the corporation for the fiscal year then beginning and to be made upon condition that no State, county, or local taxes shall be assessed or levied against the property, operations, or business of the corporation: For the fiscal year (beginning July 1) 1940, 10 per centum; 1941, 9 per centum; 1942, 8 per centum; 1943, 7% per centum; 1944, 7 per centum; 1945, 62 per centum; 1946, 6 per centum; 1947, 52 per centum; 1948 and each fiscal year thereafter, 5 per centum. 'Gross proceeds', as used in this section, is defined as the total gross proceeds derived by the corporation from the sale of power for the preceding fiscal year, excluding power used by the corporation or sold or delivered to any other department or agency of the Government of the United States.

"The payment for each fiscal year shall be apportioned among said States in the following manner: One-half of said payment shall be apportioned by paying to each State the percentage thereof which the gross proceeds of the power sales by the corporation within said State during the preceding fiscal year bears to the total gross proceeds from all power sales by the corporation during the preceding fiscal year; the remaining one-half of said payment shall be apportioned by paying to each State the percentage thereof which the book value of the power property held by the corporation within said State at the end of the preceding fiscal year bears to the total book value of all such property held by the corporation on the same date. The book value of power property shall include that portion of the investment allocated or estimated to be allocable to power: Provided, That the minimum annual payment to each State shall not be less than the two-year average of the State and local ad valorem property taxes levied against power property purchased and operated by the corporation in said State plus that portion of reservoir lands related to dams constructed by or on behalf of the United States Government and allocated or estimated to be allocable to power. The said two-year average shall be calculated for the last two tax years during which said property was privately owned and operated: Provided further, That the minimum annual payment to each State in which the corporation owns and operates power property shall not be less than $10,000 in any case. The determination of the board of the amounts due hereunder to the respective States shall be final.

"The payments above provided shall in each case be made to the State not later than July 31 of each year, and it is the intention of the Congress that each State shall redistribute said payments or a portion thereof to counties and other local taxing districts affected by the program of the corporation.

"It is likewise intended that each of the said States shall in like manner redistribute all payments made in lieu of taxation paid to municipalities by municipal authorities as provided in contracts made for the purchase of power from the corporation.

"The corporation shall, not later than January 1, 1945, submit to the Congress a report on the operation of the provisions of this section, including a statement of the distribution to the various States hereunder and the redistribution by the States of the amounts paid to them; the effect of the operation of the provisions of this section on State and local finances; an appraisal of the benefits of the program of the corporation to the States receiving payments hereunder and to the local subdivisions thereof, and the effect of such benefits in increasing taxable values within such States and local subdivisions; and such other data, information, and recommendations as may be pertinent to future legislation."

[H. R. 5068, 76th Cong., 1st sess.]

A BILL To amend the Tennessee Valley Authority Act of 1933

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Tennessee Valley Authority Act of 1933, as amended, be, and the same is hereby, amended by striking out sections 15 and 15a of said Act and inserting in lieu thereof the following:

"SEC. 15. With the approval of the Secretary of the Treasury the Corporation is authorized to issue bonds not to exceed in the aggregate $100,000,000 outstanding at any one time, which bonds may be sold by the Corporation to obtain funds for the construction or acquisition of dams with appurtenant facilities, generating plants, transmission lines, rural distribution lines, and other electric utility properties as authorized by this Act, including the purchase of the electric utility properties of the Tennessee Electric Power Company, and for the purpose of carrying out the provisions of section 12a of this Act. Such bonds shall be in

