lion. We appropriated $214,526,000 for the year just ended, and we got back $20 million. We appropriated $209,046,402 for 1953 and we got back $15 million.

I think there has been fairly generous treatment of TVA. We have not been niggardly with it. I am not advocating that we cut it off, either. It is a question of proper balance.

I now yield to the Senator from Iowa. Mr. HICKENLOOPER. I thank the I thank the Senator from Arkansas. I have been very much interested in the figures which the Senator has developed as to the cost per kilowatt-hour for electricity furnished in the Memphis area by the TVA, which I have noted as 3.88 mills.

know. If the TVA services the community

Mr. FULBRIGHT. The power is turned over to the community's own distributing system, and the community or tributing system, and the community or municipality handles it from that point on. However, there is something to the Senator's argument. The city is selling The city is selling power to private consumers. It is uniformly true, I think, over the country formly true, I think, over the country that power delivered in small amounts is sold at a higher price than power delivered to a large user. The Senator is quite correct, I think, in that under normal circumstances, if the Atomic Energy mal circumstances, if the Atomic Energy Commission were not a Government installation, but a private installation, the

Mr. HICKENLOOPER. As compared As compared with a charge of 4.25 mills to the Atomic Energy Commission, based upon the figures which the Senator has placed in the RECORD.

Mr. FULBRIGHT. That is correct. Mr. HICKENLOOPER. I should like to ask the Senator a question. I think there is another factor which enters into the cost differential, which does not appear from the bare figures which are used for the calculation.

As the Senator pointed out a moment ago, the Memphis area is a residential area. There are many thousands of residences, thousands of meters, and thousands of miles of electric line which must be maintained, as I understand, by the electric company. There are hundreds of small factories individually served, whereas in the Paducah area, for the AEC use, the general rule is that the power is pushed in through a tremendous pipe. It then becomes the property of the AEC, and the AEC handles it from that point on.

In other words, it is dumped, as compared with being filtered into the Memphis area. Normally the cost of dumped electricity should be far less than the cost of electricity in an area where there

thousands of installations which

must be maintained the cost of which must be included in calculating the cost per kilowatt-hour.

So I do not believe the figures which the Senator has given show the full amount of the overcharge which the Atomic Energy Commission is now paying to TVA, in comparison with what TVA is charging in an area of diversified industry, and in residential areas, which it must serve with countless employees and installations. I wonder if the Senator has taken into account the fact that it is far more costly to put electricity

into a diversified community than it is to deliver such electricity in great quantities to a vast industrial plant, and allow the plant itself to take over the responsibility of distribution within the plant.

Mr. FULBRIGHT. Of course, what the Senator has said would confirm my argument. However, I believe the municipality accepts the power at the gateway to the city, and distributes it. I do not believe the TVA distributes it. Therefore, the actual delivery would be practically identical in both cases.

Mr. HICKENLOOPER. I asked the Senator that question because I did not

rate charged the city, which, of course, is just the reverse of the fact.

Mr. HICKENLOOPER. Under the circumstances which the Senator has explained, my additional comparison of the ramified distribution system in a city would not necessarily be applicable.

Mr. FULBRIGHT. The cost would, of course, be absorbed by the city's own company. I do not know, but my guess is that the city probably makes some profit. The amount of profit is determined by the TVA. My guess is that the TVA is probably very generous to the local distributing system, because, after all, there is a reciprocal relationship. If one were to read the newspapers in Memphis these days and see all the letters indicating strong support for TVA, he would conclude that the people of Memphis deserve good rates. They deserve to be treated well. They have been treated very well by TVA for many years. I do not complain about that. I am only trying to examine into the factors involved, and see whether or not the proposed contract is against the public interest. I do not believe it is.

Mr. HILL. Madam President, will the Senator yield?

Mr. FULBRIGHT. I yield.

Mr. HILL. The Senator has stated the proposition correctly. TVA is not what we might call a retail distributor.

