Evening star. [volume] (Washington, D.C.) 1854-1972, 1913-01-24
CHANCE FOR PROFIT
Secretary Stimson Urges Pay
for Water Power Grants.
CASE IN HAND EXAMPLE
Approves Bill Where Government
Receives Compensation.
MILLIONS TO BE INVESTED
Private Company to Relocate and
Construct Dam Across the Con-
necticut River.
CASE IN HAND EXAMPLE
MILLIONS TO BE INVESTED


ment. In issuing statement today ap-
proving pending legislation involving an
important principle in regard to the use
of the water power in navigable rivers.
advances an argument that the govern
ment should receive compensation for
water power privileges.
Senator Burton, from the Senate COM
H1ittee on commerce. has submitted
favorable report without amendments on
Senate bill $685. to authorize the Con-
necticut River Company to relocate and
construct a dam across the Connecticut
river above the village of Windsor Locks.
in the state of Connecticut. The inter-
esting feature about this bill as thus re-
ported is that 1t contains a provision en-
bodying the views Of President Taft in
his recent message in respect to water
powers in navigable rivers. The bill con-
tains a proviso authorizing the Secretary
of War to impose a reasonable annual
charge. to be paid by the corporation, for
the privilege granted, these proceeds to
be used for the development Of naviga-
ton on the Connecticut river and the wa
tiers connected Herewith.
Company to Pay Expense.
For a number of years applications
have been made to the federal govern
ment to improve this portion of the Con-
necticut river so as to permit navigation
to pass around the rapids which obstruct
the river at that place, but the board Of
engineers to whom the project has been
referred have uniformly reported that
the expense of such an undertaking would
be- SO great as to make it inadvisable
for the federal government itself to as
eume the burden and expense Under
the present bill this burden is assumed by
the private company. which is to develop
the water power, and in addition the
company stands ready to pay additional
compensation to the federal government.
In anticipation of favorable action on
this bill, / have been in negotiation with
the company. and a basis of agreement
has been reached with the company
under which its books showing all of
the actual expenses of the enterprise. are |
to be open to the government, and the |
profits from the sale OF water power are |
to- be carefully tabluated and accounted |
for under standards subject to the ap- |
prevail Of the board of engineers.
1T is estimated that the total enter |
prise will cost in the neighborhood $5.- |
100000. Of which about $4,000 will be |
required to be spent in constructing a |
lock and channel exclusively in the in |
terest of navigation. The government will |
investment of nearly half a million dol |
lars spent solely for navigation without |
reference to water pOwer-Or. in other |
words, an equivalent of an interest charge |
Government to Share in Profits.
The company is to receive the net profits |
derived from it's Investment to an extent
OF per cent upon the actual cash in
1estment. In view OF all the Conditions of
the case. / regard this as fair and yet
conservative amount of return for such a
water power development.
Thereafter. all further net profits are |
to be divided between the company and |
the government. Between and per |
cent, they are to share equally, and be- |
yond per cent the government is to |
share in an increasing ratio. I deem this |
a far more advantageous arrangement |
than 10 deny the company any share in |
the profits beyond per cent, in that be- |
yond that point IL leaves an inducement |
TO the company for good management |
and for earning money for the public by |
partly sharing in ii itself.
Furthermore. in order to provide for |
a possible increase in the profits of such |
business as years pass and water powers |
may increase in value, l have insisted |
that after thirty years under the present |
arrangement there Is to be a readjust- |
ment of compensation by agreement be- |
tween the government and the grantee, |
and that thereafter such readjustment is !
TO take place at the end of every ten |
years until the termination of the permit, |
the life of which is fifty years altogether. |
Offers Good Illustration.
This case offers a good Illustration of
what can be done under the policy of
insisting upon compensation for the grant
of these privileges. 1t has hitherto been
the policy of the nation to allow these
water powers to pass into private hands
without getting anything for them what
ever. Only year ago this company
sought the privileges granted by this bill
and expected to get all of the profits
from the water-power development for its
own use. And it would have done SO had
the same policy been carried out which
has obtained in the multitude of other
similar bills passed in former years.
"Under the policy now insisted upon by
President Taft, il turns out that they are
not only willing to make this large initial
investment for the benefit fthe govern
ment, but they are prepared to share
their profits beyond per cent with the
government, under conditions which pro-
vide for accuracy and publicity in deter
mining what those profits shall be. I
think that every public interest is salts
fed by the bill. and the fact that ii is
also satisfactory to those persons who are
about to embark their money into the en-
terprise indicates that a legitimate devel-
opment of water power is recOncilable
with A proper protection of the interests
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