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employment and a respectable standard of living for our own citizens.

We have reached the point in weapons procurement where we can literally destroy the society and population of any aggressor nation. Further increases in our weaponry will yield sharply diminishing returns in terms of additional security.

The President has called for an all-out war on poverty. We can finance this campaign out of funds saved from defense procurement. The connection between our economic resources and the economic and human health of our Na

be applied to other governments to make similar commitments for reallocation of their resources to peaceful programs. The campaign against poverty could eventually be turned into the worldwide undertaking it must be for true security and the abolition of want.

SPEECH BY MISS AYAKO KIKUSHIMA AT GRADUATION EXERCISES OF EVERGREEN PARK COMMUNITY HIGH SCHOOL, ILLINOIS Mr. DIRKSEN. Mr. President, I do not know whether the Chair is proficient

different cultures from many different parts of the world. The names on the diplomas you will receive are all American names, but they originated in Sweden, Italy, the Netherlands, England, Ireland, Germany-from all over the world. The United States could not have become the great country that it is today if its past generations had not been willing to climb the invisible mountains that surrounded them when they came here. We of the present generation, and those that follow us, must continue the struggle to surmount the invisible barriers that now prevent all peoples of the earth from living together in peace and understanding.

In a short while I will return to Japan and once again cross the mountains. I will be

tion must be made. In the words of the in the Japanese language, but the fol- happy to see them, because they are very

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Mr. President, I ask unanimous consent that the Times editorial be printed at this point in the RECORD.

There being no objection, the editorial was ordered to be printed in the RECORD, as follows:

POVERTY AND DISARMAMENT

Profits, wages and employment are all at record levels today, yet 4 million Americans are jobless and 30 million live in families whose incomes are less than $3,000 a year.

At all levels of Government from the White House to city hall-programs for combating poverty are being feverishly drafted, with

next November well in mind.

No undertaking could be more deserving of total national commitment than aggressive war against urban and rural slums, against undereducation, against inadequate medical care and other manifestations of encrusted social neglect. The danger is that the campaign will degenerate too quickly into empty sloganeering and thus leave in greater despair than ever those whom it is supposed to help.

The conquest of poverty will be neither swift nor cheap. For the first year President Johnson says he hopes to make nearly a billion dollars in new money available for Federal antipoverty programs. However, the indications are that the amount actually to be spent for the 1964-65 fiscal year will not exceed one-third that amount. This is perhaps as much as can be usefully applied at the start; but vastly larger appropriations will be necessary later if the assault is to attain the massive dimensions essential to chop away the root causes of dependency.

The Nation's awareness of this need comes just as it has been found possible to make the first modest cuts in the billion-dollara-week military budget. What could be more appropriate than to establish now, as a matter of conscious national policy, a clear link between cutbacks in defense spending and increased investment in human welfare and community services?

Improved international understanding, plus the overkill capacity already possessed by both sides in the cold war, may in the foreseeable future permit dependable agreements for scaling down outlays for weapons. How quickly such cuts can be made with safety we do not yet know. But already the possibility that a development so beneficial to all peoples would upset the domestic economy has prompted President Johnson to appoint a special Cabinet Committee on Disarmament Planning.

By a decision now that a large part of the funds released from defense will be earmarked for schools, housing, health and public works, the movement away from military war could be coupled with a movement forward in the war against poverty. By this example, a powerful spur would simultaneously

lowing words are in Japanese as rendered.

The ACTING PRESIDENT pro tempore. The Senator from Illinois can take judicial notice that the Chair is not proficient in the Japanese language.

Mr. DIRKSEN

beautiful, and I have missed them very much. But my pledge to you, to the people of America and to the people of Japan, is that I will never go back down the invisible mountains that we have climbed together during my stay here in Evergreen Park. May we always continue to walk together and talk together in ever increasing friendship and

Tomo ni aruko, tomo ni kataro. Sekai understanding. heiwano tameni.

Translated, it means:

Walk together, talk together, all ye people of the earth. Then, and only then, shall ye have peace.

That was the title of a short speech that Miss Ayako Kikushima, American Field Service student from Japan, delivered at the graduation exercises of the Evergreen Park Community High School, at Evergreen Park, Ill.

It is quite a little gem, and I think it deserves wide currency. I therefore ask unanimous consent that it be made a part of my remarks.

There being no objection, the speech was ordered to be printed in the RECORD, as follows:

TOMO NI ARUKO, TOMO NI KATARO

Tomo ni aruko, tomo ni kataro. Sekai heiwano tameni. Translated, this means: "Walk together, talk together, all ye people of the earth. Then, and only then, shall ye have peace."

This is the motto of the American Field Service whose exchange program serves to open the door to understanding and friendship. I am honored to be a part of this program and to have been the first AFS student in Evergreen Park.

