Mr. HARRIS. That is right.

Mr. Belcher, let me say this. I have made no such determination. It is a mammoth undertaking to do it. But there is no reason for the bidder to do it, to determine it on a co-op basis, on an area-by-area basis, and what the rate structure is and what the rates are.

I must make a comment in response to what Mr. Olson said. The consumers of the investor-owned utility do have to replace the plant, because the depreciation charge for the investment that is there is an essential ingredient of the rates, so that the consumer who uses it replaces it because the depreciation is built into his rate.

Now, with the co-ops, they have got a 30-year rate, and they have got about a 30-year plant, and their depreciation ought to very closely offset their capital payments back to the Administrator. There is no distinction between the two.

The CHAIRMAN. It is 10 minutes after 4 and we must move on to other business. I want to thank you again, Mr. Harris, for your appearance. I am delighted I introduced you as one of my close personal friends, because you have been an excellent witness. I want to compliment you on your testimony. And I hope you have a nice journey home.

We have three gentlemen here from Iowa, Mr. Lantau, Mr. Connley, and Mr. Bernoski. Will you gentlemen come up, please?

And then I want to call the two gentlemen from South Dakota, Mr. Herriott and Mr. Hanlon.

Just have a seat at the witness table. Who will be the speaker for your group, Mr. Lantau?

Mr. LANTAU. All three of us are going to speak separately, sir. Each one of us has about a two-page statement which we would like to present.

The CHAIRMAN. Go right ahead.

STATEMENT OF EARL LANTAU, LOCAL 109, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, DAVENPORT, IOWA

Mr. LANTAU. I am Earl H. Lantau of Rural Route No. 3, Davenport, Iowa. I am employed by Local Union No. 109, International Brotherhood of Electrical Workers, as their business manager. We have a membership of 650 who are all employed by the Iowa Illinois Gas & Electric Co., of 206 East Second Street, Davenport, Iowa, in their Davenport-Illinois, Cedar Rapids, Iowa City, Fort Dodge, and Ottumwa districts.

My job as business manager of Local Union No. 109, International Brotherhood of Electrical Workers, is seeing that the 650 members continue to be employed by the Iowa Illinois Gas & Electric Co. under the best possible agreement. We have had such agreement for the last 22 years. I believe that by creating this Federal electric bank, rural electric cooperatives and Government power projects would be given funds to extend or expand their services into areas where private utilities are now functioning or would extend their services. If any of the bills proposing a Federal electric bank for rural electric system financing were to become law I have very serious doubts that I could continue to keep all of my membership employed by their present employer and expand it with the normal growth of the company.

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If these bills create funds which will allow expansion of Government power to the detriment of the private utility industry it would it my opinion do great harm to the union movement as such. At the present time of the 1,782 municipal electric systems in the United States, only 3 percent even recognize the union. Of the 1,057 REA cooperatives only 17 percent give union recognition. While in the investor-owned and business managed electric utilities, 92 percent are organized and of these the International Brotherhood of Electrical Workers represents 75 percent of the membership of all organized electrical utility workers.

I also believe that the rural electric cooperatives have substantially accomplished the goal for which they were originally established, i.e., to bring electric power to the areas where it was not available. It is now a matter of public record that over 98 percent of the United States has electric power. It is apparent that the business managed utilities can provide all the expanded electric service the country will need.

These bills have many other objectionable features. There are no clear limitations on the requirements which will qualify a loan request. The Congress has given up any supervision of the basis for loans or the amount of them. The Government pays more for the money it furnishes than the borrowers pay the bank.

Speaking for my local union, I respectfully request this committee to consider the future of the union movement as it would be affected by greatly expanding Government power and Governmentsubsidized power projects in these bills.

Thank you.

The CHAIRMAN. Thank you very much for your statement, sir. The next witness.

STATEMENT OF JAMES M. CONNLEY, LOCAL 1248, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS

Mr. CONNLEY. Mr. Chairman, I am James M. Connley, business manager for Local Union No. 1248, IBEW, and a delegate for System Council U-16 to the Iowa Utility Workers Conference. Council U-16 has a membership of 750. We are employed by the Iowa Electric Light & Power Co., which serves 51 counties in Iowa.

