GVEC Davis, Oran - October 7, 1986
Interview with Oran W. Davis
Interviewer: Karen Yancy
Transcriber: Karen Yancy
Date of Interview: October 7, 1986
Location: Mr. Davis’s Home, Shiner, TX
_____________________
Begin Tape 1, Side 1
Karen Yancy: This is Karen Yancy. Today is October 7, 1986, and I’m conducting an oral interview with Mr. O.W. Davis, former general manager of Guadalupe Valley Electric Cooperative [GVEC] at Gonzales, Texas.
Oran W. Davis: My knowledge of the electric co-op program, of course while I was operating in the twenty-five years that I ran GVEC. I was in politics quite a bit, and obviously—well, the electric program had been primarily all the way through Democratic, party flavor and—
Yancy: Yeah.
Davis: And I’ve been a Democrat all my life. I need to tell you those things so that there won’t be any guessing, and I guess you’ve seen all the pictures over there at the Co-op.
Yancy: Mm-hmm.
Davis: And, of course, I have a lot of them here [referencing to his dining room wall], and some are all packed away. I started a long time ago in this program before I ever connected up with GVEC. I worked forty-seven years before I retired, and I began working in 1925 for the big power companies
Yancy: Mm-hmm.
Davis: And I worked two years, the first two years, with Stone & Webster out of Chicago, but it was in Texas, and then I went with the Central Power and Light Company. They operate in South Texas, and I worked with them from ’27 and ’32, and then we had the big Depression and nobody worked. I did, after I lost the job with the Central Power and Light Company during the Depression, I came back here to Shiner and went to work for the City of Shiner in the electrical department operating—and I worked in that from 1932 until 1936, and in 1936, the early part, I went to work with an engineering firm in Bartlett, Texas, where we were putting in a power plant for the city. We were putting in this power plant when the REA [Rural Electrification Administration] came into existence. While there at Bartlett, Texas, the City organized a little cooperative group, and we got a loan from the REA. Well, it wasn’t REA then, it was the Emergency Relief Administration [ERA]. Then, after we built a few rural extensions out of the City of Bartlett in 1936, we organized a rural electric co-op and got a loan from the REA to construct about fifty miles of power lines. You saw some reference to that in the [GVEC] history [Let There Be Light by Allen H. Chessher].
Yancy: Mm-hmm.
Davis: I’m the one that supervised the field construction work, energized the first co-op lines, and connected the first rural people to a rural electric co-op line in Texas. This engineering firm that I was with, William G. Morrison and Associates, organized and built electric co-ops over the next three years; that took us up through 1938. We organized and built electrical co-ops throughout Texas and Arkansas and Louisiana. I built the first section of the first three co-ops in Louisiana. These were at Lafayette, Jeanerette, and Natchitoches, Louisiana. Then I came back to Texas from Louisiana in 1938 where I joined REA as Resident Field Engineer. While with REA in 1938, I engineered and built about 150 miles of power lines for the Bell Falls Electric Cooperative at Rosebud, Texas.
Yancy: Mm-hmm.
Davis: In 1939, REA needed a manager of an electric co-op in Rusk, Texas. I took that job and managed that electric co-op three years until 1942. Then, World War II was underway, and all the material and everything that we were using to build the electric co-op lines were frozen for the war effort, and I couldn’t connect any more members. We did have about five or six hundred meters already connected, but we couldn’t connect anymore. So I decided to perform my patriotic duty, and I joined the United States Navy as Electrical Warrant Officer. That was in September ’42. I was ordered to San Diego, California, for my initial duty. While I was there, I was supervising electric overhaul work on old USA submarines for about nine months. We were cleaning them up and putting the electrical gear back in them and getting them all ready for service again. Then I was transferred by the U.S. Navy to Norfolk, Virginia, in early 1943, where we were engaged in organizing an overseas occupational and landing unit for use in Africa. So, in October 1943, I was shipped out of Norfolk in a 110-ship convoy. We landed in North Africa, and my job was to keep the electric systems of those naval bases operating. I rebuilt the electric system at the naval base in Port Lyautey and did repair work on the electric systems at Casablanca and several other bases. I stayed over there until April 1945 or about two years. Did some work in Italy and Sicily, and then I was shipped back to the United States in the early part of ’45.
I was immediately sent to San Francisco to the navy yard where there was a large electric drive liner troop ship being built, and I was attached to this ship as one of the operating electrical officers, and when we finished the ship, I stayed with it until the war ended or until January 1946. During this period of operation, this new ship was christened the Admiral Hugh Rodman. Its duty was to transport military troops. Its capacity was approximately ten thousand. It required six hundred naval personnel to operate it. We had three crews running this electric drive, ship, and my job was to run one shift. We were on duty four hours and off eight hours. Of the four hours I was on, I supervised about thirty-five to forty electrician mates; we were operating the electrical machinery in the ship. This ship’s duty, then, was to transport military personnel back and forth. Our first job was to carry ten thousand soldiers from the San Francisco to Manila in the Philippines. Then I stayed on this ship and went back and forth across the Pacific. Our ship was in the West Pacific when the war ended, and our ship went in and gathered up prisoners of war and people that had been in prison camps, civilians and everybody. We filled our ship with about ten thousand of those people and brought them back to the United States. They were a happy group of people, but they looked terrible when we picked them up; some of them were so dissipated and starved they could barely walk.
Yancy: Uhh.
Davis: Our ship was loaded with food. We got orders to feed them well on the way back, and we fed them well. It took us fourteen days to come back. Some of the people gained as much as forty pounds in this two-week period (Yancy and Davis laugh).
Yancy: Oh.
Davis: Near Christmas of ’45, I came home on furlough. Then, in January ’46, I was separated from active duty from the Navy. That certificate you see hanging right over yonder [pointing to wall in living room, which joins the dining room], right under that air conditioner—
Yancy: Yeah.
