Forty-two percent of that tax revenue goes to the benefit of our schools. The high school received out of the tax revenue that was paid by the Tennessee Power Co., $7,101; the elementary schools, $9,468.99, a total of $16,707.73 that went directly. to the school fund out of the money paid by the Tennessee Power Co. That is the amount that the children get directly. Indirectly they get benefits from the library fund and from the health fund and the county-agent fund, and also, indirectly, from the road fund.

We have got about 6,000 children of school age. About 5,000 go to the elementary schools. The average daily attendance in our high schools is 852. So you can see what this tax revenue means to Bradley County schools.

We have a bonded indebtedness of $866,575. That does not include what are known as State highway reimbursement bonds, $232,000, which are to be paid by the State.

Out of that bonded indebtedness, $408,000 went to build school buildings for the benefit of our school children.

So you can see that we are vitally interested in educating our children in Bradley County. Of the tax revenue paid by the Tennessee Power Co., $9,784 went into our bond fund to retire our bonds and pay interest on them.

Besides what we lose from the Tennessee Electric Power Co., we also lose some tax valuation due to the inundation of lands along the Hiwassee River. These bottom lands were the best farm lands we had in Bradley County. We cannot tell you exactly how much that will reduce our tax valuation, because the agent of the Tennessee Valley Authority did not report to the tax assessor the property that they were taking, and we have had to estimate that as best we could. Of course, in addition to the farm lands, the farmers along the river paid a personal-property tax on their livestock and their farm machinery, and we think this will reduce our assessment about $300,000. The CHAIRMAN. How many of those farmers whose lands were submerged left their county and went to other places?

Mr. WESTERBERG. I could not tell you, because, you see, they were allowed to cultivate their crops until the fall of 1939-December 1939. The CHAIRMAN. Did the T. V. A. ever furnish you the acreage they had taken up in this reservoir?

Mr. WESTERBERG. The county tax assessor says not. I asked him about that.

Mr. SHORT. That is strange; very peculiar. You mean to say you do not have a record of the acreage that they covered?

Mr. WESTERBERG. The only way we can get that is the county tax assessor will have to check the books in the register's office to see what property was transferred. Then he has to go down along the river and see what they took and what they left. You see, they just took the bottom lands from these farms and left the upland. The upland has very little value. The bottom lands were valuable.

The CHAIRMAN. It is hard to maintain on account of soil erosion? Mr. WESTERBERG. Yes, sir; because it is nearly all ridges. When you get to the farm land it is nearly all ridges, of very little value.

Mr. THOMAS. How much revenue per $100 did your county lose by the loss of these taxes?

Mr. WESTERBERG. We figure 18 percent. Now, if they replace that, it means 21 percent, because, you see, that will leave us an assessment

of about $8,900,000, where we formerly had $10,700,000. That means that where we are paying a tax rate of $2.55 we will have to pay $3 per hundred. That works a hardship, because the bulk of our taxpayers are farmers on upland farms; and, of course, to make a living and send their children to school, the tax dollar looks awfully big to them, and it is hard for them to raise. And so far as the consumption of electric power is concerned, it is absolutely no benefit to them what

soever.

The CHAIRMAN. And nearly all of it is consumed in the county seat city?

Mr. WESTERBERG. Yes, sir.

The CHAIRMAN. And it has a population of 12,000?

Mr. WESTERBERG. About 12,000.

The CHAIRMAN. The plant is owned by the municipality?

Mr. WESTERBERG. Yes, sir; the city took over the distribution system.
The CHAIRMAN. Now, you are a citizen of the town, are you?
Mr. WESTERBERG. Yes, sir.

The CHAIRMAN. Do you know whether or not that city is making large profits on the redistribution of the electricity supplied by the T. V. A.?

Mr. WESTERBERG. They have not been able to figure it yet. I asked one of the members of the city commission last Saturday, and he said he thought they would make a profit, but he could not tell me what. He said they had not put on a 10-percent surcharge, whatever that means, and he thought they would make a profit. But now the property that is in the distribution lines-that is, property in the city-that only mounted to about $262,000 of the assessment against the power company. The total assessment was $1,578,000. Most of that is transmission lines across the county.

The CHAIRMAN. Where the farmers do not get any electricity or any benefits?

Mr. WESTERBERG. No, sir; they get absolutely no benefit.
The CHAIRMAN. How many farm taxpayers have you?

