ment, that I made in my testimony as to the amount of taxes that the REA's would have paid if they paid on the same basis we do-namely, $195 million for the year 1965.

Mr. HAGEN. What I am interested in is the comparison betweenyou see the farm marketing co-ops that market oranges, for example, and the REA co-ops, the rules governing the orange marketing co-op, for example, as far as taxation, has been recently tightened up. I am wondering whether the electric marketing co-ops enjoy some special exemption that another taxed farm co-op doesn't have. You could lay out pretty well what the tax situation is in this industry-instead of referring to it so generally. Because I understood some of these co-ops, at least, pay real or personal property taxes where they operate. Mr. HORTON. That is about the only taxes that they pay.

Mr. HAGEN. There may be certain other types of State and local taxes that they pay. I don't know. But certainly your industry has the data on hand to supply it to us. And certainly the Federal income

taxes.

Mr. POAGE. We would be glad to have any statement Mr. Horton cares to make on that.

I believe that concludes the number of witnesses that we can probably hear this afternoon. But Chairman Cooley is present.

The CHAIRMAN. I thank Mr. Horton for appearing here. I want to say that when I scheduled these hearings, I did not realize that so many officials of so many private companies were scheduled to attend an annual conference out in San Francisco, and in an effort to accommodate them, we held these afternoon sessions.

Mr. HORTON. We all appreciate that.

The CHAIRMAN. We still have numerous witnesses to be heard. You will recall when Mr. Clapp was heard, many members of the committee indicated a desire to question him further. Because he was available at all times here in the city of Washington, we had some questions submitted to him in writing, and I notified him to be prepared to come here Tuesday morning with the answers. It would be foolish for us to try to have a hearing tomorrow or Monday, because we have an important conference with the Senate scheduled on another important matter Monday afternoon. So I will call the next meeting for Tuesday morning, and have Mr. Clapp here, to answer such questions as any member of the committee wants to ask him, and he will submit something in rebuttal to the testimony given thus far by private companies. These people will all be out in San Francisco. I think it would be unreasonable for us to ask them to fly back here just to put in an appearance and fly back to the convention.

So after Wednesday we will call up another bill which the administration is very much interested in, and study that on Thursday and Friday, and then come back the following week and wind this thing up on Monday and Tuesday.

I had no idea we would have over 50 witnesses to hear. I know that the committee does not want to shut off anybody, or prevent anybody from presenting their views. So I think it would be the sensible thing for us to do to adjourn now the hearings on REA until next Tuesday morning, at which time we will have Mr. Clapp here and any other witness that the members of the committee would like to hear from.

I don't mean to shut off anybody. Mr. Clapp was here. I know he is ready to come back. He has been notified to come here Tuesday morning, and he will be prepared to answer all the questions submitted to him, and such other questions as may be propounded at the time.

Mr. POAGE. Mr. Chairman, do we have any information as to the scheduling of the food for freedom bill on the floor?

The CHAIRMAN. Next Thursday.

Unless there is some objection, I suggest we adjourn until Tuesday morning.

Mr. DOERMER. We represent a small union. We cannot afford to come back and forth. Can we indulge on your time 10 more minutes to be heard?

STATEMENT OF HENRY C. RULE, EXECUTIVE SECRETARY, UNITED ASSOCIATION OF OFFICE SALES AND TECHNICAL EMPLOYEES, MILWAUKEE, WIS.

Mr. RULE. Mr. Chairman, my name is Henry Rule. I represent an independent labor organization in Milwaukee, Wis., having contracts with Wisconsin Electric Power Co. and the Wisconsin Gas Co. We have had continuous contracts with these two companies since 1937. My prior experience beyond the 10 years I have served in this present capacity as a business manager of Local 953 of the International Brotherhood of Electrical Workers, AFL-CIO, at Eau Claire.

In the midforties, as business manager for 953, I negotiated contracts with Northern States Power Co. of Wisconsin, a private utility, and with Dairyland Power Cooperative, which furnishes power to the REA cooperatives. Dairyland Power Cooperative, and its affiliated co-ops, operate in the same general area of western Wisconsin as the privately owned utility the Northern States Power Co. of Wisconsin. At that time, as now, wages paid to employees of the privately owned utility were substantially higher than those paid by the REA. One might ask at this juncture why has the Union permitted this situation to exist over such a long period of time? The answer is the IBEW being a responsible Union is hesitant to use the only effective weapon of organized labor-to call a strike in a utility.

As of this date the differential in wage rates still exists. For example, a journeyman lineman in Northern States Power Co. received $686 per month plus fringe benefits; compared to Dairyland Power Cooperative $638.50 per month plus fringe benefits. Load dispatcher at Northern States Power Co. $781.50; compared to Dairyland $753 per month. Janitor at Northern States Power Co. $459.25 per month; compared to Dairyland $410.00 per month.