Davis: That’s my certificate of separation. At this point in time, I was made lieutenant in the USNR [United States Navy Reserve]. When I got back to Shiner in ’46, I was in kind of bad shape physically, and I didn’t go back to REA work for over a year. During this period, I taught electrical classes for vocational electricians here in Lavaca County and worked for the State Department of Education. In March of 1947, the GVEC asked me to go to work for them at Gonzales. My job there would be to coordinate construction. You see, the war was over, and we were getting line material back so we could go to building lines. This electric co-op and all the rest of them across the USA were just sitting there waiting for construction to begin. We had hundreds of applicants waiting anxiously for construction to begin. Immediately, we began the construction program, and my job there was to coordinate the construction and see that everything moved along smoothly because I had experience in that field already before the war. We went ahead on that program pretty fast. The manager of the GVEC at that time was E. A. Hausmann; you’ve probably run across his name and maybe his photograph, for his photographs are few and far between because he was a man that seldom took a photograph.
Yancy: Huh?
Davis: In the boardroom over there [GVEC], you’ll see his photograph, which came from a newspaper clipping and enlarged. That’s the only picture we ever had of him.
Let’s see, I started with GVEC in ’47. I worked as coordinator until the early part of ’52. At this point in time, Mr. Hausmann entered the hospital, and I had to take over for him as acting manager. Mr. Hausmann passed away in April 1952. The GVEC Board of Directors made me the general manager of the electric co-op in ’52, and so I remained as General Manager until 1972 when I retired. This picture up here [on the dining room wall] at the top was taken in 1941 in Washington, D.C.; that’s while I was manager of the electric co-op in Rusk, Texas. This [pause while he moves a few items out of the way]—that’s me right there in September 1941, and these were electric co-op engineers and some managers, mostly engineers, and these were the people in Washington, and there’s Lyndon Johnson; looks kind of familiar, doesn’t he?
Yancy: Sure does.
Davis: And all of those are from the Department of Agriculture. A lot of these worked for the REA in Washington. These were managers, and these were the engineers from the co-ops here, and that’s been quite a few years ago. It was 1941, and there’s a guy [Lyndon Johnson—Mr. Davis is pointing to another picture] that helped us out a lot in the rural electrification program. The photo was taken when I was President of TEC, Texas Electric Co-op Organization, in 1958 and 1959, you know what that is. They’ve got an office in Austin. I don’t know whether you have been there or not yet.
Yancy: No, I haven’t been there yet.
Davis: Well, it’ll be interesting for you to go there. We lost the manager of the TEC statewide, and while I was president of TEC Board, that was the time this picture was made, but this photo was made in Washington. Since I was a member of the board of directors, they elected me acting manager of the Texas, statewide, Electric Co-op, and at the same time, I was running this one [GVEC] and that one [TEC], both of them, at the same time. I would go up there two days and down here [GVEC] three days; that lasted about six weeks or more until the board elected a new manager. Now, what would you like to discuss, and how would you like to approach it?
Yancy: Well, could you tell me about the GVEC construction that occurred while you were General Manager? The extension of the electrical lines? The new headquarters building? How it grew and expanded?
Davis: Yes, I can’t be exact on these figures, but they will be approximate. When I began in 1947, as coordinator, we began to hire additional personnel to do the construction work on the power lines and the engineering work. We had about seven or eight employees, and the office was located out at Cost. You’ve heard of that.
Yancy: Yeah.
Davis: And we—by the end of 1947, we had about 35 or 40 men working, and then within the next two years it grew to about 75 men working, and we reached a peak at one time of about 135 men working, employees working, while we were doing this construction. We kept signing up additional areas, and therefore we had to keep on building power lines, doing the engineering work and building power lines, and that job has never been completed yet. It’s still going on, and it was going on when I retired to some degree, but it did slow down some, and when I began we were operating in Gonzales, Wilson, and Lavaca counties, and then later we expanded into Guadalupe County. That was about 1948 when we expanded into Guadalupe County. The San Antonio Public Service Company, which was an investor-owned utility power company, had some power lines in Guadalupe County, probably thirty to fifty miles or so, and the City of San Antonio bought them out. Then when the municipal system took over, there was a ruling set up that they couldn’t operate in another county, so they had to sell—we made a deal with them to buy their property that was in Guadalupe County, and we got two hundred to three hundred miles of lines, and I guess over one thousand consumers—
Yancy: Mmm.
Davis: —in that deal, so that’s how we got into the Guadalupe County operation. Then we started expanding on all sides. In ’47, we just began to touch Lavaca County, here where you are now, and then later on we just kept expanding and expanding until we met up with the Bellville Electric Co-op over east of Halletsville, and then we set a boundary line, and when all the electric co-ops began to expand and we would meet each other, we would set up a dividing line, and we would describe it, meets and bounds and everything, describe it, and then we could all agree to stay within our boundary, and so we were surrounded—take GVEC: it’s surrounded on the east by the Bellville Electric Co-op; on the south we joined [Dewitt County] Electric Co-op, and on the west we joined up with the Karnes Electric Co-op, and on the northeast with Fayette Electric Co-op, and then on the due north up in here we joined up with the Bluebonnet Electric Co-op; it’s at Giddings; and then when we expanded out into Guadalupe County up towards San Marcos, we joined up with the Pedernales Electric Co-op. So there’s co-ops all around us, and all of them were growing at the same time, so we soon covered the larger part of the State of Texas and the United States as well, but people kept coming into this area of the state, and the population kept growing, and the co-ops kept growing, and therefore, we had to keep on building power lines, and we had in ’47 about six hundred meters, and when I left in 1972, we were right at, I believe it was about thirteen thousand—
Yancy: Umm.
Davis: —and now it is what about twenty-five thousand (both Davis and Yancy laugh). Yeah, so it just keeps growing. Now, the opponents to the electric co-op program have always said, and they began to say that back in the late fifties, “The electric co-op program has outgrown its legal necessity, and they ought to get out of the business. They’ve done accomplished everything.” But we’re still building, still connecting rural people, and we had difficulties when I first began with the co-op program back in the early—late thirties. The power companies tried to stop the co-op program all together so they would get, and we would sign up an area, and before we could get our money from the REA, the power companies would jump out there and build lines that crisscrossed the area so that we couldn’t get any money out of the REA.
