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tion of the Department will bring about action based on facts, and that services based on teamwork will be developed in cooperation with the States.

I thank you.
Mr. RIEHLMAN. Thank you very much, Mr. Meek.
Mr. Dawson, do you have a question?
Mr. DAWSON. Yes.

I want to know, on the bottom of page 2, what he meant when he said:

For the last few years State representatives have considered the matter of taking this situation up with proper committees of Congress; but due to the instability of Congress this was not done.

I think we ought to have a little explanation on that, as to what he means by the instability of Congress.

Mr. MEEK. Well, I believe you gentlemen know what I mean there better than I do; but, as you know, it was very difficult to get anything through in Congress in the last sessions of the last Congress, the last part of the last Congress, and we felt it might be a waste of time, that we just couldn't get a decision out of the Congress under the circumstances.

Mr. RIEHLMAN. I might be able to give you the answer, Mr. Dawson, but this is very much a nonpolitical committee, you know, and I wouldn't want to get into that realm of politics.

Mr. FOUNTAIN. You mean you think he had in mind the possibility that quite a few of them might not be there very long?

Mr. Dawson. Well, that still is with us.
Mr. RIEHLMAN. Do you have any questions, Mr. Fountain ?
Mr. FOUNTAIN. No questions.
Mr. RIEHLMAN. Thank you very much, Mr. Meek.
Mr. MEEK. Thank you.
Mr. RIEHLMAN. Mr. Clyde T. Ellis.
Mr. Ellis, will you identify yourself for the record, please?

STATEMENT OF CLYDE T. ELLIS, EXECUTIVE MANAGER, NATIONAL

RURAL ELECTRIC COOPERATIVE ASSOCIATION

Mr. Ellis. My name is Clyde T. Ellis. I am executive manager of the National Rural Electric Cooperative Association.

Mr. RIEHLMAN. Do you have a prepared statement, Mr. Ellis ? Mr. Ellis. I do, Mr. Chairman, and, with your permission, I would like it to appear in the record and I would like to highlight it and not read it.

Mr. RIEHLMAN. All right.
Will you proceed, please?
This statement will be inserted in the record at this point.
(The prepared statement of Mr. Ellis is as follows:)

STATEMENT OF CLYDE T. ELLIS, EXECUTIVE MANAGER, NATIONAL RURAL

ELECTRIC COOPERATIVE ASSOCIATION

Mr. Chairman and gentlemen of the committee, my name is Clyde T. Ellis. I am executive manager of the National Rural Electric Cooperative Association, the national service organization representing 934 rural electric systems, in 42 States and Alaska, which are providing services to almost 312 million farm families and rural establishments.

I appear before your committee this morning to express our vigorous opposition to Reorganization Plan No. 2 transmitted to the Congress March 25, 1953. Our association is opposed to any proposal which would place in the hands of any individual or group, other than the Congress, the right and power to alter the functions of the Rural Electrification Administration.

This is not a new position for our association. In 1951, we appeared before the Senate Committee on E penditures in the Executive Departments to oppose S. 1149. As you will recall, S. 1149 was a bill sponsored by Senators of both parties to reorganize the Department of Agriculture along the lines suggested by the Hoover Commission. The rural electric cooperatives and power districts who are our members were on record against that proposal insofar as it would have affected Rural Electrification Administration.

At the meeting of the national board of directors of our association here in Washington on April 14, 1953, Reorganization Plan No. 2 of the Department of Agriculture was the subject of full discussion. The board then passed unanimously a motion to “* * * respectfully request Congress to exempt the Rural Electrification Administration from Reorganization Plan No. 2 * * *” This is consistent with our earlier position.

I believe the farmer members of our association throughout the country are as staunch advocates of economy and efficiency in government as can be found. Nothing in my statement here, today, should be construed as indicating that we are in any way opposed to general reorganization of the governmental departments to achieve maximum efficiency and economy. We do wish to express our opposition to approval of Reorganization Plan No. 2 as submitted to the Congress and request that it be returned to the President. If Reorganization Plan No. 2 had exempted the Rural Electrification Administration, as it did some other agencies, we would not be appearing before this committee.

