a telephone or else come to our office to report an outage. It is either drive to the office or drive practically the same distance in another direction in order to get to a telephone, and most of that entire area, and, I assume, most of the other areas in Florida outside the ones we are serving, are somewhat similar.

Senator ELLENDER. Have you made a survey to determine how many of the people you are now serving with electricity would be interested in a telephone?