We're not a general farm organization. We're not qualified to speak on the rest of it. But we think REA ought to be exempt, ought to be left out, or that the bill ought not become law.

I heard Mr. Benson talk here this morning before you-a very able presentation. There were two things about his testimony that bothered a bit. He referred to the fact that he had conferred with general farm organizations about this bill. He never conferred with the National Rural Electric Cooperative Association about it. We've had no contact whatever from the Department of Agriculture about this bill, or about several of the other things that have been done affecting REA.

It's not that I'm objecting. I'm not. I'm simply saying we've had no contact, even though this is the recognized organization of the rural electric systems.

Another thing that disturbed me was that he seemed to speak of some approval of the Hoover Commission proposal as such.

Well, now, the Hoover Commission proposal had some things in it that we fear now, that we certainly didn't like, and one of them shows up in the Hoffman bill, H. R. 292. On page 3 the different services are listed, and No. 8 is Rural Electrification Service.

That may seem a little thing, changing the name of REA. REA has become a trade-mark, a national symbol. The whole world knows of REA. The whole world is proud of REA. Little peoples of India, of Iran, of South America, of other countries, know about REA, and have copied it in some areas, in some instances, to some extent, have copied it, or tried to copy the principle. Now, if you change it to Rural Electrification Service, we lose the symbol.

Mr. RIEHLMAN. Could I interrupt at that point?

Mr. ELLIS. Yes, Mr. Chairman.

Mr. RIEHLMAN. Mr. Ellis, you were here this morning. Did you hear that question propounded by my colleague on my left, Congressman Fountain, to the Secretary, and did you hear his answer in respect to the changing of the name?

Mr. ELLIS. Yes, Mr. Chairman; I heard it.

Mr. RIEHLMAN. Do you have confidence in the Secretary?

Mr. ELLIS. Oh, yes, sir.

Mr. RIEHLMAN. I wondered, in view of that, if you have any doubts this afternoon as to his intentions of changing the name of REA. Mr. ELLIS. But the Secretary, himself, might change before tomorrow morning, you see.

Mr. RIEHLMAN. Well, if his health fails

Mr. ELLIS. NO; I am not thinking of that. He might be promoted. Anything can happen.

Mr. RIEHLMAN. Well, if he is qualified for promotions, we want him to have them, of course.

Mr. ELLIS. I meant to get around to saying that, Mr. Chairman, I am sure the present Secretary will live up to his statements to this "ommittee.

Mr. RIEHLMAN. Well, I think that is true.

Mr. ELLIS. Yes, sir.

Mr. RIEHLMAN. I just wanted to find out if you concurred in that thinking.

Mr. ELLIS. Yes, sir; we have confidence.

Mr. RIEHLMAN. I have no fears myself as to his wanting to change the name. I don't think he has any desire to do so.

I have been reading the testimony here that was given in the Senate. The very same question was propounded at that time, and I can find no foundation for it, as far as I can see, and certainly I was well satisfied with what the Secretary had to say this morning. In fact, I am sure you heard his complete answer. He was perturbed because he had never heard of it. He said where it came from he has no idea.

Mr. ELLIS. Well, even saying that we have confidence in the Secretary, I think we would all agree that men of great integrity have changed their minds, too, and he might come back to the Congress and he might come to us and still, nevertheless, want to change his mind.

Mr. RIEHLMAN. Well, I would hope that we would all have that right, sir, to change our minds from time to time. I have done it on previous occasions, and I think all sound-thinking people have to do that from time to time.

Mr. ELLIS. Yes, sir.

Now, gentlemen, may I burden you just one other minute with this point: I think that the American people are perhaps not conscious of how fast the electric industry is growing. It's the fastest growing major industry by far in the whole world today, so far as we know.

I want to repeat and emphasize: The electric industry is growing faster than any other major industry in America. It's doubling, and we could cite you several quotations from the Federal Power Commission, the Defense Electric Power Administration to that effect. It's doubling every 7 to 10 years.

Now, when you think of that-the fact that the whole industry is doubling its capacity, doubling its facility every 7 to 10 years-it's almost fantastic.

The farm electric segment of the electric industry is growing faster than the national average. It is doubling about every 4 years.

That means we've got to rebuild the lines, build bigger lines, build more generating capacity, where we do generate, and all these facilities. We can't keep up with it.