The Rural Electrification Administration was first established by the Congress as an independent agency headed by an administrator appointed by the President, with the approval of the Senate, for a 10-year term. It was stipulated in the act that its operation and employment should be nonpolitical. Reorganization Plan No. 2, effective July 1, 1939, placed the Rural Electrification Administration in the Department of Agriculture “* * * under the general direction and supervision of the Secretary of Agriculture," and the REA Legal Division was transferred to the Office of the Solicitor of Agriculture. At the time of the transfer there was vigorous opposition from rural electrification leaders to sacrificing the completely independent status of the REA. As a consequence of the strong feeling on the matter, a very fine administrator, Mr. John M. Carmody, submitted his resignation. Opposition to the loss of the independent status of REA did not cease with Mr. Carmody's resignation. As a result of continuous effort, the Senate passed a bill on May 14, 1945 (S. 89), entitled the “REA Planning Act of 1945," which would have made REA independent again. This bill never became law and REA remained in the Department of Agriculture.

Rural electric leaders have never become reconciled to the placing of REA in the Department of Agriculture and have continued to feel that the program would be better served by a completely independent agency. Since the reorganization in 1939, however, the various Secretaries of Agriculture have respected the independent status of REA and, as a result, the reorganization did not result in fundamental changes in the character and operation of REA, with the exception of the Legal Division. REA has remained a semi-independent and semiautonomous agency as conceived by the Congress and supported by the rural people.

We feel that the following provisions in Reorganization Plan No. 2 jeopardize the semi-independent and semiautonomous status of REA and would make possible the undesirable changes in its status and name recommended by the Hoover Commission and might open the way to changes even more undesirable.

Section 1 of the Reorganization Plan No. 2 provides that “* * * there are hereby transferred to the Secretary of Agriculture all functions not now vested in him of all other officers, and of all agencies and employees, of the Department of Agriculture."

All of the powers and functions which are now vested in the office of the REA Administrator would be transferred to the Secretary of Agriculture. This is contrary to the language and intent of the Rural Electrification Act and confrary, we believe, to the best interests of the Government, the rural electric systems, and the farmers served by those systems. This provision, in effect, makes the Secretary of Agriculture the de facto administrator of REA. Since the

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Secretary is admittedly a temporary, political appointee, such an arrangement would subject the rural electric program to the vagaries and pressures of partisan political activity. The Congress very wisely prohibited such activities in the original act. The Rural Electrification Act reads in part:

“SEC. 9. This Act shall be administered entirely on a nonpartisan basis, and in the appointment of officials, the selection of employees, and in the promotion of any such officials or employees, no political test or qualification shall be permitted or given consideration, but all such appointments and promotions shall be given and made on the basis of merit and efficienry. If the Administrator herein provided for is found by the President of the United States to be guilty of a violation of this section, he shall be removed from office by the President, and any appointee or selection of officials or employees made by the Administrator who is found guilty of a violation of this Act shall be removed by the Administrator." We express our vigorous opposition to the provisions of Reorganization Plan No. 2 which would destroy the nonpolitical, nonpartisan status of the Rural Electrification Administration.

Section 4 provides “(a) The Secretary of Agriculture may, from time to time, make such provisions as he shall deem appropriate, authorizing the performance by any other officer or any agency or employee, of the Department of Agriculture of any function of the Secretary, including any function transferred to the Serretary by the provisions of this reorganization plan."