Mr. FULBRIGHT. That is correct. Mr. HILL. TVA generates and transmits power to some 150 municipalities and REA cooperatives. and REA cooperatives. Those municipalities and REA cooperatives do the distributing, as was described by the Senator from Iowa. The TVA does not do the distributing.

Mr. FULBRIGHT. That is correct.

Mr. HILL. Earlier the Senator spoke about the appropriations for TVA. I am sure he knows that about half the TVA power today goes to the Atomic Energy

Commission. I emphasize this, because of the amount of appropriations which went into investments for the power. A large amount of additional power goes to great national defense installations, such as the great Tullahoma Air Base installation, great ordnance installations, chemical plants, and other installations which are direct national defense installations. So, of course, a large part of those appropriations can be charged directly to providing power for the national defense. As I stated earlier, all such power is provided to the Government by TVA without 1 penny of cost for taxes.

Two

Mr. FULBRIGHT. The Senator is quite correct. This is what might be called the reverse of what we sometimes call a vicious circle. This is an extremely happy circle. The TVA area has the TVA. Since it has the TVA, it attracts many additional plants. years ago I did everything in my power, as did many others in the State of Arkansas to get one little atomic plant in Arkansas. We had everything else except the TVA. However, that atomic energy plant went to the TVA area. In that area there are not only public installations, but private installations. It is true that the public installations pay no taxes, but is it not a happy circumstance that the TVA is able to sell power to the citizens of Memphis and to the 150 installations to which reference has been made, at a rate much lower than others pay? The most significant and amazing thing to me, after I went into the contract, was to learn that power sold in the Memphis area was sold at rates lower than the Federal Government was being charged. That is a circumstance which the Senator from Alabama has not yet explained to my satisfaction. I am waiting for the explanation.

Mr. HILL. When there has been opportunity to examine the Senator's figures there will be good reason to show that the TVA has not in any way charged the Atomic Energy Commission a higher rate. On the contrary, the very statement which the Senator from Arkansas has just made, to the effect that the atomic-energy plant went to the TVA area, when he tried so hard, powerful as he is, to get that plant for Arkansas, demonstrates the incorrectness of the Senator's premise with respect to the TVA in some way charging the Atomic Energy Commission too much. If there had been any such thing as that, with all the power and pull of the Senator from Arkansas, we know that the atomicenergy plant would have gone to Arkansas, instead of to the TVA area. So I believe the Senator, by his own illustration, has largely destroyed his own

case.

Mr. FULBRIGHT. I will say to the Senator that in Arkansas we cannot even approach this overcharge which the TVA puts on the AEC, for various other reasons. However, we are making progress. I may say that if the plant comes to Arkansas, we will get a diffusion of this great largess which has been concentrated in such a restricted area in the Tennessee Valley. Since the Senator mentioned that over a billion and a half dollars have been poured in, I do not believe he should resent some small crumbs

falling off the table and being available across the Mississippi River. I do not know why he should be so upset. It will not hurt TVA. As a result of it, not one man will lose his job in TVA. This is not a proposal to cut down the power. It is to provide an additional source of power in that whole area. I do not believe the Senator should take it so hard. I cannot understand why the TVA advocates are so distressed about this plant being located across the river. It amazes me that the Senator should be so disturbed about it.

But in this specific instance I believe the bringing in of this additional source of power is justified on many grounds. Mr. BUSH. The point I wish to make is that it seems to me it is directly in line with the policy of which I strongly approve. I think it is very much in line with some of the other things which are coming before us for a vote, and with some which have been before us recently. When the Coosa River project was before us the Senators from Alabama were loud in their praise of the bill which was to repeal an enactment of the Congress in order to get into operation a private development on the Coosa River. I helped them to get the bill through, and was very glad to do so. It is surprising to me to see that when we have before us a privately operated station on the other fringe of the TVA area, our friends are violently in opposition to it. I do I do not think their position is entirely consistent with the premises at all.

Madam President, I wish to say to the Senator from Arkansas that I am delighted to hear his address on this subject. I think it is proper and fitting that some Senator should rise and defend the President's policy in this connection, and I congratulate the Senator very much on his remarks.

