State paid all the roads were worth; don't you think those people would think it was a rather uncertain public enterprise?

Mr. HALL. Yes; because I think roads and water power are very different propositions, because roads are for all the public.

The CHAIRMAN. In creating navigable streams we are creating nothing on earth, but improving natural public highways. We will adjourn now until 10.30 tomorrow morning.

(Whereupon, at 5.15 o'clock p. m., the committee adjourned until 10.30 a. m., Wednesday, March 20, 1918.)

HOUSE OF REPRESENTATIVES,

COMMITTEE ON WATER POWER,
Wednesday, March 20, 1918.

The committee met at 10.30 o'clock a. m., Hon. Thetus W. Sims (chairman) presiding.

STATEMENT OF MR. JOHN A. BRITTON, VICE PRESIDENT AND GENERAL MANAGER PACIFIC GAS & ELECTRIC CO., SAN FRANCISCO, CAL.

The CHAIRMAN. State your name and occupation, Mr. Britton. Mr. BRITTON. My name is John A. Britton, and I am the vice president and general manager of the Pacific Gas & Electric Co. of California, a corporation operating as a public utility entirely in the State of California, generating and distributing electricity, gas, and water, and operating a street railway within that State. The territory covered by the activities of the company which I represent amounts to 39,000 square miles, and the company serves a population of approximately 2,000,000 people, or two-thirds of the entire populattion of the State of California. It operates in 229 of the cities and towns of that State. It has been the pioneer-not the company itself but its predecessors in interest in the development of hydroelectric properties not only in the State of California but in the entire world, and claims to have been, and justly claims to have been, the first company that developed long-distance hightension electric distribution in the world. It has developed more potential horsepower from the falling waters of the Sierra Nevada Mountains than has been developed in any other State in the Union with the exception, of course, of the potential water powers of Niagara Falls, which in the general discusion of this question must be ranked as first. It operates 1,640 miles of high-tension lines, and by high-tension lines I mean those in excess of 11,000 volts, running up to 110,000 volts. and it has 6,000 miles of distribution systems. It serves over 450,000 consumers and operates 14 hydroelectric plants with a capacity of 164,000 horsepower and three steam plants with a capacity of 10,000 horsepower.

Right here it may interest you to know that of these 14 hydroelectric plants 12 of them are located without public lands and are not in conflict at all with the Federal Government in the matter of any occupancy of public lands or reservations. The other two plants are in conflict, and I have a rather interesting story to tell you of those a little bit later.

The population of the territory in California which we serve has increased in the last 12 years 40 per cent, while the demand for electric energy has increased in that period of time over 200 per cent.

The company not only generates and distributes hydroelectric energy and steam-generated energy, but it purchases from other hydroelectric companies in the State a large share of their output, the company being a natural distributing company. It has therefore been able to take the surplus power that other hydroelectric companies had and distribute that to its consumers. It has a connected load on its system of 636,000 horsepower at the present time, divided approximately as follows: In mining, 38,600 horsepower; and by mining I include not only drift mining and shaft mining, but gold dredging as well. In agriculture it supplies 70,400 horsepower for irrigation and reclamation.

And right here may I say to you that it is my judgment as a man who has been for 44 years connected with public utilities in the State of California that the Pacific Gas & Electric Co. and the other hydroelectric companies of that State have done more toward its development, its growth, industrially and agriculturally, than all of the other combined factors in its growth since hydroelectric energy became a factor in the State. It has made possible by cheap electric power the reclamation of the flooded lands in the Sacramento and San Joaquin Valleys. It has made possible the development of the arid lands of the State by irrigation, and it truly has made two blades of grass grow in California where only one grew before. It supplies railways to the extent of 57,300 horsepower. Every electrically operated railway in the State of California is operated by means of hydroelectric plants, supplemented, of course, by the standby of steam service. It supplies 144,400 horsepower to manufactories in the State of California. Among those are the large shipbuilding plants now engaged in Government work and the chemical plants, giving a new industry to California which the exigencies of war permitted. California had lain dormant in the matter of its wealth untold below the surface of the ground until the war, as it has in many other cases, brought out the resources of our Nation, and we have developed chemical agencies in California from the ores that have been discovered that have astounded, I think, the eastern part of the world. California is rich not only in its gold, but it is rich in all the other minerals that to-day are so essential, and has initiated manufactures in this country, so that we will no longer, I believe, after this war be dependent upon foreign nations for the necessities of our existence. We supply 10,000 horsepower for the lighting of the streets of the several cities that we operate in. This is a total of 320,700 horsepower connected for these utilitarian uses. For mere lighting of stores, hotels, and residences we use 262,000 horsepower.

