Page 8
Summer Session Kansan
Tuesday, July 16, 1963
REA Critics Jump When Loans Go Icy
By Gaylord P. Godwin
WASHINGTON — (UPI) — The Rural Electrification Administration (REA), a New Deal agency that made good, is coming under increasing fire these days from opponents who charge that it has become an "empire-building" loan operation.
Republican critics of the REA don't question that the program has been successful in bringing electric power and light to the farms of the nation. They are glad that about 97 per cent of American farmers now have electric power because of the REA operations since 1936.
BUT THEY WONDER about the $23,000 REA loan to a cooperative in western Illinois to build a snow-making machine for a ski resort and the installation of lighting for night slaloming.
They challenge more sharply the fact that the REA can lend government funds to cooperatives at 2 per cent interest to compete with private industry when the co-op can reinvest the REA money in government bonds and collect up to 4 per cent interest.
There was a pointed test of the REA loan policies recently when the House debated the farm money bill.
A YOUNG midwestern congressman, Rep. Robert Michel, R-III., unsuccessfully sought to knock out all loan funds for the agency.
Michel told the House: "When you talk about Rural Electrification Administration, five out of six new customers of the REA lines are urban dwellers. They are getting the benefit of a low interest rate from the government."
He noted that Agriculture Secretary Orville L. Freeman, in testimony on the department's appropriation bill, spent two-thirds or three-fourths of his time about such problems as industrialization of rural areas, recreation projects such as golf courses and fish ponds, food stamp plans, manpower retraining and housing for the elderly.
"WE ARE AT THAT point where we find agriculture blossoming out into all other areas." Michel said.
Critics of REA are becoming particularly concerned about the REA stepping into a program known as Rural Area Redevelopment (RAD).
The RAD has been in existence for about two years. Its aim is to provide advice to REA borrowers on economic development of the areas they serve and on loans for developing projects in low income areas when credit cannot be obtained elsewhere.
AUTHORITY FOR this comes from the original REA act and from the Kennedy Administration's Area Redevelopment Act set up under the Commerce Department. The latter delegated to the Agriculture Department responsibilities to "assist other rural people in the development of sound industries and businesses," particularly to encourage use of electric power.
REA Chief Norman Clapp explained: "We knew that our borrowers with their small staffs could not cope with all the technical and financial aspects of economic development. We knew that there are many available sources of technical and financial assistance, private and governmental, which were little known or used by our borrowers and other rural people."
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But Congressman Michel and other critics charge that the REA is losing sight of its original purpose—installing transmission lines to light and electrify remote farm homes. They say it is becoming a "freewheeling federal agency" that operates under a "veil of secrecy" to favor cooperatives against private enterprise.
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CONCERNING THE area development loans, Clapp told UPI that only a handful of them have been made. They amount to $1.3 million for 16 projects. But he insisted that REA has a right to help promote such projects in areas developed through the agency's programs.
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The participation of a local cooperative in developing an industry in a lower income area "gives the organization a very pointed claim to participation in local activities," Clapp said.
He commented: "Any borrower can come to us with the proposal for, say, a furniture factory. We can arrange for the technical help needed to shape a sound enterprise or suggest that an unsound one be dropped. We depend on a variety of help: Farmers Home Administration, Forest Service, Economic Research Service, Agricultural Market Service, the Commerce Department, Small Business Administration, Trade Administrations, and others."
BUT CONGRESSMAN Michel told the House that the REA makes its determination on whether a cooperative should get a 2 per cent loan without letting private utilities and other industries know the basis for the decision.
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He has introduced a bill that would require the REA to conduct public hearings on such loan decisions.
THE REA ADMINISTRATOR said his agency was "Not only in the loan business for general purposes—only for the use of electricity."
Clapp has stressed that the REA "is not out of the electric business by a long shot and we do not make these loans to individuals directly. We make loans only to cooperatives."
He added that the REA does not make a profit on its loans to cooperatives. The 2 per cent interest and payments of principal are turned into the treasury.
Carl Vinson of Georgia
WASHINGTON — (UPI) — Rep. Carl Vinson, a 79-year-old, spectacle wearing, Georgia country boy sees no cause for reminiscing just because he will soon set a record for serving more years in the House than any other representative.
The shrewd and capable Vinson has withstood many a House battle since he first entered Congress in 1914 as its youngest member at age 30. On Nov. 18, he will be 80, and next year will have completed 50 years in the House.
By Frank Eleazer
Although the Milledgeville, Ga. native is very familiar with recent criticisms that there are too many old men in congress, he refuses to accept that description of himself. His hearing, vision and energy are excellent. His mind, as many admirals and generals who have appeared before his committee will attest, is as sharp as ever.
ON JULY 16, Uncle Carl Vinson,
leader of the so-called moderate bloc from the South and Chairman
of the House Armed Services Committee will break the record set by that other House giant, the late
Speaker Sam Rayburn.
HIS LAST drink of whiskey was taken 20 years ago. But, Vinson still manages to smoke seven or eight 10 cent cigars every day. As one possible concession to his age, he claims to have stopped chewing tobacco.
"You've got to stay busy and stay abreast of the times," the Dean of the House said as he neared completion of 48 years, 8 months and 13 days of continuous service in Congress. "Times move ahead. There's nothin' to be gained sittin' back reminiscing."
Farm Boy Makes Good
As chairman of the House Armed Services Committee he closely supervises the work of the subcommittee chairmen, often assigning them a problem which he already has solved. "Now heah's what let's do, and I'm gonna help you," is a frequent saying of Vinson's.
Vinson still retains his Southern drawl and a habit of being in his office by 7:30 a.m. His staff does not have to report until 8.
HE HAS headed the group for more than 12 years and was chairman of its predecessor, the Naval Affairs Committee, for 16 years before that. If there has been another person who served that long as a committee chairman, no one can recall.
During his tenure, Vinson has worked with and known well eight presidents starting with Woodrow Wilson. He has called President Kennedy one of the greatest presidents despite their disagreement over civil rights.
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He believes Kennedy is wrong, and will join fellow Southern Representatives in voting against the administration's Civil Rights Bill. But, on other critical issues, he has helped gather Southern votes for the President and predicts "I'll be heppin' him again in the future."
Vinson, with his country looks, large nose and glasses which he peers over in the manner of the country judge he once was, has become one of the real characters in Congress and it is hard for many to imagine him gone.
WHEN ASKED about rumors that he will not run for a 26th term, he looked over the rims of his spectacles and said:
"I never take off my socks until I get to the creek."
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