still can't allow that situation to be the basis for a loan over 35 years of the Government's credit."

That is where he taught me, Mr. Aandahl, that administrative discretion is fine, but after all, we are dealing with the public's business, not my business. You and I can sit down and I can agree to lend you 10 bucks, and I don't have to have your IO U, sure, because you and I understand each other. But when you are dealing with the public's business, I may be out of Kansas the 1st of January, other things can happen, and the administrative discretion promise at this table doesn't hold when you come to dealing with these criteria as they affect us out there in the field.

I want to bring that point out. In Wyoming the co-op is operated on such economy that Ward Goodrich never took any salary and the board had to force him to take his expenses when he came down to Washington fighting for a loan. Where is he located? Just south of Casper in Mountain States territory. They could have served it. I saw Ward up at the tri-county meeting at Pine Bluffs the other day. I said, "Ward, how are things going?"

"Just fine, Joe. We are in the black."

I said, "You are really getting her through, are you?"

"Yes.'

He went on and told me a lot of problems such as we talk about. Gentlemen, on this matter of getting the Corps of Army Engineers to set up a new bureau of power, what is going to happen to Wheatland up there? Do you see my point? The whole thing hasn't been taken up with the people, and that is the most serious thing for this committee. Senator Murray and Senator Kilgore, you men are very busy here in Washington, you have so many things to worry about you can't get into all this technical stuff. I have 2 million words laid out here for you if you want them. You can't get into that stuff.

The thing that is clear here is that these criteria were established and worked out, as someone remarked, for Philadelphia lawyers. I don't know whether it is Philadelphia or some other town. Anyway, you can't take that criteria out there and sell it to those farmers.

The Assistant Secretary said here yesterday he would take his good friend, Ancher Nelsen, and after the first of the year they would go out in the field and say, "Boys, we will show you where to sign on the dotted line." I hope Mr. Nelsen won't fall for that. I still have confidence in him as the REA Administrator.

If there is any disposition on the part of the Department of the Interior to resolve these criteria, I would say let's work with them. Let me point one thing out to you, gentlemen. At no point have they shown any disposition to discuss this with the REA groups other than a few managers who came in and got shoved around for a week down here. These criteria are just as solid right now as of this moment as when they were first originated, and the testimony here shows that the interests of the farmers who own these systems are just asking for the right to have some electricity. They don't want to put the power companies out of business. All this bologna about creeping socialism and the power trust. Look here. Look at this chart [indicating]. These were taken from statistics of public agencies. Look at this little 5.9 percent. That is all the power the co-ops get under this criteria. The utilities are getting 20.7; municipalities 26.8; defense agencies and other Federal agencies, 24.3. They are making you

believe that we want a Federal monopoly of the power business. They are crazier than hell.

All this criteria is designed to do is to sell a bill of goods so we have to put up with it. We don't have money. I don't know whether you want to see this or not. These are the Kansas plants. It is a kind of lousy-looking map, isn't it? But I don't have $2,500 to make up a map for this committee like the power companies have done out in my State. I have to run up on a Saturday or Sunday when I am not busy at something else, and get a little wrapping paper and do a little drawing in order to get a map. I don't have any dough for that sort of thing.

Here are the actual facts. This is the little tail down here that is controlling the dog, and constitutes a Federal monopoly of power. Is there anything that could be more obvious than that this criteria is needed in order to protect these very prosperous utilities? I don't know why we take time even to talk about it.

Now let's get back to some facts here. I have been rambling on here.

As I say, I know that Mountain States power deal. I don't know of a man in the State of Wyoming who is identified with the rurals up there who ever in my presence and I have been to State meetings, local meetings, board meetings-who ever raised any objection to Mountain States having that power. Surely they can devise a criteria that will make Mountain States have its rightful share of this power, and nobody is going to raise a rumpus about that. But, by golly, when you put it in there and are going to spread it all over the entire interior territory, then it does become a significant fact and policy.

As I told you in the beginning here, gentlemen, in all my work for the Missouri Basin setup, I have told the boys on the steering committee that Kansas wouldn't go along with them if they attack the power policy, but I said the criteria is a different thing. So when Mr. Tudor made it clear that the criteria is the Administrations, he surely put me on the spot when I go back to Kansas and say, "Listen, fellows, this is the Administration talking, not the hired help here working out some criteria."

