And the job is not completed. It may never be. We must continue to invest in the maintenance and improvement of our resources.

In conclusion, a few comments on REA. The Rural Electric Administration was established to permit farmers to borrow the funds with which they could provide themselves electric power. No one else would do it. Profit-motivated corporate utilities would not. They could not foresee the great need farmers had for electric power; they were not sympathic to farmers' cries for light in their home, power for their home, and farm equipment. But, I guess, we cannot blame the corporate utilities too much for that. They are organized to make a profit for their stockholders. That is their single reason for being in business.

That is why those in Congress and the administration at the time REA was established set up the cooperative route to bringing electricity to sparsely settled rural areas. Because members own and control cooperatives, these businesses have a different motive. They are concerned first with serving members' needs.

The rural electric cooperatives did that. They borrowed money from the Rural Electric Administration, money appropriated by Congress, they built lines, power stations, generating plants, and literally brought farmers out of the dark. And, they are paying back the money they borrowed-and, on schedule. Today, rural electric cooperatives, because they could borrow the money to do it, provide electric power to 7 million farmers and rural residents. How many of these would still be without electric power had REA not been a viable and vital program over the years? And if it is weakened now, as it certainly will be if the supply of modest-interest money is abruptly ended, what effect will this have on the whole matter of rural development? The access to reliable electric service is certainly instrumental in the overall development of rural areas. May I hasten to say I did not understand the Rural Development Act of 1972 was to be a vehicle to finance REA.

If providing money through REA to benefit rural America is a subsidy, then so let it be. We are providing huge amounts of Federal subsidies, running into the multibillions, to others. If the goal of a strong, prosperous, progressive rural America is to be met, then the continuation of low-cost REA loans, loans that are sound, that are being repaid by well-run cooperative businesses, should receive high priority, not criticism and abolition.

I cannot believe the President of the United States could possibly be so ill-informed to believe the statement he apparently gave in a press conference recently which stated, "Now," he stated, "80 percent of these 2-percent loans goes for country clubs and dilettantes. Every farmer knows this is not true.

Mr. Chairman, I wish I had the time to enumerate the many other administrative orders and impoundments that are adversely affecting farm income. We believe the above three programs that I have outlined are all good, sound investments in people. They are not only popular with those that they serve, they have a commendable record of getting the job done at low cost.

Mr. Chairman, this appears to be a matter of prioriy and a question of who will make the determination of these priorities. We urge the Congress of the United States to take immediate action to become the

determining factor in all of these priorities, and we believe without a doubt, agriculture will again be recognized as a viable part of our today's economy.

The CHAIRMAN. Thank you for an excellent statement.

Mr. CARPENTER. Thank you very much for the privilege.

The CHAIRMAN. Without objection at this point in the record I want to put an excerpt from section 201 of the Foreign Assistance Act, to show what the law provides for foreigners with reference to loans.

(The excerpt follows:)

Section 201 of the Foreign Assistance Act of 1961, as amended (22 U.S.C. 2161), provides in part that "The President is authorized to make loans payable as to principal and interest in United States dollars on such terms and conditions as he may determine, in order to promote the economic development of less developed friendly countries and areas, with emphasis upon assisting long-range plans and programs designed to develop economic resources and increase production capacities." In so doing he must take certain factors into account. Funds, however, shall not ". . . be loaned at a rate of interest of less than 3 per centum per annum commencing not later than ten years following the date on which the funds are initially made available under the loan, during which ten-year period the rate of interest shall not be lower than 2 per centum per annum . . ." Currently, the maximum term for loans under this Act is 40 years with a grace period of not to exceed 10 years.

The CHAIRMAN. The next witness is Mr. Kenneth R. Hampton, conservation liaison, National Wildlife Federation.

STATEMENT OF KENNETH R. HAMPTON, CONSERVATION LIAISON, NATIONAL WILDLIFE FEDERATION

Mr. HAMPTON. Good afternoon, Mr. Chairman.

The CHAIRMAN. How are you, Mr. Hampton?

Mr. HAMPTON. Well, I am a little apologetic for having been tardy. The CHAIRMAN. Without objection we will insert your statement in full in the record and ask you briefly to verbalize it.

Mr. HAMPTON. Fine. I will be happy to do so.

