On completion of facilities provided for in these loans, and prior REA loans the borrower will be serving 1,599 consumers over 831 miles of line in two counties. Glen S. Howard is president and Rod R. Inbody is manager. (Washington 46M-3 Ferry.)

DECEMBER 20, 1972

Colorado. San Luis Valley Rural Electric Cooperative, Inc., Monte Vista, Colorado, $174,000 loan. This REA loan is made concurrently with a loan from the National Rural Utilities Cooperative Finance Corporation. REA will finance 80 percent of the proposed project, supplemented by 20 percent from CFC.

The funds will finance facilities to serve 175 consumers. Construction proposed includes 24 miles of distribution line and system improvements.

On completion of the facilities provided for in this and prior REA loans, the borrower will be serving 5,150 consumers over 1,573 miles of line in seven counties. John R. Wright is president and Ray W. Villyard is manager. (Colorado 14AC-2 Alamosa)

Kansas. Wheatland Electric Cooperative, Inc., Scott City, Kansas, $784,000 loan. This REA loan is made concurrently with a loan from the National Rural Utilities Cooperative Finance Corporation. REA will finance 90 percent of the proposed project, supplemented by 10 percent from CFC.

The funds will finance facilities to serve 300 consumers. Construction proposed includes 81 miles of distribution and system improvements.

On completion of facilities provided for in this and prior REA loans, the borrower will be serving nine counties in Kansas and three counties in Colorado. All funds in this loan are for use in Kansas. William G. Houston is president and Lewis E. Mitchell is manager. (Kansas 51P-2 Wichita)

Michigan. O & A Electric Cooperative, Newaygo, Michigan, $747,000 loan. This REA loan is made concurrently with a loan from the National Rural Utilities Cooperative Finance Corporation. REA will finance 90 percent of the proposed project, supplemented by 10 percent from CFC.

The funds will finance facilities to serve 1,100 consumers. Construction proposed includes 60 miles of distribution line and system improvements.

On completion of the facilities provided for in this and prior REA loans, the borrower will be serving 18,519 consumers over 2,960 miles of line in 13 counties. Carl C. Johnson is president and Kenneth G. Bunstead is manager. (Michigan 40AH-2 Allegan)

Ohio. Marion Rural Electric Cooperative, Inc., Marion, Ohio, $281,000 loan. This REA loan is made concurrently with a loan from the National Rural Utilities Cooperative Finance Corporation. REA will finance 70 percent of the proposed project, supplemented by 30 percent from CFC.

The funds will finance facilities to serve 340 consumers. Construction proposed includes eight miles of distribution line and system improvements.

On completion of the facilities provided for in this and prior REA loans, the borrower will be serving 2,823 consumers over 544 miles of line in six counties. Frank Clay is president and Glenn E. Lucas is manager. (Ohio 30U-2 Marion)

Texas. Bailey County Eliectric Cooperative Association, Muleshoe, Texas, $185,000 loan. This REA loan is made concurrently with a loan from the National Rural Utilities Cooperative Finance Corporation. REA will finance 90 percent of the proposed project, supplemented by 10 percent from CFC.

The funds will finance facilities to serve 219 consumers. Construction proposed includes 22 miles of distribution line and system improvements.

On completion of the facilities provided for in this and prior REA loans, the borrower will be serving 5,922 consumers over 2,305 miles of line in five counties. Virgil Nowell is president and J. W. Coppedge is manager. (Texas 627-2 Bailey)

Texas. Belfalls Electric Cooperative, Inc., Rosebud, Texas, $106,000 loan. This REA loan is made concurrently with a loan from the National Rural Utilities Cooperative Finance Corporation. REA will finance 80 percent of the proposed project, supplemented by 20 percent from CFC.

The funds will finance facilities to serve 254 consumers. Construction proposed includes 27 miles of distribution line and system improvements.

On completion of the facilities provided for in this and prior REA loans, the borrower will be serving 4,209 consumers over 1,206 miles of line in three counties. Jim Falsone is president and Alvin L. Freeman is manager. (Texas 21T-2 Milam)

Wisconsin. Buffalo Electric Cooperative, Alma, Wisconsin, $150,000 loan. This REA loan is made concurrently with a loan from the National Rural Utilities Cooperative Finance Corporation. REA will finance 70 percent of the proposed project, supplemented by 30 percent from CFC.

The funds will finance facilities to serve 90 consumers. Construction proposed includes seven miles of distribution line and system improvements.

On completion of the facilities provided for in this and prior REA loans, the borrower will be serving 3,050 consumers over 862 miles of line in three counties. Martin Heike is president and Benjamin M. Schafer is manager. (Wisconsin 27P-2 Buffalo)

DECEMBER 22, 1972

Minnesota. Anoka Electric Cooperative, Anoka, Minnesota, $1,324,000 loan. This REA loan is made concurrently with a loan from the National Rural Utilities Cooperative Finance Corporation. REA will finance 70 percent of the proposed project, supplemented by 30 percent from CFC.

