Mr. WEITZELL. I think the Congressman might be interested in the fact that we have made such an estimate for REA borrowers, the estimate of total power requirements, up through 1955.

Mr. MARSHALL. Do you have that on a chart?

Mr. WEITZELL. Yes.

Mr. MARSHALL. May that be put in the record with an explanatory statement?

Mr. ANDERSEN. That will be done at this point in the record. (The chart referred to follows:)

REA borrowers, serving all classes of consumers in their service areas, required a total system input of 11.3 billion kilowatt-hours in 1951 and 13.5 billion kilowatthours in 1952. As the systems fully develop and as farmers and other consumers acquire electrical equipment and appliances, rural power loads will continue to expand rapidly. The above chart indicates the projected power requirements of REA borrowers from 1945 through 1955. It is anticipated that they will require nearly 20 billion kilowatt-hours by 1955.

Mr. ANDERSEN. Mr. Marshall, we have had evidence before us on the proposed Minnesota belt line that runs from Garrison Dam to the effect that they anticipated there would be a doubling of the potential use of power in western Minnesota over a period of 10 years. That was the estimate given to us by the Bureau of Reclamation.

Mr. MARSHALL. That is a very pertinent figure, because it is based upon making power available to them at lower cost than they get it

now.

Mr. ANDERSEN. That is correct.

UTILIZATION OF REA POWER

Mr. MARSHALL. Do you have any estimate that would show what percentage of the power purchased through REA co-ops is used for

farm productive purposes, and what part is used for household purposes? Do you have anything on that?

Mr. WEITZELL. We do not have any overall figures. There are studies, however, made by the Bureau of Agricultural Economics, in cooperation with several of the State agricultural colleges, which indicate the proportion of power used for household purposes and the portion used for farm productive purposes for particular areas of the country. For example, studies have been made in Tennessee, Georgia, Kansas, North Dakota, Wisconsin and some of the other States. Í would be glad to summarize those studies in very brief form if you so desire.

Mr. MARSHALL. Mr. Chairman, I believe it would be pertinent if we could have that information put in the record.

Mr. ANDERSON. We will have that put in the record at this point. (The information requested is as follows:)

CONSUMPTION OF ELECTRICITY ON FARMS For Household Uses and for Farm PRODUCTIVE USES

Farm electrification studies have been made by the Bureau of Agricultural Economics, in conjunction with the respective State agricultural experiment stations, in several different States. The results of seven of these studies show that approximately 90 percent of the electricity consumed on farms is used in the farm household, and about 10 percent is used for farm productive purposes. These results are shown in the following table which also indicates the particular area of the States where data are collected.

There is great variation in the proportion of kilowatt-hours used in household and farm production among individual farms. There are a number of reasons. why so great a proportion of the electricity used on farms is used in the farm home. Initial connection of a farm to central station electric service makes modernization of the farm home possible, and farm families have been financially able to accomplish this rather quickly after receiving service. Several household appliances are relatively large users of electricity, particularly the heating appliances such as water heaters, ranges, and ironers. On the other hand, most of the equipment used outside the house involves electric motors, and these require relatively small quantities of electric energy, despite the fact that they save a great deal of time and labor.

Mr. MARSHALL. Do you have any estimate as to what the percentage of increased use of electricity for farm production in the next 5 or 10 years? No doubt, electricity has quite a bearing on the production on a farm. Would you have any estimates on how much the production might be increased in the next 5 or 10 years by the use of electricity?

Mr. WEITZELL. Do you mean how much agricultural production has been increased because of electricity?

Mr. MARSHALL. Yes.

Mr. WEITZELL. I do not think anybody has made up such an estimate, sir. I do not believe that it would be possible for us to arrive at such an estimate on a very intelligent basis without a lot more data than we now have available.

DECREASING COST OF POWER

Mr. MARSHALL. The cost of power to all REA cooperatives, from all sources, has decreased considerably since the REA was established, has it not?

Mr. WISE. Yes.

Mr. MARSHALL. Could you give us any figures to show how the cost of power to the user has decreased?

Mr. WISE. In 1951 the average cost of energy per kilowatt hour was 1 cent. That went down to 89 cents in 1949. It is now down to 80 cents. This is particularly striking when you realize that the price of all other commodities has gone up very sharply during that same period of time. We feel it is due to the favorable bargaining power that the cooperatives are placed in by virtue of REA's authority to make them loans for the generation and transmission of power over their own systems.

Mr. MARSHALL. How does the cost of supplying power compare between the Federal suppliers and the non-Federal suppliers. Do you have any figures on that, a breakdown of that 80 cents?

Mr. WISE. We can furnish that to you.

