Lake, and we are sort of at the headwaters of all of this T. V. A., and I am afraid we are being flooded.

The CHAIRMAN. Well, what is your situation with respect to the tax question in your community?

Mr. FARGERSON. Mr. Chairman, we are sunk, if you will excuse the expression. I mean that literally. We have a rural county. It is entirely rural. There are no pay rolls other than what we get from our farms.

This was flooded by this lake built by the Tennessee Power Co. I have some few figures, if you will allow me to quote them. The CHAIRMAN. Yes; go ahead.

Mr. FARGERSON. Suppose I start with this, since I am the superintendent of this particular school. We have a little tax district. We collected $3,247 last year. Out of that Tennessee Power Co. paid $2,800, which left me about $400 from others to operate a school with 500 children coming to it. In other words, that leaves me with $400 to operate with from now on.

The CHAIRMAN. That resulted from the sale of this power plant to the T. V. A.?

Mr. FARGERSON. Yes, sir. We were in very good shape until that happened. We have an investment down there of about $60,000, and we were doing very well.

The sale, of course, went through and it has pitched us on the rocks.

Now, my district is, so far as my information goes, the worst hit of any district in the whole T. V. A. set-up, since it leaves us with so little.

I have heard the testimony given here, and my particular district has only $40 left. My county is in about the same shape. The CHAIRMAN. Tell us about the county.

Mr. FARGERSON. The county has a loss of about $60,000. That is the county government. We collected last year approximately $75,000. In other words, it leaves us with a $15,000 balance. That is the county government.

We have in the county a little city called Blue Ridge. We call it a city because of the name, I suppose. We collect out of that $24,246. That is the total tax.

Now, permit me to go back a little bit. Sixty thousand dollars of county tax was paid by the Tennessee Power Co. That leaves a balance of $15,000.

The city of Blue Ridge and the district school there collects a total tax of $24,246.82. The Tennessee Power Co. paid $19,000 of this, leaving a balance of $5,993.46 left after we lose the Tennessee Power Co.

As I have already mentioned my school district, which takes care of half of the children in the county of high-school age, has a balance of $401. We collected $3,248.

The State of Georgia, I understand, has lost only $15,000. We all lose a total of $117,997.82. Of course, I know my little problem is a very little thing to the members of this committee, but it is a whale of a problem to me because it just leaves nothing for us and we have come up here-it is a long ride from here to Georgia, and we thought it worthwhile to come up.

My school will have to turn out about 500 children when I close this term. We are going to have to close down. We haven't the money.

The CHAIRMAN. How many teachers have you?

Mr. FARGERSON. We have 17 teachers in the school. We cover from Polk County, Tenn., Copper Hill right on back.

The CHAIRMAN. Do you know whether your school district has an outstanding bond issue?

Mr. FARGERSON. Yes, sir.

The CHAIRMAN. How much?

Mr. FARGERSON. We have $10,000 in bonds outstanding.

The CHAIRMAN. What rate of interest?

Mr. FARGERSON. We are paying now 5 percent, I think.

The CHAIRMAN. Has the county of Fannin any outstanding bond issue?

Mr. FARGERSON. No, sir.

The CHAIRMAN. They do not have a bond issue?

Mr. FARGERSON. The city of Blue Ridge has an outstanding bond issue of about $30,000.

We built a new school building down there-others built several new school buildings down there. We just completed a $22,000 building at my own school. We had almost enough to pay cash for that. We voted a $4,000 bond issue there, but with the balance of the old bond issue, that gave us a total of $10,000 left outstanding. And other than the taxes paid by the Tennessee Power Co. and, gentlemen, we are up there on the lake and there is no chance to move it, except maybe the dam will burst and give us back our farms. We have no other way of getting taxes there now. I don't know about the State of Tennessee, whether they can work out some other way, but I do know about our own little district. We have $40 left to operate a 500-pupil school.

The CHAIRMAN. And 17 teachers?

Mr. FARGERSON. Yes, sir.

The CHAIRMAN. And you won't get very far with that, will you? Mr. FARGERSON. It won't pay a janitor.

The CHAIRMAN. Anything further?

Mr. MERRITT. I want to call this gentleman's attention to one thing. You have seen what this destruction of private industry, which can be taxed in support of government, has done to your little community and if it keeps this racket up it is going to do the same thing to the whole country.

Mr. FARGERSON. If the gentleman will allow me to say, I don't think that our little district there will have much to do either one way or the other. As we saw the waters piling up there we felt that the Tennessee Power Co. would reimburse us and it did. We were very well off, but now since you have taken away the Tennessee Power Co. and the Tennessee Power Co. is no more in Georgia, it has left Georgia dependent upon this committee, as I see it, or this Congress.

Mr. MERRITT. Did your people get the benefit of the low rate in electric power?

Mr. FARGERSON. Well, no, sir; we don't. If you will pardon me, I will speak personally. My bill is the same as I paid the Florida. Light & Power Co. and Georgia Power Co., and they charge us an amortization fee. We are paying that. This tax is in the rates and my bill is, over a period of 7 years, just the same.

Mr. MERRITT. Yours is a very sympathetic case. I don't think that applies to the State of Tennessee.

Mr. FARGERSON. But here we have nothing to turn to.
Mr. MERRRITT. All measures of taxation are exhausted?

Mr. FARGERSON. Yes. You see, we have the home exemption there, and besides all those valleys we live in (it is a mountain country and there is nothing to farm except the valleys). The fact of the business is we only have 252,000 acres, and 56,000 acres are in forest land. You have already taken that away from us and put it in forest land. And then this T. V. A. coming, why, it leaves us nothing but the hill sides and this flood control and soil erosion may help a great many places, but it is not helping us. We have already eroded.

The CHAIRMAN. Gentlemen, Mr. Whelchel, the Representative in the House from that Georgia district and from this county, has been very active in the interest of that community, and he is present. I would like to ask Mr. Whelchel if he has any question to ask the witness.

Mr. WHELCHEL. I would like to ask Mr. Fargerson if he cares to insert that memorandum which he has in the record?

Mr. FARGERSON. Yes.

The CHAIRMAN. All right; without objection, it will be received. (The statement referred to by Mr. Whelchel is as follows:)

FACTS ABOUT THE FANNIN COUNTY HIGH SCHOOL

Total enrollment, 483; total number in high school, 243; number in graduating class, 35; number of teachers, 17; all rural children. Total investment in building, $60,000; total taxable property for 1939, $537,832; total Tennessee Power Co., $416,681; tax rate for school, 8 mills; amount paid in 1938 by Tennessee Power Co., $2,847; amount paid in 1938 by others, $401; total, $3,248. Amount paid in 1939 by Tennessee Power Co., $3,526; amount so far collected from others, $132; bonded and other indebtedness, $10,000; amount necessary to operate the school, other than State, 7-month operation, $2,800; to carry bonds, interest, etc., $800; we cover almost half the county in service.

FACTS ABOUT FANNIN COUNTY

Four hundred and five square miles; 252,800 acres, 56,000 acres in forest lands owned by Government; also the thousands of acres now owned by Tennessee Valley Authority; 1,896 farms, 200 tenant farmers; 12,435 total population, 4,345 of school age; 99.6 percent pure native white stock; 9.6 children per square mile; total expense for education, 1938, $84,109; 1,143 in first grade 64 graduated in county.

* *

Total tax collected by all agencies in Georgia, $117,997.82.

Mr. WHELCHEL. That is all, Mr. Chairman. I wish to express my appreciation for this opportunity.

Mr. BYRNS. Do you favor the Norris-Sparkman bill?

Mr. FARGERSON. Yes; with one condition. We would like to see it paid as it has been suggested on the stand before, paid directly to the units that have already collected the taxes. In other words, we are the losers and the only losers particularly in Georgia.

The CHAIRMAN. And you should be the collectors?

Mr. FARGERSON. Yes; we feel that way.

Mr. SPARKMAN. Mr. Fargerson, I don't know whether you were here yesterday or not, but when we started the hearing it was announced that we intended to amend the bill to that effect.

Now, when were the forest lands taken over?

Mr. FARGERSON. You see, I am new in the county. This is my first year and I couldn't give you that information.

Mr. SPARKMAN. As a matter of fact, the Federal Government when they took over the forest lands, did they make a provision to pay 25 percent of the revenues from the sale of forest products? That is a matter of law. I am simply making that statement. Mr. FARGERSON. That is all right.

Mr. MERRITT. You don't feel like the Governor of Tennesseethat you are willing to stand half of the expense. You want it all back and I think you are entitled to it in your particular case.

Mr. FARGERSON. Well, we are in just this position: We want anything we can get, but it surely is a pretty high price to pay to lose all. Mr. MERRITT. You wouldn't compromise like the Governor of Tennessee, would you?

Mr. FARGERSON. Well, I am not in a position to compromise. I am pleading only.

The CHAIRMAN. What is the pleasure of the committee with respect to the hour we shall meet in the morning to hear further testimony? Mr. SPARKMAN. I move we meet at 10 o'clock.

The CHAIRMAN. We will make it the regular hour, at 10 o'clock. (Whereupon at 4 p. m. a recess was taken until 10 a. m., Thursday, January 25, 1940.)

TO AMEND THE TENNESSEE VALLEY AUTHORITY

ACT OF 1933

THURSDAY, JANUARY 25, 1940

HOUSE OF REPRESENTATIVES,
COMMITTEE ON MILITARY AFFAIRS..

Washington, DC.

The committee met at 10:55 a. m., Hon. A. J. May (chairman).. presiding.

The CHAIRMAN. In line with my suggestion a few days ago, that we try to accommodate those who are living at a distance from Washington, as nearly as we can, I have agreed with Mr. Kefauver of the Tennessee district, formerly represented by Representative McReynolds, to call Mr. Raulston as the first witness this morning— Mr. Sam Raulston, county attorney, Marion County, Tenn.

STATEMENT OF SAM P. RAULSTON, COUNTY ATTORNEY, MARION COUNTY, TENN.

The CHAIRMAN. Mr. Raulston, I believe you are county attorney of your county?

Mr. RAULSTON. Yes, sir; I am.

The CHAIRMAN. As county attorney of that county, do you have dealings in public affairs with your taxing authorities and the other public officials of your county?

Mr. RAULSTON. I do. I prepare the tax levies and things of that kind and aid the financial agents of the county in their duties.

The CHAIRMAN. And in making up your budget and expenditures for governmental purposes?

Mr. RAULSTON. Yes, sir.

The CHAIRMAN. Give us your statement with respect to these various bills, particularly the Sparkman bill that is pending in this committee, on the question of the replacement of taxes, and tell us, as nearly as you can, just what the T. V. A. situation is in your county, how it has worked, and all about it.

Mr. RAULSTON. We favor the passage of the Norris-Sparkman bill with the amendment to let the payments be made direct to the

counties.

Marion County has a population of slightly over 17,500. It is largely a rural county. We have 3 towns, small towns, in the county. One of the towns, South Pittsburg, has 2,500. The population in the towns is about one-third of the population of the county. Very little farm property is served by T. V. A. Our towns, of course, are served, but there is very little of our rural section that is served.