Mr. WESTERBERG. I could not tell you exactly, because we have got a great many small farms, but the bulk of the taxpayers are farmers. Mr. EDMISTON. What has been the reduction in rates in your home town?

Mr. WESTERBERG. I do not know. We are under the T. V. A. contract rate. I think now the residents' lighting is approximately 25 percent reduction. That is what I would say.

Mr. EDMISTON. Over the old rate?

Mr. WESTERBERG. Over the old rate. But, of course, you have got to remember that the folks in the city that get the benefit of this lower rate, a good many of them, are not taxpayers.

Mr. SHORT. Mr. Westerberg, what percentage of the total tax is paid by the Tennessee Electric Power Co. in your county?

Mr. WESTERBERG. About 15 percent.

Mr. SHORT. Do you think the Tennessee Valley Authority is a good thing or a bad thing?

Mr. WESTERBERG. You are asking me personally?

Mr. SHORT. Yes.

Mr. WESTERBERG. Personally I do not think it was a good thing.
Mr. SHORT. It has not been a boon and a blessing?
Mr. WESTERBERG. No, sir.

Mr. SHORT. The Federal Government has inflicted this thing upon you; but I am surprised that you people down there did not have more representatives here to oppose the passage of the bill.

Mr. WESTERBERG. Well, we did not know very much about it till it was all done.

Mr. SHORT. Some of us really had your interests at heart and fought to protect them.

Mr. WESTERBERG. Well, I wish you had stopped it, from my own standpoint. [Laughter.]

Mr. CLASON. How many farms are there in your county?

Mr. WESTERBERG. I imagine around 3,000.

Mr. CLASON. The farmers down there are strong for rural electrification, are they not?

Mr. WESTERBERG. Well, they tried to get it, but they could not meet the requirements.

Mr. CLASON. You mean they could not meet the requirements of the T. V. A.?

Mr. WESTERBERG. Yes, sir; they could not meet the requirements for these lines. They could not consume power enough.

Mr. CLASON. So that with all this electricity down there, after they furnish the Aluminum Co. of America, they do not find any left over to hand out to the farmers?

Mr. WESTERBERG. You see, when your farmhouses are small and scattered, it costs money to build these rural lines, and the T. V. A. could not afford to build rural lines if they were not going to get some return on the investment.

Mr. CLASON. But there are some farmers down there that use electricity?

Mr. WESTERBERG. Yes, sir.

Mr. CLASON. Who brings the electricity to them?

Mr. WESTERBERG. They get it through the T. V. A., I understand. Mr. CLASON. They get it directly?

Mr. WESTERBERG. No; they do it through one of these rural cooperative corporations.

Mr. CLASON. Now, is this rural cooperative association furnishing electricity to the farmers at a lower rate than they were previously getting it from the Tennessee Electric Power Co.?

Mr. WESTERBERG. Most of them were not getting it before. Some of them were, in and out of town. Some of them were.

Mr. CLASON. But those farmers who were getting it before, to what extent are they getting lower rates at the present time from this county cooperative?

Mr. WESTERBERG. That depends upon the amortization they pay and the amount they use. If they are small users they do not get much reduction, I guess approximately 10 percent reduction. If they are a big user, they run up to 25, 30, or 40 percent, I have been told. That is all hearsay with me.

Mr. CLASON. The bigger you are, the better off you are?
Mr. WESTERBERG. The bigger you are, the better off you are.

Mr. SHORT. Do you think the fellow in the rural community, farmer, should be penalized for being there?

Mr. WESTERBERG. No; I do not think so.

the

Mr. ARENDS. Could you give me an estimate of what your light bill was before the T. V. A. came in and what it is now?

Mr. WESTERBERG. Well, it would run from $4 to $5 a month. Now it runs $3 to $4. About 25 percent reduction.

Mr. SPARKMAN. Do you know whether or not a request has been made of the T. V. A. to furnish your county with a description of the lands that have been taken over by the T. V. A.?

Mr. WESTERBERG. I doubt it.

Mr. SPARKMAN. I suggest that that request be made.

Mr. WESTERBERG. I doubt if they did, because it has been customary in our county that if you bought a piece of property you went to the tax assessor and told him you bought it and you wanted it changed from the other man to you. And I doubt if he requested it, because that has been the custom, and once a year he goes through the register books and checks all transfers.

Mr. SPARKMAN. He does that anyhow?

