Evening star. [volume] (Washington, D.C.) 1854-1972, 1909-11-01
WATER POWER RIGHTS
Policy of the Government Out
lined by Clifford Pinchot.
AWARD OF CONCESSIONS
Renewal of Permit at End Of Fifty
Years Optional.
SUMMARY OF THE CONDITIONS
Statement Regarded as Significant
Because Of Widespread Interest
in the Question.
AWARD OF CONCESSIONS
SUMMARY OF THE CONDITIONS

| The practice of the government in
granting water power concessions is out
| lined by Clifford Pinchot, United States
! forester. in a letter written to Col. Henry
l.. Hgginson of Boston, Mass, director
| of the General Electric Company. The
| letter takes the form Of a public state
ment. and il significant at this time be-
cause of the widespread interest In the
water power question. Mr.. Pinchot seeks
to emphasize particularly that he does not
wish to retard the development of water
powers by private capital.
Summarizing the conditions imposed on
all power permits, the government fores-
ter makes clear the point that the renewal
of a permit at the end Of fifty years is
at the option of the government; that
it is, by statute, revocable by the Secre-
tary OF the Interior, but unless revoked,
continues fifty years. when 1t terminates
without any special revocation, but may
then be renewed at the option of and on
conditions to be fixed by the government.
Text of the Letter.
Mr.. Pinchots letter follows:
MY Dear Col. Higginson: Your letter
of October 4 is received. / recall with
great pleasure having been fortunate
| enough to meet you, and 1t goes without
saying that l am glad to get in touch
| with you again
You will be glad to know that I have
been misquoted as to the statements you
mention. First of all, 1 have no desire to
prevent or .retard the development of
water power by private capital. They
should be developed by private capital, In
my Judgment, under proper government
control, and not by the nation or the
states.
Secondly, I have not said. either pri-
vately or publicly, that the General Elec-
trio Company or any other single exist
ing corporation, controls. or Is now seek
ing to control. all the water powers in
the country. But no one can deny that
there is a marked tendency toward prac-
teal concentration and control of the
hydrO-electric development over a very
wide area. In some cases this concen-
tration may be a mere community of in
terests' evidenced and made effective by
directOrates In several legally distinct
corporations held by the representatives
of the same interests or of friendly in
terests.
I'm other cases it appears to be brought
| about by closer intercorporate relation.
and in still others, as for instance in
central California, there seems to be a
single corporate control of large and
populOus territory.
Established by Report.
The report of the commissioner of
corporations, transmitted to Congress by
President Roosevelt with his message Of
January 10, 1909. vetong a bill Oh. r.
177O7) to license the building of a dam in
James river. Mo-, establishes these facts.
THE increasing radius of practical cleo
trio transmission and the recent financial
history of the country as to consolidation
of other kinds of business seems to JUS
tify the belief that there is a strong ten
dency toward concentrated control of
hydro-electric development in the United
States. 1 do not say that a single trust
has yet been formed AS an outsider
warrant my saying that such a trust has
been planned. but 1t Is apparent that
present tendencies favor such trust and
will produce ii If they continue.
Il therefore think that it is of the ut
most importance for the people of the
nation to understand these tendencies,
realize their import and take effective
steps now while there is yet time to
retain and effectively exercise public con-
troll of this vital necessity of life. This
may be done by giving concessions lin
tied i'm time, requiring fair rental and
imposing conditions to prevent the evils
which experience has taught us to ex-
pect from unregulated monopoly I am
very glad indeed to have your statement
that the United States should not part
with this kind of property without fair
leases. That is precisely the position
that the forest service has always taken.
Form Of Permit.
II inclose copy of the form of permit
(called a special use agreemenp. now
used in the forest service in granting all
water power concessions in the national
forests. and call your attention to the fact
that this permit requires that construc-
ton be begun and completed within q
soma hlp time 6Yad in aNCOrda vuif n
engineering conditions, in order to prevent
the speculative holding of undevelOped
sites; that a small annual mileage and
acreage charge be paid during the con-
structiOn for the same reason: that a rea-
sonable annual charge in proportion to
the electrical output, nominal in amount
at the outset and gradually increasing
by moderate increments in successive five
year periods, be paid after operation be-
gins, with reasonable deductions on &C
count Of other national forest land used
by the plant or forming part of the
watershed and in order to encourage the
building of storage reservoirs. on account
of water storage by the permittee: that
timber cut or destroyed in construction be
! paid for at a reasonable stipulated price;
| that the plant be operated continuously
! up to a reasonable stipulated fraction OF
/ it's full capacity, in order to prevent artifi-
to consumers; that power be sold to the
| United States, when requested, at as low
! a price as to any other consumer for a
like use: that the permit shall not be
| transferred. since the transfer of gov
eminent contracts Is expressly prohibited
by statute dhe power to Issue a new per-
init to a successor of the permittee, OF
course. remains in the governmenU: that
the permittee shall not enter into any
| combination or trust to restrict output
or in restraint of trade. etc: that the per-
mittee must use reasonable precautions
to protect the forest by firefighting. etc;
| that the permit shall terminate at the
end OF fifty years. but may then be re-
| newed on such conditions as the govern
men shall then fix. but that in fixing them
neither the permit itself nor the fran
| chises, stock or bonds of the permittee
shall be considered. but only the actual
value at that time of physical works con-
| structed under the permit, this in order
that future generations may not be bur-
dened to pay dividends on inflated securi-
| ties.
Under Specific Statute.
These permits are issued under au-
thority of a specific statute (act Feb