My home in Japan is completely surrounded by mountains, and we would often talk about the world beyond the mountains and speculate on how different it must be. When I crossed those mountains to come to America I did find what at first seemed to be a different world. But as I lived with you-as we walked together and talked together-I discovered that our similarities in values and ideals far exceed our physical and

cultural differences.

There is an old Japanese proverb that says: "There are many roads to the top of the mountain, but once we reach the top the view is the same." Perhaps the real meaning of this proverb is that we are all surrounded by invisible mountains of misunderstanding and distrust that must be climbed each in his own way, before we can see the road to world peace and harmony. As we of the graduating class leave here today, we will set out on many different roads, but it is our duty and the challenge of our generation to find roads to the top of the mountains and not to wander aimlessly in the valleys below.

And it is the duty of the youth of America to lead the way in this difficult task, because you are a part of a country that has grown great and strong from the merging of many

BASIC FACTS ON THE RIGHTS ISSUE

Mr. STENNIS. Mr. President, the Senate is now engaged in a much needed Nation to the real dangers of the sodebate to alert the people of this great called civil rights bill. For the first time, there is a chance to bring the full truth to the people. It is a helpful, beneficial, and necessary part of the legislative, deliberative process of the Senate.

In addition to Senate debate, many good newspaper columnists and commentators are helping to educate the

public about the basic issues and facts regarding this most controversial piece of legislation.

The able and distinguished William S. White, had an excellent column which appeared in the Washington Evening Star of March 18, 1964.

I ask unanimous consent that this article be printed in the RECORD.

There being no objection, the article was ordered to be printed in the RECORD, as follows:

BASIC FACTS ON THE RIGHTS ISSUE

(By William S. White)

As the Senate proceeds with the gravest debate in our history on civil rights, some basic facts need to be pointed out, lest the onlookers lose their sense of perspective.

The central danger to an orderly solution of the century-old issue of passion and recurring crisis is that of oversimplification as the long struggle goes on. Too many are already reaching easy conclusions that are quite wrong.

One fiction is that all this is a mere political power play in which the politicians of both parties in the North are only out to grab minority-group votes by pressing Federal controls onto the South.

SITUATION IS CHANGED

The fact is that while all this was partly so many times in the past, things are not nearly so simple any more, because this time there is a whole new set of national circumstances. In the past, civil rights bills were openly directed exclusively at the South. Now, racial disorders have moved to the North and the Johnson administration's bill would apply with no less force above than below the Mason-Dixon line. This is especially true of the section to forbid racial discrimination by privately owned busi

nesses.

This time, there is no assurance that a vote for this bill will necessarily be politically beneficial in all areas, even in the North. There have been many indications of late that northern white voters in unusually crowded urban areas-notably ItaloAmericans and Polish-Americans-are developing a marked hostility of their own to Negro demands. Every big-city Democratic organization in the Nation is presently in fear of this countermovement.

Again, a fiction is that the Senate debate simply separates the good guys, those who wish to do something real for the Negro rights, from the bad guys, who wish to do nothing. The bad guys are presumed to be all the southerners and such crusty Repub

licans as are more or less allied with them.

The fact is that quite apart from that part of the southern wing that is against doing anything at all there is honest concern within the resisting group that the bill goes too far.

A fiction is that the southerners have already opened a bitter filibuster, an effort by a minority to dominate a majority. The fact is that no filibuster has as yet been begun, unless one wishes to assume that any discussion whatever of this profoundly difficult question is in itself an obstruction of majority will.

A Senate debate running 3 weeks or more on far less complicated issues is not uncommon. Discussion reaches the point of a filibuster only when those fighting a measure cease all effort at rational persuasion and occupy themselves in irrelevant time-killing to prevent any vote at all. It may come to this; it has not yet remotely come to this yet.

Moreover, it should be remembered that in the Senate to be a minority is not necessarily to be wrong. Actually, it is a minority institution, deliberately created to serve not as a docile yes-sayer to majorities but as their toughly skeptical critic. Its very makeup shows its fundamental mission of checkand-balance; the smallest State in population, a Nevada or a New Mexico, has precisely the same voting strength as the largest, a New York or a California.

Those who are demanding "action" right now, therefore, should curb an impatience based upon ignorance of the root meaning of the American legislative system. No responsible man should want this thing settled under a stopwatch.

SOMBER INQUEST

This is no footrace; this is a somber inquest upon a proposed policy without example in our national life. To make such an inquest is precisely what the Senate is for in our scheme of things. Let it work its will; and let it not work its will until every viewpoint has been heard and examined and heard and examined yet again.

We have lived with this terrible problem for a hundred years; a hundred days are not too many to try to solve it in dignity and in reason-as the party leaders of the Senate, MIKE MANSFIELD, of Montana, for the Democrats, and EVERETT DIRKSEN, of Illinois, for the Republicans, are in simple truth trying to do.