Yancy: Mm-hmm.
Davis: and—(pause a minute while he introduces his wife who had just entered the room)—and to continue on the power company opposition, they began to join hands, the power companies did in opposition to the electric co-op program through the United States, and when they found later on they saw they couldn’t whip us on the local—in the area where we were signing up the people because the people that they were signing up or trying to sign up to take electricity wouldn’t sign up with them.
Yancy: Umm.
Davis: Because they tried—because those people had been trying for years to get the power companies to build out there and—
Yancy and Davis: Wouldn’t do it.
Davis: And when we came along, they would run out there and offer to build, and the people said, “No, you did us that way before, and we’re going to stick with the co-op.” So the power company soon found out that they couldn’t beat us on the local level, so they joined hands and went to Washington on the political level, on the federal government level, and they have concentrated all their efforts on the REA, to keep the Congress from appropriating money for the REA. And they weren’t successful there either, because we were forced to join together, the electric co-op program throughout the United States, and set up our own lobbying system there in Congress, and we did pretty good. The Congress, as a whole, I would say 80 percent or 90 percent of the Congress was favorable to the REA program, so they couldn’t—with all the lobbying they were doing, they couldn’t get Congress to go along with them. Now, occasionally, they would get a president or some of the administration, especially the Republicans. The Republicans were against our program most of the time, all the way through, and even when they had at one time a Republican president and Republican Congress, they couldn’t do a great deal of harm to the program because the people back home told the Republican Congress, “You see that the TEA gets the money, and if you don’t, we’ll see that you don’t come back to Washington.” (Yancy laughs)
Davis: So we had the support of the Republican Congress. Oh, they treated us pretty dirty for a while, but they let off for quite a while, but I’ve noticed in the last few years, since I’ve retired, that they’re having some difficulty now with some of the administration. The REA now, and I take all the REA magazines and the NRECA [National Rural Electric Co-op Association] magazines, the administration, the federal administration, now is requiring that the REA oppose the electric co-op program. You’ve probably read some of that.
Yancy: Mm-hmm.
Davis: Well, that didn’t happen when I was back in the program, but this makes it pretty rough when the REA itself, your own lending agency, goes against you, but they’re a little late. What they’re going to do is to force this electric co-op program to go into private financing, and they’re going to finance their own, and then the power companies that have been opposing this and using the administration to fight for them probably will get caught on the local level now as they just keep on with the program.
Yancy: So the people were very responsive when cooperatives approached them?
Davis: Oh, yeah, we held meeting after meeting after meeting all the time throughout the rural area to try to keep the people abreast of what’s going on. We’d get in some of those meetings and tell them what was going on up in Washington, and they would get so mad and riled up that they’d just say, “Well, let us get to them!” and “How about us going to Washington?” and we’d say “Yeah, that’s a good idea.” Through the NRECA, National Rural Electric Co-op Association, we went to Washington, and we would organize—we would get over there and organize several thousand electric co-op representatives—board of directors, managers, and members of the electric co-ops—they’d come up there, and we’d get over there somewhere in some big auditorium and organize them and tell them what to do and then turn them loose on Congress two or three days. (Davis smiles. Yancy laughs)
Davis: And boy, we made headway, I mean, they—well, you can see what all we were doing. For example, this picture right here [picture hanging on dining room wall], that’s me standing right there; that’s on the White House grounds. Mr. Eisenhower was giving us a hard time, and I’m on this committee of managers that went to see Mr. Eisenhower, that was on October 11, 1954, and we requested our Congressman, standing right there in front of me, Congressman [Clark Thompson]. We asked him if he would set up an appointment with the President. He was on good terms with President Eisenhower, and he set up this appointment for us to go in there, and we went into the Oval Office and sat and talked with Eisenhower for two hours at least, and when we came out of there, it was evident that we had convinced him not to oppose the electric co-op program anymore like he had been. When I was president of the TEC board in 1959, we held our national convention in Washington, D.C. We put it there purposely because Eisenhower was giving us so much static, he and his administration. We invited Eisenhower to speak, and he did. He came over and spoke, and do you know what he had the nerve to do? Get up at our own convention and lambasted the co-op program.
Yancy: Uh.
Davis: Some of those people at the convention were in the mood to throw him out of there.
Yancy: I am surprised they didn’t.
Davis: That’s right (Davis and Yancy laugh), but then to follow him, we had Lyndon Johnson and Ralph Yarborough, Senator Yarborough then, and boy, when they got through with their speech, we felt pretty good because they contradicted all his speech not favorable to the REA (both Davis and Yancy laugh) right there in the convention. That’s the way we did it.
[Short pause while Mr. Davis talks to Mrs. Davis]
Well, that pretty well covers the political situation, and it went on and on until I retired, and it’s still going on, but it changes its attitude and its fighting opposition; it changes from one category to another seems like, but this one that’s going on right now where the federal government and the administration have required that the REA, the very lending agency that set up all of this go against the electric co-op program, is a pretty rough deal, and they’re not getting anywhere with it. But as I said a while ago, they’re going to force the electric co-op into a program of which I don’t think the power companies is going to like in the future because they’re going to force the electric co-op program to compete and compete heavily with the IOU. You know what an IOU is? That’s an investor-owned utilities, and this is the political side of the electric co-op program, and we have had our share of it. I was chairman of the legislative committee that did most of this fighting up there in Washington; I mean the legislative committee of the state of Texas. Every state had its own legislative committee, and then we chairmen of these legislative committees from each state would go to Washington and visit and organize and get things done. Yeah, I was the legislative committee chairman until I retired. I used to know my way around (both Davis and Yancy smile and laugh) pretty well up there. I had to stay up there so much, but it paid off, paid off well. Now, let’s see if we can get back to the local electric co-op program. Do you have any questions you would like me to elaborate on?