The funds will finance facilities to serve 3,000 consumers. Construction proposed includes 163 miles of distribution line and system improvements.

On completion of the facilities provided for in this and prior REA loans, the borrower will be serving 29,368 consumers over 3,000 miles of line in eight counties. John Spier is president and Milton S. Olberg is manager. (Minnesota 48AF-2 Anoka)

Oklahoma. Western Farmers Electric Cooperative, Anadarko, Oklahoma, $5,293,000 loan. This loan, together with $1,289,000 from prior REA loans, will finance 183 miles of new transmission line, eight new substations and additions to 16 existing substations, and additional equipment for the existing generating plant in Mooreland, Oklahoma.

New transmission and substation facilities provided for in the loan will assure adequacy and reliability in delivery of wholesale power consistent with the increasing requirements of Western Farmers' member distribution system. Western Farmers, a generation and transmission cooperative provides substantially all the wholesale power requirements of 12 of its member distribution cooperatives through its own generating facilities.

Western Farmers' transmission facilities are interconnected with those of the Southwestern Power Administration, the Oklahoma Gas and Electric Company, the Public Service Company of Oklahoma, the West Texas Utilities Company, and four municipal systems. Western Farmers also is a member of the Southwest Power Pool. These mutually beneficial arrangements assure more reliable service to the people served by these systems.

Distribution cooperatives obtaining wholesale power from Western Farmers

are:

Cimmaron Electric Cooperative, Kingfisher.

Caddo Electric Cooperative, Ginger.
Oklahoma Electric Cooperative, Norman.

Alfalfa Electric Cooperative, Inc., Cherokee.

Southwest Rural Electric Association, Inc., Tipton.

Northfork Electric Cooperatives, Inc., Sayre.

Rural Electric Cooperative, Inc., Lindsay.

Kiwash Electric Cooperative, Inc., Cordell.

Cotton Electric Cooperative, Walters.

Harmon Electric Association, Inc., Hollis.

Northwestern Electric Cooperative, Inc., Woodward.

Red River Valley Rural Electric Association, Marietta.

Together, these member cooperatives provide electric service to more than 75,000 farm and other rural consumers in Oklahoma.

Western Farmers now operates generating facilities with a combined name. plate capacity of 247,000 kilowatts at Anadarko, Woodward, and Moorehead, Oklahoma. It also operates 1,846 miles of transmission line and related facilities. Upon completion of the construction provided for in this and prior REA loans, Western Farmers will be operating facilities in 35 counties-31 in Oklahoma, three in Texas, and one in Kansas. All funds in this loan are for Oklahoma. Mr. Bob Mayes is president and Mr. Robert E. Good is manager, (Oklahoma 32S-1 Comanche)

Texas. Deaf Smith Electric Cooperative, Inc., Hereford, Texas, $553,000 loan. This REA loan is made concurrently with a loan from the National Rural Utilities Cooperative Finance Corporation. REA will finance 70 percent of the proposed project, supplemented by 30 percent from CFC.

The funds will finance facilities to serve 360 consumers. Construction proposed includes 46 miles of distribution line and system improvements.

On completion of the facilities provided for in this and prior REA loans, the borrower will be serving 6,417 consumers over 2,669 miles of line in four counties. Sloan H. Osborn is president and James T. Hull is manager. (Texas 47AC-2 Deaf Smith)

Virginia. Shenandoah Valley Electric Cooperative, Dayton, Virginia, $1,055,000 loan. This REA loan is being made concurrently with a loan from the National Rural Utilities Cooperative Finance Corporation. REA will finance 70 percent of the proposed project, supplemented by 30 percent from CFC.

The funds will finance facilities to serve 1,200 consumers. Construction proposed includes 107 miles of distribution line and system improvements.

On completion of the facilities provided for in this and prior REA loans, the borrower will be serving 18,882 consumers over 3,230 miles of line in three counties in Virginia and one county in West Virginia. Of the funds in this loan $981,000 is for use in Virginia and $74,000 in West Virginia. Howard V. May is president and Mark McNeil is manager. (Virginia 11AU-2 Rockingham)

REA AND TELEPHONE BANK APPROVE NINE LOANS

WASHINGTON, Dec. 22.-The Rural Electrification Administration and the Rural Telephone Bank have approved loans to nine telephone systems totaling $8,435,200, the U.S. Department of Agriculture announced today. Included are REA loans for $4,903,000 and bank loans for $3,532,200.

The Rural Telephone Bank is an agency of the Federal Government and operates in conjunction with the Rural Electrification Administration to provide supplemental financing for the REA telephone loan program.

