Montana labor news., 1936-06-04
The Renewal OF The Contract
For the Construction of the
Poison Power Project.

The Flathead River as it leaves the
Flathead Lake near Poison, Montana,
drops several hundred feet in a very
short stretch OF the river offering the
greatest and cheapest water power site
in Montana and perhaps the greatest
West of the Niagara. 1t is %frequen-
tly called THE NIAGARA OF THE
WEST" The Flathead Lake is fed
by rivers from the main range of the
Rocky Mountains. The large lake
mar iains a steady flow of water all
the year around.
Six years ago this power site was
leased to the Rocky Mountain Power
Company for a period of fifty years.
The rental was to begin at $1,000.0O
per month and be gradually increased.
The work was to be started within the
year and prosed to completion dill
gently. The work was started in 1881
but abandoned about a year later. The
lease was forfeited but there is a pro-
posal to renew the lease and commence
work again.
At the letting of the contract six
years or NOR ago Walter Wheeler,
a prominent engineer of Minneapolis,
MINI, bid for the lease but the Rocky
Mountain Co. was the successful bid
der. This latter company claimed an
advance payment OF $193,000.00 as pro-
motion charges. The lease was made
by the U. S. government presumably
for the Flathead Indians. The promo
ton charges included large expendi-
lures for liquor used in Indian feasts
and other charges of like kind. About
$85,000.00 was cut out of the prelease
costs, leaving a net of about $97, 000.W
as legitimate charges against the pro-
ject, The Rocky Mountain Company
now claims a capital investment OF
over $2,000OO0M but the various items
of expenditure are not available. No
detailed statement is on file in the cap
itol at Heelna.
The lease or permit is long and very
wordy as it was intend to be. Many
words conceal thought. The meat OF
the contract when finally dug up, i;
about as follows.
The Rocky Mountain Power Co. is
incorporated under the laws of Della,
ware for a capital stock Of SIS, 100000
Ii is agreed that the Montana Powei
Company, a New Jersey corporation
operating most Of the power lines anC
power projects in Montana shall fur.
nish the money as requested by thu
Rocky Mountain Company at interes
not named, to build the project taking
mortgage security on all the property
THE Montana Power Company shall
have an option on all or any part o.
the electricity generated except GER
tain specified power to be deliver tC
the Indians, and it shall pay to tht
Rocky Mountain the cost Of operation
the taxes, the rent paid the u. S., ane
8 per cent on the capital investment
Observe that by juggling the figures il
this way the interest on the invest
ment is paid and a second charge o.
8 per cent on the capital investmen'
is paid by the Montana Power Com
pany which in turn is passed on ovei
to the consumer. The Rocky Noun
tain Co. makes a clear 8 per cent OF
the investment and it has not a cent O.
money invested. Some finance. The
interest, that is the rate, is determined
by the Two power companies between
themselves and the higher the interest
rate the more the consumer pays fol
his electricity. Detailed reports may
disclose the rate Of interest charged.
The machinery purchased to equiv
the plant and other equipment charge.
are reported to the government anC
considered when the plant or any uni
is finished. The longer the delay til,
greater opportunity to pad the cost
Interest is paid on any COS PADDED
and real annually and the 8 per cen
capital investment each year and a
the end Of the fifty year term the sue