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found in the tragic consequences of our policies in the Korean war.

The tragic decision came at the time when General Van Fleet's armed forces, on his own testimony, had the Communists fleeing north, disorganized and in confusion, with their ammunition spent. The decision that he should not be permitted to pursue a vanquished enemy at least to the narrow neck of Korea was a decision which we took under strong pressure from our allies and in consequence of the blind stubbornness of our own statesmen. Korea, our country, and the world have suffered ever since from that tragic error.

The results have been that the Chinese Communists are clear in their own minds that no military threat of ours will be carried through to a conclusion. Once we have folded up with victory in our hands, they are sure we will always fold up.

The next point is that we have probably lost the respect of Asia as a whole. We have no ambitions to be a great power in the old sense, but we have given the Asians no substitute term by which to define our moral and material influence.

These losses have been compounded by recent unfortunate statements that we have not been able to back up by deeds. The promise, for example, that we would pick out the battleground with the forces of communism and engage in the contest when and where we pleased has not been borne out by the facts of current history. And again the threat of massive retaliation proves to be meaningless in the jungle fighting actions in which the Communist armies by preference engage. It retains a meaning only as massive retaliation for an atomic attack.

We threw away a military victory in favor of a military stalemate which cost us many more thousands of lives and many more billions of expense than we would have suffered had we chosen to win. But there was still a chance that

moral victory might have been achieved. This possibility I mentioned more than once on the Senate floor, but I refer particularly to my remarks of March 6, 1953, in the CONGRESSIONAL RECORD, Volume 99, part 2, page 1675, and May 20, 1953, part 4, page 5187. An endeavor to sell the idea of a moral victory was made throughout the previous administration from top to bottom of the policymaking officials involved. It appeared to be acceptable in the lower ranges of policymakers, but met with refusal at the top, where the statement was made over and over again that the Soviet Government and its allies respect only military force; and this statement was made in spite of the fact that military force was not allowed to have its proper effect. A moral victory was something unappreciated and unconsidered.

There had been great hope that the present administration might see this

thing in a clearer light. And much more progress was made than with the previous administration. Setting as our goal a diplomatic settlement of the Korean matter which was right for the people concerned-the people of North

Korea, the people of South Korea, the people of Red China-would have an effective appeal. A suggested neutral zone along the Yalu River whose neutrality was to be administered by an all-Asian commission also had the appeal of establishing a policy of Asia for the Asians, in which the Asiatic nations would have had to take on the responsibilities of such a policy as well as enjoy the advantages.

In the complicated machinery of determining national policy in this administration, this proposal disappeared. We are now in the position of not actively supporting a policy of Asia for the Asians. Lacking this support in Asiatic public opinion, we have been maneuvered by opinion, we have been maneuvered by French shortsightedness into a position French shortsightedness into a position where, on the face of it, we are the supporters of the few remaining rags and tatters of Western colonialism in the Eastern World. All of this follows from the earlier mistakes. Are we to make more of them?

So far this talk has been principally one of complaint as to the present and a mourning over what might have been in the past. What we do have to face, however, is the question of what we shall do now.

So far, at least, as our relations with the Soviet Government are concerned, it is clear to me as to what we should do now. We should go on the offensive to win the hearts and minds of the Russian people on the question of disarmament. I am not going to go over this matter again, because I have already adequately expressed myself in a speech on the Senate floor on July 8, 1953, CONGESSIONAL RECORD, Volume 99, part 7, page 8199. Here is an opportunity to enter the conflict on our own initiative, at times and places of our own choosing. Until now we have failed to carry out our announced intention. Let us not fail at this point.

There is one very important thing that we can do with regard to diminishing the increasing influence of Communist Chinese among the millions of Chinese scattered through southern Asia and the islands of the Pacific. They are now sending their children by the tens of thousands to Red China to be educated. There is no greater menace to the future of Asia than this. These children have no other place to go, except at vast expense and through the difficulties of passport and visa troubles.