The loans will finance 502 miles of new line, headquarters facilities, and various system improvements. The new construction and system improvements will result in service for 3,157 additional subscribers, 1,128 existing subscribers, and upgraded service for other people on the lines.

Telephone systems receiving the loans are located in Alabama, Kansas, Minnsota, Mississippi, Nebraska, North Carolina and North Dakota.

Details follow:

DECEMBER 13, 1972

Minnesota. Pine Island Telephone Company, Pine Island, Minnesota, $393,750 Rural Telephone Bank loan to finance facilities to connect 529 subscribers, and to complete the system authorized under prior REA loans. Provision also is made for the construction of two miles of new line.

On completion of facilities provided for under this loan, and prior REA loans, the borrower will be serving 1,959 subscribers over 214 miles of line in four counties. The system's two exchanges now provide dial service to approximately 1,430 subscribers. Margaret K. Keane is president and Dennis Keane is manager. (Minnesota 515H-5 Pine Island)

DECEMBER 18, 1972

Alabama. Hopper Telephone Company, Inc., Altoona, Alabama, $759,000 REA loan to connect 519 additional subscribers, and to make various system improvements. Included are funds to continue upgrading existing service to all one-party lines; to construct an addition to the dial central office building in the Altoona exchange; to expand existing toll facilities; and to construct 21 miles of new line.

REA loans to the Hopper Telephone Company will make possible new or improved service to 2,103 subscribers over 354 miles of line in two counties. The system's two exchanges now provide dial service to approximately 1,584 subscribers. Mrs. Arnell I. Hopper is president and manager. (Alabama 539G-1 Altoona)

Kansas. The American Communication Company, Inc., Belleville, Kansas, $648,000 REA loan to upgrade existing service to all one-party lines in the Red Cloud and Byron exchanges in Nebraska. The funds also will finance facilities to serve 115 additional subscribers, and to make various system improvements. Included are funds to construct an addition to the dial central office building in the Byron exchange; and to build eight miles of new line.

REA loans to the American Communication Company will make possible new or improved service for 4,817 subscribers over 2,019 miles of line in seven counties in Kansas and five counties in Nebraska. All funds in this loan are for use in Nebraska. Robert B. Pearson is president and manager. (Kansas 512M-1 American)

Minnesota. Ace Telephone Association, Houston, Minnesota, $1,770,300 Rural Telephone Bank loan to upgrade existing service to all one-party lines in the Houston, Lanesboro and Rushford exchanges. The funds also will finance facilities to serve 166 additional subscribers, and various system improvements. Included are funds to install new toll facilities, to build an addition to the headquarters building in the Houston exchange, and to construct 13 miles of new line.

REA loans to the Ace Telephone Association will make possible new or improved service for 7,725 subscribers over 1,752 miles of line in four counties in Minnesota and three counties in Iowa. All funds in this loan are for Minnesota. The system's 16 exchanges now provide dial service to aproximately 7,559 subscribers. Arthur S. Witt is president and Robert W. Bunke is manager. (Minnesota 525M-5 Fillmore)

Mississippi. Fulton Telephone Company, Inc., Fulton, Mississippi, (mailing address: Chickamauga, Georgia), $1,368,150 Rural Telephone Bank loan to connect 1,145 subscribers, and to make various system improvements. Included are funds to provide one and four-party dial service in the Fairview exchange and in a major portion of the Fulton exchange. Provision also is made for the construction of new headquarters facilities, and for 72 miles of new line.

On completion of facilities provided for under this loan, and prior REA loans, the borrower will be serving 5,131 subscribers over 465 miles of line in two counties. The system's four exchanges now provide dial service to approximately 3,872 subscribers. Norman S. Vaughan is president and H. D. McGee is manager. (Mississippi 521B-5 Fulton)

North Dakota. Northwest Mutual Aid Telephone Corporation, Columbus, North Dakota, (mailing address: Ray, North Dakota), $1,776,000 REA loan to upgrade existing service to all one-party lines in seven of the system's exchanges. The funds also will finance facilities to connect 266 additional subscribers and to make various system improvements. Included are funds for new toll facilities, and for 240 miles of new line.

REA loans to the Northwest Mutual Aid Telephone Corporation will make possible new or improved service for 3,259 subscribers over 1,888 miles of line in portions of five counties. The system's 13 exchanges now provide dial service to approximately 2,993 subscribers. (North Dakota 526H-1 Northwest)

DECEMBER 22, 1972

Minnesota. Delavan Telephone Company, Delavan, Minnesota, $375,000 REA loan. This new borrower of REA loan funds, a commercial corporation, will use the funds to improve service for 322 existing subscribers and to connect 17 additional subscribers in and around the town of Delavan. The borrower proposes to provide all one-party dial service throughout the system, and to make various system improvements. Included are funds for garage-warehouse facilities.