Yancy: Did you ever have any difficulties in obtaining the right of ways from the ranchers and farmers?
Davis: We sure did.
Yancy: Especially in the beginning
Davis: Not as, you would think it might have been greater, but on the average, I would say we had very good luck, but we did have a few real hard cases to solve, and some of these were caused by the IOU power company opposition.
Yancy: How so?
Davis: They were trying to block the power line, and most of that happened when we would build the big transmission lines, the backbones lines out across country, and the power companies knew if they could succeed in blocking those power lines across country, they thought maybe they could keep us from competing with them too much. But they never did block us. We would go around one way or the other (both Davis and Yancy smile and laugh). You see, we had as an electric co-op in our charter, our state charter; we had eminent domain rights also.
Yancy: Yeah.
Davis: And all we could do when they blocked us, and they would always block us where it looked like you couldn’t go this way or couldn’t go that way and get around, so we would just condemn it and go right straight through. Of course, condemning property doesn’t contribute a lot of times to good public relations, but—
Yancy: No.
Davis: We had to do it, and we would explain to the people and pay for, paid a good price for it on transmission line. But you understand that to build distribution lines out through the rural areas, the right-of-way there was given by—most of it was owned by the members of the electric co-ops, so they gave the right-of-way. If we’d had to bought that right-of-way—
(Pause)
I would like you to repeat the question to see if I finished it.
Yancy: Okay, we were talking about the right-of-ways.
Davis: Well, I think I covered it where the members and the consumers in rural areas contributed the right-of-ways. Some of them reluctantly, but on the average most of them contributed the right-of-way freely, and we were careful not to mar the area of the environment, and we did our best to favor what the consumer wanted. Sometimes we’d have to build a power line a little crooked around in order to get by something that the land owner wanted to preserve. We did that. We cooperated with them, and they cooperated with us, and it was a cooperative adventure from every standpoint, not only in the electrical but in every way possible, and that’s what made it possible for the program, the rural electrification program, to expand into these rural areas, into the sparse rural areas. We, facing that proposition, knowing that we were going to spend a lot of money to get to some very sparse, out of the way place, but being as it was a cooperative program we would let the thick area take care of the finances of the thin area, and that way we gained area coverage. You see, we had a big goal of gaining area coverage all over the United States, and we’ve pretty well done it. I don’t know whether you’ve read this month’s [Texas] Co-op Power paper, you know what is it? It’s printed by the Texas Electric Co-op at Austin, and I’ve got it laying right here. There’s a point I want to make to you (short pause while Mr. Davis goes into the next room to get the paper). You’ll enjoy reading this. The TEC people in Austin that puts out this paper. I’m sure you’ve seen it at the GVEC Electric Co-op. Well, you see this is the—you talk about area coverage these—there’s an article here about them building rural lines into this little town way out in Big Bend, where there’s miles and miles and miles of no meters. Now, they built down there because when they got to this little town [Lajitas], they would have maybe twenty-five or thirty meters right there in one little group, and along the way they would pick up one every mile and two miles, maybe sometimes five miles (Davis smiles and Yancy laughs briefly), but it’s like that. And you’re familiar with this magazine I’m sure, the Rural Electrification Magazine put out by the National Rural Electric Cooperative Association, and there’s a lot of information that comes out of those, and as far as the cooperative program is concerned, I think it is one of the greatest accomplishments that the rural areas of the United States have ever seen in what they could do. One of the great accomplishments—overcome was right in the beginning of the electric co-op program when they first began to build these power lines. The power companies would buy big ads in papers and write trying to tell the public how we were wasting money to build lines out here in the areas where there wasn’t anything. They’d try to make it look like we were wasting money, but we’d counteract them every time with a nice power line built four or five miles out yonder to some home, ranch home, farm home, and then we’d get out there and show what all we’d accomplished when we got there. Offset every time what they’d write. Okay, go ahead now.
Yancy: Could you explain to me the reasons why there were such public service programs as “Food Fun for Juniors” and youth groups to Washington, D.C., and the specials like on hot water heaters and electrical blankets were offered, and why they were eventually discontinued, if they were so successful?
Davis: Well, I can give you why they were started in the first place because I’m one of those that started it. If you’ll notice—and I don’t know whether you have been to the GVEC Co-op very much at the office at Gonzales?
Yancy: A few times.
Davis: Have they ever shown you all of the trophies that we won? The trophy room there has all the trophies in it that we won. They were from contests in public relations, power use, and electric cooperative education. Some are national trophies and state trophies and all of that. You need to look at those—they, in a short reply, is why we did all of these things, primarily it’s to enhance public relations. You see, we didn’t own any image at all when we first started, and we needed a good image, and the power companies were just trying to tear down our image just as fast as they could so we were forced to get into public relations in every way possible: give-away programs, whatever you have that would make good public relations, we did it. And we put on those electric co-op programs out through the area and put on contests. Sure, some people say, “How come you’ve got beauty contests going on?” We’d say, Do you know any better way of gaining better public relations with the people that live out and through the rural areas then to take their daughters and make queens of them and take them to Washington, D.C.?
From across the state, the kids would organize, like those kids you mentioned there while ago, and we would take them to Washington, D.C., get them acquainted at the expense of the electric co-ops, and it wasn’t very expensive because the electric co-ops would join together and pool their money to send these kids up there and let them learn [the] REA—just how it all operated. But now it’s getting to where the REA doesn’t even want to receive those kids that come up there, but they sent them this year, I understand, and they went over to Congress. Congress is still very receptive to the kids, and the electric co-op program; even some of the Republicans are because they know back home they better. (both Davis and Yancy smile and laugh)
Yancy: And what were the events that lead to the establishment of the National Rural Utilities Cooperative Finance Cooperation [CFC], and what is your opinion of CFC?