Section 5 of Reorganization Plan No. 2 gives the Secretary of Agriculture the authority to "* * * transfer records, property, and personnel * * * and unexpended balances * * * of appropriations, allocations, and other funds of such denartmonts. as he deems necessary to carry out the provisions of this reorganization plan * . *

These p ovisions would make it possible to change the name, the organization and functions of REA. They would give to the Secretary of Agriculture the power to transfer, reallocate, and abolish existing functions of RFA. Whereas section 1, as noted above, makes the Secretary de facto administrator of REA, these sections give him broad powers that currently rest only with the Congress. REA has been an integrated operation-an integration most vital to the rural electric systems. The loss of its legal division has led to delays and inefficiencies. We urge the Congress to authorize no such delegation of powers over REA.

Subsection (b) of section 4 provides that "To the extent that the carrying out of subsection (a) * * * involves the assignment of major functions or major grouns of functions * * * and to the extent deemed practicable by the Secretary, he shall give appropriate advance public notice of delegations of functions proposed to be made by him and shall afford appropriate opportunity for interested persons and groups to place before the Department of Agriculture their views with respect to such proposed delegations."

Subsection (b) does not reduce our opposition to this proposed reorganization plan. The phrasing is such that it only gives the blessing of the Congress to procedures which would be resorted to voluntarily by the Secretary without congressional approval.

It leaves any Secretary with the last word on any proposed reorganization of the Rural Electrification Administration. This proviso does not mitigate our fears, nor does it protect the control of the Congress over Rural Electrification Administration affairs.

We understand that, in recent days, Secretary Benson has stated that he does not contemplate any reorganization of the Rural Electrification Administration. We are grateful to the Secretary for the position he has taken on this, but his statement does not reduce our opposition to this reorganization plan. If no changes in REA are contemplated then it should have been exempted from the reorganization plan as were other agencies. Moreover, Reorganization Plan No. 2 contains no "cutoff” date. Our study indicates that it empowers any Secre tary of Agriculture for an indefinite period to carry out reorganizations of the Department of Agriculture. The assurance by the present Secretary that he plans no alteration in REA would, nevertheless, leave any of his successors free to make surh changes.

H. R. 292, introduced by Mr. Hoffman, of Michigan, January 3, 1953, provides for the reorganization of the Department of Agriculture in accordance with the recommendations of the Hoover Commission, which would include changing the name of the Rural Electrifiration Administration to Rural Electrification Service We are opposed to H. R. 292 and fear that the very provisions in that bull njan which we base our objections will be accomplished under Reorganization Plan No. 2 by administrative action.

Among other things, H. R. 292 provides for the name change which I have mentioned. Our people feel very strongly on the matter and do not want the name of Rural Electrification Administration changed. Across the whole of this Nation and even in foreign countries those letters, REA, have come to symbolize the joint efforts of a democratic Government and responsible local organizations of farmers which have brought electricity to many millions of American farmers. REA has become a kind of trade name for the rural electrics, a byword for efficiency and progress, and a symbol of a better life for rural people. We are vigorously opposed to any name change which would lead to the abandonment of that symbol which means so much to so many millions.

The functions of the Federal Government are quite varied and particular agencies are established to carry out general or special programs. We know of no Federal function comparable to that of the Rural Electrification Administration. REA is, in effect, the banker and technical adviser for the rural electric systems. It administers a loan program already in excess of $2 billion, a tremendous responsibility.

Moreover, REA'S functions make it a vital segment of the electrical industry. No major industry in America is growing as rapidly as the electrical industry and the fastest growing segment of the electrical industry is the rural segment, financed by REA. In this situation, if the rural electric systems are to keep pace with the industry, if they are to complete the job of electrifying the nearly 1 million farms and rural establishments not yet receiving electrical service, if they are to keep pace, do their job and keep the Government's investment sound and safe, they must be served by an agency fitted to the problems.

The farmers of this country and all other citizens, who understand the achievements of the Rural Electrification Administration since 1936, are proud of the record that has been made. We believe very strongly that that record has been good in part because of the independent and, later, semi-independent and semiautonomous status of REA in all these years of operation. There have been no evidences of corruption, mismanagement, or abuse in REA. It was created to be a nonpolitical administration, independent and devoteil to the electrification of rural America. Its accomplishments are a tribute to the wisdom of the Congress, the honesty and integrity of REA administrators and staff, and the perseverance and sense of responsibility of the locally elected rural-electric leaders who operate the rural-electric systems. The future of REA might well be seriously affected by reorganizations made possible by Reorganization Plan No. 2, if it becomes effective.

