Supplemental Financing of REA Programs: Hearings Before a Subcommittee of ..., 89-2 on S. 3337, S. 3720 ..., August 15 ... 19, 1966
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Page 429 - bank" bill or otherwise — becomes so important. We recognize, however, that the reader of this letter might not understand or agree with us that it is important and might have a number of fair questions to ask. We will anticipate several of these questions and attempt to answer them ahead of time : Question No. 1 Why do you say that the tax shelter weapon is so important— isn't the reason for the difference the fact that the co-ops are nonprofit associations? The answer to this question can become...
Page 445 - T5EA financed cooperatives, under threat of immediate duplication of our facilities by systems financed with federal money in the form of outright grants and loans at a very low rate of interest. Despite this experience we, from the beginning, made every effort to assist the cooperatives that were organized in Southeast Mississippi in providing electric service to the rural area. We established our first delivery points to REA financed electric cooperatives in 1938. As these six cooperatives mentioned...
Page 395 - ... result of these efforts of the Company and cooperatives, almost every person in Northwest Florida actually desiring electric service is supplied. Several years ago with most of the persons in rural areas supplied with electric service, the REA controlled cooperatives began to deviate from the purposes for which they were created by Congress. I would like to recite three occurrences in Northwest Florida which conflict with the intent which the late Speaker Sam Rayburn expressed in urging the passage...
Page 427 - ... preference in the form of Federally subsidized financing and freedom from taxes. The annual Statistical Report on Rural Electrification Borrowers for 1964 shows the 18 Arkansas cooperatives as a group to be in sound financial condition. Certainly, most of them should be in a position at this time to borrow money for their reasonable needs on the open market We believe that, before any move is made, careful study should be given to the question of whether existing lending agencies set up under...
Page 329 - It is felt that a favorable recommendation on the bills now before this Honorable Committee will enable them to do so. Mr. Chairman and Members of this Committee, we again thank you for the privilege you have accorded us in permitting our appearance to testify. It is hoped that our testimony may prove to be helpful to the committee in its deliberations. Mr. PETERSON.
Page 411 - We are not in this bill intending to go out and compete with anybody. By this bill, we hope to bring electricity to people who do not now have it. This bill was not written on the theory that we are going to...
Page 375 - ... systems, including investor and municipally owned systems? 2. Will the metropolitan populations, with their pressing problems be asked to continue to pay 20 and more percent of their electric service bills in support of government, while this privileged group of electric cooperative customers continues to pay only a fraction of that amount? 3. Is the other half of rural America, which is served by...
Page 363 - ... Utilities Co. served the city of Paris, at retail, from 1923 to 1932. In 1932, the city installed generating facilities from which it presently supplies about three-fourths of the customers in that city. My company continued to supply the remaining one-fourth, about 700 consumers in Paris, a municipality with population of about 7,900. It has been apparent for several years that the city's generating facilities at Paris would soon become inadequate and the city woulcl need an additional source...
Page 375 - ... of debt to ownership investment and lower margins of earnings over interest charges are commonly regarded as adequate to meet the standards of the investment bond market. The following recommendations with respect to security provisions that appear desirable to achieve one or both of the objectives stated at the outset are : 1. Because electric utility property is choice security, it might be possible to increase the permitted ratio of electric debentures from "ten times the paid-in capital...
Page 423 - ... money would continue to be provided to those cooperatives that are unable to operate at a profit, but such legislation should also provide that future loans to cooperatives for replacement and expansion of existing facilities would be made at the current interest cost of the participation certificates plus a small charge for administration. If. instead of these alternatives, it is decided that a Bank must be established to provide the capital estimated to be needed by the REA electric systems...