Davis: Well, I happen to have been on the committee that worked on that too, the national committee. The establishment of NRECA was necessary to represent the local electric co-ops in Washington D.C. Also, it was brought on by a program of the power companies that lobbied the Congress and the federal government to increase the interest rates on the REA loans to the co-ops. Therefore, the NRECA was to be the local co-op’s watchdog over federal activity in Washington, D.C. Personnel to head the NRECA that was experienced in federal legislative matters was secured. One such qualified person, a former member of Congress, Mr. Clyde Ellis, was obtained. One of his greatest and earlier achievements was his leadership in Congress to get the Pace Act enacted, which provided for the 2 percent interest rates on co-op loans to accomplish area coverage.
End Side 1, Begin Side 2
When the REA was set up, the interest rates were set at whatever the cost of money was to the Treasury, but the Treasury money began to go up and up. That was another opposition to the electric co-op program. The interest rates were going to go up, so the Congress said, “Well, you can’t gain area coverage and pay high interest rates.” So they said, “We will bind you to use the loan money to gain area coverage, and therefore we’ll set the cost of money in the Pace Act at 2 percent interest.” This brought on a lot of opposition from the power companies and the people who opposed the electric co-op program. There was hue and cry from all, from one side of the United States to another that these people were being favorably treated because they were lending them federal money for 2 percent. A lot of people would organize and go to Washington and say, You’re using our tax dollars to build power lines out in those old, rough rural areas and just wasting the money, and stuff like that. The Congress says, “No, we’ve investigated, and we find they’re doing the job exactly the way Congress intended for them to do, and we’re going to continue.” Now, that 2 percent interest money continued until the latter part of the sixties. And then to quiet down some in the Congress, the interest rate was changed to 5 percent. This was brought about by the Republican administration’s pressure on Congress to change the interest rate. Some of the co-ops had to pay as much as 5 percent, but the co-ops that couldn’t afford it, that were still trying to gain area coverage in the rural areas where they had no thickly-settled areas, they could still get loans at 2 percent. The co-ops that were a little more densely settled, they had to pay 5 percent. Okay, now that 5 percent caused us quite a bit of trouble because it was getting to where it was almost too expensive to build power lines to gain area coverage throughout these rural areas. So we organized a national committee to study new methods of co-op financing. The committee of co-op people was members and engineers and managers of co-ops, mostly managers, organized to study the ways and means of establishing another method of financing. This was along about the middle to latter part of the sixties. [The committee] finally got together and voted and set up the CFC. You know what that is?
Yancy: Yeah.
Davis: It’s the Cooperative Finance Corporation, and we managed to set that up to loan money to the co-ops as a supplement to the 5 percent money, and we finally got the REA and Congress to agree that we could borrow money from both the CFC and the REA and blending it together, therefore holding down, to some extent, the interest rates of the money. Now, that’s what they are still doing. I mean, they are still operating on that procedure, but the CFC had to go up on the interest rates a little later on. That was in the last five or six years or more when the cost of money got to be more expensive, so the CFC had to go up. Then that brought on another study to where they finally got Congress to change the law then to finance co-ops on a different basis. In other words, it was on a guaranteed loan basis. It was just a case where the federal government would endorse the loan, and the co-op would go to the CFC, or you could even go to private banks, provided you could get the interest rates well enough, and some of the private banks did come down. Wall Street made some of the banking institutions to come down on their money, and that’s where some of the co-ops for the present day are getting their money. Under these conditions, some co-ops may be successful to cut loose from the REA program altogether. That’s what they are attempting to do. Some of the co-ops just as soon they would because the REA would quit breathing down their necks, coming down here and looking over their shoulder. Some of the co-ops that are big enough now that they could go on their own and hold bond issues just like any other large corporation. I think we’re just on the brink of seeing that happen now.
Yancy: What would happen if REA got out of the—quit helping the rural utilities cooperatives?
Davis: They’re not going to get out altogether. There’s some indication that this is happening right now in Congress. They will probably rewrite the law to say that certain electric co-ops in certain rural areas that are in financial straits will continue on the REA program at a low interest rate. What that will be I don’t know, but they’re trying to set it down around 2–5 percent. They’ll probably say that when those co-ops have reached a certain plateau in their operations and finances and revenue, they will be cut loose from the REA, but there’s a hitch in this method, and they’re working on it now. Some of the co-ops have looked into it, even cutting loose from the REA, but the REA doesn’t want to give them any discount on their loan papers for paying it off in full. They claim if it’s paid in full that it will do something to their bookkeeping system up there (Davis smiles while Yancy laughs), so here you’ve got all kinds of opposition. It puts people in a strange category. It makes strange bedfellows, I’ll tell you the truth, especially when you get the REA saying, “Well, we can’t afford to let you pay off this loan now and let you cut loose.” You see, what they’re trying to do, they found out if some of these co-ops cut loose, they’re going to be in competition with some of these power companies, IOU. So what does the present administration say? “No, we can’t let you pay off everything. Those loans you’ve got now with the REA, you keep; but we won’t loan you more money. You’ll have to go to the private money market, but you’ll continue to leave your loan with us.”
Yancy: So they’ll continue to still have some control.
Davis: So they’ll have control, but the co-ops say they’re not going to do it. So that fight is on right now. They’re not going to do it, and I don’t blame them. (Yancy agrees with Davis)
Davis: If I was in there, I would be one of them fighting to get out of it, too. It’s a very interesting occurrence, and it has been ever since this electric co-op program started, but of course it’s changed from a small program to a large program. It’s national now, and electric cooperatives are strong enough now, until they can be really recognized as a strong influence in the United States. Well, when they have—the National Convention now, they go up to fifteen thousand, so what they’ve done, the power companies have sat back and have let them grow, and they’ve grown to be a real influence among the politicians. Well, there’s room for all of them. I guess you’ve read—its public knowledge now that GVEC is negotiating to buy out Kerrville Electric System. The City of Kerrville voted down a bond issue for this purpose.
Yancy: No, I haven’t read that far yet.
