probably would not even send him up, because we would have to spend some money.

Senator ALLOTT. He would be rejected flat out if he has got a felony conviction?

General HERSHEY. He will be rejected flat out. There is no question about it, if he has been convicted of a felony. While there is a little difference between the States what constitutes a felony, the case you outline is definite. There is no question about that.

Senator ALLOTT. Well, I just wanted to get the matter straight in my mind.

What about the draft-card burners?

DRAFT-CARD BURNERS

General HERSHEY. Well, the draft-card burners that we have had have all advertised far enough ahead that they were going to burn them that the FBI and the police have picked them up, and Selective Service never had to report any draft-card burners, because they have been exhibitionists and have tried to see that they have their audience pretty well notified before they indulged in the draft-card burning. Some have been sentenced. I do not know too much about it. I just have not made it a point to find out.

One of the problems, where I get again burned up, if this draftcard burner comes in and says, "I have learned my lesson and I am willing to go and serve," the provisions of this act is for the purpose of getting people in the service and not in the penitentiary, and therefore he should have been allowed to do it. Of course, these boys have not any intentions of volunteering to serve.

We did have a case in Chicago and all I know is what I read in the paper. The boy would not step forward and he was being tried and I think the judge had about convinced him he ought to go in. His mother was in court and she shouted out, really almost in contempt of court, "You go to the penitentiary." He did. Which is one of the things that gets the father in somewhat of a peculiar position because he believes in parental authority, in the first place, and be believes in boys obeying their parents, and here is a case where the boy obeyed his parent and he should have obeyed the judge. I am sure he will regret some day that he went to the penitentiary.

Senator MAGNUSON. What are the rejections on the perversion problem, low?

General HERSHEY. I suppose they are low but they are high even if they are low.

Senator MAGNUSON. Are they moving up, too?

General HERSHEY. Well, the Armed Forces would be the ones to answer that.

Senator MAGNUSON. Of course, that is sometimes determined by self-admission?

General HERSHEY. Yes.

Senator MAGNUSON. However, that would be very small; would it not?

General HERSHEY. Yes; but, of course, many things of that kind, that sort of thing would be largely statistical.

PROPORTION OF NEGROES TAKEN

Senator MAGNUSON. Could you give us any enlightenment on the charge that has always been made that percentagewise, racialwise, more of the colored boys are taken in than white boys?

General HERSHEY. Well, in the first place, unless it has been very, very lately, our rejection rate obviously and for reasons I think we all regret have been much, much higher-out of the 212 million that have been rejected for educational reasons, there is a disproportionate number of those, unfortunately, that came from the Negroes because they just did not have school facilities and, therefore, they did not pass.

Senator MAGNUSON. They are probably just as bright but they did not have the same advantages?

General HERSHEY. They did not have the chance to go to school. It is also true, and Selective Service gets the blame for this, and it is all right, but we do not have anything to do with it. The reenlistment rate of the Negroes, I understand, is about 46 percent, which is, of course, very, very much higher than others. I do not know much about who is down in Vietnam, but most of those units are regular units and, therefore they are going to have a disproportionate number of reenlistments. I have a son-in-law, commanding a battalion out in Korea, and his sergeant major is a Negro and very properly so. He has reenlisted three or four times. They are regular units and your noncommissioned officers are far more Negroes than exists in the population. I am very proud of that. I also saw an article in the paper this morning that I am pretty proud of, because at least the Armed Forces are setting some example in integration.

After all, they are down there in the Armed Forces and somebody gets injured and killed; you get killed, but in the induction business we always have been on the other side because the rejection has always been very much higher for the very obvious reasons.

Senator MAGNUSON. For the same reasons?

General HERSHEY. Yes.

Senator MAGNUSON. One of the reasons is, the Negroes do well, and I suppose they must like the military life or they would not reenlist?

EDUCATIONAL REQUIREMENTS

General HERSHEY. It has an economic problem, because a sergeant gets paid pretty well compared to some living on the outside. Leaving the colored question out of it, if I were in the Army and had any authority, I would try to get hold of a kid that maybe had not finished high school but was sort of a bright boy and he is the fellow I would train to be my first sergeant, because, in the first place, I am not going to have some company coming to hire him because he has not got very much educational background.