Upon completion of facilities under this loan, the borrower will be serving 339 subscribers over 119 miles of line in Faribault and Blue Earth counties. The system consists of one exchange. Edward Parish is president and manager. (Minnesota 617A-1 Delavan)

Nebraska. Dalton Telephone Company, Inc., Dalton, Nebraska, $955,000 loan. This new borrower of REA loan funds, a commercial corporation, will use the funds to improve service for 806 existing subscribers and to connect 46 additional subscribers.

The borrower proposes to acquire the facilities of the Gurley Telephone Company, Gurley, and the Lodge Telephone Company, Lodgepole. Subscribers to receive new or improved service as a result of this loan are located in and around the towns of Gurley, Lodgepole and Dalton.

The loan contains funds to upgrade existing service throughout the system to one and four-party lines, and to make various system improvements. Included are funds to construct an addition to the dial central office building in the Lodgepole exchange, and to replace obsolete dial equipment with new facilities in this exchange. Provision also is made for the replacement of overhead line with buried cable in the Gurley exchange, and for six miles of new line.

On completion of facilities provided for in this loan, the borrower will be serving 852 subscribers over 417 miles of line in portions of Cheyenne, Garden, Deuel and Morrill counties. The system consists of three exchanges. Lowell L. Swanson is president and manager. (Nebraska 563A-1 Dalton)

North Carolina. Piedmont Telephone Membership Corporation, Lexington, North Carolina, $390,000 REA loan to finance facilities to serve 354 additional subscribers, and to make various system improvements. Provision also is made for the construction of 21 miles of new line.

REA loans to the Piedmont Telephone Membership Corporation will make possible new or improved service for 1,663 subscribers over 200 miles of line in one county. The system's two exchanges now provide dial service to approximately 1,309 subscribers. Mr. Grady L. Leonard is president and Elbert R. Perrell is manager. (North Carolina 540D-1 Piedmont)

RURAL ELECTRIC AND RURAL TELEPHONE LOAN PROGRAMS CHANGE

WASHINGTON Dec. 29.-The U.S. Department of Agriculture announced today that the REA electric and telephone 2 percent direct loan programs are being converted to insured and guaranteed loan programs at somewhat higher interest rates effective Jan 1, 1973. This action was made possible by the enactment of the Rural Development Act of 1972 in which the Congress provided very broad authorities to make guaranteed and insured loans to finance all types of community development programs.

This change is a part of the effort to hold 1973 Federal budget outlays to $250 billion and keep the outstanding public debt within the statutory limit of $465 billion through June 30, 1973. It will eliminate direct Federal loans and substitute credit from private sources at interest rates that are more in line with the cost of money on today's market. Insured and guaranteed loans will reduce the impact on the Federal budget and the public debt and are designed to facilitate more rapid growth in the credit programs being provided by the National Rural Utilities Cooperative Finance Corporation, the Rural Telephone Bank and other private lenders.

Beginning on Jan. 1, 1973, all REA loans will be made as guaranteed and insured loans under the authority of section 104 of the Rural Development Act of 1972 (Section 306(a)(1) of the Consolidated Farm and Home Development Act). In order to meet more fully the needs of REA borrowers, an additional $200 million in loan authority will be made available over and above current allocations. This will provide a total loan authority of $618 million for rural electric loans and $145 million for rural telephone loans in fiscal year 1973. These funds are in addition to those loans available to REA borrowers from private sources, including CFC.

Loans to electric and telephone cooperatives will be made on an insured basis at 5 percent interest (guaranteed loans will also be available to electric cooperatives where private capital is available on advantageous terms). Loans to commercial power companies and commercial telephone companies will be guaranteed at market rates of interest.

Many details of this transition from the authorities of the Rural Electrification Act of 1936, as amended, to the authorities of the Rural Development Act will require time to work out. Borrowers and other interested parties will be advised of the necessary changes in loan requirements and loan processing as rapidly as possible. Every effort will be made to expedite these new programs in order to meet the expanding needs of REA borrowers.

Senator HUMPHREY. Please give us for the record a list of rural electric and rural telephone borrowers, the amount of unpaid principal, and the extent of default, if any.

Secretary BUTZ. There have been no defaults in the rural telephone program with almost $2.1 billion in loans approved through December 31, 1972. In the electric program, after almost $8.4 billion in loans had been approved through December 31, 1972, there have been two defaults with the lost principal totaling $37,237 and the lost interest totaling $7,241, for a total loss of $44,478.

Senator HUMPHREY. Do you expect to continue the direct loan program for any of these borrowers under any circumstances, on any basis?

Secretary BUTZ. No; we do not.

Following is a list of borrowers, by program and State, showing their principal indebtedness to REA as of December 31, 1972: