This is a transcription of this speech made for the convenience of readers and researchers. One draft of the speech exists in the John F. Kennedy Pre-Presidential Papers at the John F. Kennedy Library. Page images of the draft can be found here.
One program - of particular interest to Wisconsin - which has been constantly threatened and harassed by the Administration is our vital program of rural electrification. For over a year now, we have been besieged with the threat of high interest, tight money and increased taxes upon REA cooperatives.
These policies are justified on the ground that the battle for REA has been won and it is time to be content with the progress already made. The Director of the Budget, the Secretary of Agriculture, and the REA Administrator all join the chorus - asking for legislation to curtail loans to cooperatives- to double the interest rate upon the loans already made - and to compel the cooperatives to go to "private sources" for the rest of their money.
I cannot agree with these demands. I do not believe the fight for rural electrification is over. I will not accept the premise that the cooperatives must now begin to liquidate. It is true that most farms now have electric lights. It is a fact that REA cooperatives and power districts are well established, well accepted enterprises. There is no doubt that the dream first visualized by George Norris and Franklin Roosevelt has been fulfilled.
But today we are faced with new problems and new horizons never even forseen by George Norris. The history of the REA demonstrates that the farmer's consumption of power can double in as short a time as five years. The key to the future is power - power on the farm as well as in the factory - power in the country as well as in the city. Let no one doubt that the role of REA is as vital now, and in the years to come, as it has ever been in the past quarter of a century. Instead of reducing REA loans, we should be increasing them. Instead of restricting REA's operations, we should be expanding them. Instead of trying to increase REA interest rates, we should keep them where they are.
The drive to raise REA interest rates, we all know, is closely related to the tight money, high interest rate national policy. It is no isolated undertaking. And it is time we took a firm stand against this policy, all across the board. One by one, we have already lost the battle against high interest and tight money in the case of veterans loans, farmers' home loans, farm credits, and housing. But we must not permit the long established interest rate upon REA loans to follow that trend.
High interest rates can be an expensive item - for every individual taxpayer as well as every REA co-op. The interest we pay upon our national debt this year will be three times as much as we lent REA in a quarter of a century. It will be enough to build two TVA systems. And the cost is still growing. Every time we raise the interest rate one-quarter of one per cent, we add $250 million to our tax bill.
It is equally important that we resist the attempt to increase taxes upon rural electric cooperatives. The Administration's proposal to tax cooperatives - which has been repeated this year - shows a basic mis-understanding of the very nature of the cooperative movement. As I stated last year, when the Treasury Department first suggested it, it taxes most those least able to pay. Although this proposal was not directed at REA cooperatives, it is clear that they would be next on the list.
We need in Washington a whole new attitude toward REA - an outlook that does not constantly grumble about REA's small role in the budget - an outlook that recognizes that the miracle of REA has returned to the public treasuries - through taxes on new appliances and new farm equipment - many times the entire cost of the program. So let no one tell you that REA should be cut back in any drive for economy.
And let no one tell you that standard banking and utility practices can do the job. When Franklin Roosevelt and George Norris decided twenty-five years ago that the job must be done, they assigned it to the cooperatives. They did so because the banks and utilities could not and would not take it on. We must not permit this decision to be reversed now, when we need REA more than ever.
Even if and when financial stability is achieved for all rural electric systems, that is not a signal to change our REA philosophy and increase rates and costs to the system - it is a signal to reduce the cost of electricity to the farmer. For cheap electric power - for the farmer and his family - is, and must remain, the primary purpose of this program.