Statement on Signing a Bill To Improve the Rural Electrification and Telephone Program.

THIRTY-EIGHT years ago today, President Franklin Roosevelt signed Executive Order 7037 to create the Rural Electrification Administration. On this anniversary date, I am pleased to sign into law S. 394, a bill making significant improvements in the REA program.

When the Federal Government first moved to assist in bringing electricity to rural America through low-cost loans, only 10 percent of the country's farms and rural areas had central station electric service. Today, 99 percent of the farms in America have such service. Because of these changing conditions, I could not in good conscience continue to ask the American taxpayer to subsidize a need which no longer exists in its original form. Therefore, in 1972, the Administration moved to convert the existing 2 percent loans to a program of insured and guaranteed loans at higher rates.

There were many in the Congress who wanted to restore this program in its original form, a move which I was unwilling to accept. Fortunately, S. 394 represents a reasonable compromise on both sides. In fact, the enactment of this bill is a tribute to the months of constructive cooperation between the executive and legislative branches. There was much debate and much negotiation, but the important point is that the common objectives of all parties were not lost in a cloud of partisanship. I wan to express the hope that this cooperative attitude will characterize many of our legislative efforts in the future.

S. 394 recognizes and deals with two major objectives which were particularly essential to the reform of the REA program.

First, this bill focuses Federal assistance and taxpayer dollars on those who truly need that assistance. Only those borrowers in rural areas with a definite need--those in remote, geographically isolated, or economically depressed areas--will receive Federal loans at the 2 percent interest rate.

Second, in those areas in which the consumers are able and can afford to help themselves, credit and assistance will come from the private sector. No longer should those who can afford to pay for their electricity and telephone service continue to receive unwarranted assistance from the Federal Government.

I am also pleased that the volume of loan funds available under this legislation will substantially exceed the total loan funds previously available.

These changes insure the modernization and continued viability of the REA program.

The hard work and mutual effort with which this legislation proceeded convincingly shows that when government works well by working right, there is credit enough for all. In such instances the winner is always the American citizen.