such forms and denominations, shall mature within such periods not more than fifty years from the date of their issue, may be redeemable at the option of the Corporation before maturity in such manner as may be stipulated therein, shall bear such rates of interest not exceeding 32 per centum per annum, shall be subject to such terms and conditions, shall be issued in such manner and amount, and sold at such prices, as may be prescribed by the Corporation with the approval of the Secretary of the Treasury: Provided, That such bonds shall not be sold at such prices or on such terms as to afford an investment yield to the holders in excess of 32 per centum per annum. Such bonds shall be fully and unconditionally guaranteed both as to interest and principal by the United States, and such guaranty shall be expressed on the face thereof, and such bonds shall be lawful investments, and may be accepted as security, for all fiduciary, trust, and public funds, the investment or deposit of which shall be under the authority or control of the United States or any officer or officers thereof. In the event that the Corporation should not pay upon demand, when due, the principal of, or interest on, such bonds, the Secretary of the Treasury shall pay to the holder the amount thereof, which is hereby authorized to be appropriated out of any moneys in the Treasury not otherwise appropriated, and thereupon to the extent of the amount so paid the Secretary of the Treasury shall succeed to all the rights of the holders of such bonds. The Secretary of the Treasury, in his discretion, is authorized to purchase any bonds issued hereunder, and for such purpose the Secretary of the Treasury is authorized to use as a public-debt transaction the proceeds from the sale of any securities hereafter issued under the Second Liberty Bond Act, as amended, and the purposes for which securities may be issued under such Act, as amended, are extended to include any purchases of the Corporation's bonds hereunder. The Secretary of the Treasury may, at any time, sell any of the bonds of the Corporation acquired by him under this section. All redemptions, purchases, and sales by the Secretary of the Treasury of the bonds of the Corporation shall be treated as publicdebt transactions of the United States. With the approval of the Secretary of the Treasury, the Corporation shall have power to purchase such bonds in the open market at any time and at any price. No bonds shall be issued hereunder to provide funds or bonds necessary for the performance of any proposed contract negotiated by the Corporation under the authority of section 12a of this Act until the proposed contract shall have been submitted to and approved by the Federal Power Commission. When any such proposed contract shall have been submitted to the said Commission, the matter shall be given precedence and shall be in every way expedited and the Commission's determination of the matter shall be final. The authority of the Corporation to issue bonds hereunder shall expire January 1, 1941, except that such bonds may be issued at any time after the expiration of said period for refunding purposes or to provide bonds or funds found necessary for the performance of any contract entered into by the Corporation, prior to the expiration of said period, under the authority of section 12a of this Act."

[H. R. 3822, 76th Cong., 1st sess.]

A BILL Amending the Tennessee Valley Authority Act of 1933, as amended

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the first section of the Tennessee Valley Authority Act of 1933, as amended (U. S. C., 1934 edition, title 16, sec. 831), is amended by inserting after the words "Tennessee River", wherever they appear, the words "and Cumberland River".

SEC. 2. (a) Subdivision (i) of section 4 of such Act, as amended (U. S. C., 1934 edition, Supp. II, title 16, sec. 831c (i)), is amended by striking out "Tennessee River, or any of its tributaries" and inserting in lieu thereof "Tennessee River or the Cumberland River, or any of their tributaries".

(b) Subdivision (j) of section 4 of such Act, as amended (U. S. C., 1934 edition, Supp. II, title 16, sec. 831c (j)), is amended by inserting after the words "Mississippi River drainage basins" a semicolon and the following: "shall have power to construct such dams, and reservoirs, in the Cumberland River and its tributaries as will best serve to promote navigation on the Cumberland River and its tributaries and control destructive floodwaters in the Cumberland River, Ohio River, and Mississippi River drainage basins"; and by striking out the words "incidental works in the Tennessee River and its tributaries" and insert

ing in lieu thereof the following: "incidental works in the Tennessee River, the Cumberland River, and their tributaries".

SEC. 3. Section 13 of such Act, as amended (U. S. C., 1934 edition, title 16, sec. 8311, is amended

(1) By inserting after the second sentence thereof the following new sentence: "Five per centum of the gross proceeds received by the board from the sale of power generated at any dam located in Kentucky shall be paid to the State of Kentucky."

(2) By striking out the words "operated by the board on the Tennessee River or any of its tributaries" and inserting in lieu thereof the following: "operated by the board on the Tennessee River, the Cumberland River, or any of their tributaries".

(3) By striking out the words "States of Alabama and Tennessee", wherever they appear, and inserting in lieu thereof "States of Alabama, Tennessee, and Kentucky".

(4) By inserting after the words "locks on the Tennessee River" the words "or the Cumberland River".

SEC. 4. Section 22 of such Act, as amended (U. S. C., 1934 edition, title 16, sec. 831u), is amended by inserting after the words "Tennessee River drainage basin" the words "and the Cumberland River drainage basin"; and by inserting after the words "Tennessee Basin" the words "and Cumberland Basin".

SEC. 5. Section 23 of such Act, as amended (U. S. C., 1934 edition, title 16, sec. 831v), is amended by inserting after the words "Tennessee drainage basin" the words "and Cumberland drainage basin"; and by inserting after the words "Tennessee River" the words "and Cumberland River".

SEC. 6. The first paragraph of section 26a of such Act, as amended (U. S. C., 1934 edition, Supp. II, title 16, sec. 831y-1), is amended by inserting after the words "Tennessee River system" the words "and the Cumberland River system"; and by striking out the words "said river or any of its tributaries" and inserting in lieu thereof the words "said rivers or any of their tributaries".