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and sound philosophy which are the bedrock of our American way.

Mrs. Craig, perceptive and searching in her skill with the pen, mentions some of the fundamental principles and standards which must be followed if we are to remain strong as a nation and a free people.

Her article, entitled, "A Woman Writer Takes a Critical Look at America," is most worthy and helpful and should be widely read and thus strengthen our people and our Nation.

I ask unanimous consent to insert this article in the RECORD.

There being no objection, the article was ordered to be printed in the RECORD, as follows:

if he campaigned, crying in the wilderness that we come and be saved-from ourselves?

We could have saved Cuba for freedom, and

saved ourselves and the rest of Latin America from this nest of communism, but we did not. Around the world they do not believe what we say; they look at what we do.

The United Nations was founded in this country. Now it is a messy combination of polyglot nations, old and new, grabbing for our money and ignoring our half-hearted arguments.

The idea of letting in a small nation of fewer than a half million people, utterly inexperienced in governing itself, unproved as a stable, honest state-letting them in within a few days of their establishment. We might at least insist on a period of probation.

The United Nations itself should be forced into financial honesty by the United States

A WOMAN WRITER TAKES A CRITICAL LOOK AT refusing to keep on paying the bills while

AMERICA

Unless there is a change, deep down, in the American people, a genuine crusade against self-indulgence, immorality-public and private, then we are witnesses to the decline and fall of the American Republic.

Death on the highways, a pack a day, cheating from top to bottom in our society, get rich quick, breakup of the family, faltering in foreign policy, reckless debt-these have destroyed nations before us. Why should we think we can take that path and change history?

Look around you, and everywhere you see lack of principle and steadfastness in the right and brave. The disgraceful cover on the recent issue of a publication with a nationwide circulation and its palliating story of sexual immorality adds adult consent to the looseness of our youth, already far down the road of delinquency, shiftlessness, derogation of virginity in our girls who will be the

mothers of tomorrow.

There is no financial morality in our Government "charge it," is the accepted practice.

Round the world they think they can take our money with one hand and slap us in the face with the other. We talk of our "leadership," but we are apparently incapable of giving leadership.

One listens with dismay to the campaigning for the Presidency that is going on. Oh, for a crusader to call us back to dignity and strength and austerity.

What was that last word? "Austerity" plain living and high thinking, putting our money into the real things of life, not minkhandled saucepans and three cars in every garage; public servants who are not Bobby Bakers. Schools for the young, care for the elderly, strength so that none will dare attack us, a worthy succession to those men with feet wrapped in bloody bandages at Valley Forge to give us liberty. How have we used the liberty they bought for us so dearly?

Because it is unpleasant to think of unpleasant things, we say the Soviet Union may be changing its determination to "bury

us." Red China is bad, of course, but maybe not Khrushchev. Halfheartedly we send American men to die in jungles, where we do not have the guts to go in to win or to stay out.

We sell wheat to Russia to save her from a demonstration that communism cannot produce enough food for its own people. If we do this to get rid of surplus wheat, which we have already subsidized and which we will subsidize again to give it to the Communists cheaper, we might try discouraging the production of surplus wheat and remember the old-fashioned private enterprise where one grows for the market, not the Government storage bins.

We faltered in Cuba and now she is the homeland of subversion of all Latin America and Africa. Where will we find a strong man to lead us? Would we vote for one

many get a free ride while outvoting us. The idea of letting in Red China in the face of the Charter which says, "peace-loving nations." True, we are against letting Red China in, but all we do is get out our handkerchiefs and weep into them while the majority in the U.N. does as it pleases.

We waste untold sums on useless defense, and fail to keep ourselves truly strong in all fields, to be able to fight small as well as missile wars.

We sign test ban treaties with known enemies, known defaulters on treaties, that we will not test as we may need to. Why should we put our defense in such an agreement? If our defense experts-not Businessman McNamara [Secretary of Defense]-say we need to test, then let us test without asking permission of friend or foe.

We fiddle-faddle in southeast Asia, and may be ignominiously pushed out. Maybe we should never have gone in there-let the Reds take it but there is one thing for sure: If we go in anywhere, we should go in to win.

We are losing the respect of the world, and respect is more necessary to a nation, as to a person, than affection. We get little affection from the people we have helped over the years-and we are losing respect. Nobody respects a fumbler, a weak man, a wobbler, in policy or deeds.

First, every one of us has to clean out weakness and selfishness and immorality of all types. Then choose leaders who with strength and principle and intelligence will lead us to where we can have self-respect and respect of others.

Would we elect such a man if he campaigned on such a platform?

