TOTJRTEEK MEDrORD (OBEGOlf) MAIL TRIBUNE
r rid ay. August 23, 19S7
Congress Quietly Ends One of Biggest Federal Subsidy Programs
By A. ROBERT SMITH
Mil Tribune Corespondent
Washington Congress last
week quietly ended one of the
biggest federal subsidy programs
ever launch
ed, and from
which the pri
vitc electric
utility indus
try w s s the
chief benefici
ary. Not one con
gressman rose
in protest
the fast tax write-off. program,
mostly, it appeared, because tax
write-off had become almost a
dirty word in ihe Washington
lexicon during this session of
Congress which was marked by
the hot Hells Canyon fight and
the big economy drive.
It was the fast tax write-off
granted Idaho Power company
in April which triggered off the
loudest criticism of the subsidy
program ev?r heard, much of it
from such stalwart supporters of
private enterprise as Sen. Harry
F. Byrd (D-Va.). It also provoked
an investigation by Sen. Estes
Kefauver (D-Tenn.) and his anti
monopoly subcommittee. And
that tax write-off, probably
more than anything, put the
Hells Canyon bill successfully
through the Senate before it was
killed in the House Interior committee.
The Hells Canyon battle this
year was finally won by the pri
vate utility industry, which had
made it a principal target against
federal dam building with the
aid of extensive advertising cam
paigns. The ads, appearing in
national magazines, showed pic
tures of the big Snake river
gorge and asked the reader
whether he thought taxpayers'
dollars should be thrown into
that canyon.
The irony of it all now is that
the Hells Canyon battle brought
to light for the first time in an
understandable way how many
taxpayers' dollars were going
into the private utility industry
via the fast tax write-off pro
gram, and which now has
brough the subsidy to a quick
end.
From the start of the tax
write-off program after the out
break of the Korean conflict in
1950, the office of defense mobil
ization issued 928 certificates to
private power companies allow
ing them to amortize their new
capital investment in five years
in order to cut their taxes imme
diately. These certificates cov
ered a plant expansion valued at
S6.7 billion, of which $3,300,
178,000 was declared eligible for
fast tax write-offs. Railroads ran
second with $6.3 billion, fol
lowed by primary metals (mostly
steel) $5.7 billion, oil and coal
$3 billion and chemicals $2.9
billion.
To the utility industry, which
became America's fastest grow
ing industry under this program,
these write-offs represented "in
terest free loans" (to use the
term of the Federal Power com
mission) amounting to nearly
$1.5 billion. And, based on FPC
methods of computing the total
subsidy 'or benefit to the utili
ties over the lifetime of the" new
plant, it amounted to almost $5
billion.
These figures have more mean
ing when compared with the
total federal investment in gov
ernment power facilities up to
this year about $5 billion,
which covers the costs cf all
northwest ' dams allocated to
power, as well as TVA and other
federal power projects. Most of
this is repayable at 2Vi per cent
interest.
The total government invest
ment in loans to rural electric
co-ops also comes .to about $3
billion. This is repayable at 2
per cent.
In short, the total subsidy to
the private utilities under the
tax write-off program in the past
seven years almost matched the
total subsidy for public power
development over the past gen
eration. Perhaps these related events
of this summer in Washington
could be properly recorded on
the rim of Hells Canyon with a
historical marker like those that
adorn the fields at Gettysburg
and Bull Run. It might say:
The Battle of Halls. Canyon
Here fell the defenders of a
high federal dam, but only
after exposing to fatal assault
one of their attackers' main
supply sources, fast tax write
offs. For" the private utility
army massed in this bitter
campaign, Hells Canyon turn
ed out to be a Pyrrhic victory.
NEW AIR LINK
Washington 0PI Miami will
be linked directly to Europe for
the first time by an American
airline Oct. 21. President Eisen
hower Thursday authorized Pan
American Airways to operate a
regular flight from the Florida
city to Madrid. The route will
link Miami; San Juan, Puerto
Rico; Madrid and Rome.
DRAMATIC
SAVINGS
SUNDAY
Watch Sunday's Tribune
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Charges made
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WATCH SALLY
9:30 P.M. FRIDAY
FOR ANOTHER
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;i 1 i-3Bj
MEDFORD
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