[H. R. 2741, 76th Cong., 1st sess.]

A BILL To amend the Tennessee Valley Authority Act of 1933 (Public, Numbered 17, Seventy-third Congress; U. S. C.. 1934 edition. title 16, sec. 8311), providing that a portion of the taxes to be paid by the Tennessee Valley Authority on its gross sales of power in the States of Tennessee and Alabama shall be paid to certain counties in the State of Tennessee

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 13 of the Tennessee Valley Act of 1933 (Public, Numbered 17, Seventy-third Congress; U. S. C., 1934 edition, title 16, sec. 8311), be, and the same is hereby, amended to read as follows:

"SEC. 13. Five per centum of the gross proceeds received by the Board for the sale of power generated at dam numbered 2 or from any other hydro power plant constructed in the State of Alabama shall be paid to the State of Alabama; and 5 per centum of the gross proceeds from the sale of power generated at Cove Creek Dam hereinafter provided for, or any other dam located in the State of Tennessee shall be paid to the State of Tennessee and to the counties of Tennessee, wherein the Tennessee Valley Authority has acquired land for purposes of such dam and the reservoir adjoining and by reason thereof said lands are rendered exempt from county taxation, in the following manner, to wit:

"(1) Two and one-half per centum of said gross sales shall be distributed among and paid to such counties in which lands have been acquired by the Tennessee Valley Authority for said dam and adjoining reservoir and by reason thereof said lands are rendered exempt from county taxation and each county shall be paid an amount equal to the amount of taxes payable to such county on the assessed value of said lands for the tax year immediately preceding the tax year in which such land was acquired by the Tennessee Valley Authority. Should said 21⁄2 per centum be insufficient to pay all of said county taxes, then each of said counties shall be paid that proportionate part of the whole sum which the amount of its assessed taxes against said lands bear to the whole sum. "(2) The remaining 21⁄2 per centum of said gross sales shall be paid to the State of Tennessee, and should the 22 per centum reserved for the counties exceed the amount of taxes due on the assessed value of the lands in said counties such excess shall also be paid to the State of Tennessee.

"Upon the completion of such Cove Creek Dam the Board shall ascertain how much additional power is thereby generated at dam numbered 2 and at any other dam hereafter constructed by the Government of the United States on the Tennessee River in the State of Alabama, or in the State of Tennessee, and from the gross proceeds of the sale of such additional power 21⁄2 per centum shall be paid to the State of Alabama and 21⁄2 per centum to the State of Tennessee and counties of Tennessee wherein the Tennessee Valley Authority has acquired land for purposes of such dams and the reservoirs adjoining, and by reason thereof said lands are rendered exempt from county taxation, in the same proportion and in the same manner as herein provided for the division of the 5 per centum of gross sales of power generated at dam numbered 2 and Cove Creek Dam in the event the amounts paid from the sale of power at dam numbered 2 and Cove Creek Dam are not sufficient to pay the full amount due said counties on the assessed value of said lands. In no event are said counties to receive more than the amount which they would have collected on the assessed value of said lands prior to the acquisition thereof by the Tennessee Valley Authority. These percentages shall apply to any other dam that may hereafter be constructed and controlled and operated by the Board on the Tennessee River or any of its tributaries, the main purpose of which is to control floodwaters, and where the development of electric power is incidental to the operation of such flood-control dam. In ascertaining the gross proceeds from the sale of such power upon which a percentage is paid to the States of Alabama and Tennessee, the Board shall not take into consideration the proceeds of any power sold or delivered to the Government of the United States, or any department or agency of the Government of the United States, used in the operation of any locks on the Tennessee River or for any experimental purpose, or for the manufacture of fertilizer or any of the ingredients thereof, or for any other governmental purpose: Provided, That the percentages to be paid to the States of Alabama and Tennessee and counties in Tennessee, as provided in this section, shall be subject to revision and change by the Board, and any new percentages established by the Board, when approved by the President, shall remain in effect until and unless again changed by the Board with the approval of the President. In the event of any change or revision in such percentages the State of Tennessee and the counties affected hereby shall participate in any increase or decrease of same in the same proportions as are hereinabove provided. No change of said percentages shall be made more than once in five years, and no change shall be made without giving to the States of Alabama and Tennessee and the counties in Tennessee affected by this section an opportunity to be heard."

[H. R. 4640, 76th Cong., 1st sess.]