Davis: Well, you’ll run across that in your search for historical material—it’s quite complicated, but it’ll be explained to you, I’m sure. You’ll need that in your history—
Yancy: Yeah.
Davis: It was brought about because the Lower Colorado River Authority [LCRA] owned the electric distribution systems at San Marcos, Kerrville, and San Saba. They were subsidizing the electric rates to the consumers there by competing drastically with their wholesale customers. The electric co-ops and other cities.
Yancy: Why do they want to get out of the distribution?
Davis: Because it’s competing with their own wholesale consumers, wholesale customers—the electric co-ops and cities they serve.
Yancy: Okay.
Davis: You see LCRA sells wholesale electricity, generates it and sells it to the electric co-ops. How many are there now? About eleven or twelve of them.
Yancy: Somewhere in there.
Davis: They also sell wholesale to about thirty-some off cities; Kerrville and San Marcos are pretty good size cities—
Yancy: Uh-huh.
Davis: —for them to serve. They were competing with their own wholesale consumers, and they were giving a lower electric rate in Kerrville and San Marcos and San Saba than the electric co-op just outside the city limits could do. You see that set up strong competition—
Yancy: Competition.
Davis: So the electric co-ops and some of the cities they served wholesale raised strong objections to LCRA. This probably caused the LCRA to offer to sell them out.
Yancy: Were there ever any problems in purchasing electricity from LCRA wholesale?
Davis: Yeah, there have been little problems all along, but on the other hand, LCRA and some of these state authorities have been able to generate and transmit and sell electricity to the electric co-op program at a lower rate than the co-ops could buy it from the power companies. You see, when we’d go out there and organize an electric co-op, we had to have a power supplier. In many instances, there was nobody but the IOU’s to sell it to us. They would hold the price up and make us build a power line out there, and they would have a power line over here and serve people in the same area. They’d sell to them cheaper than we could afford to sell it to them because they had control of it. It’s been a great thing, and then we finally got that cleared up. We finally worked through the State Utility Commission and got that settled where they couldn’t do it, so after a while, then the picture began to change and the electric co-ops were selling cheaper than the power companies. That was brought on through the efforts put forth by the Lower Colorado River Authority and the Guadalupe River Authority and all these river authorities and some in east Texas and those big power dams like Sam Rayburn and a lot of those that brought back for us some real low-cost electricity, comparatively speaking. When I took over the management of the GVEC, we were buying power from the Central Power and Light, wholesale, also buying some from the City of San Antonio, was also buying some from the Guadalupe/Blanco River Authority and pooling it all together, we had a fairly low rate. The Co-op is now buying the bulk of its electricity from the two authorities; that’s the Lower Colorado River Authority and the Guadalupe/Blanco River Authority. You know all of those little dams up on the Guadalupe River; the GVEC is buying that power wholesale. They’re getting it at a pretty good price, and that’s what it takes just to use your head on a lot of that to keep that cost of electricity down.
Yancy: Down.
Davis: That’s right.
Yancy: Were there ever any problems between the employees and the management of GVEC?
Davis: In the early days, we did.
Yancy: What were they? What kind of problems?
Davis: Primarily union aggravations. Yes, we had a good many attempts by the IBEW, that’s the International Board of Electrical Workers, and that is a national organization, and they didn’t like it because we were building these power lines and not using union labor because union labor would have prohibited us from—well, it really would have run the cost so high we couldn’t afford it, so we had to bow our neck and just go ahead and use local labor. So we overcame the situation by, in the early days, by going out here in the country and organizing work forces out of the rural people, farmers. We’d lease their trucks and put them on the pay roll, but we didn’t pay union labor wages, but we went ahead building power lines just the same and doing it a lot cheaper. Then the IBEW decided they would do something else to interrupt the situation, so they would go in on an electric co-op, kind of do some undercover work, to try to organize the permanent employees that were working for the Co-op, trying to organize them quietly with management not knowing about it, and then when they got them organized, they would pull a strike. That happened to me one time, and it happened 1954 or ’55. They got into our line crew without me knowing what was going on, and they organized them. They really didn’t sign them up on the membership. They just got among them and said, We recommend you striking. You’ll get better wages because here’s what management is doing to you and so on and so on.
Well, one morning I was sick in bed, and I had an assistant manager who was also an engineer, and he was a little weak in management. So they picked the time when I was sick in bed to pull a strike. There were twenty, twenty-five of them that pulled a strike, and they went into the warehouse, the line crews primarily, none of the office force. So they pulled a strike and wouldn’t go out to work, just took over, and they all sat around and took over. The assistant manager came to my house where I was sick in bed and told my wife about it. He didn’t know what to do. He said he didn’t know whether to tell me or not because I was sick in bed; I was having a little heart trouble. So she let him in, and he told me about it, and I just reached over and got my clothes and put them on, and I said, “Let’s go back to the Co-op.” I walked in, and there they were sitting back there. I walked in, and I said, “What’s going on boys?” One of them said, “Blankety-blank, we’ve taken over this thing, and we’re going to run it.” I said, “Oh, I didn’t know that. Well,” I said, “Let’s see about that. I’d like to find out how you’re going to run it.” And so I said, “I’ll tell you what, y’all just stay right here. I’m going to—we’ll have a little session and find out how you’re going to run it.” So I went up to the front to my office and got on the telephone and called [the] board of directors, one by one, and I said, “Come on in, We’ve got trouble.” I said, “Come in as quick as you can,” and within an hour’s time they were all there. I said, “Now here’s what we’re going to do.” I recommend to the board; the board asked me what I wanted to do. I said, “I recommend that you sit down here in this office of mine, and I want you to call each one of these employees, one by one, not all together, but one by one, and find out what’s going on.” And I said, “I’ll just go over here in another office, and I’ll just wait until you get through.”