We urge this committee to recommend to the Senate that Reorganization Plan No. 2 be rejected, and we urge that any future reorganization plan affecting the Department of Agriculture exclude the Rural Electrification Administration in order that that fine agency may remain semi-independent, semiautonomous, dynamic, and nonpolitical.

Mr. Ellis. Thank you, sir.

The rural-electric systems of the country are mostly cooperatives, with some power districts through which about 334 million farmers and rural establishments are supplying themselves with electricity.

The REA, as you know, was established by act of Congress in 1936. It was the Norris-Rayburn Act. The authors of the bill, the committees working upon it and the Congress went to great length in that act to provide that it should be nonpolitically administered, setting up an Administrator with a long term and specifically providing in the language of the act for nonpartisan administration.

I would like to read you just section 9 of the act, which is short:

This Act shall be administered entirely on a nonpartisan basis, and in the appointment of officials, the selection of employees, and in the promotion of any such officials or employees, no political test or qualification shall be permitted or given consideration, but all such appointments and promotions shall be given and made on the basis of merit and efficiency. If the Administrator herein provided for is found by the President of the United States to be guilty of a violation of this section, he shall be removed from office by the President, and any appointee or selection of officials or employees made by the Administrator who is found guilty of a violation of this Act shall be removed by the Administrator.

I think it is evident that the Congress intended no political administration in REA.

I think to that extent it is a bit different from the Department of Agriculture in general, whose Secretary, whose chief administrative officer, is a member of the Cabinet, and it is assumed, I think, by all of us, that he would be a political appointee, appointed by the President, and by every President.

The Rural Electrification Administration from almost the beginning has been subjected more or less to abuses of what we think were the intent of the Congress to keep it strictly nonpartisan, bipartisan, nonpolitical.

In 1939 when the President talked of consolidating it with the Department of Agriculture there was a great deal of opposition. I was one of those who, as a Member of the House of Representatives, went to see the President in protest. He did it, nevertheless, but he assured those of us who went to see him, some of us, that there would not be a tendency for REA to lose its identity, to lose its dynamic force, and to become political; yet, in the very reorganization that was effected then something was done which interfered with its semi-independent and semiautonomous nature, and which tended to slow down the dynamic force of the organization itself.

What was it? They broke the legal section away from it and took the lawyers out of REA and put them over into the Solicitor's Office, USDA.

That has caused inefficiencies and that's given us trouble—not because of any desire of any one individual, we think, to injure the program; oh, no. We had a very able Solicitor before the present one, and a very able one now, and I'm sure the objective would not be that, never, I hope-but, yet, because the lawyers are not under the control of the Administrator, you sort of get two administrations there, you see, and they do not always coordinate the programs too well, we think.

Something else happened that pointed up the fact that REA was losing its independence and getting itself in the position of being under political influence, perhaps. The Administrator resigned. John Carmody, the able Administrator, then refused to go to Agriculture and become a part of that Department.

The Congress of the United States took some note of the fact that REA was losing its identity, especially the Senate. The Senate in 1945, not happy with the way REA was drifting, passed a bill, passed it through the Senate, to make REA a separate agency again, an independent agency. It did not pass the House.

All of that, Mr. Chairman, gentlemen of the committee, I think, constitutes some of the reasons why the rural electric people went on record 2 or 3 years ago against the reorganization bill that was proposed in 1950.

That is why the national board of directors of the National Rural Electric Cooperative Association, meeting in Washington as late as April 13, 14, and 15 last, again went on record against this reorganization bill as now proposed, as applies to REA,

They are not against the bill as it applies to other agencies.

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