We, of organized labor in general, and the utility workers in particular, have through the years viewed with alarm the ever-increasing encroachment of Government sponsored and controlled public power projects upon the utility industry. We have found out through bitter experience that this type of governmental, or political subdivision, operations are not in the best interests of our country, as well as being destructive to organized labor.

In the State of Nebraska, where organized labor once enjoyed the rights of collective bargaining, we now find that this showplace of the Government-owned public power systems, cannot compete wagewise with private enterprise even though they enjoy privileges and tax exemptions unknown to the average citizen. Instead they feel that the worker, in lieu of adequate wages, must develop a sense of public service to be satisfied.

Organized utility workers in Nebraska are now second-class citizens since they cannot collectively bargain with their employer as

freemen can. Nebraska is not the only example but certainly will suffice.

In our own State of Iowa, as in many other States, we see emerging a new type of electric supply system. This new system would and is being financed by the Federal Government through REA. A good local example of this system was the awarding to the Basin Electric Cooperative of Bismarck, N. Dak., a loan of $36 million to build a 200,000-kilowatt lignite plant and transmission lines. The offer to build a plant and trade power with the Bureau of Reclamation (at a cost of nothing to the taxpayer) had been made by MAAPP-and that is the Midwest Association of Applied Power Plants-but was rejected. Now we have a condition where Basin Electric has a surplus, along with the Bureau, and are looking for customers. These new customers are the municipals, REC's, and existing customers of investor-owned utilities. Here is where we, as labor, are hurt. As the trend continues to take over private enterprise, we lose jobs, as well as the right to bargain collectively.

We have found that when people are informed of what public power is the very large majority are against it. We have found that, on the national average, investor-owned utilities wholesale power to municipals and REC's cheaper than they can produce it themselves even with 2-percent money and tax exemptions. We have found that there is not a scarcity of power and if there was, the free enterprise systems that have done so much for our country, are willing and able to economically take care of the need. We have found with rare exceptions, whenever utility labor must deal with political subdivisions or Government, we are denied rights given to labor in the free enterprise system.

The proposed bill H.R. 14837, and others of similar nature, would only increase the trend toward nationalization of the utility field. Because of this, the Iowa Utility Workers Conference is unable to support such a bill and, indeed, must use every recourse open to them to discourage its adoption.

The utility workers have the active support of labor groups throughout the State of Iowa. This support comes from all segments of organized labor. In my area alone, some of the labor groups supporting our views are the Fisher Governor employees (makers of valves), Lennox Furnace Co. Union, the Moulders Union, and the Carpenters Union, and from Knoxville the Garment Workers Union. From Algona, a small municipal utility town, we received full support from its organized labor of the Universal and Wiedenhoff plants of 300 employees. All of these, along with the Iowa State Federation of Labor, have adopted the attached resolution. Others are the Woodbury County Labor Councils (6,500 members), Black Hawk Labor Council (18,000 members), also the Northwest Iowa Labor Federation. These are but a very few of the many who have adopted this resolution. Because the original intent of the REA Act has been completed and it is no longer necessary for the people of the United States to subsidize another Federal program and since such a program as H.R. 14837 and other bills of similar nature would encourage the eventual takeover of the investor-owned utility companies, we of the Iowa Utility Workers Conference request that the proposed bill not be adopted, or recommended, by this committee.

Thank you.

The CHAIRMAN. Thank you, sir.

I now recognize Mr. Greigg of Iowa.

Mr. GREIGG. Mr. Chairman, I certainly want to introduce the next witness before the committee. Mr. Walter Bernoski comes from my hometown of Sioux City. I have known Walt for many years. He is a most respected official of his organization.

And, Walt, I am pleased to welcome you before this committee.
Mr. BERNOSKI. Thank you.

The CHAIRMAN. You know, the great State of Iowa has too much representation on this committee. We have got two of them, both of them very distinguished and able Members of Congress.

Mr. CONNLEY. Mr. Chairman, may I have permission to read the resolution, sir?

The CHAIRMAN. Yes, sir.