So they called them in, one by one, just like I said, and when they got through, well, the president of the co-op board came over there where I was and said, “Come on back in. We want to talk to you now.” So, I thought, Uh-oh, and so they, that was Mr. [R.L. Allert]; he was a very close friend of mine. So we sat down, and they all sat there and looking at each other and kind of grinned, and I said, “Well, what did you decide on gentlemen?” They said, “We’ve decided to leave it up to you, and we’ll back you up 100 percent whatever you want to do.” I said, “Boy, oh boy, let me to it.” (Davis smiles while Yancy laughs) And I went back to where the boys were, and I said, “Come on up, boys, and take a seat in the board room.” This will seat all twenty-five of them in the board room, and the board was still in my office. Then I walked back, and I told the board, I said, “Come on out here, and I want you” —there wasn’t enough seats anymore, all of them boys sitting around, and I said, “I want you to stand right here.” The board stood up. I said, “The reason I want you to stand up; I’m going to stand up in front of you and,” I said, “you’re going to stand behind me.” “Yeah, okay.” They stood up there, and boys all sitting there looking at me. I said, “Well, boys here it is.” One of them said, “What is it? What are you going to tell us?” I said, “Every one of you is fired as of this moment, and your checks will be ready just as soon as we can write them. Just stay right where you are.” Some of the boys turned pale and all kind of colors, all twenty-five of them. They said, “What, you can’t do that?” I said, “Oh, yes, I can.” I turned around, and I said, “Here’s the board of directors.” I said, “Now, what do you think about it, boys?” “Well, we’ll see. You’ll see! You’ll see! You’ll see!” “Okay,” I said, “Okay, we’ll see.” They went on, “What are you going to do now?” I said, “Well, I tell you what. I’m going to pay you off, and today’s Friday,” and I said, “Monday, any of you boys that want to come back on your knees apologizing for what you’ve done and come into my office one at a time and tell me this” I said, “I’ll consider seriously about taking you back on. Otherwise you’re through!” I said, “You can either wait right here for your paycheck, or you can come by and get it in a little bit.” I said, “The clerks are working on them right now.” So most of them got up and left and went back to the warehouse mumbling, some of them even crying. Well, maybe there’s a part of this I shouldn’t even talk about, I hate to put it on record, but we found out that one of the board members was in on this. I better not say anymore. He repented considerably because one of the—well, do you have another question?
Yancy: Yeah, what do you see as the future of GVEC?
Davis: Great. You’ve got a good manager, and I take a little pride in him being manager because I hired him away from another co-op as the power use man, in charge of power use, and he did a very good job and assisted the management considerably while he was in that position, and I had several good men. Mr. Lewis Eckols was one of them that was considered for manager to take my place. Leon Netardus and Doyle Hines and I told the board that when I left there, I said, “I’m not going to make recommendation for anybody, but I’ll recommend three men, and if you want to pick the manager from one of these three men, I’ll be satisfied with either one of them.” I knew which one they would pick. They picked Doyle Hines to take my place, and he’s done an excellent job. He’s been in the management business now fifteen years, and he was in the power use business, what was it, twelve–fourteen years before that. Now, he’s plenty capable of managing, and I think the growth of this co-op; it’s growing by leaps and bounds, and a great deal of that you can contribute to his management. Okay, do you have something else you want to—
Yancy: I don’t have any more questions. Can you think of anything more?
Davis: Well, yeah, I can. (Pause while Mrs. Davis serves refreshments)
Yes, I would like to be a little more specific and talk about GVEC.
Yancy: Okay.
Davis: I would like to see you do some research work on the accomplishments of the GVEC, not because I managed it or am bragging on it or because I was manager, but GVEC was the first electric co-op in the United States that got the first prize for doing the best job of consumer education, of member education, and public relations. Maybe you can see it right here. I would like for you to look them up if you haven’t seen them. Do you see this large trophy right there (pointing to a picture)? Well, that is number one, GVEC got number one in the United States at the convention in St. Louis, and that’s me holding it there, and that’s our board of directors and their wives. We was at the NRECA convention in St. Louis. Then the next year we won the second place and then the next year the first place again. We got three of those trophies, and then we got several other trophies that we won for public relations and power use (Pause while Mr. Davis partakes of some of the refreshments) And Doyle Hines needs a lot of credit for helping the management and the Co-op to get those trophies to, and GVEC has been getting them ever since. Why, I remember we got another national trophy called the Silver Switch Award. Have you seen it? It’s over there in the trophy room, and we’ve gotten numerous other commendations and certificates of management. And, well, I, in order to get to accomplish all of this in public relations and member education, I started hiring big management firms to come in and teach all of us—most of our employees, especially the management level, all hold certificates, national certificates, certificates from A&M, and different universities in management and public relations. I took all the courses that were available at A&M and the national management, all of those and it really paid off. We worked very closely with the 4H Clubs, the FFA [Future Farmers of America], and we had some organizations of our own. We had an organization that was very prominent for a good long while called—it was the little girls in the cooking schools—“Momma’s Little Kitchen Helpers.” We had the program going for years (pause while we eat some of the refreshments)
When I went to work for GVEC in ’47, I’ll go back over this, we were in a little office, two little rooms, not as big as this. We had three employees. The Co-op had the manager, didn’t call him manager back in those days, called them project superintendents, so if you run across that phrase in some of your literature you’ll know what it is. Mr. Hausmann and a bookkeeper and a billing clerk, and a lineman. There would be four of them. When they started hiring in ’47, it was obvious when you hired about eight or ten more employees that they didn’t have any place to put them, so we went to REA for money to build us a larger building, and we got a loan but REA said, “Can’t loan you any money if you’re going to build out there in the country at cost.” Said, “You move into Gonzales, find you a good location, preferably to buy a building big enough to house this organization and then we’ll loan you the money.” So we went into Gonzales, and we looked over some buildings, and we found a big warehouse, Swift & Company Warehouse. (Cat is creating noise in background) I don’t know whether you have seen our old GVEC headquarters building there in Gonzales, that’s one you need to look at for your research work. It’s located down there across the street from the post office. It’s about—it was a big warehouse about three hundred feet long and about one hundred feet wide, and it extended a full city block, across the north end of the city block. We bought that from the old Swift & Company, the old warehouse. It was vacant at the time. We had to pay $49,000 for it. We borrowed the money from the REA. The first thing we knew, the people out at Cost who had established the headquarters out there, when they found out that efforts were being made to move that headquarters from Cost into Gonzales. They became hostile opponents to the move. There were nine members of the board of directors who represented nine areas of the GVEC. They were divided on the issue of moving the headquarters from Cost. Finally, after much discussion and hassle over the issue, a board meeting was held and a vote taken. The vote was a tie, four and four. The board president voted to break the tie in favor of the issue, and the headquarters was then moved to Gonzales. This left some of the members in the Cost community very unhappy, and some hard feelings over the issue seemed to prevail for quite some time. There was some indication that this issue caused some of these underlying difficulties connected with the employee strike. After the strike was over, I never had any more trouble, no more labor trouble, ever. (Mr. Davis, Mrs. Davis, and Yancy discuss how remarkable GVEC is) I never took back but two of the guys out of the twenty-five.
