Evening star. [volume] (Washington, D.C.) 1854-1972, 1918-03-02
SECRETARIES URGE
POWER BILL CHANGE
Declares Prices for Properties
Taken Over Should Consider
Only Investment Values.
WOULD DEVELOP INDUSTRY

Changes in the pending administration
water power bill to more clearly express
the intent Of the legislation were recon-.
mended today to Chairman Sims Of the
House special water power committee by
Secretaries Baker, Lane and Houston, who
drew the measure. They urged speedy pas
sage Of the bill so as to stabilize the power
industry generally and encourage the
building Of extensions to existing projects.
water power legislation" said the let
ter from the secretaries. should have in
view not only the maintenance of the
rieiats Of the public in the national re-
sources, but also tiss. adequate protection
OF private capital by which such resources
are developed The bill before you seems
to do both. After careful consideration.
however, it is believed that certain changes
in language could be made which would
more clearly express the intent Of the
proposed legislation.
Would Reduce Uncertainties.
1T is particularly important that the
conditions which affect the disposition
of the property at the termination of
the license should be SO dehpite that
uncertainties will be reduced to a mini
mum. If the properties are not taken
over the conditions under which a new
license may be secured should be en-
tirely clear. If the properties are
taken over the price to be paid should
not include alleged values not repre-
sented by investment. or. on the other
hand, require needless amortization of
capital during the period of the license
t.. 10. Waf Ia fYry CT ant 4
is, therefore. believed advisable to de-
fine in specific language the items
which should or should not enter into
the price to be paid"
tion in the bill of this defination Of net
investment. prepared after thorough
consideration and after consultation
with accounting and banking experts:
"Net Investment Explained.
"Net investment in a project means
the actual legitimate original cost
thereof as defined and interpreted in
the Classification of Investment in
Road and Equipment of Steam Roads,
Issue of 1914. Interstate Commerce
Commission plus similar costs of ad-
ditions thereto and betterments there
of. minus the sum of the following
Mems properly allocated thereof. If
and to the extent that such items have
been accumulated during the period of
the license from earnings in excess of
a fair return on such investment:
(a) Unappropriated surplus, (b) ag-
gregate credit balances of current
depreciation accounts. and (c) aggre-
gate appropriations of surplus or in
come held in amortization. sinking
fund or similar reserves, or expend-
ed for extensions or betterments. The
term cost shall include. in SO far as ap-
plicable. the elements thereof pre-
scribed in said classification, but shall
not include expenditures from funds
obtained through donations by states,
municipalities. individuals or Others"
Development Needed.
Development of water power is ur-
gently needed. the secretaries wrote. il
proper place in world trade after the
war. or even to supply it's domestic
needs. 1t also is necessary in order to
| reduce the drain on the nations coal
and petroleum supplies, particularly the
latter.
"The Industrial expansion which has
been necessary in order to produce the
materials and equipment needed in the
| prosecution of the war" the letter con-
| tinued. has placed unprecedented de-
mands upon the electric power industry
| to such an extent in fact that the out
put of commercial central stations has
| increased more than so per cent since
| 1914. This increase has been greatest
| in the manufacturing sections Of the
east, where water power development
is comparatively limited and
| has taken place notwithstanding ad-
vances in costs Of construction and Of
! operation.
| To Stabilize Whole Industry.
while the form Of the bill which has