In past generations they would have had other places to go. American friendship for the people of China led to the establishment of many institutions, both of middle and higher learning, supported by funds from Europe and America. The need was great then. It is far greater now. Private philanthropy must reenter this field. Here is a field Here is a field in which people can help people. Institutions of higher learning for Chinese might well be set up in Japan, for example, in Singapore and in Djakarta, so that with a minimum of personal expenditure these bright young people

could be trained to serve the interests of the many, instead of serving as tools for totalitarian tyranny.

Finally, let me make a suggestion Finally, let me make a suggestion which perhaps may not appeal at first thought to many of my fellow Senators

who believe, as I do, that Red China must not be admitted to the United Nations. As was said at the beginning, this is a purely negative policy. Let us put something positive into it.

Let us not use weasel words such as "she must not be admitted at the present time" or "until she has shown a willingness to abide by decisions of the United Nations." Let us make it specific and positive. Let us say that when Communist China tears away its curtain and resumes intercourse with the Western World, as freely as the nations of the Western World now allow their people to intervisit, intertrade, and intercommunicate, then we should be willing to reconsider our objections. Such a China will not be the Communist China of today.

There should, indeed, be two great principles which our Nation must uphold in the Assembly and in the Security Council of the United Nations. One of them is guaranteed universal disarmament, which must become a hard-fought crusade instead of being referred to stagnant committees. The second is that nant committees. curtains-iron, bamboo, and othersmust be vigorously attacked and their destruction made a primary objective based on our experience with nations which hide behind them.

Let us be positive instead of negative. Military action has proved its necessity defensively, to gain time. It has solved no problems. The solution lies in moral action, in the appeal to the hearts of men.

Destroying curtains, establishing free education and disarmament are moral purposes and can bring to their support the spiritual forces of the universe.

Let us ally ourselves with these forces. Let us not allow the sword of the spirit to rust in its scabbard. Let us sharpen it and wield it with faith and with might.

PROPOSED ATOMIC ENERGY COMMISSION POWER CONTRACT Mr. FULBRIGHT obtained the floor. Mr. SMATHERS. Mr. President, will the Senator from Arkansas yield so that I may suggest the absence of a quorum, with the understanding that he will not lose the floor?

Mr. FULBRIGHT. I yield for that purpose.

Mr. SMATHERS. Mr. President, I suggest the absence of a quorum.

The PRESIDING OFFICER. The secretary will call the roll.

The Chief Clerk proceeded to call the roll.

Mr. SMATHERS. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

The PRESIDING OFFICER. Without objection, it is so ordered.

Mr. FULBRIGHT. Mr. President, during recent weeks there has been much sound and fury with respect to a proposed contract to be entered into by the Atomic Energy Commission for 600,000 kilowatts of electric power. Many statements being made are not based on fact, and it is time for the other side of this issue to be presented in an objective manner to the Senate. The proposed

contract would, of course, result in an expenditure of substantial substantial sums of money in my State-a most welcome development-but actually the proposal recommended by the President of the United States is justified in the national interest.

Mr. President, if I may digress for a moment, on the front page of this morning's Washington Post there appears an article entitled "Democrats Planning TVA Battle." The article, written by Sam Zagoria, begins with this paragraph:

Senate Democrats yesterday laid out legislative strategy to be used next week in an attempt to scuttle an Eisenhower administration plan to bring private power into the Tennessee Valley Authority area.

Mr. President, I should like to suggest that the sentence should refer to "some" Senate Democrats, because by no means are all Democrats planning any such a strategy or supporting any such movement. While I do not speak for the Democratic Party, I am quite sure that whoever gave that interview, if it was an interview, or whoever gave that information to the reporter, was not speaking for anywhere near all the Democratic Members of the Senate.

I see no reason why this should be made a party matter. I think it will not be made a party matter. I hope it will not be considered a party matter by the

Democratic Members of the Senate. I

think it is a matter involving high policy in both the economic and fiscal areas of government.

As Senators from the Tennessee Val

ley know, I am not motivated by any desire to destroy the TVA either piecemeal or by one fell swoop. I have supported TVA in the past and I have supported the SPA in my own area.

That is the Southwestern Power Ad

ministration, which operates in my State and in the Southwestern area.