I will first identify myself for the record. I am Col. Kenneth R. Hampton, U.S. Army retired. My job is one of conservation liaison with the National Wildlife Federation and I am a professional conservationist with degrees in forest management and meteorology.

For the sake of brevity and to save your time, I am attempting to just briefly summarize the contents of the statement which you say will appear in its entirety in the record.

The thrust of our statement, Mr. Chairman, is that the National Wildlife Federation has no particular quarrel with the actions proposed by the President and the executive branch to place a lid on the funding on the budget for this year and for next year. We think that this shows a high degree of fiscal responsibility and we certainly respect and admire him for the position he has taken on this and I think this is a position that most Americans can appreciate.

We do find it hard though to justify the manner in which he is proposing to make these cuts. To our way of thinking it is much more equitable if he were to make some sort of reasonable percentage financial reduction across the board rather than to arbitrarily cut out certain programs such as REAP and water bank. We are especially concerned about the cancellation of a program as modest as water

bank, $10 million, just going into its second year, and a program which in our judgment holds considerable promise for enabling us to be able to hang on to some of the rapidly disappearing "pot hole" country that is so vital to the continued survivability of our migratory waterfowl.

We think that the President by canceling this program is sacrificing far too much for too little.

With respect to REAP, we have mixed feelings about the rural environmental assistance program.

We think, on balance, it is definitely a program worth keeping. We are not sympathetic with some of the practices that have been existent within REAP in the previous years, those which are aimed at increasing agricultural production, although we recognize that even many of them have some conservation side benefits, but we, on the other hand, are very much in favor of, and support strongly, those practices in REAP that are aimed at enhancing environment quality—and there are many, as you well know, Mr. Chairman.

So we think that the aim of the legislative branch should be to work with the executive branch in restoring an REAP program which has been trimmed of some of the more questionable practices.

Lastly, with respect to the impoundment of a total of $9 million, I believe it is, out of the $25 million that was appropriated for the cooperative forest fire protection program, we think that this also is far too deep a cut in a program which has given us so much good over the years. Through that program we have been able to cut our losses on protected State, private forests from about 3 percent down to about three-tenths of a percent, an order of magnitude of 10.

We think it is especially embarrassing, if you will, to the Federal Government to impound an additional $4 million, as the executive branch did just a few weeks back, out of that program, at such a late date. This really puts the State agencies in a bind. Many of them, I am told, had already committed themselves, based on the reasonable assumption that the $20 million which remained after the first $5 million was impounded would be apportioned to the States and there would be no further impoundment of money. As a consequence they went ahead and committed their respective shares of that money. We think it is rather sad now that they are in this predicament where they have committeed themselves and don't have the money to take care of these commitments.

So, in summary, we are very much disturbed about the cancellation of water bank. We think that water bank and REAP and the cooperative forest fire protection programs perhaps deserve their fair share of cuts, but not to the extent that they were cut.

(The prepared statement of Mr. Hampton is as follows:)

Mr. HAMPTON. Mr. Chairman, I am Col. Kenneth R. Hampton, U.S. Army (Ret.), conservation liaison for the National Wildlife Federation which has its national headquarters at 1412 16th Street NW., here in Washington, D.C. I am a professional conservationist with degrees in forest management and meterology.

Ours is a private organization which seeks to attain conservation goals through educational means. Affiliates of the National Wildlife Federation are located in all 50 States, Puerto Rico, Guam, and the Virgin Islands. These affiliates, in turn, are made up of local groups

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and individuals who, when combined with associate members and other supporters of the National Wildlife Federation, number an estimated 31 million persons.

We welcome the invitation to appear here today to comment upon the action taken recently by the executive branch to terminate the water bank program, the rural environmental assistance program (REAP), and to impound $9 million of the $25 million appropriated for cooperative forest fire protection program.

Thomas L. Kimball, executive vice president of the National Wildlife Federation has expressed his concern about the cancellation of REAP and water bank in a letter to the President dated January 8, 1973. A copy of that letter is attached for the record.