WHEN THE PEOPLE HAVE AN OPPORTUNITY TO VOTE ON OPEN OCCUPANCY POLICY

Mr. STENNIS. Mr. President, on March 18, I commented on the remarks of the junior Senator from New York [Mr. KEATING] concerning the fact that his mail was running about 50-50 on the civil rights bill. I also pointed out that, in my belief, the more the American public learns what is really in this bill, the more it will be against it.

In line with this thought, I would like to observe that on March 10, 1964, the voters in the city of Seattle, Wash., rejected a proposed jected a proposed antidiscrimination housing ordinance. The vote was 112,448 against and 53,453 for, a margin of more than 2 to 1. Only a little more than a month ago, the voters of Tacoma, Wash., did the same thing and the margin there was 3 to 1.

This is a very significant thing, coming at the time that it does. It shows that

when the issues are put directly to the people themselves, who have to live with these problems, they vote them down. I think it was natural for a great majority of the voters to say that they did not want to be forced to an open occupancy policy in real estate-that is, to sell, rent, or lease to people of all races, creeds, color, and national origins alike.

I believe that if the broad, sweeping provisions of this bill were explained to the voters of this country and that they had to vote on it-title by title if necessary-it would be defeated at the polls. These voices directly from the people on the issue clearly drawn, fully discussed with a free choice fairly made, are a wholesome influence. Such issues, so intimate and close to the daily lives of the people, should be decided by direct vote of the people.

Mr. KEATING. Mr. President, will the Senator yield?

Mr. STENNIS. I yield. Mr. KEATING. The Senator does not contend that there is any housing title in the bill or any section relating to housing; does he?

Mr. STENNIS. The main point the Senator from Mississippi makes is that the bill is full of provisions for executive orders, and the housing order already in effect, taking it as a sample and framework and pattern of what may happen, certainly makes anything that is happening under the housing order or on votes of the people on similar matters relevant and direct and overwhelming. Mr. KEATING. I am not questioning the relevancy or propriety of the Senator's entering this matter in the RECORD, but it seems to me it is not conducive to an explanation and understanding of the bill to talk about State or municipal problems relating to housing.

The ACTING PRESIDENT pro tempore. The time of the Senator has expired.

Mr. KEATING. Mr. President, I ask unanimous consent that the Senator may have 1 additional minute.

The ACTING PRESIDENT pro tempore. Without objection, it is so ordered. Mr. KEATING. So far as I know, the So far as I know, the only provision that could have a remote connection with housing is the provision in title VI which states that the administrator shall have the right to cut off Federal funds collected from both white and Negro taxpayers to aid a federally subsidized housing project if it is a segregated project. Beyond that, I know of nothing else in the bill.

Mr. STENNIS. I do not think there is any doubt that it can be demonstrated. The civil rights bill provides for express Executive authority to go into loansnot only grants but loans-for housing. At any rate, the Executive order on housing now is a fact of life. This was an instance in which the people had a chance to vote on an open housing ordinance, and in one case they voted against it 2 to 1, and in another case they voted against it 3 to 1, which shows that the people are against it.

Mr. KEATING. It has nothing to do with what is contained in the civil rights bill.

Mr. STENNIS. It has nothing to do with it except that it has the same effect, of taking away the people's civil rights. of taking away the people's civil rights.

GOVERNOR REYNOLDS' EXCELLENT JOB IN EMERGENCY TRANSPORT PROGRAM

Mr. PROXMIRE. Mr. President, Gov. John Reynolds of Wisconsin was recently John Reynolds of Wisconsin was recently commended by Chairman Goff of the Interstate Commerce Commission for the outstanding progress our State has made in the initiation and implementation of an emergency motor transport program. This organized effort is intended to meet any possible national emergency arising from enemy action.

program, initiated jointly by the State of Wisconsin, this Commission and the motor since its establishment. This program is decarrier industry, has accomplished much signed to develop and assure a continuous state of readiness in motor transport for any national emergency that may be thrust upon us. The tremendous progress made to date in furtherance of the program must be attributed in a large measure to the excellent

cooperation that has been given by your office and the Public Service Commission of Wisconsin.

The Wisconsin Emergency Motor Transport Board was created and a chairman appointed by you. Thus, Wisconsin was among the first States to establish such boards, of which there are now 49. Since that time Wisconsin is among the States whose Civil Defense Transportation Annex gives recognition to the board. Your State is among the first 17 to adopt the 12 Emergency Transport Mobilization Orders issued by this Commission or prescribe comparable orders, thus making the requirements applicable in a national emergency to intrastate as well as interstate transportation.