I have tried to approach these question from a realistic viewpoint, and have done what I could to promote both public and private power development in this great area. I am quite willing for this proposal to be judged on that same basis. In fact, my concept of the TVA is very similar to that expressed by the junior Senator from Mississippi [Mr. STENNIS] when he said:

TVA is a national yardstick for electric power rates and as such has served a great purpose to the Nation as a whole, and to the private power companies. It has helped put electricity within the reach of the masses of the people and at the same time has created mass customers for the private power companies and the appliance manufacturers.

This statement of the Senator from Mississippi is a proper description of the role performed by TVA. Let us, there fore, proceed to analyze this proposed contract in the light of the TVA yard


The issue at hand has been greatly distorted and exaggerated by TVA advocates who are needlessly concerned, I believe, over the future of the Authority. TVA is not a weak reed to be broken by a waft of power blowing across the Mississippi River toward Memphis. The fact is that TVA has been buying power from

across the Mississippi for several years450 million kilowatt-hours in 1953. Practically all of this power was delivered to the Memphis area from the same sources who are sponsoring the proposed sources who are sponsoring the proposed contract with the Government.

As to the background of this proposal, the Atomic Energy Commission had the Atomic Energy Commission had contracted for nearly 2 million kilowatts contracted for nearly 2 million kilowatts of electric power in the Paducah, Ky., of electric power in the Paducah, Ky., area. It has insisted that all of its power contracts provide a means of cancellacontracts provide a means of cancellation in the event power requirements tion in the event power requirements should decrease or be eliminated. AEC has been conscious of the advantages cf having diverse power sources. To me that makes commonsense. The proposed power contract provides a means for permitting the Government to rid itself of a substantial liability for excess power in the Paducah area if at any time it becomes desirable to cancel a portion or all of the AEC power contract. In addition, a remedy was found for TVA's widely publicized crying need for more electric power for the city of Memphis. electric power for the city of Memphis. Furthermore, having this plant in Arkansas is an asset to national defense. I am told by competent engineers that having the additional heavy transmission lines crossing the Mississippi River results in more tying together of the great power resources of TVA and those of the private power companies operating of the private power companies operating in the Southwest.

We have heard much criticism about

having the Atomic Energy Commission enter into a contract for power generated at Memphis, Tenn., because it was some distance removed from Paducah. The delivery of power by replacement Such criticism is without foundation. is neither a new nor novel idea. It is the practice employed by TVA since it began adding capacity to its system to serve AEC beginning in 1949.

TVA has continuously coupled its demands for new steam electric stations with the plea that such additional power was needed by the Atomic Energy Commission for national defense. Did TVA consistently locate its plants immediately adjacent to the required AEC loads? The answer is definitely "No." The lines did not go directly into the Atomic Energy Commission plant at all.

The first major expansion of AEC facilities was authorized in 1949. To supply power to these new facilities, TVA sought and received authority to build the Widows Creek generating plant and unit 4 of the Johnsonville steam plant. AEC needed the additional power at Oak Ridge. Johnsonville is 200 miles away from Oak Ridge, Widows Creek 100 miles. The Johnsonville plant is farther away from Paducah than is the proposed plant.

When TVA was requested late in 1952 to supply additional power requirements at Oak Ridge and Paducah and when TVA received appropriations to build steam stations to supply these requirements, 2 units were requested for Kingston, 2 units for John Sevier, and 2 for Gallatin. The Kingston plant is located near Oak Ridge, but the John Sevier plant is 70 miles away and Gallatin 150 miles away.

The Shawnee plant authorized to supply power at Paducah initially was to be

a 4-unit plant, then 2 more units were added-not for AEC but for normal load growth-and then 4 additional units were requested on the basis of AEC's last request for power. However, in justifying additional capacity for the Paducah requirement, TVA requested funds for the last 4 units at Shawnee and also part of 2 units at Gallatin. Gallatin

is 130 miles from Paducah.

It is apparent that TVA has long applied the theory of serving power loads by displacement-the same theory that their stanch advocates now denounce because it does not serve the purpose of adding further to the TVA empire. Electric power, like water, flows over the path of least resistance. A large power pool is somewhat like a large lake-one may put water, or power, in at one point and take a like amount out at another point. That is exactly what is happening here. The only difference between the proposed replacement of 600,000 kilowatts for the Paducah load and previous increases to the TVA system to supply AEC requirements is this: In the past, TVA made the decisions as to where it would locate its plants. In this case it has been decided, with competent technical advice, that additional power could advantageously be obtained through a contract between the AEC and private utilities from a new plant to be located in the Memphis area, the same area previously selected for such purpose by TVA itself.