With 99 percent of the farms now electrified, we cannot conceive permitting the REA to take over or duplicate existing services now being served by investor-owned utilities.

We are fully cognizant of the problem confronting the REA of building generating capacity to take care of peakload demands which occur twice daily once in the morning and once in the evening of approximately 45 minutes duration at each time. The REA chose to build this capacity rather than to accept the offer made by privately owned utilities to furnish them with power at wholesale rates.

That concludes my statement, Mr. Chairman, and thank you very much for giving us this opportunity.

The CHAIRMAN. Thank you, Mr. Rule.

Your full statement will be included in the record.

(The complete statement of Mr. Rule follows:)

STATEMENT BY HENRY C. RULE, EXECUTIVE SECRETARY, UNITED ASSOCIATION OF OFFICE, SALES AND TECHNICAL EMPLOYEES

My name is Henry C. Rule. For the past ten years I have been the full time representative for two independent Local Unions with a membership of approximately seventeen hundred and fifty, who are employed by the Wisconsin Electric Power Company and the Wisconsin Gas Company. These two Local Unions have negotiated and maintained labor agreements with the above named companies continuously since 1937.

For the past seven years I have also been a member of the Board of Education of the City of Oak Creek, and for the past four years Municipal Justice for the City of Oak Creek having just recently been re-elected to a two year term.

Prior experience includes among other things four years as personnel manager; five years commissioner on the Wisconsin Employment Relations Board; and four years as business manager for Local 953, International Brotherhood of Elec trical Workers, AFL-CIO, Eau Claire, Wisconsin.

At a meeting held on Thursday, May 26, 1966, the Directors of the two Local Unions adopted a resolution to oppose enactment of Bill H.R. 14837.

In the mid-1940's as business manager for Local 953 I.B.E.W., I negotiated labor contracts with Northern States Power Company of Wisconsin, a private utility, and with Dairyland Power Cooperative, which furnishes power to the R.E.A. co-operatives. Dairyland Power Cooperative, and its affiliated co-ops. operate in the same general area of western Wisconsin as the privately owned utility the Northern States Power Company of Wisconsin. At that time, as now, wages paid to employees of the privately owned utility were substantially higher than those paid by the R.E.A. One might ask at this juncture why has the Union permitted this situation to exist over such a long period of time? The answer is the I.B.E.W. being a responsible Union is hesitant to use the only effective weapon of organized labor-to call a strike in a utility.

As of this date the differential in wage rates still exists. For example-a Journeyman Lineman in Northern States Power Company receives $686.00 per month plus fringe benefits; compared to Dairyland Power Cooperative $638.50 per month plus fringe benefits. Load Dispatcher at Northern States Power Company $781.50; compared to Dairyland $753.00 per month. Janitor at Northern States Power Company $459.25 per month, compared to Dairyland $410.00 per month.

With 99% of the farms now electrified, we cannot conceive permitting the R.E.A. to take over or duplicate existing services now being served by investorowned utilities. We are fully cognizant of the problem confronting the R.E.A. of building generating capacity to take care of peak load demands which occur twice daily-once in the morning and once in the evening of approximate 45 minutes duration at each time. The R.E.A. chose to build this capacity rather than to accept the offer made by privately owned utilities to furnish them with power at wholesale rates.

Mr. RULE. This is Mr. Doermer, the president of local 2 of our association.

STATEMENT OF JOHN DOERMER, PRESIDENT OF LOCAL 2 OF THE UNITED ASSOCIATION OF OFFICE, SALES & TECHNICAL EMPLOYEES, MILWAUKEE, WIS.

Mr. DOERMER. Thank you, Mr. Chairman, for giving us this privilege of appearing before you.

I am president of local 2. We have 1,200 employees and they happen to be the white collar workers, the engineers, technicians, and professional people, as well as the office staff.

65-357-66-31

Our opposition to bill H.R. 14837 is based on the experience of labor organizations generally who deal with government and governmental agencies.

Today, in spite of legislation, the employees still have problems in getting pay raises.

This bill would adversely affect our pay scales, their unfair competition, reducing capital for our employer, and therefore place us in a very awkward position when it comes to bargaining.

I might cite one example. We have the highest paid meter readers in the industry. They average about $8,000 a year. But in spite of this, we have the lowest cost per meter read. This is based on productivity and good working conditions.

It is most difficult to understand why expanding the REA at this time would fit the bill when Senator Proxmire, in Milwaukee, on May 31 made this statement on television:

We are losing 15 to 16 farmers per day who are leaving the farm, and we will have a dairy and food product shortage in less than 1 year.

