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duction facilities. They plan to enlarge their peak generating capacity from 177.3 million kilowatts in 1965 to 492.6 million kilowatts in

1980.68

Although such aggregate figures do not prove that unusual situations may not arise in which a real need for G. & T. loans might be shown to exist in some sections of the country, it should be emphasized that procedures under the present program would permit such loans to be granted under authorizations made by the Congress without, however, giving carte blanche to the Administrator to whatever extent the resources of the electric bank would permit.

Under these circumstances to encourage unnecessary duplication of their facilities would accomplish nothing of value; on the contrary, it would result in an uneconomic and wasteful use of our resources. Surely better uses can be found for public funds.

In conclusion, let me summarize briefly the reasons for my opposi tion to the pending bills as follows:

(1) They are not needed to finish the task of serving rural areas, which is now nearly completed;

(2) They would encourage wasteful duplication of facilities and the encroachment of REA borrowers upon markets adequately served by investor-owned companies;

(3) Such uneconomic duplication and competition would be subsidized at great cost to the taxpayer in terms of taxes forgone and the use of Federal credit-again, I refer to the loss of Federal taxes on earnings from industries which might otherwise be made and which might otherwise be made by investor-owned companies that would be replaced if G. & T. loans provided the unneeded duplicative facilities; and

(4) This subsidy program would lack both definite termination provisions, and, once established, any opportunity for the exercise of effective, continuing surveillance by the Congress.

Would it not be wiser to complete the program within its present framework, rather than to embark upon a very large new undertaking, geared to totally different objectives and for which no real need has been shown? Would not this course be more consistent with the efforts being made to combat inflation and budget stringencies, by appealing for restraint in seeking wage and price increases and the curtailment of unnecessary capital outlays by private enterprise?

Mr. Chairman, I thank you for your courtesy and indulgence. (The document "Appendix" consisting of exhibits 1 through 9. follow :)

6s Figures from Edison Electric Institute.

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Number and percentage of farms electrified with central station service by States, 1935, 1940, 1950, and 1965

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Number and percentage of farms electrified with central station service by States, 1935, 1940, 1959, and 1965-Continued

State

Dec. 31, 1934

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1 U.S. Census of Agriculture.

11, 200

11,050

98.7

197, 632

14, 954

7.6

174,885

42, 144

24.1

150, 997

113, 949

75.5

85,000

83, 300

98.0

84, 381

40, 060

47.5

81,686

58,283

71.4

69, 820

64, 161

91.9

51,000

50, 550

99. 1

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4U.S. Department of Agriculture, Statistical Reporting Service (preliminary).

Source: U.S. Department of Agriculture, Rural Electrification Release October 1965.

EXHIBIT 2

RURAL ELECTRIFICATION ADMINISTRATION

Administrative funds appropriated and obligated by purpose, fiscal years

1935-66

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Sources: Congressional hearings on agricultural appropriations, Public Laws, annual reports of REA.

EXHIBIT 3

Percentage of energy purchased by REA borrowers—by supplier, 1946-65

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1936.

1937.

1938.

1939.

1940

1941.

1942.

1943.

1944.

1945

1946.

1947

1948

1949

1950

1951

1952.

1953

1954

1955.

1956

1957

1958

1959

1960.

1961

1962.

1963.

1964

1965.

1 Net loans, rescissions deducted. Source: Annual reports of REA.

Year

$13, 903, 412 45,032, 805 29, 236, 219 139, 064, 513 41, 736,000 100, 054, 672 91, 152, 724 6,700, 978 31,930, 124 25, 731, 055 289, 372, 488 254, 521, 172 313, 023, 099 448, 859, 597 375, 151, 456 221,733, 800 165, 425, 811 137, 379, 160 155, 923, 014 164, 187, 315 188, 131, 345 298, 704, 669 235, 622, 224 169,760, 887 210, 987, 212 271, 430, 657 255, 986, 252 339, 420, 626 260, 708, 287 350, 700, 623

Cumulative

$13, 903, 412 58,936, 217 88, 172, 436 227, 236, 949 268, 972, 949 369, 027, 621 460, 180, 345 466,881, 323 498, 811, 447 524, 542, 502 813,914, 990 1,068, 436, 162 1,381, 459, 261 1,830, 318, 858 2, 205, 470, 314 2, 427, 204, 114 2,592, 629, 925 2,730, 009, 085 2,885, 932, 099 3,050, 119, 414 3,238, 250, 759 3,536, 955, 428 3, 772, 577, 652 3,942, 338, 539 4,153, 325, 751 4, 424, 756, 408 4,680, 742, 660 5, 020, 163, 286 5, 280, 871, 573 5,631, 572, 196

$832, 262 11,041, 574

48, 175, 974 62, 299, 014 98,947, 463 75, 107, 855 58,220, 868 14, 536, 572 18, 478, 088 39, 736, 068 87,253,106 190, 085, 857 246, 235, 957

321,286, 868 286, 658, 652 268, 130, 658 227, 574, 029 207, 633, 936 181, 528, 532 156, 741, 935 154,739, 544 185,977, 622 205, 332, 297 211, 717, 335 222, 621, 015 183, 413, 040 195, 807, 127 245,754, 118 245, 964, 488 299,789, 434

Cumulative

$823,262 11, 864, 836 60,040, 810 122, 339, 824 221, 287, 287 296,395, 142 354, 616, 010 369, 152, 582 387,630, 670 427,366, 738 514, 619, 844 704, 705, 701

950, 941, 658 1,272, 228, 526 1,558, 887, 178 1,827, 017, 836 2,054,591, 865 2,262, 225, 801 2,443, 754, 333 2, 600, 496, 268 2,755, 235, 812 2,941, 213, 434 3, 146, 545, 731 3,358,263, 066 3, 580, 884, 081 3, 764, 297, 121 3,960, 104, 248 4, 205, 858, 366 4, 451, 822, 854 4,751, 612, 288

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