Many confusing and misleading statements have been made indicating substantial additional costs under the proposed contract. Figures prepared by the Bureau of the Budget with the assistance of the Federal Power Commission give quite a different answer. These are the facts.

The Atomic Energy Commission has The contract is a document which lends contracted with TVA for electric power. itself to ready analysis-there can be no dispute on what the cost of power to the AEC will be, save for the effect of escalation provided for in the contract. The

TVA does not charge its sister agency,

the Atomic Energy Commission, the actual costs of producing that power. It charges a contract rate which will increase as national indexes of costs increase.

A proper appraisal of the proposed contract is simply a comparison of the cost of 600,000 kilowatts to be purchased from the private power companies versus the contract price in the existing TVAAEC arrangement. I am sure that it will surprise many people to learn that the difference in cost is almost negligible. Based on fuel priced at 19 cents per million British thermal units, it is only $282,000 a year, exclusive of Federal income taxes which, obviously, should be ignored in this comparison. This very nominal difference in the bill of the power companies is even more impressive when it is considered that they must pay some $1,499,000 in State and local taxes.

Much has been made of the fact that the AEC is to pay, through this proposed contract, the Federal income taxes arising from the sale of power.

TVA, by law, is not required to pay any taxes on sales of power to AEC. However, if they should be required to do so, the following excerpt from article 5 of the AEC-TVA Paducah contract would govern:

In the event that Authority is required by any law enacted after January 1, 1953, to pay any amounts for or in lieu of taxes which it would not have been required to pay except for the supply of power hereunder, including without limitation any payments resulting from Authority's ownership or operation of steam electric generating and other facilities required for such supply of power, Commission will reimburse Authority for such payments. Authority will confer with Commission before making any payment for which it would be entitled to such reimbursement in whole or in part.

That is in the existing contract. Mr. HILL. Mr. President, will the Senator yield?

Mr. FULBRIGHT. I yield.

Mr. HILL. The Senator from Arkansas realizes, of course, that today the Atomic Energy Commission does not pay the TVA anything for taxes, does he not?

Mr. FULBRIGHT. I have just made it clear that that provision is in the contract; and if the TVA is required to pay taxes, then the AEC will have to pay.

Mr. HILL. Of course, that is only a The TVA has precautionary clause. been supplying the AEC with power for some 14 or 15 years, and the AEC has never paid the TVA $1 for any taxes whatsoever. Other purchasers of power would have to pay taxes equivalent to what the TVA pays, but not the Federal Government. Whether it be the Atomic Energy Commission or the Air Force, for its Air Force base-all Government agencies are exempt from paying any taxes whatsoever.

I do not see how Arkansas really would get much benefit from this plant, even if it be admitted that the contract is a good one, except the payment of $1,500,000 each year for taxes, because not one kilowatt of the power is supposed to go into Arkansas. The Senator knows that a steam plant uses very little manpower; and so far as the machinery and equipment of the plant are concerned, they would not be manufactured in Arkansas; they would be built outside the State.

Mr. FULBRIGHT. I realize that the amounts which would accrue to Arkansas, contrasted with the enormous amounts which have been put into the TVA, look very small; but, as a matter of fact, there will be about $7 million a year, for 3 years, spent in construction. It is estimated also that there will be a payroll of $1 million a year, and that $1,500,000 will be paid in taxes.

To my State, that is a very substantial amount, although I am not basing my argument solely upon the benefits to Arkansas. I think the contract is a good one in itself, for the reasons which I hope the Senator will listen to, and will consider seriously.