In addition to all of the foregoing significant actions, Wisconsin has designated motor transport officers throughout the State. Thus, an effective means

is established

whereby, in an emergency, the damage to motor transport will be quickly assessed and a determination made as to the remaining transportation capability. It seems clear

Wisconsin was among the first States to establish an Emergency Motor Transport Board and is among the first 17 States to adopt the 12 Emergency Transport Mobilization Orders issued by the ICC. In addition, Wisconsin has designated motor transport officers throughout the State so that, in an emergency, damage to motor transport will be quickly assessed and a determination made as to remaining capability. State cooperation in the finest tradition. that only by such an organization can motor Mr. President, this represents FederalI am very proud not only of my State but of Governor Reynolds, A. Wilford and Charles W. Buckner, who devoted Larson, Miles F. Fenske, John P. Varda, their time and energy to make this their time and energy to make this achievement possible. I ask unanimous consent that letters to Governor Reynolds and to me from Chairman Goff detailing this accomplishment be in the RECORD.

There being no objection, the letters were ordered to be printed in the RECORD, as follows: were ordered to be printed in the RECORD,

INTERSTATE COMMERCE COMMISSION,

Washington, D.C., March 17, 1964.
The Honorable WILLIAM PROXMIRE,
U.S. Senate,
Washington, D.C.

DEAR SENATOR PROXMIRE: The enclosed copy motor phase of our joint planning effort and of a letter to Governor Reynolds covers the reflects, without exaggeration, the tremendous contribution responsible State officials have made to the program. I am sure you will share with me the sense of pride and gratification that the State of Wisconsin has quickly and sensibly organized to meet a possible national emergency from enemy action. What we believe to be a very flexible, sound, and self-triggering arrangement dealing with emergency rail and inland water transportation has also been effected with executive reservists strategically placed, ready to function should the occasion call for onthe-spot survival and rehabilitation measto suggestions or calls with alacrity and ures. Here, too, your State has responded complete cooperation.

This is intended solely as information regarding major developments in our Federal and State cooperative effort. Meanwhile, should you have any questions, please do not hesitate to let me hear from you. Sincerely yours,

ABE MCGREGOR GOFF,
Chairman.

INTERSTATE COMMERCE COMMISSION, Washington, D.C., March 12, 1964. Hon. JOHN W. REYNOLDS, Governor of Wisconsin, Madison, Wis.

DEAR GOVERNOR REYNOLDS: As you know, the coordinated emergency motor transport

transport be quickly mobilized in an emergency to assure transportation to meet the survival needs of the State and the Nation.

In forming a resources task group for transportation as suggested in the comprehensive program of the Office of Emergency from the motor transport board in the task Planning you wisely included representatives group membership. Thus, the task group becomes an effective coordinating instrument. By your action in this matter the motor transport board is established as the single planning agency to which motor transport can look for guidance and direction now or in an emergency.

Much time and energy has been expended in achieving those major accomplishments. For their diligence and dedicated effort in this matter, I commend highly Mr. A. Wilford Larson, Chief, Transportation Division, Wisconsin Public Service Commission; Mr. Miles F. Fenske, III, Administrative Assistant, Wisconsin Public Service Commission; Mr. John P. Varda, general manager, Wisconsin Motor Carriers Association; and our District Supervisor Charles W. Buckner.

There is a feeling of comfort and confidence in the knowledge that in a national emergency capable hands would guide the mobilization of motor transport in Wisconsin and assure emergency transportation upon which our very survival could well depend.

My sincere thanks to you and your staff for joining hands with this Commission and the motor transport industry in doing a job that could not be accomplished singly by any one Sincerely yours,

ABE MCGREGOR GOFF,
Chairman.

NORMAN KRAEFT OF ABC COMMENTS ON IMPORT PROBLEMS AND AGRICULTURE

Mr. SIMPSON. Mr. President, the national agricultural editor of American Broadcasting Co., Mr. Norman Kraeft, authored a comment for his February 19 "American Farm Daily" program which, unfortunately, escaped the high measure of nationwide attention it deserved.

Although the Senate dialog on beef imports in connection with the farm bill is over for a few months, the questions of imports still remain with us. The Senate Finance Committee is holding hearings on that important question now, and as long as foreign beef and mutton products threaten to destroy those domestic industries in the United States, discussion on the issues will continue.

I would like to call Editor Kraeft's commentary to the attention of my colleagues with special reference to the writer's observation that:

Australia and New Zealand built up a beef business in the United States-and we settled with them at a level near the peak of their exports to us. In chickens, we built up an export business to Western Europe we finally settled on a basis of little better than 50 cents on our lost poultry dollar.

which is a graphic way of saying the administration cut our throat on "voluntary" meat agreements with Australia, New Zealand, and Ireland even after losing its pinfeathers in the so-called chicken war.

Editor Kraeft concludes his comment with this salient right hook:

We trust the chicken and beef settlements are not typical examples of what is in store for U.S. agriculture.

Mr. President, I ask unanimous consent that the commentary by ABC's Norman Kraeft be printed in the REC

ORD.

