never have been the head of the O. P. M. Power Section. He is with the Edison people and naturally Mr. TARVER (interposing). What was his connection; head of the Power Section? Mr. SLATTERY. He was head of the Power Section. Mr. TARVER. What is his name? Mr. SLATTERY. C. W. Kellogg; he was with it. EVIDENCE OF ABILITY OF PRIVATE COMPANIES TO GET COPPER Mr. TARVER. You make a statement there that is of intense interest to all the members of the committee, and I think to all the Members of Congress and perhaps to people throughout the country with reference to power companies being able to get plenty of copper. Now you say you do not know the facts; you do not know how much they have. Upon what do you base that statement? Mr. SLATTERY. I do not have the figures; but the spite lines they are constructing are evidence that they have the copper. Mr. TARVER. You mean in building new ones? Mr. SLATTERY. In building new lines; they not only have said they had the copper but they have made it visible on their spite lines. Mr. TARVER. To what extent have they been doing that? Mr. SLATTERY. You mean were planning to take over? Mr. TARVER. In what way were they going to get the copper? Mr. SLATTERY. I do not know; I do not know their line of inquiry, but I will get Mr. TARVER (interposing). Can you give us any idea as to just what amount of copper is involved in these allocations, to these concerns concerning which you do have information? Mr. SLATTERY. You mean the immediate amount? Mr. TARVER. Yes. Mr. SLATTERY. I could not answer that; perhaps we could get the data. Mr. TARVER. And as to the miles of line. Mr. SLATTERY. I think we could; miles of spite lines. Mr. TARVER. And as to the lines that are under construction, and as to the copper they had prior to this acute emergency. Mr. SLATTERY. I could not answer with respect to their other construction, or as to their inventories prior to the emergency. Mr. TARVER. You do not know they will receive allocation for copper or not? Mr. SLATTERY. I could not answer that. I will say frankly that I suppose I see as many utility men as O. P. M., and I have had it from many-it is not a guess, and I will say right here, that men like Carpenter told me Mr. TARVER (interposing). Who is Carpenter? Mr. SLATTERY. Of the Texas Power & Light Co. Mr. TARVER. What is his position? Mr. SLATTERY. He is president of the Texas Power & Light, and he told me they had plenty of copper. Mr. TARVER. Did he say when they got it? Mr. SLATTERY. No; he did not. But he was negotiating the construction of some lines Mr. TARVER. That is the sort of information the committee wants, as to the copper these power companies have. Now, if you have that information we would be interested in having it. Mr. SLATTERY. And I remember Mr. Owens- Mr. SLATTERY. President of Oklahoma Gas & Electric. Mr. TARVER. And what was it he told you? Mr. SLATTERY. He told us he had copper; that we should not build, inasmuch as he was interested in other lines, and that R. E. A. should not be taking the strategic materials which they would have to get from O. P. M. And, I am going to say that I am Mr. TARVER (interposing). Did he tell you how much they had? Mr. SLATTERY. He did not say how much, but he was urging that we not build because it would take strategic material, and that they had the copper. Now I do not think it is any secret; certainly the power people were farsighted enough to see ahead, and they did buy up plenty of copper. AVAILABILITY OF INVENTORY COPPER FOR NEW EXTENSIONS Mr. TARVER. Do you understand that they are permitted to use that copper in the construction of new lines, that is, copper that they had prior to the period of acute emergency through which we are now passing? Mr. SLATTERY. I think they had the foresight; of course they saw that priorities were coming and I do not know why they should not exercise foresight enough to get the copper. Mr. TARVER. But my question is whether that copper can be used in the construction of new projects and which you cannot use to complete the construction of R. E. A. lines. And do you know of any order having been issued which would prevent their using, to the fullest extent, any available amount of copper which they procured prior to period of the acute emergency? Mr. SLATTERY. I should say the answer to that is perfectly clear. The situation has been such that the R. E. A. could only make allotments, whereas the power companies could