Mr. FULBRIGHT. I thank the Senator from Connecticut very much for his contribution.

Mr. STENNIS. Madam President, will the Senator from Arkansas yield?

Mr. FULBRIGHT. I yield. I am sorry the Senator from Mississippi was not here earlier. I quoted with approval from the Senator's speech.

at all.

Mr. FULBRIGHT. I have talked with two of them.

Mr. STENNIS. There was a press report stating that 2 members opposed it and that 2 said they would go along with the President's wishes, and, since that time, they have said they were for the contract. I am using that as a preliminary remark to this question: Does the Senator think it is a sound policy of government for the Atomic Energy Commission, which is charged with great responsibility, on the very highest plane, with reference to the national security, in the very highest realm of national security, on an absolute nonpartisan, nonpolitical, and nonsectional basis, with the whole world looking to it for a decision, and having to consider cases such as the Oppenheimer case, for illustration, to be also dabbling in this highly controversial domestic question of public power and private power? Does not the Senator think the Commission should be kept entirely out of domestic controversy and squabbles of that kind?

Mr. FULBRIGHT. That is a long question. In the first place, I do not know how we can keep anything of such importance as atomic energy out of domestic controversy, any more than we can keep the Senate out of domestic controversy. President, controversy. Controversy is the very essence of any democratic system. The purchase of power is most important to the AEC. The purchase of uranium is likewise important and may involve greater expenditures. I cannot, however, ever, imagine that the Commission would not be extremely interested in its power rates. The Commission should have more than one source of power, if have more than one source of power, if that is possible. As I pointed out before the Senator entered the Chamber, there is evidence to indicate that they are being charged more than other people are being charged by the TVA within that area, for instance, in the city of Memphis.

Mr. STENNIS. I appreciate the Senator's compliment. It is a compliment to have my speech quoted with approval

the Senator. I do not think the Senator has ever been a member of the Atomic Energy Committee, but I think he would make a fine member of it.

Mr. FULBRIGHT. I should be glad to be a member of it.

Mr. STENNIS. In any event, does not the Senator know that there was not a single member of the Atomic Energy Commission who really wanted to become involved in the matter of negotiating a contract for power? Although it has never been denied that they said they would go along with the wish of the President. Does the Senator accept that as a fact?

Mr. FULBRIGHT. I should like to deny it right now. I personally talked with two members and discussed this matter with them. I do not agree with the Senator. I am not a member of the Atomic Energy Committee nor obviously of the Commission, and I am not as well acquainted with all the members of the Atomic Energy Commission as I might be, but two members of the Commission including the Chairman, I do know, and I have discussed it with them. They are in favor of the contract. In fact, they participated, I think, in originating the entire idea, on the ground of the need of additional sources of power and on the ground of not concentrating all of it in the area of area of Paducah.

Mr. STENNIS. I am not attempting to speak for the members of the Com

I think it is good business to have more than one source of supply. I know that persons who manufacture do not like to be dependent upon a single source of supply. If the price is not out of line, I think there are many good reasons why they can bring into this picture a private

source.

There is one other item which I suppose would not appeal to the Senator from Mississippi; it is an item of $100 million which would have to be appropriated for the TVA if it built the plant. If the proposed contract is approved, then a private company will do its own financing largely through loans from insurance companies and banks. The private banks. The private source would pay more interest by approximately 1 percent. The Government can obtain money for 22 percent.

We are going to be asked in a few days, probably, to raise the public-debt limit. I was against it last year, and I may be I was against it last year, and I may be against it this year. I certainly cannot be against it if we continue increasing appropriations.

This is a long-term contract. No one knows but that within 10 years we may use atomic power itself to generate elec

necessary. There are provisions in the contract for cancellation, which do not occur, I may say, in the other alternative which has been said to have been offered, nor would it be possible to cancel it if the Government itself built the plant. The Government would be stuck with it. That is an important economic business consideration. I cannot imagine, important a part of the whole operation as electricity is, that the Atomic Energy Commission could ignore it or not be concerned about it, as the Senator from Mississippi has suggested.

