The Washington herald., 1913-11-20
CONTINUED FROM PAGE ONE.

lows:
.'Tho Committee on Water Power, while
fndin- a difference of opinion among its
members as to certain details of the
subject feels very strongly the i'm
portance of making clear the general
principles which control It and realizes
keenly the consequences which would
follow a failure to agree upon a con-
structive program of progress. 1t has
therefore, framed the following brief
which II is unanimous.
Like other Grants.
"A grant of the right to use water
power, while differing in some details, Is
essentially similar to a grant OF any
other privilege or franchise from the gov
ernment. State or national, and its terms,
regulation and control should be guided
by essentially the same principles neces-
sary to safeguard the rights Of the pub
lie and of posterity as have been found
essential in the case of other classes Of
franchises from the government. Par
ticularly is this true in view Of the fact
that a water power being perpetual will
surely tend to increase in value as other
sources of power, such as coal and oil,
become exhausted At the same time, for
the very purpose of preserving our other
power resources which are capable of ex-
haustion, the development of water pow
er under proper safeguards of the public
interest should be earnestly encouraged
and hastened. We recommend that the
following principles should govern the
granting of a privilege to use water
power:
'tal For a definite period, sufficient to
be financially attractive to investors, the
privilege should be irrevocable except for
cause, renewable by the courts:
"Cb) Thereafter the privilege should
continue subject to revocation in the alb
solute discretion Of the government exer-
cised through its administrative board of
officers upon giving reasonable notice and
upon payment Of the value of the physical
property and improvements of the
grantee as below provided under (h).
Amount of Compensation.
'Cc) After the expiration of the period
provided for in (a) above, at recurring
intervals of not more than ten years, the
amount of compensation to be paid to
the government FOR the privilege, and all
the terms and conditions OF the grant
during the next succeeding period of not
more than ten years shall automatically
come up for determination by the grant
ing officer of the government.
Id The privilege shall be unassignable,
except with the approval of the govern
ment, in order to safeguard the interests
of the government against speculation in
water power and against appropriation
without prompt development
''(e) The privilege shall be granted only
on condition of development of the whole
capacity of the power site rapidly as
the granting officer may from time to
time require, giving due consideration to
reasonable market demands and condi-
Jions and also on condition of continuous
operation, subject to such demands and
conditions.
10 The right to receive compensation
for the value of the privilege varying ac-
cordinE to the proper conditions of each
case shall be reserved to the government
state or Federal from whom the privi-
lege comes. We believe that the reserva-
tion of such right TO compensation is q
vital essential toward the end of proper
regulation. Ii is not sufficient to trust
that the public will always receive its
proper share by means of regulation of
rates alone. Local authorities may neg
lect or may be unable, under conflict of
jurisdiction, or for other reasons, to eX-
act in the interest of the public the full
value Of the public's right. The value of
a water power may in the course of time
increase far beyond the power of local
regulation TO adequately distribute its
benefits. At the same time. the method
OF exacting compensation must be care
fully safeguarded so that in case full
compensation by rate regulation is ex-
acted by local authorities, al additional
burden shall not be imposed. We believe
that IN normal cases the best method is
for the government to share increa singly
in the net profits of the enterprise, pro-
vided those profits exceed a certain per-
ccntage. the right of the government be-
ing recognized otherwise merely by the
imposition of a small annual fee or its
equivalent
Methods of Accounting.
"Cg The government shall have the
right to prescribe uniform methods of
accounting for the grantee and to in
spect its books and records.
'(h) Upon revocation of a privilege by
the government the grantee shall be paid
compensation equivalent to the fair valu-
alton OF its property, exclusive of fran
chise and consequential damages; this
compensation shall include such appur
tenances as a-e necessary for the oper-
alton of the water powe- and the trans
mission of electricity therefrom, but shall
not include such properties as railroads,
lighting systems, factories &c, which
are Of themselves separate industries.
In such transfer all contracts for the
sale or delivery Of power made in good
faith previous to such notice of transfer
that said grantee may operate and main |
tain the power business during his occu-
pancy of the property under such stable
guarantees as may beget confidence
therein by prospective long term con-
tractors; provided, that the government
or said transferee shall not assume any
contracts made at a price or under con-
ditions which shall be determined by the
proper administrative officer of the gov
eminent to be unreasonable or confisca-
tory"
senator Burton's Views:
when the session opened in the
morning charges had been made that
the Pinchot faction had packed the con-
vention with employees from the For
estry Service and governments clerks,
and a battle was predicted.
That Mr.. Pinchot has not lost in
popularity was evident by the warm re-
ception he received.
The first address was by Senator
Burton of Ohio. who advocated the Pin
chot doctrines. He said that many of
the natural resources of the country
had been wasted and had fallen under
control, but that some OF
the evil could yet be remedied. He de- |
piored the injection of argument and |
over the States rights"
doctrines, but held that the subject OF |
was one too large for the |
Statesi to handle. He was in favor of |
granting franchises that |
would allow of unrestricted develop
ment of resources, but urged that these |
be hedged about with Federal control.
TO prevent domination by any trusts"
Following Senator Burton, Mr.. Pinchot
Al,