Yancy: Hmm.
Davis: Well, it was bad in a way; some of the best electricians I had were among this group.
Yancy: Oh, yeah.
Davis: Do you know what I had to do?
Yancy: What did you do?
Davis: I got on the telephone and called my neighboring electric co-ops and said, “Help. Send me some men, all you can spare and some of your trucks and help us out.” Boy, in twenty-four hours, I had more men there than I knew what to do with, and they stayed until we could hire some more, but I wasn’t long at getting them because there was a lot of unemployment at that time, and the first thing I knew, word spread over the state of Texas. Here come linemen and helpers and everybody wanting a job, so I filled all the positions in about a week’s time. Now, mind you, a lot of these men that I fired were good co-op members’ sons. You can see where I was treading on touchy ground. However, I had about eight of those board members behind me. Well, that was 1949, when we moved into the building at Gonzales from out at Cost. When it was finished, it was right nice-looking building, still is, still a nice-looking building. That was ’49, and I operated out of there until 1964. By this time, the GVEC had grown so much that we just didn’t have any room anymore, and there was nowhere you could expand—a street over here, a street over here, and a street over here, and a lumber yard here, so we couldn’t expand anymore. We decided the time was here to begin the establishment of a new headquarters.
On the north side of Gonzales, the highway department had recently constructed a bypass through there, and where the Co-op headquarters office is presently located there was about twenty-one acres of land, just old mesquite trees and ditches and gullies and things like that, but it was right close to town and fronting this highway bypass, so I went to the man that owned it; well, not the man, he was dead, a lady owned it, and she worked down at the bank where we were banking. “Mrs. Scheske,” I said, “Mrs. Sheske, you know we’ve got to build a larger Headquarters facilities. We’ve outgrown this one.” She said, “Yeah, I’ve been noticing that.” I said, “Yes, I’m looking for a place,” and I said, “That twenty-one acres you’ve got is an ideal location. We would have to fill in a lot of the deep gullies and everything, but we would like to buy that.” “Oh,” she said, “my husband just passed away, and that was his pride and joy. He ran a meat market, and he was using it for a slaughter, had a slaughterhouse on it. I don’t think I could part with it because he loved it so much.” Well, land was selling for about $500 an acre out there at the edge of town, so I called an executive meeting of three board members: president, vice president and secretary treasurer. I told them about it, and I said, “I’ll tell you what. She’s not going to sell it, I don’t believe.” But, I said, “Let’s offer her an inflated price and see what she’ll do with it.” “Okay,” I said, “that’s a valuable piece of land, and we’d better get it while we can.” So I got the board to authorize me to go up to a $1,000 an acre if I had to, and so I went back and talked with her, and I said, “Mrs. Scheske, would you consider selling that land at any price?” “No, I don’t believe I would.” (Mr. and Mrs. Davis and Yancy laugh) “I just can’t hardly part with it; my husband loved it so.” I had a piece of paper in my hand, and I wrote down there $1,000 an acre, $21,000. I said “Mrs. Scheske, look at this and just study about it, and then let me know.” You know, she called me that afternoon and said, “I have decided to sell.” We then proceeded with the purchase. That was in ’64, and the board of directors authorized me to proceed. I hired an architect and an engineer out of Austin; their name was Brooks and Barr. I got them down there to look over the situation, and I told them to do things—make me a landscape drawing of the whole acreage and maybe two or three of them, and we’ll take it up with the board and see what we can do. Okay, and we drew up a contract with them. We had to guarantee them $25,000, but that would take them all through the construction period. We began construction of that headquarters in ’64, kind of middle part of ’64, and we got it ready in May ’65, and on June 1, 1965, we moved in and started operating out of the new headquarters. The total cost of the new headquarters including the land was $490,000. They have built, since then, that big warehouse in the back, and they remodeled most of the office space. To show you how things have gone up, when they built just the warehouse, last year, he came to me one day and he said, “Look, you spent $490,000 on the original,” he said. “I’ve already spent a million and a half on that warehouse and remodeling the office space.” I said, “Well, times have changed. Things have gone up.” They’ve just about used up all of that twenty-one acres too that we bought back in 1964. You know what that acreage would cost you now. I mean, if it was available right, where is it? It would cost somewhere around $6–10,000 an acre.
Yancy: Hmmm. (Yancy and Davis comment on the price of land being outrageous)
Davis: Now, we kept the old headquarters building. They use it for storage, and well, I believe they did rent it out to some of the farm organizations. The Farm Bureau had some office space in it. They store a lot of things in the warehouse section. Well, we’ve just about covered most of it. Of course, I can think of little bits here and there, and I think we covered the political side of it and the co-op growth, the public relations, power use, and member services, administration, and so forth. Now, if you can think of anything else, why—
Yancy: I can’t think of anything else.
End of interview
As an afterthought I retired from GVEC as General Manager February 1, 1972. I was employed twenty-five years. I was engaged in REA work for thirty-one years.