Mr. STENNIS. I did not suggest that the AEC should not be concerned about rates at a time when it should be concerned. My point is that the movement in this direction precipitates the AEC unnecessarily into the middle of a highly controversial matter which has been raging throughout the country for many years, and will continue to rage for many more years. If that is to be the case, the TVA should have been directed either to generate the power or to negotiate for the purchase of it. Although I have not looked into the question, I doubt that there is authority in the law for the TVA to enter into the contract. The General Accounting Office raised the point. It said it was doubtful whether the Atomic Energy Commission had such authority.

Mr. FULBRIGHT. I do not think there is the slightest doubt about it. There is specific authority in the Atomic Energy Commission legislation to enable the Commission to make contracts up to 25 years for the purchase of electricity or anything else.

Mr. STENNIS. I appreciate the Senator's yielding to me.

Mr. FULBRIGHT. The Senator from Mississippi says that this should not be a controversial subject. I do not think it should be controversial either. That is why I have been surprised at all the controversy which has arisen on the floor. This is the first speech which has been made on the floor in defense of the contract. I did not start the controversy. The contract has been so viciously attacked, and I think so unfairly and erroneously attacked, and figures have been so freely used without justification, that someone simply had to say something about actual facts of the contract.

Mr. STENNIS. The Senator from Arkansas certainly is within his rights. No attempt has been made to limit him.

Mr. FULBRIGHT. I think everyone should quiet down and let the contract proceed as it should.

Mr. STENNIS. My point is that there is already a public power controversy, and this puts the Atomic Energy Commission right in the middle of it. The Commission will have a hard time regaining the high place in the Halls of Congress which it has always had, at least since I have been a Member of Congress, and I think since the Atomic Energy Commission was created.

The Senator from Arkansas made a point about the amount of money which will be saved. I certainly am not opposing private enterprises having legitimate investments. That is all right. If private enterprise can make money, well

and good. But as one who has served on the committee which has been considering this year the bills to construct post offices and other public buildings under a new plan, and to build ships under a new plan, and although I supported the bills in their final form, I am firmly convinced that there will not be any money saved.

So the Senator from Arkansas will be disillusioned. When he ascertains the real facts, he will understand that there will not be any savings in dollars and cents to the National Treasury on this proposal.

I thank the Senator for yielding. I do not unnecessarily wish to take up his time.

Mr. HILL. Madam President, will the Senator yield?

Mr. FULBRIGHT. I yield to the senior Senator from Alabama.

Mr. HILL. The Senator from Arkansas has referred at quite some length, and with considerable emphasis, to certain rates which the AEC paid to the TVA for power. Can the Senator advise us whether or not the power for which those rates were paid was power generated by the TVA in a TVA plant?

Those are figures

Mr. FULBRIGHT. to which I am about to come. The figures I was citing are the rates which are provided in the contract as compared with the Memphis rates. It does not matter where they came from. Those are the rates which are provided in the contract.

Mr. HILL. Madam President, will the Senator further yield?

Mr. FULBRIGHT. In a moment. That is the rate under the existing contract. I think that what the Senator from Alabama is coming to-and I have the figures in my hand-are the socalled interim rates being charged in the process of the building of the new power installations. I shall read the figures now.

Mr. HILL. That is what I want. Some of those rates are rates paid to private power companies.

Mr. FULBRIGHT. I understand.

Mr. HILL. It is for power which the TVA bought from private power companies for the Atomic Energy Commission.

Mr. FULBRIGHT. In the initial stages of construction. The figures which I quoted with respect to the proposed rate are not that case. They are the firm, permanent rates under the existing contract between the TVA and the AEC at the Paducah plant.