Mr. CONNLEY. Whereas labor should have a universal right to organize and function under negotiated conditions of wages, hours, and other conditions of employment; and

Whereas the investor-owned utility companies of Iowa are all organized, and the members are now enjoying the rights of collective bargaining; and

Whereas the investor-owned utility companies of Iowa, when subcontracting for construction and building, employ union contractors;

and

Whereas the employees of various Government owned and operated electric systems have been denied the right to so function as organized labor; and

Whereas only scant recognition to organized labor has been given by municipal, REC's, and public power districts; and

Whereas it is creating an unfair situation to labor with these nontaxpaying, low-wage-paying groups: Therefore be it

Resolved, That the Iowa State Federation of Labor pledges its support and assistance to the efforts of the Iowa Utility Workers Conference to combat the encroachment of Government in the utility business.

And this is the same statement that was passed by the other labor groups in Iowa.

The CHAIRMAN. If you will file it with the reporter it will be made a part of the record.

We will now hear from Mr. Bernoski.

STATEMENT OF WALTER BERNOSKI, LOCAL 880, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, SIOUX CITY, IOWA

Mr. BERNOSKI. Mr. Chairman, I would like to take the opportunity to thank you gentlemen of the committee for being so gracious as to allow us to appear here on schedule so that we could return home and make a report to our members who are anxiously awaiting to see what we have accomplished.

Mr. Chairman and members of the committee, I am Walt Bernoski. I am the secretary of the Iowa Utility Workers Conference, representing approximately 6,000 electric utility workers in the State of

Iowa. I am also the business manager of Local Union 880, IBEW, representing some 250 members, and a member of System Council U-14, representing close to 800 members of 3 IBEW local unions.

I appear here today to testify against the proposed bills, H.R. 14837 and H.R. 14000, which would create an REA bank. I feel that it is against the public interest to create a taxpayers' burden for the benefit of a select segment of the American society, especially when such a bank is entirely unnecessary. Everything I know and understand about the establishment of the REA's under the law has been approximately 99 percent accomplished. Why must my job and my fellow union members' jobs be placed in jeopardy? The REA has done a wonderful job in electrifying the farms of the Nation. However, they are not satisfied to stay within the limits for which they were established. The intent of Congress that established REA was not to have them electrify already established and served areas by investor-owned utilities. In my State of Iowa, it is very difficult to talk to people who head up the various types of public systems. The wages, working conditions, tax exemptions, interest rates, and so forth, give these public systems an unfair and absolutely unjustified competitive position in the electric and gas business. To establish a bank of this nature would only open the door to an uncontrolled bureaucratic form of government. If there is such a lucrative amount of money in the electric business, why not let everybody operate honestly and fairly under the same set of rules. Let the public systems pay all the same taxes, the same interest rates, and operate under the same regulations as are placed on the investor-owned companies. And let them pay the same wages, establish the same pension provisions, vacations, insurance, and all the other items that I am allowed by law to negotiate. And the most important factor that is so dear to clear-thinking Americans, the right to be allowed to express yourself to an employer as a union member with the protection of the NLRB.

I am sure that this banking bill will destroy a taxpaying, free enterprise system that was built by industrious, hard-working people in the years since Thomas Edison's inventive mind created the light bulb. I am positive that there are people in Washington who have spread some seeds in the great State of Iowa to create a public power district scheme such as exists in Nebraska. There is no doubt in my mind, from my personal experience, that my job and the jobs of thousands of others of local IBEW members are on the line for survival because of wasteful duplication of systems that have been adequate throughout all these years. These duplications are being built in Iowa for the purpose of pushing my employer out of the picture. The trend for Federal bureau control is obvious. The pressures on small towns by so-called "friends of the small businessman" is also obvious. The thought that troubles me is the fact that the Congress and the Senate are slowly being replaced by bureaus established by their own hand. When the bureaus are firmly entrenched in every facet of this Great Society, there will be no need for Congressmen or Senators. Just as public power districts restrict the workingman from bargaining for a better standard of living, so the bureaus will restrict the authority of Congress and the Senate.

I believe in what President John F. Kennedy said, "Ask not what your country can do for you, but what you can do for your country."