Remember that the figures I have given you represent the connected horsepower. The peak load that we carried last year on our system amounted to 211,000 horsepower; and that explains, in a degree, the diversity mentioned by Mr. Merrill in his opening statement to you; and while we have 636,000 horsepower connected to our system which might possibly at any moment call upon us for that

amount of energy, yet due to the diversity of the load, the peak demand at any one time, the highest demand upon our entire system in the year 1917 was only 211,000 horsepower, or about one-third of the connected load; but we have to be ready at all times to meet any demand that comes from any one of these connected loads I have told you about.

To supply this energy from hydroelectric plants, the company possesses 66 lakes in the Sierra Nevada Mountains of varying sizes. They are all artificial lakes created by man, and created for the superior purpose of serving the public. They contain practically 40,000,000,000 gallons of water, or enough to supply a city of half a million inhabitants for three years if no water fell during that period; a thousand days' supply for the city and county of San Francisco on its present daily use of 40,000,000 gallons. Now, the average load we carry on our system-I have given you the peak load of 211,000 horsepower-is approximately 133,000 horsepower.

May I divert a moment and go back and say to you that in the shipbuilding end of the game, which has developed so much along our western coast, we now have eight shipyards turning out wooden and steel ships and one turning out concrete ships. The one which was successfully launched the other day in Redwood City in California was built by means of the energy supplied by the Pacific Gas & Electric Co. We practically have supplied every demand that the Government has made upon us or the people of the State of California have made upon us, and we are able to do it not so much by reason of our hydroelectric capacity but because of our steam capacity in conjunction therewith; and I want to touch upon that steam. capacity a little bit later to indicate why that use of power should be discouraged by the Government in its action in making possible the development of hydroelectric properties.

Of the average daily horsepower that we distributed during the year 1917 of 133,000, there was 71,600 of that which was generated by our own hydroelectric plants and 30,000 of that by our steam plants; in other words, 41 per cent of the entire energy we generated was from steam. We purchased 28,000 horsepower, which represented 22 per cent of the total. Our own steam represented 23 per cent of the total and our hydroelectric 55 per cent of the total. So 77 per cent of our entire energy distributed to our consumers was from hydroelectric plants, our own and those from whom we purchased.

Right here I may say that if our steam-generated energy could be dispensed with-and it could to a very great degree-the saving in oil would have been, say, 1,000,000 barrels; certainly a necessary thing for us to save to-day, because our oil supply is being depleted at the rate of over 1,000,000 barrels a month, and the amount of oil available for fuel purposes-I mean for driving the steam engines on railroads and for meeting the deficiency in hydroelectric power will be absorbed inside of 12 months or 10 months from to-day, and then the output of the oil fields in California will be insufficient to supply the demand. That in itself, to me, gentlemen, seems to be one of the necessary things to take into consideration in hurrying up such legislation as will permit immediately the entrance on Government lands and the development of the power

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there hidden, and to conserve that which can readily be destroyed in favor of the use of that which can not be destroyed and is everlasting in its character, and that is the flowing waters.

A little of our financial statement, if it please you and will not weary you: We have a total of 7,880 stockholders in our corporation, of whom 2,719 are women, and the average holding in our corporation is 73 shares only per stockholder.

The CHAIRMAN. $100 shares?

Mr. BRITTON. Yes, sir. Out of the total of 7,880 stockholders, 4,823, or 61 per cent, are residents of the State of California; the rest are scattered over the Middle West States, the Eastern States, and in Europe. The control, you will notice, is in California. and we claim that we are essentially and entirely a California corporation, owned, controlled, and managed by California men, as the corporation always has been and as all of its predecessors have been. Our total invested capital is $137.000,000-dollars, not water-and all of our properties have been built up on the basis of dollars being put into property and nothing else. We paid in taxes last year $1,250,000. You understand that in California we are taxed upon the basis of our gross revenue and not upon any ad valorem basis, and our taxes have increased in the past seven years from approximately $300,000 to $1,250,000, reflecting to some extent the growth of the industry and also the necessities of the State administration, requir ing more money for its administration. The State of California. pays all of its expenses from a percentage on the gross revenues of the corporations operating in the State as public utilities.

