Citizens in all walks of life have declared themselves vehemently opposed to the policy of placing our utilities in the hands of the Government and the bureaus that have been set up to operate these utilities. The people in my section of the country, whenever given an opportunity to express themselves at the polls, have overwhelmingly voted against such governmental interference and encroachments, such bureaucratic domination, and the destruction of the American system of free enterprise. Most of these circumstances are a matter of public record. The people know that such programs result in the impoverishment of local communities and the destruction of local self-government. This inevitably follows when taxpaying business institutions are put out of business and the revenues for the maintenance of our schools, our cities and towns, our counties, and other units of local government are extinguished. It strikes at the very foundation of our American system of government. Therefore, in principle, I must oppose such a program. There is little or no difference in principle between the direct ownership and operation of the steam-power, electric-generating plant at the Oklahoma ordnance works by the Federal Government and by the State government, in this instance. The Federal Government will have to finance the operations by the State government, as has been so ably pointed out. The operations had not been successful, until after contracts had been entered into between the Grand River Dam Authority and privately owned, taxpaying free enterprises, the Public Service Co. of Oklahoma and others. As a lawyer who has spent more than 40 years in the preparation for and actual experience in the practice of law, it is difficult for me to refrain from offering legal objections that are so persuasive, and in my opinion should be controlling in this case. I think these have been ably covered in the presentations-statements and arguments that have preceded and will follow this statement by me. I have read and analyzed them carefully and I think they are wholly tenable and irrefutable. Suffice to say, the legal objections urged against the sale by the War Assets Administration of the property in question to the Grand River Dam Authority, an agency of the government of the State of Oklahoma, cannot possibly be made by the ordinary and usually accepted construction of the Federal and State laws applicable to the subject. It is only by strained and distorted constructions of the laws enacted by the people of my State and this Nation, that the State of Oklahoma can, through its agency, purchase the properties involved. In my humble opinion, it will require an equally strained construction on the part of the Federal Government and its agencies, to authorize and consummate the sale. Certainly no agency of the Federal Government should or will attempt to do indirectly that which they cannot do directly. I am sure that the War Assets Administration would not attempt to put into operation a program that the Congress has repudiated and on which it has expressed its will adversely. No agency of the Federal Government should be a party to overriding the will of Congress by lending public funds for the furtherance of an enterprise sought to be engaged in by a State or Federal agency, in derogation of the will of Congress. I seriously fear that if this sale is approved to the Grand River Dam Authority, the will of Congress will be circumvented, and the results which Congress has attempted to prevent will take place before our very eyes. In conclusion, permit me to remind you that the will of the people, as best the same can be ascertained in the actions they have taken in voting upon similar questions, or circumstances incidentally involved in the principle at issue; the will of Congress, nonpartisan and thoroughly American as it has been so recently expressed; and the legal implications, restrictions, and impediments should be inclined to direct that the War Assets Administration, and other departments of our Federal Government, refuse to make the sale of the property involved to the State of Oklahoma or its agency, the Grand River Dam Authority. I sincerely trust that your most serious consideration of the arguments presented will convince you of the righteousness of the position of the objectors at this hearing. Mr. SCHWABE (continuing). Members of the committee, my conviction at the time I gave that statement to the Board was just what those words imply and indicate. My conviction has not changed, but has been strengthened by subsequent events and by subsequent expressions of the will of the people. In that connection I want to offer to the committee a group of editorials from our newspapers in the affected area in northeastern Oklahoma: One is from the Tulsa Daily World, the newspaper that has the largest circulation and covers that entire district or trade territory. An editorial from the Pryor Times-Democrat of Pryor, Okla., bearing in mind that this plant is located in Mayes County and that Pryor is the county seat of Mayes County. Another editorial from the same newspaper, quoting a letter that I had written to them and a statement of Will Crockett of Choteau. This plant is located between Choteau and Pryor, Okla., the two towns being about 11 miles apart, and Mr. Crockett was at one time a member of the legislature from Mayes County, and is one of the outstanding citizens of that county. Also an editorial from the Tulsa Tribune. Of all the editorials J have seen, this is the only one in opposition to the purchase by the Public Service Co. of this steam power plant. Then another editorial from the Tulsa Daily World. I merely submit them to the committee for such use as they may see fit, but do not insist that they be made a part of the record unless the committee