Mr. HILL. I may say to my distinguished friend from Arkansas that the $1,500,000 which the contract would require the Atomic Energy Commission to pay to Arkansas does not seem like a small amount to me. I think it is one of the most outrageous things about the contract. The Atomic Energy Commis

sion is the most delicate and vital agency connected with the defense of our country; yet it is directed to enter into a contract under which it will have to pay taxes, for which there is no precedent, so far as I know.


to the Government pay taxes.

taken out of thin air by the TVA and compared with the proposal by the private companies. That is a difference which has never been pointed out in the press. The legitimate proper comparison is with the existing contracts-the Private suppliers price the AEC now pays for the same kind of kilowatts. There is no difference in the kilowatts; they do the same thing in the same way in the steam plants. The proper legitimate comparison is between the price which is now being paid, based on 600,000 kilowatts, and the price contained in the proposal. That is the legitimate way for private persons to try to compete with or to do business with the Government. It is not some cookedup proposal, which may or may not materialize; it is not a barebone proposal, as I have previously suggested.

Mr. HILL. Oh, but the Senator knows that the Government of the United States, and particularly in its defense installations, does not pay taxes. Why should it pay taxes? The atomic facilities are constructed for the defense of the people of Arkansas as well as for the the people of Arkansas as well as for the defense of all the other people of the United States. Shall we now establish a precedent whereby a Government agency, the Atomic Energy Commission, will have to

Mr. FULBRIGHT. Just a moment; I have the floor. I wish to respond to the Senator.

I said that those who supply materials of all kinds to the Government pay taxes. It so happens that the school system of my State is dependent upon taxes, and that other facilities of the State need taxes with which to operate.

It also will be quite apparent as I develop the subject, I hope to the satisfaction of the Senator from Alabama, that what has been happening has been that the TVA has been siphoning out of AEC quite substantial sums of money, in many cases at a higher rate than is taken out of local citizens, enabling the TVA thereby to subsidize local citizens in a very satisfactory manner.

I should like to have the comments of the Senator from Alabama on some of the facts and comparative figures I shall use in a moment. The matter of taxation is not quite so simple as the Senator from Alabama would have us believe. from Alabama would have us believe. There are more ways of getting money than by taxation, and of spreading it in the places where it is most appreciated, the places where it is most appreciated, I may say. So I hope the Senator from Alabama will bear with me while I state some figures. If they If they are wrong, I should like to have the error pointed out. Much confusion has been brought into the picture by various statements that the added cost to the Government would be from $3,500,000 to $5,500,000 annually. Those figures have been bandied about by speakers in both Houses of Congress and have also appeared in the press.

The figures represent an estimate purely an estimate of the difference between what TVA claims to be their net barebone expense of operating a powerplant versus a guaranteed cost backed up by the credit of the private power companies. If there is any substance in these larger figures, it must be that the TVA is charging its sister agency, the TVA is charging its sister agency, the Atomic Energy Commission, a substantial profit on the power it now sells stantial profit on the power it now sells at Paducah.

To me, this is one of the key questions. The comparisons I am making, and to which I have referred, are between the existing contracts. There is no funny business about it. It is the price provided by existing contracts between the vided by existing contracts between the AEC and the TVA. It is a comparison of that rate and those conditions with the proposal of the private companies, the proposal of the private companies, not a comparison between an estimate not a comparison between an estimate

I do not know-no one knows-how an activity so large as the TVA keeps its books. We do not know how much they allocate for depreciation or to the payments in lieu of taxes. They have a tremendous discretion as to how they shall keep their books. I do not mean to imply that there is anything wrong or anything dishonest, but all of us know that in any company there is great discretion as to how depreciation is taken, whether it be fast or slow. It is a quite legitimate bookkeeping procedure. But that question is eliminated when existing rates are considered. That is what I want to emphasize. I am comparing existing rates-rates which the AEC is now paying to the TVA-with the proposal made by private companies.

I say that if there is anything at all to the estimate made by the TVA, then TVA is certainly overcharging AEC. It is overcharging, in an unconscionable way, and in a way which no friendly agency should ever overcharge another friendly agency. It appears to me that if one accepts the proposal, or anywhere near the proposal, made by the TVA estimate, one must conclude that what the TVA has been doing is billing the AEC high charges and giving the benefit of the profits therefrom to the city of Memphis and other purchasers in the local area. I see no other explanation for it, and I call attention to the facts. The figures are not mine.

Mr. SPARKMAN. will the Senator yield?