Senator MAGNUSON. However he is going to be a great soldier? General HERSHEY. Yes. And not only that, I can teach him the things he has to know. He will know about electronics, but I will not have anybody trying to hire him because they will say how long did you go to school and he will have to say I didn't finish high school. So, therefore, for that very reason, with 11 percent, 10 percent, of the Negroes in the population, there are probably, I do not know-Alsop had the figures in this morning and they run very high, 30 to 40 percent of our noncommissioned officers are Negroes.

Senator ELLENDER. Now in the service?

General HERSHEY. Now in the service, yes, because they reenlisted. About 20 percent of our noncommissioned officers are Negroes because they reenlisted.

Senator ELLENDER. That is a way of life for them, as you said.

General HERSHEY. Yes, economically, they can do better there than they can on the outside.

Senator MAGNUSON. Well, is there any further questioning of General Hershey?

Do you have any, Senator?

Senator ALLOTT. I do not have any more, Senator.

POSITION OF SELECTIVE SERVICE

Senator MAGNUSON. Well, we appreciate your testimony and your frankness in these matters. I still hope that maybe we can help in a small way to clear up some of the misunderstandings where the line of authority and responsibility lies in this particular field.

I think, this system is one in which there are bound to be some problems, in some cases, with that large a number of people involved. We cannot help it. However, Congress has a great responsibility itself. If we do not carry it out properly, or the President or Defense Department has too wide a range of authority, within the act, we ought to limit it, if we feel that way, or change it.

However, the telling point I think you make, is that when a man is deferred he is supposed to be deferred because he is going to make contributions somewhere else. These could be just as important a part of the defense of the country as the man who goes in. Otherwise, there would be no reason to defer him. Local boards sometimes will make mistakes. They are bound to with this number of people.

General HERSHEY. If one of the local boards makes a mistake we would have one-four thousandths of one mistake. If I were up here running all 4,000 of them, I might have 4,000 mistakes if I make them. Senator MAGNUSON. That is true. This is part of it.

Congress is always very diligent and conscientious in trying to place authority down to a local level as much as we can in nearly everything we do. I do not know why people sometimes accuse Members of Congress of wanting to have big Government. The smaller the Government, the less job we have. The problem is, sometimes when we get down to the local level, we get in some trouble. We do attempt this, however, with nearly all major legislation. We do as much as we can. When the States and these local communities can handle it. The same way with Selective Service. I think this was a wise decision to put the authority with the local boards. Despite that fact I can find in my office today, I am sure, in the morning's mail, something that looks like, on the face value like some kind of discrimination. And sometimes it is.

Thank you very much.

General HERSHEY. Thank you.

SUBCOMMITTEE RECESS

Senator MAGNUSON. We will be in recess until 2 o'clock.

(Thereupon, at 11:45 a.m., the hearing was recessed until 2 p.m. the same day.)

(AFTERNOON SESSION, 2:05 O'CLOCK, WEDNESDAY, MAY 25, 1966)

FEDERAL POWER COMMISSION

NONAGENCY WITNESSES

STATEMENT OF ALEX RADIN, GENERAL MANAGER, AMERICAN PUBLIC POWER ASSOCIATION

PREPARED STATEMENT

Senator MAGNUSON. The subcommittee will come to order. Mr. Alex Radin, of the American Public Power Association, wants to give a brief testimony on the Federal Power Commission.

Mr. RADIN. Thank you, Mr. Chairman. My statement can be in

serted in the record.

Senator MAGNUSON. All right, we will put it in the record in full. (The statement follows:)

My name is Alex Radin. I am General Manager of the American Public Power Association, which represents more than 1,400 municipal and other local publicly-owned electric utilities in 45 States and Puerto Rico. Our offices are located at 919 18th Street NW., Washington, D.C.

Although local public power systems serve only about 13% of the nation's electric consumers, they operate more separate electric utilities (in excess of 2,000) than any other segment of the electric industry, and they are second only to the private power companies in the number of consumers they serve. Altogether, local public power systems serve about nine million homes, businesses, and industries, or a total of about 30 million Americans.

FPC POINTS WAY TO CONSUMER SAVINGS

Many local public power systems generate their own power supplies or pur-, chase power from Federal power systems. However, nearly 1,000 purchase all or part of their power from private power companies subject to the jurisdiction of the Federal Power Commission. This is a principal reason for our interest in adequate appropriations for the FPC.