There being no objection, the commentary was ordered to be printed in the RECORD, as follows:

AMERICAN FARM DAILY

(As broadcast on Wednesday, February 19, 1964, by Norman Kraeft, national agricultural editor of ABC radio)

The settlement with Australia and New Zealand under which they voluntarily agree to limit their exports of certain meats to the United States to the average amount they exported to us in 1962-63 raises at least one question. How well are we doing in the international trade arena, especially in the bargaining on behalf of U.S. agriculture?

Cattlemen, livestock feeders and their organizations have complained for over a year about the damage they said they were suffering because of the rapid rise in imports of beef and other meats from abroad. Congressmen of both parties tell me that they have received more mail on the issue of beef imports than they have on any other agricultural topic in many a moon. Stockmen have taken note of the fact that beef imports from the down-under countries increased nearly a hundred percent in the past 2 years. They have suggested a rollback based on the average imports of the past 5 years and are not happy with the new agreement which rolls back the 1963 level a mere 6 percent.

It is interesting to note a comparison between the beef import situation and the recent chicken export business we had with the European Common Market. Australia and New Zealand built up a beef business in the United States over the past several years and we settled with them at a level near the peak of their exports to us. In chickens, we built up an export business to Western Europe. When they raised trade barriers against our chickens, we finally settled on a basis of little better than 50 cents concessions on our lost poultry dollars, and even this settlement did little-if anything

to maintain our poultry markets in Western Europe.

We trust the chicken and beef settlements are not typical examples of what is in store for U.S. agriculture in the forthcoming trade negotiations when, as Agriculture Secretary Freeman has so often said: "Agriculture and industry will be negotiated as a single package."

ADDRESS BY NORMAN M. CLAPP, ADMINISTRATOR OF THE RURAL ELECTRIFICATION ADMINISTRA

TION

Mr. NELSON. Mr. President, I ask unanimous consent to have printed in the RECORD at this point an address delivered by Mr. Norman M. Clapp, Administrator, Rural Electrification Administration, at the 22d annual meeting of the National Rural Electric Cooperative Association, in Dallas, Tex., on March 10, 1964.

There being no objection, the address was ordered to be printed in the RECORD, as follows:

REMARKS OF NORMAN M. CLAPP, ADMINISTRATOR, RURAL ELECTRIFICATION ADMINISTRATION, BEFORE 22D ANNUAL MEETING, NATIONAL RURAL ELECTRIC COOPERATIVE AssoCIATION, DALLAS, TEX., MARCH 10, 1964

It was 3 years ago that I spoke to you very briefly from this platform as the REA Administrator-designate. President Kennedy had announced it was his intention to appoint me to this position but at the time of your annual meeting here in Dallas I was still officially unappointed and unconfirmed although, thanks to your generous hospitality, not uninvited.

For all of us the occasion marked the threshold of a new period of reinvigoration for the rural electrification program.

In 1960, President Kennedy, then a candidate for the Presidency of the United States, had made a commitment to the rural people of America, a commitment to you. He had promised that as President of the United States he would, "restore REA to its former role of preeminence, freeing it from constant concern over political interference, higher rates of interest and budgetary starvation and enabling that remarkable American institution to get on with its work of providing low-cost electricity and telephones for every American farm family.

For the 3 years which have followed, this commitment has been the mandate for the REA program.

These years are now history. They have been years of great problems and progress, crisis and decision, tragedy and triumph.

Meeting again as we are at this time and in this place we cannot help but be mindful of the supreme tragedy these years have brought, but we should be mindful, too, of the triumph of American democratic institutions in rising to meet it. It can be truly said that never has the inner strength and dynamic stability of American democracy been more dramatically demonstrated than it was in that dark hour when President Kennedy was taken from the Nation. When all the world seemed to stand still in shocked disbelief, one great American President was promptly succeeded by another— and America continues to move forward.

And I am here today to assure you that the mission of rural electrification continues to move forward. The commitment of President Kennedy is still the mandate of REA under President Johnson.

This, I am sure, comes as no surprise to you who know firsthand the great contribution President Johnson has already made as a Member of Congress, U.S. Senator, majority leader of the Senate, and Vice President

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President Johnson has been a part of the great American story of rural electrification. He knows what you have done in bringing its importance to rural people. He knows light and power to rural America. He knows what it means in terms of better living. He knows what it means in terms of greater business opportunities in rural areas, for there are very few businesses which can operate today where there is not good electric-and telephone-service.

He knows the importance of rural electrification in the all-out war against poverty, a war he himself has declared on behalf of all Americans as President of the United States.

So, although the President deeply regrets his inability to be with you at this annual meeting as he has been on other occasions, I bring you his personal assurance of his continued support for the full purpose of rural electrification. He wants the job of rural electrification pressed forward toward the ultimate goal of providing parity of electric service for rural people. If rural America is to share fully in the Nation's prosperity, if rural people are to make their full contribution to the Nation's progress, we cannot allow either inadequate electric service or the high cost of electric service to retard better living or business opportunity in a rural area.