Mr. RIEHLMAN. Well, do you have any idea, Mr. Ellis, that this plan would interfere with that?

Mr. ELLIS. Yes, sir.

Mr. RIEHLMAN. In what way?

Mr. ELLIS. We have in mind-we have a fear that it would, might interfere. May I say it that way.

Mr. RIEHLMAN. Yes.

Mr. ELLIS. We think REA has got to be a compact, dynamic, action agency. Now, every time you break off a segment of it, as the lawyers were broken off, and merge them with some other section of the Department of Agriculture, it tends to slow down.

For instance, already this year the Secretary has placed another man between the REA Administrator and himself.

Now, I believe he has said, in fairness to him, that the REA Administrator may still come direct to him; but he, nevertheless, has placed a man between the REA Administrator and himself in the person at the head of the credit agencies.

I do not know the extent to which that may assist him in streamlining the Department; but we do know that we have found it convenient at least, may I say, to confer with this man in between, to the extent that that may be carried out.

This matter of breaking off parts of the dynamic agency and fusing them and, to us, confusing them with other parts would tend to make it less dynamic, I think.

Mr. RIEHLMAN. There is a possibility this man in between may be helpful to you. Isn't there a possibility that he may?

Mr. ELLIS. Well, let me say this about Bob Farrington: I am sure he is one of the finest men in the Department of Agriculture, and I am sure he is strong for this program; but again let me say it adds to redtape when you put a man in between the Administrator and the Secretary, and we think it's not good for the program.

That_completes my statement.

Mr. RIEHLMAN. Well, I just wanted to clarify one statement you made, Mr. Ellis.

I think you said you had never conferred with the Secretary in respect to this reorganization plan, but I do note that in the Senate hearings you refer to his meeting with the national board on the 14th of April. Did he at that time discuss this program with the national board?

Mr. ELLIS. Let me answer your question this way, if I may: We wrote him a letter, if I recall, saying that we would like to confer with him on any basic changes that might be proposed, and I believe we had an assurance that we would be consulted.

Now, whether this is considered by him anything that covers that, I don't know, because we have not been consulted.

He did come before our board, and we appreciated that, and made à statement.

Now, it may have been the fault of the Congress and not his fault that he couldn't give us any more time, because I think he was before a committee of the Congress. He didn't even have time to eat with us and I'm under the impression that he actually did it without lunch that day.

Mr. RIEHLMAN. Well, may I

Mr. ELLIS. He did not discuss this, no, sir; with our Board.

Mr. RIEHLMAN. May I read your statement, so that it may refresh your memory, in response to a question propounded by Senator Dworshak. Here is his question:

Mr. Ellis, you have had an opportunity in the past 3 or 4 months to discuss the REA program with the new Secretary of agriculture to ascertain his views? Mr. ELLIS. Not personally, I would say. He came before our National Board on April 14 and discussed the program at some length, and various groups of people, of our people, have conferred with him. We have conferred with people whom he has named.

In other words, apparently the plan has been discussed?

Mr. ELLIS. No, sir; it was not my understanding they were talking about the plan. We have not discussed the plan with him, and so far as I know none of our people—

Mr. RIEHLMAN. You imply you have discussed with him the future activities of REA?

Mr. ELLIS. The program, yes, sir; but this

Mr. RIEHLMAN. But at no time have you got into the controversy of the reorganization plan; is that it?

Mr. ELLIS. No, sir.

Mr. RIEHLMAN. I see.

Well, that clarifies my question, I think, and your statement to the Senate.

Mr. ELLIS. I'm sorry if I may have given them the wrong impression, because I did not intend it.

Mr. RIEHLMAN. Well, I am not sure. The rest of the testimony may clarify it. I haven't read that all through, but this was just a question propounded to you in the Senate and apparently it refers to REA activities and not the reorganization plan.

Mr. ELLIS. Right, sir.

Mr. RIEHLMAN. Mr. Dawson, do you have some questions? (No response.)

Mr. RIEHLMAN. Mr. Fountain.

Mr. FOUNTAIN. Mr. Ellis, is it your understanding that this plan transfers from the REA all the functions of the REA to the Secretary of Agriculture, so that if this plan becomes law, as of the effective date of it, the Secretary will have all of the functions and the REA will have none. Is that not right?

