SOUTHWESTERN POWER ADMINISTRATION

Mr. JOHNSON of Oklahoma. In that connection, there is a budget estimate of about $23,000,000 before this committee for the Southwestern Power Administration. I assume that you have not made any study of that proposed program and that you would not care to make any specific recommendation with respect thereto at this time. The committee seems to be somewhat disturbed about it. I am personally disturbed about the proposed estimate, especially when Mr. Wright comes before the committee and says that he wants all or none of the $23,000,000 at this time.

Do you care to make any comment about that project, especially the proposal to tie the projects together, or would you prefer to wait until you have given it some study?

Secretary KRUG. I would prefer to wait until I have given study to the specifics of that project. There is just one general thing I might say in connection with a project of this kind. This is a controversial matter, but I think the committee ought to know frankly what my position is.

I feel that you cannot give the public the benefit of the power from these great Federal projects unless the projects are tied together in such a way as to maintain the economy of their operations, at its maximum, and unless you can take the power to the REA groups and to the people wanting it.

Now, I think that can be done in every single area without duplicating existing investment and without invalidating dollars spent by private parties on similar facilities. In some cases it might require the leasing of lines or the common use of lines. But I am very cynical about the argument always made by the private power people that every Government transmission line duplicates something they already

have.

As you gentlemen probably know, that argument was made in the TVA area and it was made in the Pacific Northwest, and the facts have demonstrated that the Government transmission lines did not duplicate the private facilities. Taking TVA, as an example, all the private facilities were finally bought out, and more had to he added to serve adequately the entire area and to give the kind of power service needed to reach the farming areas and to serve the new industries which are located in the area.

I do not think you ought to bottle up the power generated at these multiple-purpose dams at the bus bar on the promise of somebody, of some private group, that they are glad to take that power and distribute it just the way Congress intended. I do not think you can depend on that.

I do hope that this committee will recommend the funds necessary to tie together these projects so that they can operate as an integrated economic power system, bringing the benefits of power to the people in the area.

If the people in an area want private distribution, that is all right with me. If they want public distribution, I think they should have a chance to have it and I think that these farm groups ought to have a chance to get the benefit of low cost power where they need it. They are not in a position to build the transmission lines to the dams, and I

do not think you ought to leave them at the mercy of some private group that says, "We will take just as good care of these farmers, the same as though they were buying the power directly."

Mr. ROONEY. Have you found from your experience that you cannot depend on such promises from private utilities?

Secretary KRUG. I have spent a good deal of time, before I went into the TVA, on the regulatory end of the utility business, and it is impossible to establish the cost of utility service without having some way of measuring it. And unless you have a mixture of public operation and private operation, I do not think you can get essential services to the public at the minimum cost.

I do not mean for a minute that all the private utility operations in the country should be replaced. I think that might be equally bad, to have all of them under public control. But I think a community which wants its own power system, should have the right to get power, which has been developed in that area, incidental to other responsibilities of the Government, at the lowest possible cost.

Mr. ROONEY. Mr. Secretary, you do not think that there should be any delay on the part of this committee in deciding upon the $23,000,000 requested appropriation for Southwestern Power administration?

Secretary KRUG. I do not. I hope the committee will use its very best judgment. I am sorry I have not had a chance to study the problem in detail, so that I could give you my own opinion. I do know a good deal about this area and I know that the argument about duplication has been made many times before. It happens that as Director of the Office of War Utilities in the War Production Board, I approved the construction of the so-called Ark-La Transmission Line, which was a subject of tremendous controversy. I can tell you that that particular line did not involve any duplication, although the argument was made and was made strongly by the private power companies, that it did.

I can tell you that on the basis of my own personal study of the facts. I would think that lines that would link together the Federal project under way in that area, from the point of view of sound engineering, would not duplicate existing facilities, but would supplement them and would be essential and desirable for the long-range development of that very vital region.