We are particularly disturbed by the abrupt termination of a program as modest and as promising as the $10 million water bank. Aimed at providing rural land owners some incentive for resisting commercial encroachment, the program was just starting its second year. Administrators were in the process of negotiating long-term agreements ($1 million per year for 10 years) to preserve and maintain irreplaceable wetlands for migratory waterfowl nesting and breeding areas. The retention of such "pothole" habitat is the key to a continued, viable migratory waterfowl population, especially in the Central and Mississippi Migratory Waterfowl Flyways.

We would like to believe, as the administration apparently does, that "pothole" landowners are so well fixed that, despite the lack of financial support from the Federal Government, they are able and willing to resist the attractive blandishments of land developers and others. However, our programatic instincts lead us to believe otherwise. In our judgment, the President was the recipient of some bad advice from his budget experts. How else can one explain a penny-wise, pound-foolish decision which forfeits so much to save so little? If we permit these "potholes" to slip between our fingers, we will have lost a valuable part of our American heritage.

From a pure bookkeeping standpoint, the White House's decision to cancel REAP is more understandable. At least a significant dollar saving will be effected if REAP is terminated. However, here again the administration doesn't seem to be able to "see the forest for the trees."

The National Wildlife Federation does not pretend to endorse all the practices included in REAP. Conservationists, in general, do not support practices in a program supposedly designed to enhance the environment which simply stimulates agricultural production by encouraging land drainage, land leveling, and irrigation or by using chemicals to fertilize or to control competitive shrubs. Nor are they very enthusiastic about practices which provide only temporary conservation benefits such as seasonal cover crops.

On the other hand, we are interested in, and strongly support, practices which provide long-lasting environmental values such as: Wind and water erosion control measures, development of wildlife habitat and the construction of ponds for wildlife, pollution abatement, reforestation, and woodlot improvement, and solid waste disposal.

Therefore, the federation is of the considered opinion that, on balance, REAP is a program worth keeping. If there are deficiencies in REAP, the solution is to weed them out-not kill the entire program.

By terminating REAP the administration might save some money for a few years but we are convinced that such myopic vision will be environmentally costly over the long haul. We are hopeful, Mr. Chairman, that the Congress can work with the executive brance to revamp REAP and come up with a trim program aimed solely at long-term conservation practices.

This would accomplish two things: First, it would invalidate the administration's argument that REAP accomplishes little other than supplementing farmers income by increasing agricultural production. Second, the program could absorb a sizable funding cut and still remain viable.

We cannot understand the executive branch action taken in January to impose another $4 million cut on top of the $5 million previously impounded by OMB out of the $25 million cooperative forest fire protection program. That cost sharing program has, over the years, been instrumental in materially reducing fire losses in protected State and private forests by an order of 10 (from 3 percent to 0.3 percent). The Federal portion of the highly effective cost sharing program has averaged only 20 percent or less (16 percent in 1971) with the States contributing more than $4 for every $1 of Federal money.

What makes this particular cost so repugnant is the timing. Acting on the reasonable assumption that they were going to have $20 million of funds available (after OMB impounded $5 million last summer), many State agencies fully committed their respective annual shares. Then, on January 10, 1973, they were arbitrarily advised that another $4 million is being withheld. Now the State agencies must try to extricate themselves, as best they can, from the unhappy position of being overcommitted. This kind of "hip pocket" budgetary exercise would seem to be completely out of place in Government circles, especially at the Federal level with the White House's own fiscal experts orchestrating the score.

The National Wildlife Federation recognizes that it is relatively easy to stand back and take potshots at the administration for its budgetary actions. That is not our intention. We admire the Chief Executive's determination to hold the line on Federal spending. It is a fiscally responsible stance which the overwhelming majority of Americans can appreciate and respect.

Hence, we do not question the need for the President to "bite the bullet" and make cuts in popular Federal programs. That appears to be the only way we, as a nation, can avoid rampant inflation without even higher taxes.

But it seems to us that the cuts-if they must be made to retain fiscal order should be apportioned in a more equitable manner across the board instead of completely terminating some programs, such as REAP and water bank. Of course priorities must be properly weighed when deciding where cuts are made. However, we cannot agree with the administration that water bank and REAP are low priority programs.

We think the water bank should rank high in anyone's list of priorities. And if, as already suggested, practices of doubtful long-lasting conservation value, such as irrigation, drainage and use of chemical herbicides, and fertilizers were eliminated, REAP would move up the priority ladder as far as the federation is concerned.