Mr. MARSHALL. I believe that that would be desirable also. Mr. ANDERSEN. It will be inserted in the record at this point. (The material referred to follows:)

SOURCE AND COST OF POWER

More than 53 percent of all power purchased by REA distribution borrowers is obtained from commercial power companies and industrial corporations. An additional 38.2 percent is purchased from public agencies, including municipalities, Federal and State agencies. The remainder is purchased from other REA borrowers that generate power for sale to distribution systems. The below tabulation indicates the average cost of wholesale power purchased from the several types of suppliers.

Source and cost of power purchased by REA borrowers, fiscal year 1952

Mr. MARSHALL. I am also interested in two other matters, particularly relating to the matter of cost.

Do you have figures that show how much it costs to electrify a farm with all of its convenciences? Do you have any breakdown of that by areas?

Mr. WISE. We do not have a breakdown here. You could get the average per consumer by dividing the number of consumers into the amount loaned per borrower. We will be glad to work that out and and put it in the record.

Mr. MARSHALL. That would show the cost of the line to the borrowers. It would not show the cost of electrifying the farm with conveniences.

Mr. WISE. You mean the investment made by the farmer himself? Mr. MARSHALL. Yes.

Mr. WEITZELL. I do not think anybody has assembled information as to what the total investment of the average farmer is in electrical equipment, machinery, and appliances. It would be possible to arrive. at an estimate of what that investment might be, but I do not know of any research or survey data that would give us the answer.

Mr. MARSHALL. I have been asking a similar question of other groups that have come up in connection with farm costs, because so many people seem to feel that all that a farmer has to do is to go out and pick up his produce that he sells without realizing the investment that he has put into the machinery. Of course, today in this modern age of electricity, it means that he must have a considerable investment. In order to do that it means that he must have a fairly reasonable income to carry the investment that he has made. If you have something, will you include it in your remarks in the record?

Mr. WEITZELL. We shall be glad to include anything on that point we can find available.

(The information requested follows:)

FARM INVESTMENT IN ELECTRICAL EQUIPMENT, APPLIANCES, AND WIRING

In 10 cooperatives for which data is available from field appraisals, farmers have invested an average of roughly $2,000 per farm in wiring of buildings and in purchase of equipment and appliances with which to utilize the electric power made available to them. The accompanying table shows the relationship of this farm investment to the investment necessary to bring electricity to them. It shows that, on the 10 cooperative systems, farmers spend $3 or $4 for electrical appliances, equipment, and wiring for every dollar spent for electric plant necessary to bring them central station service.

This average investment of $2,000, expanded by the total number of electrified farms, represents a real stimulus to the national economy. More important, this investment is injected into the economy at the local level. Local contractors do the wiring; local merchants sell the materials and the appliances; and this expansion of local business sets in action a stimulus to business activity which reaches back through and benefits the dealers, manufacturers, transportation, and raw materials producers.

30505-53-pt. 3--22

Farm investment in electric equipment, appliances and wiring compared to investment in electric plant

VOLUME OF ELECTRICAL APPLIANCES AND EQUIPMENT PURCHASED BY FARMERS Data on sales of electrical appliances and equipment do not indicate the proportion which is sold to farmers. However, it is estimated that farmers purchased a total of about $825 million worth of electrical equipment to be used outside the house in connection with the farm productive enterprise in 1952. With respect to household appliances, estimates are available for refrigerators only. It is estimated that farm purchases of refrigerators in 1952 amounted to $108 million. The total purchase of household electric appliances by farmers probably exceeded the $825 million spent for electrically operated farmstead equipment during 1952.

ECONOMIC EFFECTS OF FARM ELECTRIFICATION

Mr. MARSHALL. Mr. Chairman, there is one other problem that comes up in this respect: I am inclined to feel that many people have overlooked a tremendous market that has been built by the REA for manufactured items that the farmer uses in the operation of his farm, and that the wife uses in the house.

Do you have any figures that would indicate how much equipment has been put on farms, and an estimate as to how many jobs that has created for people supplying the equipment?

Mr. WEITZELL. Sir, that would be another difficult question for us to get firm data on because electrical appliances and equipment are manufactured for both farms and nonfarms, including urban consumers, and it is sold through various distributors, most of them located in urban or town centers.

Mr. MARSHALL. Could you make some sort of an estimate on that for the record at this point?

The statement requested is as follows:

EFFECT OF RURAL ELECTRIFICATION ON EMPLOYMENT AND BUSINESS ACTIVITY

While no data are available to indicate the employment in industry and service trades which rural electrification affords, it is apparent that employment and business activity generally is favorably affected by the additional market for appliances and equipment which rural electrification provides.

This effect may be made clearer by observing the manufacturing and marketing process by which an electric motor reaches the farmer. The farmer normally purchases his electric motor from a local retailer, and if it later requires repairs