So if that is the Administration's policy, it is my job to go back to Kansas and tell them the truth about this criteria and what it is for. In the Mountain States situation, Senator Schoeppel asked me what the reason was for a 20-year contract. I smelled out the answer, but I didn't get it as clear and sharp as when Mr. Day talked to you and you spelled it out for him. I do appreciate your being so frank about this policy, because you certainly have made it clear to me what is involved on this proposal for 20-year contracts, with no withdrawal clause.

You see, as soon as the 20-year contracts are moved out for anybody else, at the end of the 20-year period they have squatter's rights for renewal, and there you have effectively evaded the intent of the preference clause. I will be frank with you. It may be that the Congress should spell out that preference clause this next session. Maybe that is a good idea, because I can appreciate an administrator's trying to follow through on these different laws and to get a correct interpretation when he is trying to carry out the policy of the President. So maybe in fairness to the Department of the Interior it may be that out of this investigation the thing we need is clarification.

While these investigations are going on, let me point out that if the Department of the Interior was honest-I mean that-if they were fair and reasonable, they would respond to the requests of the cooperatives to postpone the application of the criteria until we could get at the bottom of the thing and iron it out.

Senator KILGORE. Let me ask you a question in line with something that was said here on Monday, in line with your testimony earlier and your experience in fathering cooperatives. I am very much interested in the question of time lag on that. How long would be a fair time in which a group of farmers would be able to get together and build up the necessary data, a reasonable amount, to put a cooperative in position to apply for power?

Mr. JENNESS. Let's look at my statement. I have it in there. Here it is on page 4 of my statement. This actually happened in Kansas right up to the last minute, so I can answer your question very factually.

We met with our power suppliers in August of this year, 1953, and it was agreed that we would secure data on existing loads and load growth for a 3-year period. The representatives of the private utilities told us that figures beyond 3 years can only be guesses, that is, they didn't want anything more than 1954, 1955, and 1956 on load growth. This was an organized effort to get load data for this one State.

Four months later, we still have some substations that haven't been reported. The system at Horton estimated a 2-percent load growth. The one at Wamego estimated 28 percent.

The power companies looked at that and said, "Here, if we can invest money on a 22-percent load growth, you boys are going to come back at us in a year or two and be screaming for more capacity because even our figures indicate that that is too low."

Do you know what the answer was? The manager said, "I have been losing farms. In Kansas we have been losing farms at the rate of 10 percent a year. People are moving to town. Our farms are

still expanding in size."

In that particular system it lost 50 from its peak connections because of this decrease. That hasn't been mentioned around here, but you ask any of these-I don't know about these other States up in the Dakotas, whether they are still losing farms up there and getting into the machine age of farming or not, but in our State REA has never given us any thought about this matter of decrease in the number of farms.

Senator KILGORE. You mean decrease in the number of farmers? Mr. JENNESS. And farms.

Senator KILGORE. Not the farm acreage, but decrease in the number of farmers operating farms?

Mr. JENNESS. For instance, around Salina, Kans., the doctors are going out there, and that system has lost 16 farm consumers to members of the medical profession who have bought these farms, and they have a hired manager who goes out. They remove the house, move it to Salina and rent it; the improvements are taken off, and then they add that acreage to what they are holding-16 doctors. I am not talking about everything. It is just that one case.

I thought it rather interesting that the medical profession was making enough money in Salina to go out and buy up 16 of our con

sumers and consolidate them and move the improvements to town and rent them.

That is a factor. When you ask a manager to estimate his load growth, he has this counter thing to think about. It is complicated. The power suppliers told us that they are willing to risk their capital on an 8- to 10-percent load growth. To me that is interesting in Kansas. These men have to put the money in.

The power companies out there have indicated in this process that we are trying to work with them to get the best integration we can in the State, that 8- to 10-percent load growth we can submit and they will accept and risk their capital on it.

Do you get my point there? That is not borrowed money from the Government. That is their money, on 8 to 10 percent. Yet we have 1 manager saying 28-percent load growth, and they won't go along with that. Another man says 22. We are right in the process of that, and that has taken 4 months.