We cannot allow such handicaps to contribute to the persistence of poverty in rural

areas.

President Johnson knows the problems of bringing low-cost electric service to thinly populated rural areas. He knows the importance of technical assistance and lowcost capital as essential equalizers in overcoming the handicaps of rural service. He knows the magnificent job you have done in working together through nonprofit cooperatives, using the assistance offered through REA and developing systems of growing strength, to provide rural light and power.

And he wants you to keep at it, not simply to supply temporary stopgap service until someone else is ready to take over, but, as growing, vital, permanent rural electrification organizations, to continue the job you have begun so well.

And I can tell you that President Johnson wants REA to continue to help you do it.

The theme of your annual meeting in this year 1964 is "New Dimensions in Rural Electrification." As I recall my high school geometry there were the usual dimensions of length, breadth, and depth. But now there is a new fourth dimension-time. In rural electrification we have worked quite successfully in establishing the usual dimensions of the length and breadth and depth of the program. We need now to consider the new dimension of time, the new dimension of the future, the new dimension of permanence for what you have built and are still building.

If the rural electric systems are to be enabled to bring service to rural people of a kind and cost comparable to that enjoyed by consumers in the more densely populated urban communities, they must have assistance in overcoming the inevitable handicaps of low-consumer density and the limited revenue base of present-day rural service.

At the close of 1962, REA borrowers and the class A and B commercial power companies were operating 2.8 million pole-miles of distribution line and were serving 49.2 million consumers. The rural electric systems accounted for 1.4 million miles, or over half of this mileage, but only 4.8 million, or less than 10 percent, of the consumers. The

rural systems financed by REA serve only 3.3 consumers per mile of line, while the commercial companies average 33.2, or 10 times as many, consumers on each mile of their lines.

This handicap in density is further compounded for the rural systems by a lack of large power users in rural areas and a lack of load diversity. The electric business is a volume business. It is a business of large capital requirements necessary to build the basic plant to reach the users who must be reached, and the capacity to meet the maximum demand which must be met.

That basic plant investment must be there whether it is used to deliver 1 kilowatt-hour or a thousand, whether it is used 1 hour of the day or 24 hours each day. It is therefore a simple fact of electric life that the unit cost, the cost per kilowatt-hour delivered, goes down as the facilities are used to their maximum capacity. Load volume and load diversity make this possible.

Less than 20 percent of the 1961 revenues of REA-financed systems came from commercial and industrial loads. The class A and B commercial utilities drew more than 50 percent of their revenues from these

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Altogether this adds up to a contrast in revenue base even more startling than the gap in consumer density between the REAfinanced rural systems and the commercial urban-based utilities. In 1962, the annual gross revenue per mile of line on the REAfinanced systems was $460. On the class A and B commercial utility systems it was $7,164.

Low-cost REA financing and REA technical assistance have been indispensable equalizers in the development of feasible rural electric systems in the face of these handicaps of rural service. For many systems across the country these equalizers will continue to be indispensable for some time to come if we are to continue to work toward the goal of parity electric service and costs for rural people.

But, as I have said on many occasions, there are other equalizers which can be developed and which, if developed, can eventually eliminate the need for the equalizers provided through REA.

And this is where we can well look to the future in emphasizing such basic equalizers as rural area development, territorial protection, and full access to the lowest cost power the rapidly advancing technology of the industry can provide.

Three years ago as I met with you here in Dallas I cited these three problems as the major challenges of the rural electrification program, and we have been working together ever since to help you meet them successfully.

and rural electric cooperatives in particular, Since that time, REA borrowers generally, have contributed significantly to the economic development of the rural communi

ties they serve. They have become a key factor in the Department of Agriculture's

rural areas development program, revitalized and given new impetus by Secretary Freeman. They have provided valuable local leadership and support for the Area Redevelopment Administration's program in designated rural areas.

REA has helped you in this effort through trained staff people who are specially qualified to guide you in initiating local development projects and assist you in finding necessary financing for sound and feasible ventures. We have pointed to the availability

of section 5 loan funds in those situations where no other financing is available, where section 5 loans for the financing of electri

cally operated machinery and equipment, which also builds load and revenue for your cooperatives, can supply the missing credit link for launching a successful project.

In August 1961, we approved the first section 5 loan in connection with a rural areas development project. It was a loan of $25,000 to finance electrically operated gravel crushing and washing equipment to be run with electricity off the lines of a North Dakota rural electric cooperative. Since then, we have approved 16 more such RAD-type section 5 loans. Two of these were later rescinded as a result of changes in the borrowers' plans. All told, these loans have totaled $1,300,000 over a 3-year period.