go out and secure the copper, secure the material, which of course was an advantage they had over us. Mr. TARVER. I do not think you understand my question. You said the power companies have large amounts of copper. Mr. SLATTERY. I think they have. Mr. TARVER. That they can use in the construction of new lines, and that you cannot get copper for the construction of new lines. Now, assuming that the power companies secured that copper before this period of acute emergency, and had it in stock, has any effort been made by O. P. M. or so far as you know, is any consideration being given to having restrictions placed upon the use of that copper in stock prior to the emergency, so that it cannot be used except under the same restrictions that you might be able to obtain allocation for copper for your construction? Mr. SLATTERY. Well, I will answer that by asking another question. As I understand it, Mr. Wallace's group found where they were taking away from some people what they were going to use, and if you are going to hold it down to a very definite object Mr. TARVER (interposing). In other words, you express approval of such procedure as my question might have suggested.. Mr. SLATTERY. I think so. Mr. TARVER. But my question was, during this time, do you know. whether or not any action has been taken by the O. P. M. or by S. P. A. B., according to your information? Mr. SLATTERY. I do not know, but I think that from the questionnaire Mr. Krug is securing information about copper; what amount of copper the utilities have on hand. STATUS OF CONSTRUCTION OF RURAL ELECTRIFICATION ADMINISTRATION PROJECTS Mr. TARVER. With regard to the list of projects which is submitted: Do you include here all the cooperative projects for which allotments have been made but where no construction has been undertaken ? Mr. HAGEN. In the D group there has been no construction on the systems identified as zero construction, although some bids have been opened and contracts are under consideration. Mr. TARVER. The first, under A, B, C, in each case, I find in group C you have a number of cases where no construction has been had. Mr. HAGEN. That is correct, sir, in group C; although contracts have been let, construction has not yet begun. Mr. TARVER. But no construction has been had? Mr. HAGEN. No construction undertaken. Mr. TARVER. It seems then that perhaps the majority of the projects in group C come within that category. Mr. HAGEN. Approximately half of those in group C. TOTAL MILEAGE AND POUNDS OF COPPER REQUIRED TO COMPLETE EXISTING PROJECTS Mr. TARVER. What is the total mileage of the projects which are listed here? Mr. CRAIG. 68,750 miles, comprising 373 projects, needing 51,369,403 pounds of copper for conductor. Mr. TARVER. What is that in tons? Mr. CRAIG. It is about 25,000 tons. Mr. TARVER. 25,000 tons of copper would enable you to complete all of these projects? Mr. HAGEN. That is the estimate for conductor requirements. Mr. TARVER. That would not, however, permit giving any consideration to any new project? Mr. CRAIG. No. Mr. TARVER. How does the 68,750 miles of line compare with the mileage of lines under construction during the last fiscal year? Mr. CRAIG. In terms of money it includes about one-half of the cooperative program for the present fiscal year. Because of differences in appropriations and carry-over figures, data for various fiscal years are not strictly comparable. Mr. TARVER. In other words, if you secured enough copper to build all of these projects, you would still be about able to spend one-half of the money which has been made available for the present fiscal year? Mr. CRAIG. That is correct; on new lines. Mr. TARVER. I am sure, gentlemen, that other facts with regard to this matter will be brought out by other members. FINANCIAL SUCCESS OF RURAL ELECTRIFICATION ADMINISTRATION PROJECTS DEPENDS ON COMPLETION Mr. LEAVY. Mr. Slattery, I am sure your agency takes the position that all of us do, that if there has to be curtailment by reason of the emergency program you are willing to make that curtailment and do it gladly, but you do not want it to be made at the expense of these various R. E. A. cooperatives in the country to the advantage of some other groups. Mr. SLATTERY. That is it exactly, Judge. Mr. LEAVY. The Central Agency, of which you are the head, does have an interest in every R. E. A. throughout the United States, does it not? Mr. SLATTERY. Yes, indeed. Mr. LEAVY. And