Here is a bit more evidence. It is older, but-

Senator KILGORE. My question went to an area that did not have electrification and wanted to organize a cooperative, the proposition of their organizing. For instance, the Assistant Secretary, I believe, testified that up to 1960 or 1961, based upon the present construction schedule of multipurpose dams, you would have certain additional volumes of kilowatt-hours coming into being, and as they came in, if I understand correctly, then people would be invited to ask for allotments of that additional power. Is that right?

Mr. AANDAHL. The situation that we have out in the Missouri Basin

Senator KILGORE. I was speaking about the Missouri Basin.

Mr. AANDAHL. Is a system of pretty well established REA cooperatives. They are already using power that they are buying from sources other than the Federal Government. As soon as the Federal power is available, they are ready to come in and will take, we think, all of these new blocks of power, firm power, as they are being offered for sale, and they will have, of course,a full right to do that under the criteria.

Mr. JENNESS. I have been trying to bring out the point, Senator, that the 90 days that the Department of the Interior expected these co-ops to furnish information is too short a period for the whole area. Senator KILGORE. I understand now. I was aiming at that future power, and you are talking about the January 1 deadline.

Go right ahead on that.

Mr. AANDAHL. Mr. Chairman, may I make one observation. If the REA co-ops are going to measure what their needs will be 20 years hence and intend to put that under contract now, of course, the period is entirely too short. But I think all of these co-ops are pretty well informed right at this moment how much power they need this year and how much power they are going to need during the next 2 years. I think that the 90-day period is ample time for them to make the application for power that will be needed in that period of time, which is the power that we now have for sale.

Mr. JENNESS. I wish to be on record as stating an exception to that. Senator KILGORE. The private utility companies, through their interlocking networks, if they contract for a little excess power this year they can transmit it over to another company that needs it.

The entire United States is hooked up with interlocking networks, and I know that in West Virginia, if Appalachian in West Virginia gets more power than they need right now, either Virginia or Ohio takes it over, and vice versa. If we get a sudden increased load, West Virginia takes it over.

Mr. JENNESS. Mr. Chairman, I want to take denfiite exception to the Assistant Secretary's last statement. I have factual evidence to prove that the cooperatives as a group cannot estimate these 3-year power needs in a matter of 90 days. I have just cited our own experience with the 36 systems in Kansas. We have been 4 months actively working on it because there was a definite concern there between the power suppliers and outselves.

That isn't just a case where somebody was trying to get us to do something against our own desires. It was something we wanted to do.

Now let us take a look at this thing. This is the preliminary statewide power study on the whole State of Kansas prepared by the engineering firm of Burns & McDonnell at Kansas City, Mo. We invested $10,000 and the REA invested about $15,000 in that little book. Under the former administration we went in and told them we were too poor to make our own load studies, and they assigned their field staff to make the very thing that is necessary to get these power requirements worked out. It took REA 1 solid year to get the information that is the basis of this report.

Ancher Nelsen has streamlined his staff. He has reduced his payroll. You have a lot of new fellows running around, and you don't know for sure what their jobs are, and so forth. They have new duties and they don't know their new relationships. He has asked Roy Zook to make this study on the effect of the criteria on a 10-State basis. They couldn't do Kansas in 1 year with a bigger staff, so how long is it going to take them to do 10 States, and do it with any real factual information that you can put money behind? All he can do is what is called a cream-skimming job. He can grab out this project and consider their needs and make up a report. But to do a basic job, anything like this, REA hasn't the staff to make a study of the effect of the criteria.

I submit as evidence that it took 1 solid year to get this study through, and I was being criticized in Kansas because it took me 2 years to get that study done. They thought it ought to be done in 90 days. There is factual evidence, gentlemen. You can't walk away from it. Instead of going out and talking to a manager, send a investigator out to Burns & McDonnell, an independent engineering firm, one of the oldest engineering firms in the country dealing with public power. Municipals is their field.

Senator MURRAY. They are also in the field of waterworks.
Mr. JENNESS. Yes.

Senator MURRAY. I have known them for the last 40 to 50 years, and I have had dealings with them.

My

Mr. JENNESS. McDonell, I understand, is a Stanford man. dad got the first degree from Stanford University. He gave Herbert Hoover his job and gave him a college education. This is a very fine firm.

I say, go out and investigate my statement of how long it took to get the load data on this thing, and then how in the devil can you