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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 opposition 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 :)

as 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

Dec. 31, 1934

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U.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.

Fiscal year

I 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

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