PRINCIPLES ESSENTIAL TO SOUND GOVERNMENT

Mr. KIRWAN. Mr. Secretary, I am very much interested in the statement that you made when you took over the office you now hold. You set forth three principles, which you said have been recognized as essential to sound government. They were:

Operation of the Department as a single going concern through the teamwork of its bureaus and agencies. We will not need any grandstand performers.. The activities and functions of the Department will be discharged, delegated, or redistributed to produce the best results for the people of the country. The Department's prestige or the prestige of its executives will not be permitted to confuse the issue of how the job can best be done.

Merit, competency, and devotion to public service will provide the criteria for employment or advancement.

NEED FOR ECONOMY IN ADMINISTRATION

I was glad to read that statement, Mr. Secretary, and I am glad that you made it. But there is one thing that is important to me, as a member of this committee, and that is this: From what I know of this Government, it is the custom that all money matters originate in the House. But the practice has grown up, in the 10 years that I have been in Congress, for a bill to originate in the House and what is not secured in the bill in the House, is later requested of the Senate, and it is inserted in the bill over there, bypassing the House committee. when under the Constitution, those matters should start in the House.

I have made two trips over this country. I went up into Alaska this year and I was sorry to see as a member of the Appropriations Committee, the waste of taxpayers' money-the situation at Sitka. and the $37,000,000 investment at Excursion Inlet, completed after the Japs were headed toward Tokio, which was a deliberate waste of money. True, that does not come under the Interior Department, but we do see some waste of money in this Department.

As a member of this committee I think we have been bypassed too often, but I think I can say this truthfully, that as long as I am a Member of Congress and a member of this committee, whenever the Department does bypass the committee from now on, they will find me very bitterly opposed to those things the Department wants and maybe needs.

I think you will find that this committee is very sympathetic to the wants and the needs of the Department, but I say again, speaking for myself, that if I find the Department bypassing this committee and going over to the other end of the Capitol, instead of coming here, where these money matters should start in the first place, they are not going to find me in their corner.

I would like to say for the record that I do believe you are going to make a good Secretary of the Interior. But I say again, if you are going to be a good Secretary of the Interior-and I hope you will be--I hope that when you want something for the Interior Department, you will lay your cards on this table first, before going to the other end of the Capitol. I think you will find that the rest of the committee are of the same opinion; that if you do that, we will be very sympathetic to your needs and we will be in your corner. I believe that is all, Mr. Chairman.

Mr. NORRELL. I have one or two matters I wish to discuss, Mr. Chairman. I should like to say that I concur in what our chairman and Mr. Kirwan have said. The one hope I have is that we will have between this committee and the Interior Department a more friendly and harmonious relationship than we have had in the past.

I have been able to disagree with my fellow man as vigorously as a human being can and at the same time like him and respect him and be his friend. I think the highest compliment that was ever paid to me was paid by a circuit judge. He said to me, "You can fight for what you believe to be right as hard as any man, and win or lose, when the fight is over, you have no scars left and you still desire a friendly relationship with your fellow man."

Some people cannot do that. I may not agree with you and other members of the Interior Department. I may be wrong. There is

a possibility that you may be wrong. After all, there has only been. one perfect man and I believe He was crucified.

IMPORTANCE OF REAL PURPOSE OF RECLAMATION, FLOOD CONTROL,

ETC., PROJECTS

Something has been said about power. I happen to be on the Appropriations Subcommittee for the War Department. We have jurisdiction over appropriations for flood control and river and harbor matters. And I am a member of this subcommittee that has charge of reclamation appropriations. I know that these two subcommittees are interested first in flood control, rivers, harbors, and reclamation. We have not appropriated one dollar to produce power, as a principal consideration. And these programs are going to be jeopardized and probably destroyed if we place public power over and ahead of flood control, rivers, harbors, and reclamation. I have always supported REA; never voted against it in my life. I was born and reared in the country. I know what it means for country people to have to live without electric lights and refrigeration. I have supported all of those appropriations. I want as cheap power as can be supplied on a sound economical basis. I want the benefits of these dams to be passed on to the consumers.