Madam President,

The PRESIDING OFFICER (Mrs. BOWRING in the chair). BOWRING in the chair). Does the Senator from Arkansas yield to the Senator from Alabama?

Mr. FULBRIGHT. I yield.

Mr. SPARKMAN. The Senator has just stated that apparently the TVA was overcharging the Atomic Energy Commission and passing the benefits on to municipalities which had contracted with the TVA for power. As a matter of fact, I am sure that when the TVA makes a contract with a municipality, it makes it for a long period of years. For example, the contract with Memphis was made nearly 20 years ago. The contract will expire in another year or so. So far as I understand, there has been no modification of the contract with Memphis or with any other municipality since it was originally made, so I do not see how it is possible for TVA to pass on the benefits accruing as a result of undue profits

which it has been making from contracts with the Atomic Energy Commission. If the Senator from Arkansas intends that the charge which he has made shall stand, I certainly hope he will give us the facts on which he has based his statement.

Mr. FULBRIGHT. I was on the verge of giving the facts. I was leading up to that. I made my statement not as a charge. I said that if the statement which has been made by the Senator from Alabama that the private power contract would cost the Government $51⁄2 million more a year than the TVA estimate is accurate, that is, if TVA can undersell the private power companies by $52 million, then certainly the TVA is overcharging under the existing contract.

I make that statement to point up the significance of the figures I am about to put into the RECORD.

Mr. SPARKMAN. Will the Senator yield for another question?

Mr. FULBRIGHT. I yield. Mr. SPARKMAN. The able Senator has just used the figure $52 million. I believe that is the estimate which the TVA made as to what the loss would be.


Mr. SPARKMAN. Is it not true that the representatives of the Atomic Energy Commission said that the loss would be $3,600,000 a year, or a figure similar to that?

Mr. FULBRIGHT. I am coming to the figures. I question the last statement made by the Senator from Alabama. I do not think the Atomic Energy Commission would put it in quite the terms stated by the Senator from Alabama. That amount has been used by the press, but I shall presently deal with those figures.

I point out again that the extravagant claims are based on the TVA estimate. The true comparison, I repeat, rests in the difference between the cost to the AEC for 600,000 kilowatts under their existing contract with TVA versus a proposal of the private power companies for an equivalent amount of power delivered where most needed; and that difference is $282,000 a year, which is more than offset by payment of State and local taxes of $1,499,000. I wish to emphasize that the $282,000 difference is after paying the full taxes in the State of Arkan


There are other advantages in the proposed contract. The private power companies are taking a substantial risk, for the Government can serve notice of can

cellation at any time, to be effective 3 years thereafter. In other words, if the AEC finds that it does not need power in these amounts, or if a more economical source of power becomes available, it can cancel its contract on favorable terms, and the private power companies

will have the burden of taking over the expense of paying for and operating this large plant. They are the ones that must find a market for the power. On the other hand, if this plant continues to be useful in the AEC's program, it can use it for the entire 25 years of the contract, and have an absolute call on the facilities for 2 additional 5-year periods.

The Atomic Energy Commission has, I believe, driven a sound bargain in its negotiations with these companies because, in addition to the privilege of cancellation, it has also protected itself in the event actual construction costs should exceed estimates. The contract for power is keyed to construction costs of $107,250,000, an amount found by the Federal Power Commission representative to be in line with existing costs. If construction costs should soar, the maximum exposure of the Government is limited to $285,000 per annum. On the other hand, if construction costs should be less than the estimate, the Government will share 50-50 in all such savings without limit. Thus, the sponsors have a real risk under the proposal offered, and a compelling reason to keep capital costs below the estimated cost of $107,250,000. The Government, on the other hand, stands almost no risk, and has a very real prospect of participating in savings.

Madam President, I ask unanimous consent to have printed in the RECORD at this point in my remarks a table which I have prepared, so that the figures may be contained in the RECORD, and I merely wish to discuss the figures for a moment with the Senator from Alabama.

There being no objection, the table was ordered to be printed in the RECORD,

as follows:

[blocks in formation]

der similar conditions, with a similar place for power. I shall not read the subtotals, unless the Senator from Alabama desires to have me do so, but the total of the energy, plus the standby charge, is $18,463,000. That is a substantially lesser charge when compared to the charge of $19,856,000.