Mr. HILL. Is the Senator now getting ready to address himself to the rates being paid by the TVA to private power companies for the AEC plant? Mr. FULBRIGHT. For the For the period from January 1, 1951, to December 31, 1953, the AEC bought for use at its Paducah plant 2,987,403,660 kilowatt-hours from TVA, for which they paid $20,277,585.78, or an average cost of 6.7897 mills per kilowatt-hour. During the same period, the AEC bought from Electric Energy, Inc., almost the same number of kilowatt hours-2,802,626,121for $16,001,700.64, or 5.7095 mills per

kilowatt-hour.

Therefore, private power was more than a mill cheaper per kilowatt hour. Mr. HILL. Madam President, will the Senator yield?

Mr. FULBRIGHT. In a moment.

I am not suggesting that this is representative of what the costs will be when both the private plant and the TVA plant near Paducah are completed. I think it indicates, though, that the private power companies, during the period of the construction of their facilities near Paducah, have done a workmanlike job in getting kilowatt-hours to the AEC at fair prices, at lower prices than the TVA prices, for whatever reasons.

That is interesting. I looked at the actual figures, and I asked for an explanation of them. I was told, as the Senator has indicated, that the TVA had to buy from private sources some of the power which they supply. But I may say that the figures which I used a moment ago, to compare with Memphis, are not interim power rates; they are the rates which will be charged under the existing contract.

I should very much like to have the Senator from Alabama ascertain what is wrong about the figures I have placed in the RECORD. I do not think anything is wrong with them. This is a compariThis is a comparison between Memphis and the AEC. The figures which I think the Senator had in mind are the interim rates, during the period of construction.

It seems to me that the TVA is not making a very strenuous effort to give the AEC a break during this period, when it is charging the AEC almost 1 mill more-6.7 mills against 5.7 mills. That appears to be too big a difference to be justified on any ground.

If I were trying to maintain my position and to be popular with my constituents, I would give them a break, too. I would try to give them a break, because that is a part of the game in which we are engaged, in trying to keep the peace among a great many people in the 48 States. This is one of the ways in which to do it.

I am not blaming anyone; I am trying to explain the circumstances which I think gave the Atomic Energy Commission the justification for entering into negotiations for this contract.

Mr. SPARKMAN. Madam President, will the Senator yield?

Mr. FULBRIGHT. I yield.

Mr. SPARKMAN. The able Senator from Mississippi [Mr. STENNIS] a few minutes ago referred to the stand taken by at least three members of the Atomic Energy Commission. I should like to quote from the testimony of one of the witnesses before the joint committee. I refer to the testimony of Commissioner Thomas E. Murray, who testified as follows:

Since our program is not advanced by these negotiations and the subsequent_administration of this 25-year contract, I do not believe that it is desirable for the Atomic Energy Commission to perform a function that another agency of the Government could perhaps more logically perform.

He was certainly testifying directly in opposition to the statement made on the floor of the Senate. It is my understanding that at least two of the other Commissioners testified in a similar vein.

Mr. FULBRIGHT. As I said to the Senator, there is a difference of opinion. We often run into differences of opinion, even on the floor of the Senate. I am

Mr. FULBRIGHT. I yield.

Mr. HILL. Of course, the Senator realizes, does he not, that the TVA had to buy the power on an interim basis, and had to pay pretty much whatever the private power companies charged? Those rates were not fixed by the TVA, but were fixed by the private power companies.

Mr. FULBRIGHT. The TVA has been buying enormous amounts of power from private companies throughout the years. I gave the figures a moment ago. They I gave the figures a moment ago. They are such large figures that I cannot remember them. It was something like 4 billion kilowatt-hours that was purchased from private sources. The TVA is now buying power from private sources; it is buying it from the southwest grid, through an interchange agreement. This is not something which occurred to the TVA overnight. It is possible, too, that the TVA billed the AEC for some of the more expensive power for some of the more expensive power it obtained from private sources during this period.

If there were only one instance in which the TVA had charged the AEC more than had been charged other power consumers, I should think that perhaps that was not very significant. But the figures relating to the Memphis sales seemed very significant to me. I think I understand the reason for it.

from differences of opinion.

Mr. SPARKMAN. In this case it happened that a majority of the Commission was in opposition to the order sent by the President to an independent agency, telling it to do something which did not fall within the category of its obligations at all.