I am also in favor of private enterprise in this country and I am going to be fighting for the American system of private enterprise when the last scrap has been won at Waterloo, or Gettysburg, or Bunker Hill.

POWER PROJECTS IN THE SOUTHWEST

I want to ask you this question. Down in the Southwest we have a number of REA projects. You may be surprised to know that within a period of 10 years, my State of Arkansas ranks today as having made the third highest progress in rural electrification of any State in the Nation. We rank No. 3. The State that ranks No. 1 is Mississippi. The State that ranks No. 2 is South Carolina. Arkansas is No. 3 and Texas is No. 4. So we believe in rural electrification.

I am advised that the REA's in that area are presently getting power from two sources, (1), the private power companies, and, (2), the public power facilities; and that the private power companies are supplying power to the REA's on the same basis and for the same price as the public power facilities.

If that is true, then so far as REA is concerned, can you see any necessity for building transmission lines? That is, if the rest of the State can be electrified on the same basis, and at the same price as exists there at this time, is there any basis for transmission lines?

Secretary KRUG. I really cannot answer your question the way I would like to, because I do not know enough about it. But I just want to put out this generality that you might want to have in mind in considering that problem.

The cost of public power now in your area is controlled by the system that is now there, which is not as economic as it could be made. The rates charged by the public power systems are premised on their current set-up and their current cost.

There are a number of things that could be done in Arkansas, Oklahoma, and Texas to greatly reduce the cost of public power. I will give you just one example, because I am not in a position today to discuss the details of the plan. There is at Camden, Ark., the footings of what is probably the most economic steam plant in the entire Southwest. That plant was stopped during the war, as a war necessity, because we found a way of pooling the power in the region and rather than putting turbines in there, we put them in battleships. But a steam plant at that point would greatly reduce the cost of power to the public systems in that area.

In short, you might have $100,000,000 in flood-control projects, with incidental power. By putting four or five million dollars into a steam power plant, to back up that hydro system, you could greatly reduce the cost of the power in total, because you would get so much more power for such a small added investment.

It is economics of that kind which are finally controlling in whether your committee should appropriate funds for the purposes for which they have been requested.

I would not want to go into that question because I assume Mr. Wright has laid all that before the committee. But I do know, from my own experience in this particular area, that the cost of public power can be greatly reduced by proper integration of the facilities in the area, with some backing up from low-cost steam-produced power that could be used to greatly increase the available hydro power.

Mr. NORRELL. I am in favor of passing all these benefits on to the consuming public. I share that interest equally with you. I am opposed to the private power companies bottlenecking any power up in any certain area. But I notice, in looking over a statement that was placed in the Congressional Record yesterday by Mr. Rankin that, for instance, the Tennessee Light & Power Co. is supplying power to the KEA's over there for 7.11 mills.

And then cthers in Mississippi-I will not read them all-7.44, and others at 6.43, and 6.88. Now, that is all in the TVA region. It strikes me, if the rates in Arkansas are not very much in excess of those, that the power price is very well stabilized, because we could not expect to get cheaper power than the REA's receive in the TVA region. Is not that correct? Of course, I repeat, I want all these benefits made available to consumers as by law provided.

Secretary KRUG. I cannot say what the cost of power is in Arkansas. I knew at one time, but I do not remember it. It is my recollection that the power rates to the public in Arkansas are considerably higher than the rates of public power in Tennessee.

QUESTION AS TO DUPLICATION OF TRANSMISSION LINES IN SOUTHWEST

Mr. NORRELL. In looking at the map to which you referred awhile ago, you see the green and red lines. Now, after a study of the map and in view of what you said you ought to be able, as an expert, to tell this committee whether or not in your opinion, without any special study, the red and green lines duplicate services or do not duplicate services, or that there would be a partial duplication. What would you say about that?

Secretary KRUG. I wish I were that expert, Mr. Norrell. To be frank about it, you cannot tell anything about whether facilities duplicate without knowing what the conditions are in the area.