The Winslow mail., 1923-05-18
ARIZONA'S VITAL INTEREST

We are waking up to the great
benefit, national we'll as state, that
will result from harnessing the en-
egy of the water now wasting in the
rapids in the Canyon of the Colo
rado. Eventually 100000 horse
power will be developed in the Can
yon which, at the low selling price
of $40 per horse power year, will be
worth $10O,000,000 annually. A can
yon power project is only feasible
with a large scale development. The
time has now come when such
development is possible. Eighty per
cent of the power to be developed
in the Canyon is entirely in Arizona.
The other twenty per cent is on the
Arizona-Nevada boundary, half in
Arizona and half in Nevada. Ariz-
ona is very vitally interested in the
development of the great super-pow-
er resource, and 1 take it our pre-
sence here today is prompted by our
desire to expedite the development
and to protect what justly belongs
to Arizona.
There seems to be a question in
the minds Of some as to what may
tax or royalty benefit from the pow
er developments in the Canyon. 1
believe, if Arizona makes effort to
claim what is her own, but instead
waits for the Federal Government or
some other State or municipality to
come in and develop her resources,
the direct tax or royalty benefit she
may be able to derive will depend
largely upon the generosity of such
outside agency. We have already
seen some of the cards they hope to
play Arizona will be most ,bene-
fitted by the development. If We fail
to take corresponding responsible
lity and merely wait, we can well
hav. f'Cubts alb u, our ability to &C.
rive these direct benefits. The way
out is prompt constructive action
by the people Of Arizona.
Canyon Development One Owner
Project
| am not a Socialist, and l am not
for public ownership with political
management, but l believe the pres
ent case is unique, and l maintain
that no better agency exists today
than the State of Arizona for putt
ing over the comprehensive develop
ment Of our great resource.
In the first place, l wish to point
out that while there will eventually
be six or eight dams and power
plants in the Canyon, the entire
Canyon development should be a
one owner project. The agency
which constructs the great storage
reservoir for the control of the floods
a site for which very fortunately
happens to be at the head of the Can
you, will make subsequent power
projects below less expensive to de-
velop, and will give such projects
about five times the power output
during the long low water period that
they would otherwise have.
The benefits conferred on the sub
sequent developments below by the
storage at the head of the Canyon
will be so great that the agency pro-
viding such storage will have very
important equity in them. This
equity will be difficult to appraise
and this is one reason why I say the
Canyon development is a one owner
project.
If the Canyon is thrown open to
competing private corporations to
develop, the securities of such cor
porations will be serious risk to
investors, and their financing will be
difficult | believe it will be impos-
sible for private corporation to
undertake a development in the Can
yon without some assurance in the
mind of management that it will be
able to protect itself by eventually
gaining virtually monopoly of the
Canyon power development.
If the Canyon is to be developed
by private capital, the entire Can
yon should be turned over to one
corporation in the beginning. The
financing will be much easier, and
this will result in cheaper power.
Capital Charges Main Item in Cost
of Colorado River Power State of
Arizona Will have decided advantage
over Private Corporation.
The operation of a large hydro
electric project differs widely from
the operation of steam power plant
railroad or a factory, where the
cost of the service rendered or the
cost of the article produced is made
up largely of labor, fuel and other
supply costs, and the charges for
capital are relatively a small item.
When power is sold from large de-
velopment on the Colorado, less than
ten per cent of the operating cost Of
the operating cost of delivering
power will be represented in labor
and supply costs, and more than
ninety per cent of the cost will be
represented in capital charges.
Compare the capital charges ne
cessary for a private corporation
undertaking the development with
its highly speculative stock, taxable
bonds also speculative to some ex-
tent, it's harassment by corporation
and tax commissions and by federal
income tax collectors ETC., compare
this situation, if you will with the
advantage the State would have with
it's ability to issue absolutely nom
speculative low interest, long term,
tax exempt bonds, and the States
freedom from federal income tax col