the difference between the completion of an R. E. A. construction of a few miles, perhaps, and the furnishing of the various instrumentalities used in the distribution of electricity by such R. E. A. may be the difference between the success or failure, finally, of such R. E. A. Mr. SLATTERY. That is correct. Mr. LEAVY. And for that reason, perhaps, you ought to be able or should be placed in the position where you would exercise some discretion in the matter of priority. Mr. SLATTERY. I did agree to that, Judge, at the beginning, and if that arrangement had continued we would not have most of this trouble. Mr. LEAVY. Do you now have R. E. A. cooperatives in the United States that are on the verge of collapse by reason of their inability to complete construction? Mr. SLATTERY. That is right. SPITE LINE ACTIVITY Mr. LEAVY. Do you have instances, or have you had instances, since the priorities have come into being where R. E. A. "co-ops" that were going concerns have projected their lines before the emergency began, went out and got subscribers, and now, by reason of the inability to get copper or other things that are needed, the subscribers are being urged to take down their subscriptions and are being told that they can be served from some private sources? Mr. SLATTERY. I would say again, as I said a minute ago, that we have to face an increase of spite lines. I could list here many instances where representatives of private companies have said to people starting an R. E. A. system that strategic material is very necessary, and that "you are unable to get copper; we have got copper; you can never get it from R. E. A.” Mr. LEAVY. And that is having a tendency to demoralize the R. E. A. program out in the field? Mr. SLATTERY. That is right. AVERAGE MONTHLY COPPER REQUIREMENT UNDER RURAL ELECTRIFICATION ADMINIS TRATION PROGRAM Mr. LEAVY. And in this table you have submitted, and which has been made a part of the record, do you include just such R. E. A. projects as have come into being in the last fiscal year, in this priority classification? Mr. SLATTERY. There is an overlapping of fiscal years. Mr. HAGEN. Yes; it does overlap. The total figures there are about 51,000,000 pounds of copper necessary for completion of construction of all projects under allotment; of that approximately 33,000,000 pounds is for projects allotted out of fiscal 1941 funds actually under construction, and not quite 7,000,000 for projects allotted out of fiscal 1942 funds actually under construction. Mr. LEAVY. But in addition to projects that are enumerated in that table there are those that are going to be completed. That is what I wanted to get at. Now, if you were authorized to make loans this year to the extent of $100,000,000-I think that is the appropriation made by Congress, and initiated in this committee. Mr. CRAIG. Yes? Mr. LEAVY. And you say you have now allocated from that how much? Mr. SLATTERY. $56,000,000. Mr. LEAVY. And does that $56,000,000 allocation include the projects which you expect to include as well as the projects that are set forth in this exhibit? Mr. CRAIG. With the exception of approximately $9,000,000 worth of line, which would be somewhat around 900,000 pounds. Mr. HAGEN. I think so. Mr. CRAIG. With the exception of about 900,000 pounds of copper. Since this table was made, Mr. Congressman, there have been some additional allotments made which have not been included in the total. Mr. LEAVY. Now, in the preceding fiscal year you also had the authority to place $100,000,000. Mr. CRAIG. Yes, sir. Mr. LEAVY. What was the average copper consumption in these projects through the 12-month period; do you have that? Mr. CRAIG. I think I could give you that exactly. On an average we constructed approximately 6,600 miles of line per month and that would normally require about 7,250,000 pounds of copper per month. Mr. LEAVY. I think that answer is close enough for my next question. To carry that program forward, in view of the $100,000,000, you would have needed more than the amount of copper indicated. by reason of uncompleted projects? Mr. CRAIG. We are of course using the schedule of projects here based on an 18-month program; the construction program resulting from a fiscal year's funds extends over about 18 months. Mr. LEAVY. Based upon the $100,000,000? Mr. CRAIG. $100,000,000, and carrying over from last year about $30,000,000 for construction. Mr. LEAVY. I see. |