The CHAIRMAN. You mean California has no other source of revenue?

Mr. BRITTON. That is all.

The CHAIRMAN. They do not collect any land tax or any ad valorem tax?

Mr. BRITTON. No, sir.

Mr. RAKER. That is taxation for State purposes only.

Mr. BRITTON. Yes; the counties and cities have an ad valorem tax. The CHAIRMAN. My question had reference to the State.

Mr. BRITTON. We are now paying 5.6 per cent of our gross revenue as an annual tax to the State. The tax is graded to other classes of public utilities, the railroads paying 5.4 per cent, as I remember, and the banks about 4 per cent.

Mr. RAKER. That has only been so for the last four years, has it not, Mr. Britton?

Mr. BRITTON. That is all; yes, sir.

Now, let me tell you a little story, gentlemen, of the experiences of our company with respect to development of hydroelectric properties in California, aside from those I mentioned which do not concern the Government's lands. The total development outside of the public lands of 124,000 horsepower, out of 164,000 horsepower, was made possible by reason of the fact that in the early days of California hydraulic mining called for the storage of waters in the mountains in a limited way, called for the building of ditches and flumes to carry the water to the sites of the mines, and provided a certain head in order that the monitors would wash away the earth and recover the gold. Also there were certain developments of

irrigation that were begun in California that called for storage in some cases and for ditches and flumes to carry the water to the arid land.

When the idea of the development of hydroelectric properties occurred to men in California by the development of the possibilities of high heads, low heads having been known to some extent prior to that in open water wheels and some in the small Pelton wheels for mining purposes, the presence of these old reservoirs and ditches, of course, attracted attention as one of the means for producing hydroelectric power. The first plant of any consequence that was built in California was built on the North Yuba River. That river is fed from underground springs. It is a lava-cap country, and the melting snows from the Shasta and Lassen buttes, in the northern part of the State, finding their way down through these underground channels, produce in that river an almost constant flow. It does not vary materially during the year except during the extreme flood period. An irrigation flume led from the head dam on the North Yuba River to a place called Brown's Valley in Yuba County. The promoters of the Bay Counties Power Co., which was the initial company operating in that State, bought the rights of the irrigation district under the condition that it would continue to supply the district with water, and, taking advantage of a fall in the river of about 700 feet, put in the first plant of any consequence, as I said a moment ago, in California, named "Colgate," of about 8.000 horsepower, and built a line 50 miles in length, a hightension line, of 30,000 volts, which was deemed to be as high voltage as could be safely carried over wires, to the city of Sacramento, 68 miles distant, the capital of the State of California. From that installation has sprung every hydroelectric plant of any consequence in the State.

Just above Colgate, on Butte Creek, were a number of mining ditches owned by the Cherokee Mining Co., which were again taken advantage of, and a plant called the De Sabla plant was erected, utilizing a head of 1,535 feet. That is the third highest head in California, and that plant has been in operation ever since 1900. The South Yuba Water Co. owned a number of lakes and old canals used for mining and irrigation purposes in Placer County and in Nevada County, in our State, and in 1910 the idea was conceived by the company that a utilization could be made of the available head of that stream, which amounted to practically 3,875 feet total head, in five drops, and so develop those resources of California, and so provide for hydroelectric energy for all the purposes I have mentioned to you. It began the work of surveying the land to determine the most effective fall and the locations of the power houses, and conceived the idea of increasing the capacity of its main reservoir or lake, known as Lake Spaulding, so that with the ordinary season's requirements a certainty could be had of enough water to operate the chain of power houses during the entire year. The whole project contemplated the development of approximately 200,000 horsepower in five separate and distinct plants-the first one. of over 50,000 horsepower, the second one of over 40,000 horsepower, and the remaining power houses making up the continuous chain.