The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1921-07-24
SECOND SECTION
WATER POWER
ACT Is EXPLAINED
Analysis Shows Its Purpose to Pro-
teot Consumers and Reward In
vestors and Developers.

An analysis OF the Water power act
showing how It proposes TO protect
consumers and reward investors and
developers Is given by Liewellyn M.
Evans as follows:
This law is known as the Federal
Water Power Act. The general sub
1ect had been before congress for ten
years and this bill was thoroughly de-
bated in both houses. In no sense,
therefore, can 1t be said to be partisan
legislation, or hastily adopted, nor in
any way is It local in application.
Both because of its importance and
because it bespeaks a materially new
governmental policy along important
lines, an analysis Of IT may be both
interesting and worth while.
'srhe law creates a commission,
composed OF the secretaries Of war,
agriculture and interior, to be charged
with the execution of its provisions.
"a license may be granted by the
commission. and is a necessary condi-
ton for the development and use OF
waterpower on the navigable rivers or
on non-navgable streams under the
jurisdiction OF congress the use Of
which, though not affecting public
terstate or foreign commerce,
Licenses will be granted for per-
iod not to exceed fifty years and may
then be renewed upon such conditions
al required. This is a reasonably lib
eral. term; yet it marks a material de-
parture In the governments policy in
its contractual relations, compared
with the perpetual permits that We're
ut a RI
Of a license, the government may pur-
chase the plant at its net investment
valuation.
''rhe Significance of this require
menf IL the reversal of the time--hon-
ored policy of the governments dis
possession of itself of title, by gift or
for a paltry price, to lands or rights
necessary for the exercise of a fran
chiso and so forever barring itself
from a continuing income and from
tho advantageous position Of landlord
when necessary to enforce its will.
.sThe act provides that in fixing
charges the commission shall seek to
avoid increasing the price of power to
consumers.
Tho act also provides that excess
slve profits shall be appropriated to-
either the general government or to,
the state in which the project is sit
uated until. the date when the amorti-
"a ton fund shall have been started.
TT is made obligatory that IL
oenaee maintain the project works in
condition for efficient operation, with
an necessary renewals and to do this
must maintain adequate depreciation
reserves.
'Srhese are merely good business re-
dufroments. Still, by making those
conditions, the public is protected in
service, and the plant cannot be al
lowed TO deteriorate to the disadvan-
tage of the government or the service
where a licensee produces power
for sale In the public service, the act
provides that the state in which the
project Is situated shall fix the rate
OF charges to consumers, and shall
pass on loans the licensee may desire
to place, or the commission may do So
This is not revolutionary, but in ac-
cordance with the going policy now
we'll established. 1t is provision against
the old methods of monopolistic con-
Germs Of mulcting the public for ex-
oessive dividends on their stocks and
for dividends on watered capital and
manipulated securities.
Undoubtedly It Is a curb on the
speculative possibilities OF the field:
but If, therefore, it promises little to
tho schemer, IT. undoubtedly protects
the bona fide investor I'm stocks or
bonds. It's effects are altogether whole
some.
''ThuH, we see the act grants permits
or provides the necessary agency for
licensing individuals or companies for
the Development and operation of all
federal waterpowers for a limited term
of years. with privilege thereafter Of
purchase by the government; that it
provides a licensee, with exceptions,
shall pay certain fixed charges; that
excessive profits shall go to the govz
eminent or to the state; that the
plart shall be maintained in an eff
ciert condition and that where IL
cense provides power in public service,
the commission or state shall fix the
rate OF charges to consumers and APP
prove thA mourning of the indebt-
edness"
rnn