Mr. FULBRIGHT. Of course, there are many differences. As I understand, a majority of the Commission was opposed to going forward with the H-bomb, but the President overrode it and went ahead. There often occur differences of opinion. opinion. I personally happen to know that two of the members of the Commission are not opposed to what is proposed. I have not spoken to the other Commissioners. I have spoken to two of them, including the Chairman. I do not want to leave the impression that they endorse such a contract. They say conditions are such as to justify negotiating for a contract. If the contract works out as they think it will, it is their position that it should be entered into. They have not said such a contract should be signed. They have merely stated that they should enter into negotiations. If the private group can do what it has indicated it can, then the contract should be entered into. That is their position.

What is the function of the President in our system of government? It is properly a function of the President

to resolve differences within his official family, in this case between the TVA and the AEC. There is nothing wrong with his stepping in and saying, "This should be done." I do not say I always accept his judgment, but there is certainly nothing immoral or illegal about his action, nor is it beyond his jurisdiction.

Mr. SPARKMAN. I believe the Acting Comptroller General questioned the legality of it. That is the way I interpret the letter he wrote. He did indicate that perhaps under the Second War Powers Act the President might invoke his

powers.

Mr. FULBRIGHT. This is the second or third time that point has been raised. I wish to read a paragraph from a memorandum prepared by the General Counsel, William Mitchell, of the Atomic Energy Commission:

Section 12 (d) of the Atomic Energy Act reads as follows:

"12 (d). The Atomic Energy Commission is authorized in connection with the construction or operation of the Oak Ridge, Paducah, and Portsmouth installations of the Commission, without regard to section 3679 of the Revised Statutes, as amended, to enter into new contracts or modify or confirm existing contracts to provide for electricutility services for periods not exceeding 25 years"

And so on. It is as clear as a bell to me what that means. I shall be glad to read the entire paragraph, if the Senator from Alabama is interested.

Mr. SPARKMAN. I suggest that the Senator have it printed in the RECORD.

Mr. FULBRIGHT. I am willing to read it all, but I ask unanimous consent that the paragraph be printed in the RECORD at this point.

There being no objection, the paragraph was ordered to be printed in the RECORD, as follows:

12 (d). The Atomic Energy Commission is authorized in connection with the construction or operation of the Oak Ridge, Paducah, and Portsmouth installations of the Commission, without regard to section 3679 of the Revised Statutes, as amended, to enter into new contracts or modify or confirm existing contracts to provide for electric-utility services for periods not exceeding 25 years, and such contracts shall be subject to termination by the Commission upon payment of cancellation costs as provided in such contracts, and any appropriation presently or hereafter made available to the Commission shall be available for the payment of such cancellation costs. Any such cancellation payments shall be taken into consideration in determination of the rate to be charged in the event the Commission or any other agency of the Federal Government shall purchase electric-utility services from the contractor subsequent to the cancellation and during the life of the original contract.

Mr. SPARKMAN. If the Senator from Arkansas has the letter which came from the General Accounting Office, I suggest that he also place it in the RECORD.

Mr. FULBRIGHT. What I have read is contained in a memorandum from the General Counsel.

Mr. SPARKMAN. That is a memorandum from Counsel for the Atomic Energy Commission. I am talking about a letter from the General Accounting Office. Contracts involving the Government have to clear that Office. If the

Senator has that letter, I suggest he put Senator has that letter, I suggest he put it in the RECORD, in order that those who read the RECORD may learn that the who read the RECORD may learn that the General Accounting Office raised a question as to the legality of such a contract.

Mr. FULBRIGHT. Did the General Accounting Office raise the question, or pass on the question and say that such a contract would be illegal? Of course, the Office has to raise the question. Did it state that such a contract would be illegal?

Mr. SPARKMAN. I am sorry I do not have the letter before me, but, as I recall, the Acting Comptroller General stated that the President might have power under certain war powers, probably the Second War Powers Act, provided he invoked such powers. If I interpret the action of the President correctly, he had not invoked those particular powers.