This is a very small part of the REA loan program because the section 5 loan has been used very sparingly and only as a last resort when absolutely necessary. Its real significance is found not in the total volume of such loans but rather in its function as "seed money" in making it possible for electric cooperatives to help communities utilize whatever other resources have been available for expanding economic opportunity.

Nor is the use of section 5 loan funds an adequate measure of the far greater contribution made by REA borrowers in stimulating, assisting, and bringing to fruition a growing number of commercal and industrial development projects which are making rural areas better places in which to live and work. Although our surveys are by no means complete, they do indicate that since July of 1961 REA borrowers have helped to launch 937 commercial and industrial projects in rural America creating direct employment for 62,500 people and providing employment indirectly for 57,500 more people.

These new and expanded businesses represent a total additional investment in rural America of over three-fourths of a billion dollars. Of this capital, more than 92 percent is coming from non-Federal sources. The amount of section 5 loan funds provided through REA-financed electric systems is less than one-fifth of 1 percent of this total investment in new opportunity for rural America. This is a record of prudence and care. It is also a record of significant results. It is a record of which you-and wecan be proud.

If the rural systems are to successfully overcome the handicaps of low consumer density and limited revenue to support the cost of capital investment in their facilities, they must not only be able to stimulate growth within their service territories but hang on to it when it develops. This means they must be able both to protect their right to retain their complete service territories large ones as well as the small ones. and serve all electrical loads in them, the

While the protection of your cooperatives' territorial integrity continues to be a serious problem, there are hopeful signs of progress.

State legislation. Moreover, in Washington You have made some progress in the field of and in the State courts and commissions there has been new recognition that your cooperatives are entitled to equal treatment with other segments of the electric industry.

There is encouragement in recognition by important congressional committees that

dual rates and similar restrictive wholesale power provisions are not looked upon with favor and are recognized as sound reasons for turning to REA-financed power sources. The Comptroller General of the United States has likewise recognized that an REA generation and transmission loan can properly be based upon the need to protect the security and effectiveness of REA borrowers. Such warnings ought to promote a greater respect in the industry for cooperative service territories.

In the commissions and courts on the State level, efforts to make the cooperative's right to serve subordinate to certain asserted power company priorities have, in hopeful measure, been repulsed. There are welcome and increasing indications that the cooperative's right to serve its area is not to be prejudiced and watered down simply because its consumers are its members and owners, or because it has borrowed from REA.

The complete acceptance of the equal status, within the electric industry, of the rural electric cooperative's territorial integrity, is an important factor in bringing closer the day when rural electric systems can be self-sustaining.

Perhaps our greatest progress these past 3 years has been in the field of power supply. Whereas in the last 3 years of the previous administration, REA financed the addition of 717,000 kilowatts of new generating capacity, we have made loans in the 3 years of this administration for a total additional capacity of 1,700,000 kilowatts, or more than twice as much.

More than that, through the development of larger scale, more complex generation and transmission arrangements, substantial economies have been made in reducing the cost of power for rural electric systems under the present G. & T. program. The average generating unit size involved in our G. & T. loans of the last 3 years is over twice the average unit size for which loans were approved from 1958 to 1961. The average cost of power under the generation and transmission loans approved since 1961 is 8 mills. The average cost of power under the G. & T. loans approved in the 3 years before 1961 was 9.2 mills.

The wholesale cost of power represents almost half of the REA-financed distribution systems' cost of operation. Low-cost power, the lowest cost power possible, is therefore one of the basic equalizers we must develop if the rural distribution system is to overcome its handicaps of low density and low revenue and still make electric service available in rural areas at parity rates.

The third criterion which was added to REA generation and transmission loan policy in 1961 under this administration is a straightforward avowal of the role of REAfinanced generation and transmission in both the protection of rural systems from the retail encroachments of hostile wholesale suppliers, and increasing the distribution system's effectiveness in delivering lowcost power to its rural consumers.

One of

There are other equalizers, too. these which you are developing is the very important equalizer of nonprofit operation through your cooperative organizations. Your members are supplying free use of their equity capital in their respective systems. This interest-free capital provided by your member-consumers is growing into very substantial amounts. It totals now $950 million or 23.7 percent of the total assets of all REA

electrification program to move closer to its financed rural electric systems. All this is progress which enables the rural ultimate objective of parity of electric service for rural people. We are still substantially short of this goal. Exactly how far short we are is hard to determine precisely. The limited studies we have been able to make indicate, for instance, that rates on REA-financed rural systems are generally about 30 percent higher for the first 250 kilowatt-hours than the rates of city consumers. For the first 500 kilowatt-hours, our limited studies indicate that rural consumers on REA-financed systems are paying between 20 and 25 percent more than are city con

sumers.

But the progress we have been making these past 3 years is showing up in rate reductions for consumers on REA-financed systems. In fiscal year 1961 only 14 REA bor

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