The San Francisco call., 1908-05-17

tIOnal forest reservations Tor the sOH-
GRAFTON Of electric power from the
streams. AS the region along the
western slope Of the Sierras is just
beginning to be developed for power
and lighting purposes, these letters
dealing with matters closely connected
with California may afford informa-
;ion regarding the policy Of President
Roosevelt looking toward the conser-
walton OF national resources. The let
ters follow:
Mr.. VIM. G. Kerckhoff. Los Angeles. Cal;
Dear Kerckhon-Your letter of April
I6 with the inclOsed clippings from the
California papers is received. am
keenIy sorry for the delay in answer
ing il. We have been very greatly
rushed.
No information was furnished by the
forest service for the articles you IN
closed and no intimation tnat the
power companies OF California are the
agents or associates Of Mr.. Hartman
mas been given out The service has
no Information Wnatever on that SUB
isct The presidents messages, the re-
port OF the inland waterways commits
sion anu statements Of mine, ali OF
which were made in public addresses
may have been in the minds OF the
writers Of these and similar articles
but in no other sense have they been
based upon information obtained nom
the forest service or any other depart
ment Of the government so Tar as
know.
POLICY Is APPROVED
AS you know. / heartily approve the
presidents policy with respect to
water power. especially those features
of his policy which oppose perpetual
grants for this purpose and require the
payment Of a reasonable charge. After
careful investigation and conference
with many applicants for power per
nlits and with representatives OF bank
ing houses interested in the financing
of power projects. I believe that
limited term OF years will be no OBJ
stacle to power development. ] no
tice that the prospectus issued last
fan by a New York banking house for
the s45, ,000.0Oo bond issue of the Cali
fornia electric corporation fixes the
term Of the bonds at 30 years and
makes provision for a sinking fund
which viii pay s1G50o,000 at the end
Of that period. For the last 10 OF
these so years the amount redeemed
each year viii be 100000. At the
same rate for 20 years more the total
amount retired al the end Of the so
year term viii be S35.500,00o. Since
the interest charge would be constant
~ decreasing as more and more bonds
We're retired. it is evident that the sum
Of $500 coo could be largely increased
in each successive year, beginning with
the wv nty- hrst. and II is uulJe sSible
that the entire issue Of S45.000,00o
could be retired within the 80 year
term without any additional burden on
the enterprise.
DANGER OF MONOPOLY
Ny personal opinion is that the
president has not al all overstated the
danger Of a power monopoly. This
does not mean that consolidation has
gone as far as II will or that plans
have been as yet matured for that pur-
pose, though the prospectus 1 have
above referred to and much other in
formation contains evidence that con-
soIidation has taken place TO a consid-
cradle degree and that the towns
served by that and other corporations
are dealing with power monopoly L
have come into possession Of a state
ment issued for one large company
urging its complete monopoly as a
reason for investment. But even II we
did not have actual cases IN plenty.
the experience OF the country with
respect to oil, coal and other great
necessities of Industrial and commun-
ity life is a sufficient basis for the be-
lief that water power also will. be-
fore many years, be controlled by
very few great combinations. and that
measures to insure control by the gov
ernment must be taken In time.
You know that ] have tried to give
permittees security Of tenure for
definite term Of years, providing the
Repeated conferences were held with
representatives of the power compa-
MES TO agree upon legislation for this
purpose, beginning late Ia February,
but the demands Of the power COM
panies were so extreme that II was I'M
possible for the government to ac-
cede to them. Evidently their repre-
sentatives came here not to confer but
10 demand. OF course such an attitude
must necessarily defeat its own OBJ
ject,
Last fall suggested the insertion
in the agricultural appropriation bill
Of z clause authorizing permits irrev-
Ocable for 80 years. but 1T was strick-
en- out In the house OF representatives
on a point Of order.
MAKE HANDSOME PROFITS
Ny opinion is that the power com
panies have, IN general. made hand
some profits on any fair capitalization.
] am far from having any objection to
this. and an anxious TO see them sue
ceed. The forest service has not at
any time proposed to pry into the
business OF its permittees and has de-
vised its system Of charges In such a
manner as to avoid so doing. so far
as possible. At the recent conferences
with the power companies to which I
have referred. their representative
claimed that the rate of charges fixed
by the service is conhscatory. then
suggested TO them that they must
submit their business to a thorough in
vestigation by the bureau Of corpora
tions TO determine whether the charges
are unreasonable or not Nearly three
months has elapsed and ! have had
no reply to that suggestion.
No action by the forest service and
no opinion Of my own is based upon
any assumption that prices paid by
consumers for light and power are
higher in California than elsewhere.
thank you very much for writing
to me rs you have done. and shall al
ways be glad TO have any statement
OF facts and any expression of opinion
that you may care to make. Though
we differ as 70 what policy will most
benefit the people Of the west. I real
ize that our differing opinions are
honestly held on both sides and that