Then the charge of $177,000 for the TVA transmission to point of delivery should be added. Then State and local taxes should be added, amounting to $1,499,000. Those all bring the total to $20,139,000.

That represents a difference of $282,000. The private companies' figures are that much higher.

The comparison made is with the existing rates in effect. The figures the Senator was referring to were based on a rate estimated by TVA.

The point I make, and I do not see how the Senator from Alabama can get away from it, is that the TVA is making an estimate of a much lower rate than it is presently charging the AEC. How does the Senator justify that?

It seems to me that the only legitimate

comparison is with the rate being presently charged under an existing contract. When the TVA comes forward at this late date and says, "Oh, we can do it $3,500,000 or $5,500,000 cheaper," it seems to me there is something questionable about such a procedure.

When the private company is asked by the Atomic Energy Commission to make a proposal, and when it makes a proposal in trying to approach the existing rate, it seems to me that is the proper way to proceed.

So I say that these circumstances lead me to believe that the Atomic Energy Commission is presently being overcharged. I believe there are several reasons why the Atomic Energy Commission should cast about for a new source of electric power, and it seems to me that possibly, and probably, one of the reasons is a feeling that it was being overcharged.

Now let me refer to the figures regarding Memphis, that I mentioned a moment ago. These figures are for the sale of power to Memphis, Tenn., by the Tennessee Valley Authority, for the fiscal year 1953. The TVA sells power to Memphis at an average monthly demand rate of 249,054 kilowatts. The annual sale of power amounted to 1,459,861,220 kilowatt-hours.

Madam President, I ask unanimous consent to have printed at this point in the RECORD the table to which I now refer. These figures are very complex, and I wish to have them available for study by other Senators who are interested in this subject.

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

Sale of power to Memphis, Tenn., by TVA, fiscal year 1953

1. TVA sales to Memphis:
Average monthly demand
(kilowatts) -
Kilowatt-hours sold 1__
Revenue 1____

Average per kilowatt

hour1 (mills) ‒‒‒‒‒‒‒‒

249, 054

1, 459, 861, 220 $5,663, 005 3.88

1 Distributors of TVA Power 1954 Annual Report.

Sale of power to Memphis, Tenn., by TVA, comparison. fiscal year 1953—Continued

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2 Based on fuel at 17.5 cents per million B. t. u.

Mr. FULBRIGHT. Madam President, the sale price was $5,663,005. It works out at an average kilowatt hourly rate of 3.88 mills. These figures are taken from Distributors of TVA Power 1953 Annual Report.

Under the contract with the Atomic Energy Commission, under date of March 26, 1953, the capacity charge has been $1.10 per kilowatt-month, or $13.20 per kilowatt-year. The energy charge was 2 mills per kilowatt-hour. The following is what Memphis would have paid the TVA under the TVA Atomic Energy Commission contract rate-in other words, when applying to the electricity that Memphis actually used, the rate the TVA is charging the Atomic Energy Commission: a total charge of $6,207,235, as compared with last year's figure of $5,663,005, or an overcharge of $544,230. The percentage overcharge is 9.6. The average charge per kilowatt-hour would have been 4.25 mills, as compared to a charge of 3.88 mills for the 1953 TVA sales to Memphis. The difference between these figures is hard for me to explain.

Mr. SPARKMAN. Madam President, will the Senator from Arkansas yield to me?

Mr. FULBRIGHT. I yield.

Mr. SPARKMAN. Certainly the Senator from Arkansas must understand that an accurate comparison cannot be made between the power supplied to the Atomic Energy Commission, which in large part is for industrial purposes, and perhaps is supplied on a 24-hour basis, and the power which is sold to a city, a great part of which is used for the ordinary lighting of homes and for various commercial uses, and so forth. In other words, for city use, certainly different types of power are mixed together, whereas the chances are that most of the power supplied to the Atomic Energy Commission is supplied on an industrial basis, and I assume it must be firm power, perhap on a basis of 24 hours a day.