Mr. ELLIS. Yes, sir: it's my impression. It's my understanding that this would make the Secretary of Agriculture the REA Administrator, without the safeguards which the Congress originally placed around the person of the Administrator insofar as the political phase of it is concerned, at least.

Mr. FOUNTAIN. That is all.

Mr. RIEHLMAN. Well, of course, yon would agree that he cannot eliminate any of the functions of the REA. He can not abolish them. He may transfer over some of the activities within the Department, but there certainly can be no fear that he has any authority to abolish REA or any of its activities.

Mr. ELLIS. Well, I don't know, Mr. Riehlman. I think I would have to agree with you in the broad statement.

But what is the function of REA?

It's simply an agency to do two things, as I understand it: To lend money, and to provide technical services to these assistants.

Now, REA is in the process at this moment of vastly reducing its services to the electric systems. More than a hundred people are in the process of being eliminated. In that group are very vital services which are being eliminated in toto, or for the most part, and there's pretty strong feeling among the rural electric systems—and I am trying to say this without being critical: I'm saying it as a matter of fact that the act, as they've known it, the service of the Rural Electrification Administration, as they've known it. is being changed very substantially, a service which, over the years, has been approved, at least by implication, by the Congress from time to time by making the appropriations.

Mr. RIEHT MAN. Well, I leave no inference that I am opposed to REA. I will probably support it as long as I am here in Congress, and I know some of the benefits it has brought to the farmers of our Nation.

I am equally sure if there is a tremendous move toward eliminating the activities and the good work that has been done by REA that

Congress will receive sufficient warning from those who are going to be affected, and I presume that corrective action will be taken fast.

I want to say, in closing, I appreciate your coming over, Mr. Ellis. I am sorry we couldn't get to you sooner in the day, and we appreciate the comments you have made to the committee.

Mr. ELLIS. Thank you.

Mr. RIEHLMAN. Thank you very much.

Now, before we adjourn this meeting, is there anyone else here who would like to testify before the committee?

I have several statements that I would like to request permission to put into the record.

First is an additional statement made by the Secretary this morning. We had permission, I think, earlier to insert that in the record.

I have a letter here in answer to a letter from the chairman of the committee sent to the former President of the United States, Herbert Hoover, in respect to this plan. I have his letter addressed to the chairman of the committee, and his statement in respect to this plan, which I would like to insert in the record at this point.

(The letter from and statement of Mr. Herbert Hoover are as follows:)

Hon. CLARE E. HOFFMAN,

NEW YORK, N. Y., April 21, 1953.

Chairman, Committee on Government Operations,

House of Representatives, Washington, D. C.

MY DEAR MR. CHAIRMAN: I had prepared the attached statement, in compliance with your request for my views on the President's Reorganization Plan No. 2 of 1953, for the Department of Agriculture.

As I do not know what Senate committee is now going to handle the matter, perhaps you might wish to send it to them.

With kind regards,

Yours faithfully,

HERBERT HOOVER.

STATEMENT OF HERBERT HOOVER IN COMPLIANCE WITH THE REQUEST OF HOUSE COMMITTEE ON GOVERNMENT OPERATIONS UPON THE PRESIDENT'S PLAN No. 2 of 1953 FOR THE DEPARTMENT OF AGRICULTURE

The organization of the Department of Agriculture is obsolete. To modernize it the Commission on Organization made 16 recommendations. Very few of these have been put into effect.

The first necessity in good and economical executive administration now is to give responsibility and to fix that responsibility. That is the purpose of the President's plan. It is in full accord with the recommendations of the Commission on Organization, and, in my opinion, the plan should be approved as soon as possible.

Major reductions in expenditures of the Department can be realized if the plan is approved and energetically implemented.

Among the advantages which would derive from the plan are these:

1. The plan would permit drastic reduction in the number of major units reporting directly to the Secretary. There are now more than 20 so reporting to him.

2. The plan would permit reduction of expenditures through elimination of overlapping of services within the department such as budgeting, personnel, supply, and research.

3. The plan would permit the Secretary to integrate related functions to the betterment of service for farmers.

4. The President's message directs that there be established closer working relationships between the Federal Government and State and local groups. The plan provides the machinery for making this possible.

5. The plan would make possible widespread streamlining and reduction in overlapping of Federal activities at the State and county levels.