wishes to do so. Mr. RIZLEY. We will receive them without incorporating them in the record. Mr. SCHWABE. I don't want to make your record unduly cumbersome, and merely leave them with the committee to make such use of them as they see fit. In this connection I want to say that I also have letters from a number of people, representative citizens, from all over the State of Oklahoma. I have one here in the form of a certified copy of a resolution, which I wish to call to the committee's attention very briefly. This is from the KAMO Electric Cooperative, an REA cooperative, which I think has its headquarters at least the secretary who certified it has his headquarters at Neosho, Mo. I think the reason for that is that their operations extend across the line. Mr. RIZLEY. IS Mr. Clyde Ellis the secretary of that organization? Mr. SNYDER. No. Mr. Ellis is with the national service organization. Mr. SCHWABE. The first two paragraphs of the resolution, I think, are worthy of repetition. I will read them to the committee: Whereas the Grand River Dam Authority has heretofore constructed a great dam in northeastern Oklahoma utilized to capacity for power purposes in prosecuting the war Bear in mind that this dam was constructed long before the war and was not constructed as a war industry or activity. Then the next paragraph: Whereas the United States of America constructed the Oklahoma Ordnance Works in Mayes County in said State and they did, under the supervision of the United States Army engineers— including a steam generating plant for similar purposes. I just wish to call the attention of the committee to such inaccuracies. There was no steam generating plant included in that construc tion, and is not one there yet, and a steam generating plant was never contemplated by the State act authorizing the construction, and was not contemplated by those who advocated such construction. Mr. HOLIFIELD. My understanding from the reading of that was that the matter of construction there would refer to the building of the steam plant in reference to the ordnance works and not the GRDA. Will you please reread it? Mr. SCHWABE. Yes; I will be happy to. That is the second paragraph of the resolution: Whereas the United States of America constructed the Oklahoma Ordnance Works in Mayes County in said State, including a steam generating plant for similar purposes. That is true, and I stand corrected that the statement is that the Oklahoma Ordnance Works was constructed to include the steam plant in question. But the last part of it, "for similar purposes," is wholly inapplicable to the situation here, because that was a powder plant, a war industry, which had no connection whatever with the construction of the Grand River Dam plant, some 30 miles up the river, and never has been used in connection with it except during the war when the Government commandeered all activities that would promote the interests of the war. A number of people have written me from all over the State. Without burdening the committee to give their names-which I shall be glad to give you if the committee wants them-or to read from the letters, I will sir ply say they are full of the same ideas embodied in my statement, and they come from all over the State, and I submit there are not over one out of five who are adverse to the position I have taken here. I also want to read, for the benefit of the committee, two letters from labor union organizations, locals, in my district. These were written in June, both of them dated June 8, 1946, at the time we had under consideration in Congress an appropriation for a steam plant for the Southwestern Power Administration, which at that time was operating the Grand River Dam installation and which wanted to firm up power, exactly the same thing under consideration at this time by the Grand River Dam Authority. So the proposition is identical so far as the installation is concerned, except the Southwestern Power Administration did not say where the steam power plant would be, whereas in this case it would mean the steam power plant at the Oklahoma Ordnance Works. This is from the Bartlesville Central Trades and Labor Council, affiliated with the A. F. of L. organization, Bartlesville, Okla., June 8, 1946. It is on their regular stationery, and this and all other letters have come to me voluntarily, without any solicitation on my part or on the part of anybody else so far as I know. It is addressed to me at Washington, D. C. and states: DEAR MR. SCHWABE: We have just seen a letter from Senator Thomas reporting on the status of the appropriation bill for the Southwestern Power Administration and note that the Senate denied wholly the request of SPA. We believe the plan of SPA is un-American. It is a very serious threat to private enterprise and individual enterprise and freedom. The plan would destroy the savings of millions of individuals invested in the existing electric companies. These companies are large consumers of labor and have been found to be fair in their dealings. We do not want them driven out of business. We feel that you favor our feelings in this matter and we hope that you will vigorously oppose the granting of any money for Southwestern Power Administration. That is signed by R. J. Lover, president, and Joe Young, secretary, with the seal of the local impressed upon the letter. The other letters is from the Bartlesville Typographical Union, Local 648. It is addressed to me at Washington, D. C. and reads: DEAR MR. SCHWABE: We understand that the appropriation_request of the Southwestern Power Administration was wholly denied by the Senate and that it will next be before a joint committee of the Congress. We believe that no funds whatever should be appropriated for this agency. The SPA plan is contrary to our principles, in that it further