Mr. WESTERBERG. Yes, sir; he had always done that. That is the way he gets the transfers.

Mr. ELSTON. Have you any idea what the total savings are by reason of reduced rates in the county?

Mr. WESTERBERG. No; I have not.

Mr. ELSTON. Do you know whether or not the savings exceed what you would lose in taxes?

Mr. WESTERBERG. Well, now, that presents an entirely different proposition, because a great many of the people that get savings from the power do not pay any taxes. They own no property.

Mr. ELSTON. But let us take it in its entirety. Do you know whether the savings exceed your losses?

Mr. WESTERBERG. I could not tell you that, because we have had no reports from the Cleveland Electric System. You see, they have only been operating 4 or 5 months.

Mr. HARNESS. Judge, you say the farmers of your county derive no benefit from the T. V. A.? You mean as power users? Mr. WESTERBERG. Yes.

Mr. HARNESS. What about the recreational features of this great project? Do they get any benefit out of that?

Mr. WESTERBERG. I do not know of the recreational features [Laughter.]

Mr. HARNESS. How about the flood control, that we have heard so much about?

Mr. WESTERBERG. Floods do not bother us.

Mr. HARNESS. You do not get any benefit from any source?

Mr. WESTERBERG. No, sir.

Mr. SHORT. How about navigation?

Mr. WESTERBERG. I would rather you did not ask me about navigation. [Laughter.]

The CHAIRMAN. Thank you very much, Judge.

Mr. WESTERBERG. I thank you gentlemen for your attention.

The CHAIRMAN. Our next witness is Judge Elmer Eblen, of Roan County.

STATEMENT OF HON. ELMER EBLEN, COUNTY JUDGE, ROAN COUNTY, TENN.

Mr. EBLEN. Mr. Chairman and gentlemen, I appear as county judge of Roan County, Tenn., and as a member of the legislative committee

of the County Judges Association, I will try to make by statement brief.

I will first take up the matter of Roan County's losses. We lost an assessment of $783,130, which brings in $23,982. That is from the sales of the Tennessee Power Co.; $17,552 of that we are of the opinion can be remedied by an act of the legislature, leaving $8,430, which is the total loss of the county by reason of the sale of the Tennessee Electric Power Co.

Besides this, with the building of the Watts Bar Dam, I had an estimate made by our county tax assessor and by the trustees, which figures that we would lose $1,750,000 in the basin area of our county, having an assessment now of $9,231,000, which makes an approximate loss of 25 percent of our total valuation in the county.

It comes to the place with us, gentlemen, that without any tax replacement we will be compelled to default on our obligations, and where it would cripple our schools, and that is the reason for my plea to you gentlemen here today. We are of the opinion that if this committee fails to report out this bill, it will cause between $14,000,000 and $15,000,000 worth of defaults in Tennessee in the next year. We are further of the opinion that in as many as 10 or 12 counties in Tennessee they will be unable to carry out their 8 months' school term.

We do know that many of the counties that are affected are in bad financial condition, including my own, and that they cannot carry on the usual functions of county government with this loss that is facing them at this time. As you know, the counties of Tennessee would lose approximately $800,000 that the legislature cannot replace. We have an idea, of course, that some of that, a million and a half dollars almost, can be replaced by the legislature, but it is those counties that are in the basin area that are so vitally affected. My own county is one of the hardest-struck counties in that area, because they are losing-we lose some railroads in our county, which we doubt if they will rebuild, and that is included in the tax assessor's estimate. We believe that unless they are replaced, our county will default, and that Loudon County, Rhea County, Meigs County, and probably some of the other counties, will be compelled to default upon their debts.

The CHAIRMAN. What is the reservoir? Of what dam?

Mr. EBLEN. Watts Barr Dam is the main one. Of course, Guntersville Dam strikes Marion and some of the lower counties in Tennessee.

About 35 percent of our citizenship are users of electricity, including, of course, some of the farmers who are nearby to the cities. As has been stated here by other gentlemen who have preceded me, our farmers are not deriving much benefit from the lower rates furnished us by the municipalities that have purchased these power developments, because they cannot get a contract. We cannot get rural electricity because it costs too much to construct the line, and the farmer is the main one that the burden of taxation must fall upon us, but still he is receiving no benefits. Sixty-five percent of our population in that county-not all those are farmers-are poor people in town who own a small home and other things and do not have electricity. So we figure that only about 35 percent of our people are benefited by the lower power rates.