So I think the Senator from Arkansas would have to go much further than he has gone in order to show an accurate

In fact, I doubt that a true comparison could be shown, as between two different types of power served.

Mr. FULBRIGHT. Of course I would not undertake, even if I could-and I cannot to go into the technicalities the Senator from Alabama has raised. But there are certain facts we do know about the relationship. For example, we know that the AEC obtains funds from Congress very easily. In fact, Congress rushes virtually to cover the AEC with money, because we are so afraid of Russia, and we have become so hysterial about the possibility of being wiped out; and because of a lack of other policy, we build atomic bombs. At any rate, for various reasons we have almost overwhelmed the Atomic Energy Commission with money.

Thus, in the face of that situation, there is a great temptation to the TVA, which has had great difficulty in obtaining funds. I remind the Senator from Alabama that I have always supported the TVA; yet our efforts to obtain funds for it have invariably involved considerable struggle and controversy. So I think the TVA would be under some temptation to let the Atomic Energy Commission pay a little higher rate, for, after all, the AEC has a great deal of

When the TVA is charging the AEC the rate I have just stated, and when a counterproposal is submitted by a private company, and then when the TVA suddenly finds it can undercut that proposal probably by $5,500,000, I must say it is a circumstance that I find hard to explain; and I do not think the Senator from Alabama has yet explained it to my satisfaction.

Mr. SPARKMAN. I am not certain that the sequence of events as related by the Senator from Arkansas is correctin other words, that the TVA rushed in and tried to meet a bid which had been made to the Atomic Energy Commission. Mr. FULBRIGHT. In what way was I in error?

Mr. SPARKMAN. I said I was not certain that the Senator from Arkansas had the proper sequence-in other words, that the TVA rushed in, after the other proposal had been made, and tried to compete with it.

But a few minutes ago the Senator from Arkansas said the Atomic Energy Commission was trying to find other sources of power, and he thought perhaps one reason was the high charge being made to it. As a matter of fact, is it not true that the representatives of the Atomic Energy Commission have testified before the committees of Congress that they did not deem the proposed contract to be in the national interest?

Mr. FULBRIGHT. All I can say, Madam President, is that the Chairman of the Atomic Energy Commission personally told me that they were casting about, in the latter part of last year, for other sources of supply of electric energy. That is not hearsay on my part.

Mr. SPARKMAN. Of course, so long Congress refused to appropriate money to allow the TVA to expand its generating capacity, it had to be looking for other sources of power. for other sources of power. But despite

all that, is it not true that a majority of the members of the Atomic Energy Commission, according to their testimony before congressional committees, were opposed to the contract, and stated that they did not deem that it was in the public interest?

Mr. FULBRIGHT. No; I do not understand their testimony to be subject to that interpretation. The furthest I would go would be to say that I think 2 or 3 of the members felt perhaps they were getting beyond their proper jurisdiction, let us say. There is no question that they have the legal authority. I think perhaps they felt they should not concern themselves with making electric-power contracts.

Mr. SPARKMAN. For power not for their own use.

Mr. FULBRIGHT. However, I do not think what they said can properly be interpreted as a statement that it was not in the public interest. I do not think they said that at all.

Mr. HICKENLOOPER. Madam President, will the Senator from Arkansas yield for a question?


Madam President, I shall be glad to yield in a moment. First, in regard to the inference left by the Senator from Alabama-namely, that perhaps Congress has been niggardly with the TVA-I shall ask unanimous consent to have printed in the RECORD Some figures which have been calculated to show how ungenerous we have been with the TVA. As a matter of fact, it is very clear that we have been extremely generous with the TVA, and I am glad it has profited as a result. The total appropriations by Congress for the TVA amount to $1,596,734,581. So I would say Congress has not been too mean to the TVA.

I ask unanimous consent that the table to which I have referred be printed in the RECORD at this point as a part of my remarks.

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

Tennessee Valley Authority, fiscal year 1953 1. Fixed assets, June 30, 1954: (a) Total (less reserves

for depreciation) - $1,359, 618, 270 (b) Portion applicable to power: Completed powerplant (less reserves for depreciation) ____ Construction and investigations in progress_-_


803, 481, 086

205, 684, 170

1, 009, 165, 256

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