places the GovernIment in competition with its citizens. This is un-American and we oppose it strenuously. The SPA plan, if carried out to any degree, would result in the destruction of the electric companies which have pioneered in the development of our State and which are heavy taxpayers, supporting our towns, schools, and State and Federal Governments. The electric companies are large employers of labor, pay good wages, provide good and safe working conditions, provide employee benefits such as insurance, hospitalization, retirement, annuity, etc., working cooperatively with the union organization. We hope you will vigorously oppose any appropriation to SPA. That is signed by Neil Zink, president. I want to supplement what I have said with this very brief statement: Three weeks ago I visited 44 towns in my district and bear in mind that this whole program is in my district; the Oklahoma Ordnance Works is located in my district and the Grand River Dam Authority's dam, lake, and installation are all located in my district. I met the people in their post offices, in the people's temples; and I met people in every walk of life and from all religious sects, I assume, and I know from all political groups that are represented down there. I want to say frankly to you that I did not suggest a topic for discussion or consideration, did not make a single speech, but asked them to tell me what they thought their Member of Congress and the rest of the Members of Congress should do that we are not doing, and what they thought we should not do that we are doing, and to offer any other suggestions that they might see fit. One of the suggestions they most frequently offered was that I should come back to Washington and oppose this sale of the Oklahoma Ordnance Works steam plant to the Grand River Dam Authority, and refrain at every instance from putting the Government further into business. That was voiced by the letters five or six times as much as those who expressed the contrary view. That is fresh from the people of my district. Gentlemen, I think I have nothing further to say. If any member of the committee or the staff has any questions to ask, I shall be very happy to yield at this time. Mr. DONOHUE. In regard to your statement that the hydroelectric project under the Grand River Dam Authority was conpleted and in operation a number of years before the war, isn't it true that the power plant was first turned on in September 1940? Mr. SCHWABE. I think that is approximately correct, and we went in the war in December 1941. Mr. DONOHUE. Isn't it further true that when the United States took over this project in November 1941 there was still a considerable amount of construction to be completed, and that was completed by the Government? Mr. SCHWABE. That is right. Mr. DONOHUE. So that the project was not all completed before the Government took it over? Mr. SCHWABE. That is true. I am sure I remember seeing some of those fringe incompletions there. Mr. RIZLEY. Thank you very much. (Witness excused.) Mr. DONOHUE. Congressman Johnson. STATEMENT OF HON. GLEN D. JOHNSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OKLAHOMA Mr. DONOHUE. State your full name to the reporter. Mr. JOHNSON. Glen D. Johnson, Representative in Congress, Fourth District, State of Oklahoma. Mr. Chairman, about 3 weeks ago we appeared before the Review Board of the War Assets Administration protesting the sale of the steam generating plant of the Oklahoma Ordnance Works to the Grand River Dam Authority. I approached that thing that morning, as I want to do here today, on a more or less broad philosophical ground. I am against, in this instance or any other instances so far as I have anything to do with it, anything that would tend to put the Government, either State or Federal, in business competing with taxpaying private enterprise. I think the Review Board of the War Assets Administration, and finally and eventually the Administrator, feeling that he ultimately is the deciding power, is going to have to turn the proposed sale of this plant on one ground, and I think the thing this committee should be interested in is: Is this sale being conducted in keeping and in conformity with the Surplus Property Act. Under section 13 of the Surplus Property Act the Grand River Dam Authority, as I understand it, is proceeding on the theory that they are a priority bidder. Mr. Donohue has pointed out, time and again in this bearing, that there are two things to be considered in determining whether or not the Grand River Dam Authority is a priority bidder under section 13 of the Surplus Property Act. The first is: Is the Grand River Dam Authority an instrumentality of the State? I think that has been more or less proved, although he has pointed out there is still the certification that must be made, but I think that is more or less a formality. Then we get to the question of whether this sale to the Grand River Dam Authority would be in the public interest. I think we would all agree that this sale would help the Grand River Dam Authority in firming up its power. But when you talk about public interest it goes further than that. They will have to make this determination: Is it in the public interest to sell a plant having a fair value of $3,500,000-which is a large amount of money when you are talking in the State of Oklahoma about a small industry-is it in the public interest to sell that plant to a Government instrumentality which will be in direct competition with the taxpaying private enterprises in that State? You get into a twofold proposition there. If this plant were sold to a private utility, we will say, it could go on the tax rolls of Mayes County, the little county in which this plant is situated, and directly benefit that small county. To pursue it further, it seems to me |