Remarks at the 7th Annual Meeting of the National Rural Electric Cooperative Association.

Mr. President, Ladies and Gentlemen:

I am delighted to meet with the representatives of the rural electrification systems. I salute you and those you represent for a job well done.

I understand there has been a little advance billing here about my alleged views on matters of interest to you. Well, I am here to set forth my views accurately and frankly, in what I believe to be your own interest as in the interest of our country.

We all know that when the REA was born, less than 11 percent of our farms had central station electric service. And today, of course, you know that 95 percent of our farms have central electric service. Your record of meeting loan repayments on time or ahead of schedule is outstanding. Your achievements have encouraged the growth of both rural residences and rural industries.

Much of this growth has taken place these past 6 years. Since January 1, 1953, you have added some 800,000 new consumers; your net worth has more than doubled, every loan has been met.

All of us know that in these past 6 years, the REA has experienced the greatest financial growth in its history.

As we look ahead certainly we are anxious that the future growth of REA be based upon sound principles--principles that are sound for REA and for the entire nation.

America at this very moment is engaged in a great debate on the role of the Government in the lives of her citizens. A part of this debate revolves around the question: shall Government live within its means; shall our citizens, in prosperous times, meet the cost of the services they desire of their Government?

Or is it to be our established policy to follow the ruinous route of free republics of the past ages--the route of deficit financing, of inflation, of taxes ever rising, until all initiative and self-reliant enterprise are destroyed? This route, I remind you, is one that would surely torpedo all the great achievements of your organizations in the past quarter century.

My view on this issue is clear, and, I hope, well known.

I believe profoundly that we must, in these times, not fail to live within our income. I believe that this is the view of most Americans.

I believe all of us want a healthy, free economy--one that will produce growth in terms of real goods, real services, real wages. Surely none of us favors actions that tend to debase our currency.

I believe further that most of you and most of your organizations are equally dedicated to these principles. Moreover, now that your REA systems have arrived at a state of maturity, I am sure you want to make the kind of contribution all of us must make as citizens toward a goal of fiscal soundness throughout America. To this end, none of us should add to the burdens of the general citizenry by insisting upon a favored position.

Now I come to one point on which I realize full well there is disagreement. Parenthetically I feel obliged to say this: I believe we are not going to find decent solutions to any of these differences--or to any other serious problems facing our country--by resort to demagoguery that seeks support for a special position.

One difference of which I speak is the rate of interest paid by persons and agencies who borrow money from the Federal Treasury. Specifically I refer to programs--such as REA and college housing--in which borrowers do not pay interest rates equal to the cost of money to the Government and are capable of doing so.

I have recommended that the Congress authorize the Treasury to set these rates at a level that will recover the cost of the money loaned. This recommendation would not raise interest rates now in effect on outstanding REA loans, for these loans are firm contracts between your member cooperatives and the Federal Government.

Now such a development would unquestionably be in the public interest. I do not intend, nor does this administration believe, that these future interest rate changes would be harmful in any way, nor can they be, to your systems.

Here I hope you will indulge me in a little philosophizing about our Government and how it relates, to my thinking, to each one of us.

I believe that Government, at all levels, has certain clear obligations to you and to me. It owes us, for example:

security from external attack

protection of our person and property protection in the exercise of all the individual rights guaranteed by our Constitution.

But beyond these things that the Government owes us, Government may, if it so chooses, do a number of things for all our people that benefit you and me as citizens. For example, it supports certain medical services, we need to establish schools to assist in the education of our children, and prevent pollution of the air and the water we use. But even beyond this, the Government may also undertake special activities in favor of particular groups, of which you and I may be members. This is sometimes done not only for humanitarian purposes, but also to equalize economic opportunity among different areas, or groupings, and to prevent disaster in some sector of our economy from hurting, too much, the entire economy and population of the country.

We have, for instance, farm programs, housing assistance, urban renewal, the REA, and so on and so on. The effort here is not to give to one group of citizens special privilege or undeserved advantage. Rather it is to see that equality of opportunity is not withheld from the citizen through no fault of his own.

These and many other things our Government does for you and me. In return we have certain obligations to Government. Payment of taxes, obedience to the laws, readiness for military service in emergency are illustrations. In addition, it is our obligation, as I see it, if we belong to one of the groups for which the Government has made special provision, to use that help responsibly and constructively. It is up to us to do our level best to re-establish speedily our own equality of opportunity, and so share proportionately in the productivity of our economy.

I believe that when this has once been accomplished, and my special requirements satisfied, then certainly I do not need, do not deserve, and should not accept any special help from the Government. If I do so, I help deny equality of opportunity to all my fellow citizens. No longer am I a fully independent, sturdy, and useful member of society. Rather I am, to the extent I profit unfairly at the expense of others, dependent upon their bounty.

These beliefs lead to the conviction that the great success of REA justifies the adjustment in future interest rates that I have suggested.

I believe we have reached a point where REA is no longer an infant enterprise. You have grown wonderfully through your infancy and adolescence. My congratulations to you are not only enthusiastic, but deep and sincere. Now in your prideful maturity, it is my earnest desire to see the local enterprises you represent become even stronger and more self-sufficient.

I like to think that the program which lighted the farm homes of America will also help illuminate the path to sound finance, good government, and responsible citizenship.

It is my earnest desire that these broad gauge goals will unite us all as we plan confidently for your future and the future of our whole country.

Thank you and best wishes to you--all of you, and to your families-for the journey ahead. Goodbye. Thank you.