Specifically, gentlemen, under the existing REA program, title I, section 4, and under H.R. 14837, title 4, section 410(b) (4) State approval is required for construction of generating facilities providing the State has assumed jurisdiction. Some States, as was witnesed today, have not assumed this jurisdiction. We believe the individual States are best qualified to make a determination as to the need for or the lack thereof for the construction of generating facilities. And this jurisdiction should remain with the State.

Now, listening to this meeting I have some notes, gentlemen—I think you might want to consider this in developing a bill.

We feel that immediately all co-ops should recognize all labor organizations and permit National Labor Relations Board elections and representation at all the REA co-ops. I was shocked to hear that the IBEW, which represents about 90 percent of the employees in the private power company field, has only a 17-percent representation in the co-op area.

I would like to further recommend that the committee consider placing all REA co-ops under State and Federal public service commission and regulation immediately.

We would like to further suggest to equalize Federal and State taxes for all producers of electricity. And then increase the pay scales and improve working conditions for all producers of electricity. Increase them, gentlemen, to the levels enjoyed by the employees of private power companies.

We would like to see established pension plans for electricity producers equal to the plans now in effect for private power companies, and we have one of the best plans in the business, negotiated across the table.

We would like to also suggest that something be done to remove socalled sweatshop working conditions in all REA co-ops at once.

Two parts of the bill disturb me very immensely. I would like to see the governor of the electric bank placed under the direct control of the Federal Power Commission, with final annual approval by the Congress for any additional funds that he would decide to spend.

And I would like to see removed the privileged status of the electric. bank as to Federal taxes, State taxes, franking privileges, and to eliminate the underwriting of any loss to be passed on to the Treasury.

And I would like to finally conclude with saying, I would like to see you forbid now and forever duplicating of services and restrict expansion of REA to modernize their own present facilities.

Thank you for your time.

The CHAIRMAN. Thank you very much.

Your complete statement will be included in the record. (The statement of Mr. Doermer referred to follows:)

STATEMENT OF JOHN DOERMER, PRESIDENT, LOCAL 2, UNITED ASSOCIATION OF OFFICE, SALES, AND TECHNICAL EMPLOYEES

My name is John Doermer. I am President of Local 2 of the United Association of Office, Sales and Technical Employees, representing twelve hundred employees at the Wisconsin Electric Power Company. I was formerly secretary of Local 430 of the American Federation of State, County and Municipal Employees Union at Milwaukee, Wisconsin.

Our opposition to Bill H.R. 14837 is based on the experience of labor organizations generally who deal with government and governmental agencies. The take-over or duplicating existing services provisions of the bill jeopardizes the security and job opportunity of all employees of privately owned utilities. The unfair competition by R.E.A. because of cheap money and tax advantages would adversely affect future negotiated wage increases and fringe benefits. Privately owned utilities' corporate taxes would be reduced and passed on to the individual taxpayer.

Our Meter Reader members average about eight thousand dollars per year, and are among the highest paid Meter Readers in the industry. The unit cost per meter is the lowest in the industry. This illustrates the wages paid by private utilities, which are generally higher than those paid by the R.E.A.'s, is recognition given to productivity.

It is most difficult to understand expanding R.E.A. facilities in view of Wisconsin Senator Proxmire's statement made in Milwaukee on May 31, 1966, that we are losing from fifteen to sixteen people per day from the farm, and that the farm population is declining so rapidly that we may incur dairy products and food shortages in less than one year.

Under the existing R.E.A. program Title 1, Section 4, and under H.R. 14837, Title 4, Section 410 (b) (4) State approval is required for construction of generating facilities providing the State has assumed jurisdiction. Some States: have not assumed jurisdiction. We believe that the individual States are best qualified to make a determination as to the need for or lack thereof for the construction of generating facilities, and should be required to take jurisdiction. For the reasons stated in this joint submission, we pray that Bill H.R. 14837 be defeated.

The CHAIRMAN. I understand there are two further statements that have been submitted for inclusion in the record. These will be placed in the record at this point, one from Gene W. Porter, president of the Kansas Electric Cooperatives, and the other from M. S. Luthringer, president of Central Illinois Public Service Co.

(The statements referred to follow :)

STATEMENT OF GENE W. PORTER, PRESIDENT, KANSAS ELECTRIC COOPERATIVES

The Electric Cooperatives in Kansas support in principle the bill introduced on REA supplemental financing. We support the need for continuing the present REA 2% loan program in addition to the establishment of a source of supplemental capital. Many of our electric cooperatives serve sparsely settled areas of Kansas that need a continuation of 2% capital. Others that serve the more populated areas will be able to use a supplemental source of financing