Furthermore, I may say that the General Accounting Office likewise suggested that if a contract was to be made, it ought to be made in competitive bidding.

I should like to ask the able Senator from Arkansas, who has always been an advocate of legislation against monopolistic practices, is it not rather unusual that the President of the United States should direct the Atomic Energy Commission, an independent agency charged with a high responsibility, as pointed out by the Senator from Mississippi, to enter into a contract for which specifications had never been drawn, to make that contract with a corporation which had never been organized, and is not yet in existence, and to buy that power from a plant which has not yet been built?

Mr. FULBRIGHT. I should like the Senator to yield for a moment, because, very clearly, the Senator is misstating the facts. In the first place, the President did not order any such thing. The proposal really came through the Bureau of the Budget. There were inquiries made and discussions had with the electric-power industry regarding the possibilities of such a contract. However, the Senator from Alabama is creating a false impression. Actually, we all know that the electric-power industry is what we call a natural monopoly. To my knowledge, there will not be found, within the same city, two electric-power companies competing any more, because it is not economically feasible.

What are the facts in the area under discussion? The Senator from Mississippi knows very well which companies constitute the electric power industry in that area: The Mississippi Power & Light Co., the Arkansas Power & Light Co., the Louisiana Power & Light Co., and New Orleans Public Service Co. constitute the operating companies in Middle South Utilities, Inc. The other is the Southern Co.

To give an example of why a company from New York State or one from the Northwest would not come into that area to compete, I suggest that we consider an item which is extremely important in a contract, that of cancellation. What would happen if the Atomic Energy Commission should wish to cancel a contract? What would happen is that

the companies would have to absorb and dispose of the power. If a company were brought into the area which had no other connection in the whole area, which had nothing but the plant, and it was faced with a cancellation, what would happen? It would be a total loss. Under the contract being discussed, since it would be with existing companies having other connections, the loss would be minimized in the event of a cancellation. The provision in the proposed contract relating to cancellation would be that there would be an absorption of the power into the systems of the States of Mississippi, Arkansas, and Louisiana. The additional capacity that had been provided would simply be absorbed by the existing systems.

The ability to do that is extremely important. The idea that there could be competition in the sense that a company could enter the area and compete with a system which is already there simply is not correct.

I do not know whether the other proposal submitted to the AEC was a bona fide arrangement or not, but in that case a company with no existing capacity or distribution system simply said, "We will build it cost-plus, if you will give us $4 million as a fee." That is as simple as it was. There could not possibly be any provision which would result in distributing the excess power in case of cancellation. Of course, there is no competition in the purchase of electric power. It is a matter of negotiation.

If in this case the respective parties do not and cannot arrive at figures approximating what has been suggested here on the floor in my figures, I would say the negotiations would be off. The proposed contract and the rates under it must be satisfactory to the Commission, as compared with the TVA rates. That is why I was making the comparison. The TVA was set up as a yardstick. We are simply accepting it at its word. The private companies are trying to meet that yardstick, and they have come very close to meeting it. That seems to me a perfectly legitimate way to proceed.

Mr. HICKENLOOPER. Mr. President, will the Senator from Arkansas yield at this time?

The PRESIDING OFFICER (Mr. CRIPPA in the chair). Does the Senator from Arkansas yield to the Senator from Iowa?

Mr. FULBRIGHT. I yield.

Mr. HICKENLOOPER. In recent days, much has been made in claiming that no specifications were developed by the AEC and furnished in connection with this matter. I wish to ask the Senator from Arkansas whether the specification in which the AEC was interested was the question of who would furnish 650,000 kilowatt-hours of electricity and how it would be furnished?

The AEC was not telling anyone how to design or build the plant. It was not telling anyone how many bricks to place in the foundation or what motors or generators to use. The AEC said, in effect, "The specifications are 600,000 kilowatt-hours of electricity. Who will propose to supply it? We will examine the proposals, to see which one is the best; and if it is in the public interest,