A BILL To amend an Act approved May 18, 1933, entitled "An Act to improve the navigability and to provide for flood control of the Tennessee River; to provide for reforestation and the proper use of marginal lands in the Tennessee Valley; to provide for the agricultural and industrial development of said valley; to provide for the national defense by the creation of a corporation for the operation of Government properties at and near Muscle Shoals in the State of Alabama; and for other purposes"

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 13 of the Act entitled "An Act to improve the navigability and to provide for the flood control of the Tennessee River; to provide for reforestation and the proper use of marginal lands in the Tennessee Valley; to provide for the agricultural and industrial development of said valley; to provide for the national defense by the creation of a corporation for the operation of Government properties at and near Muscle Shoals in the State of Alabama; and for other purposes," be amended as follows:

"SEC. 13. Five per centum of the gross proceeds received by the Board for the sale of power generated at Dam Numbered 2, or from any other hydropower plant hereinafter constructed in the State of Alabama, shall be paid to the State of Alabama; and 5 per centum of the gross proceeds from the sale of power generated at Cove Creek Dam, hereinafter provided for, or any other dam located in the State of Tennessee, shall be paid to the State of Tennessee; and 5 per centum of the gross proceeds from the sale of power generated at the Hiwassee Dam, provided for under said Act, and situated in Cherokee County, North Carolina, or any other dam located in the State of North

Carolina, shall be paid to the State of North Carolina, for the use and benefit of the county or counties in which said dam or dams, including contributing storage dams, are now or shall hereafter be located. Upon the completion of the said Cove Creek Dam the Board shall ascertain how much additional power is thereby generated at Dam Numbered 2 and any other dam hereafter constructed by the Government of the United States on the Tennessee River, in the State of Alabama, or in the State of Tennessee, and from the gross proceeds of the sale of such additional power 21⁄2 per centum shall be paid to the State of Alabama and 21⁄2 per centum to the State of Tennessee. These percentages shall apply to any other dam that may hereafter be constructed and controlled and operated by the Board on the Tennessee River or any of its tributaries, the main purpose of which is to control floodwaters and where the development of electric power is incidental to the operation of such floodcontrol dam. In ascertaining the gross proceeds from the sale of such power upon which a percentage is paid to the States of Alabama, Tennessee, and North Carolina the Board shall not take into consideration the proceeds of any power sold or delivered to the Government of the United States, or any department or agency of the Government of the United States, used in the operation of any locks on the Tennessee River or for any experimental purpose, or for the manufacture of fertilizer or any of the ingredients thereof, or for any other governmental purpose: Provided, That the percentages to be paid to the States of Alabama, Tennessee, and North Carolina as provided in this section, shall be subject to revision and change by the Board, and any new percentages established by the Board, when approved by the President, shall remain in effect until and unless again changed by the Board with the approval of the President. No change of said percentages shall be made more often than once in five years, and no change shall be made without giving to the States of Alabama, Tennessee, and North Carolina an opportunity to be heard."

[H. R. 4094, 76th Cong., 1st sess.]

A BILL To amend an Act known as the Tennessee Valley Authority Act of 1933 so as to provide that the Tennessee Valley Authority reimburse certain county, or counties, in the United States for loss of taxable values, by reason of the purchase of the electrical properties of the Tennessee Electric Power Company

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Tennessee Valley Authority Act of 1933 be amended by inserting after section 25 thereof, and before section 26 thereof, a new section to be numbered section 25a, as follows:

"SEC. 25a. (a) The Corporation is hereby authorized and empowered to ascertain what county, or counties, in the United States will be affected by reason of withdrawal of taxes heretofore paid to them by the Tennessee Electric Power Company, the said Tennessee Electric Power Company's electrical properties having been purchased by the Tennessee Valley Authority, and to ascertain further the sum, or sums, that have been paid annually to such county, or counties, by the said Tennessee Electric Power Company.

"(b) The Corporation is also authorized and empowered to reimburse such county, or counties, for such loss by the payment, in cash, to them annually such amounts as they received from the Tennessee Electric Power Company annually for taxes, to be applied for schools, and other purposes, as may be deemed advisable by the authorities of such county, or counties."

Now, before entering upon the hearings in the matter, I desire to make a very brief statement with respect to these proceedings. First of all, it is my idea we should conduct these hearings as speedily as possible and we should first give preference to the gentlemen who are from the country, from the States, who are interested in the matter and, at a later time, hear all of the Members of the House and the Senators, if they desire to be heard, with respect to any statements they desire to make with respect to he matter. I have already assured several gentlemen who represent the State of Tennessee that we would hear Governor Cooper this morning.

Before starting the hearings with any testimony, I want to say, as I see the matter, the burden of proof, as we call it in a court