In recent years, the FPC has made a variety of significant contributions to the electric industry, American consumers, and the national economy. These include the preparation and publication of the landmark "National Power Survey" which set guidelines for utility growth over the next 15 years and pointed to possible patterns of expansion which could result in savings of as much as $11 billion a year to users of electricity in 1980. The Commission's report on the Northeast blackout of November 9, 1965, and subsequent studies of major power failures have helped to pinpoint desirable changes in existing practices. Similarly, the FPC has actively sought to implement its hydroelectric licensing responsibilities, and to carry out internal procedural reforms.

Of particular interest to local public power systems is the Commission's work in regulating the wholesale rates and contract conditions of jurisdictional private power companies who sell to municipalities and other public agencies.

RATE REGULATION REVITALIZED BY COMMISSION

Electric rate regulation five years ago was a neglected responsibility at the Federal Power Commission. The interstate wholesale rates of many interstate utilities were not even on file with the Commission. Furthermore, since the entire electric rate staff consisted of four people, the rates that were on file could not be scrutinized. The Commission had not decided an electric rate case in 10 years.

Today such apathetic administration of Part II of the Federal Power Act has been discarded, and the Commission is actively engaged in a program of reviewing rates to insure reasonable prices and fair terms and conditions. While the FPC was virtually starting from scratch as far as a comprehensive effort to implement the law in this area is concerned, the cumulative effect in the relatively short intervening period has been substantial. For instance, the number of rate schedule filings received during fiscal year 1965 was about double the number received in fiscal year 1964, and among the completed filings in fiscal year 1965 were annual rate reductions of over $8,000,000, compared with $1,448,000 during the previous fiscal year. Major credit for these changes is due to increased FPC staff activity.

Local public power systems have found that the Federal Power Act represents an opportunity to obtain remedial relief from existing inequities in rate level, rate design, restrictive provisions, discrimination, and interconnection. Sometimes these complaints can be settled informally, with the Commission staff serving as mediator. In other situations, a formal proceeding is required. In either event, the ability of small systems-public or private-to deal on equal and equitable terms with large wholesale suppliers has been materially enhanced. Here are a few examples:

EXAMPLES OF FPC PROTECTION

The municipal utility of Shrewsbury, Massachusetts, had been served for years by a devious route which brought power to Shrewsbury via two affiliated power companies, both operating at the Shrewsbury substation. The city was forced to pay the higher rates of one of the companies, and went to the FPC for help in obtaining direct service from the company with the lower rate. FPC ruled with the city and ordered New England Power Company to serve the municipal utility at its lower rate. Savings to the city are estimated at more than $40,000 annually.

Six cities in Wisconsin filed a protest with FPC over a proposed rate increase by Wisconsin-Michigan Power Company. The company had filed new rates which would have increased the cities' wholesale costs from 13% to 30%. The cities appealed to FPC to reject the new rate schedule or to provide for hearings on the new rates, contending that their contracts with the company did not provide for such unilateral action. The Commission suspended the rate increase and called for hearings. After a full-scale case, the Commission ordered refunds of almost $500,000 to nine of the company's wholesale customers. The FPC also recommended a reduction of about $50,000 per year in the company's proposed new rate.

Georgia Power Company has for a number of years restricted its municipal customers from reselling power for industrial and commercial loads above certain sizes. FPC asked the company to show cause why such rate schedule provisions should be maintained, and a hearing was held. The Commission found that these limitations were "unjust, unreasonable and unduly discriminatory", and ordered them eliminated. It is not "normally consistent with the public interest for a wholesale supplier of electric power to restrict the manner in which its customer may resell the power," the Commission said.

Some 30 electric cases are presently underway at the FPC. These include complaints charging rate discrimination by private power companies as between municipal and co-op wholesale customers, refusal by a company to interconnect and exchange power with a municipality, and failure of privately-owned utilities to permit a municipal system to enter into an area power pool on equitable terms.

ADEQUATE FPC STAFF ESSENTIAL

FPC regulation is of great significance with respect to the ability of local public power systems to participate in power pooling plans. Many municipal electric systems are small and are often physically isolated. If they are to take part fully and fairly in the economic benefits of "bigness" expected with large generating units and extra-high voltage transmission lines, then they must rely heavily on FPC action to insure that the private power companies equitably share with them economies of scale. A strong, vigorous FPC is an essential element if the present pluralistic character of the electric industry-with both large systems and small, both public and private-is to be preserved and enhanced.

The electric industry is today the largest single industry in the United States. Use of electricity is expected to triple by 1980. The trend toward giant genera