Mr. RAKER. Is it not the theory of this bill and your theory that while it is desirable to develop water power you should first look to see what these other conditions are and to see that they are provided for, and at the same time you provide for them get a higher amount of energy from the water?

Mr. CHADWICK. Not necessarily. That would depend upon circumstances. The first use, as I said, was preservation for potable purposes, and then after that to follow with the commercial use.

Mr. RAKER. Is it your theory that the development of hydroelectric energy should not be the sole, primal purpose at all time in legislation in regard to the conservation of water?

Mr. CHADWICK. No; it should not be the primal purpose. In the first place, there is a great big mistake as to the idea that hydroelectric power is paramount, as compared with steam electric power, by reason of the economy pertaining to it, of course, limited by statute. There are lots of places where you think you could naturally develop hydroelectric power; but there are things that enter into it that make it difficult to do that, and those are conditions that I do not think you ought to attempt to lay down here, that anything should arbitrarily be first or arbitrarily be second.

Mr. RAKER. I will put it in this way: Is it your theory that any attempt to develop hydroelectric power and the other uses to which water can be put should not be overlooked?

Mr. CHADWICK. Should not be overlooked.

Mr. RAKER. But they should all be considered together----
Mr. CHADWICK (interposing). As a whole.

Mr. RAKER. As a whole, and those conditions specified in subdivisions (a), (b), and (c) include all of them?

Mr. CHADWICK. Yes.

Mr. RAKER. Does not section 4, subdivision (a), of the proposed legislation, in substance, while not as prolific or as verbose as the section in your bill-and I use that language with no intention to reflect on you are not practically all the provisions you specify included. there? I will read it:

That the commission is hereby authorized and empowered (a) to make investigations and to collect and record data concerning the power industry and its relation to other industries and to interstate or foreign commerce, and concerning the location, capacity, development costs, and relation to market of power sites, to the extent it may deem necessary or useful for the purposes of this act.

Then turn to subdivision (a) of section 10, in reference to the plans to be prepared and the scheme that is to be used. That reads as follows:

That all licenses issued under this act shall be on the following conditions: (a) That the project adopted, including the maps, plans, and specifications shall be such as, in the judgment of the commission, will be best adapted to a comprehensive scheme of improvement and utilization for the purposes of navigation, of water-power development, and of other beneficial public uses; and if necessary, in order to secure such scheme, the commission shall have authority to require the modification of any project and of the pians and specifications of the project works before approval.

Does not that, in substance, while not expressing it as fully as you have presented it, really carry out your idea?

Mr. CHADWICK. In substance; it states practically the same thing, but that is only a part of the act.

Mr. RAKER. So the only difference now between the provisions of your bill, which is H. R. 9681, and the proposed legislation goes back fundamentally to the question of who shall constitute this commission?

Mr. CHADWICK. That and the method or manner of handling the work as a whole.

Mr. RAKER. Fundamentally, the difference between your suggested legislation, the merits of which you have so ably presented, and the bill which is now before the committee is the constitution of the personnel of the commission?

Mr. CHADWICK. Very largely so, but our bill is based upon the proposition of a broad policy first, not hydroelectric power as the basic principle.

Mr. RAKER. Your theory is that the three men named in the bill before the committee are overburdened with their present work? Mr. CHADWICK. That is the criticism.

Mr. RAKER. And you think that the personnel should be such that they could devote not only a part but all of their time to the work of the commission and not be permitted to do anything else, giving their time solely and exclusively to this work?

Mr. CHADWICK. Yes; and not subjected to the will of one man who can remove them for the causes set forth and put somebody else in there, bringing about changing administration, changing ideas and varying action upon an interpretation of the act.

Mr. RAKER. I note also that in your bill you divide the commission geographically. Do you make that suggestion so that when these men are selected each part of the country will be represented on the commission?

Mr. CHADWICK. You have the humid, the arid, and the semiarid sections represented.

Mr. RAKER. Do you think that would make any material difference in the administration of the law?

Mr. CHADWICK. What do you mean by that?

Mr. RAKER. Of course I could expand on that.

Mr. CHADWICK. I did not quite catch what you meant.

Mr. RAKER. You think it would be better, so far as the administration of the law is concerned, to select a man from each locality who is familiar with the conditions?

Mr. CHADWICK. I think that is desirable, because they then would be better able to deal with the problems that come before them with an understanding mind. I had in mind this, in answer to your question, that when this commission is appointed it should have under its jurisdiction bureaus, or subcommissions appointed by it in each State, consisting of an engineer, a lawyer, and a business man, if you like, who will make a study of the particular conditions of the State, with a view to coordinating them with the action of the Federal Government, and with other States by reason of the fact that they are appointed by the commission of the Federal Government, and they would work in harmony. Their ideas might be different, but their purposes would be in harmony. In other words, the whole proposition is this, that it is too big a proposition to attempt to pass any particular act in reference to it at this time, until you have thoroughly thrashed out the idea as to whether there can be a broad, general policy worked out, to be administered by a Federal commission.

Mr. RAKER. I am trying to call this to your attention. As a matter of fact, with some slight modifications, are not all of the conditions provided in your proposed legislation also provided in the bill which is before the committee, with the exception that it creates a different commission, or a commission made up in a different way? Is not that the only difference?

Mr. CHADWICK. I am not prepared to admit that, nor am I prepared to pass upon the bill which is before the committee without a very thorough study of all of the provisions of it. I have read it, but one reading does not give you the grasp of everything that is in it. But it seemed to me that it was an attempt to centralize everything in the idea of hydroelectric development, that everything was conditioned upon that, and not conditioned upon anything else. That seemed to me to be the proposition of the bill that is now before the committee, and that everything else that entered into it was subordinate, making hydroelectric energy the fundamental proposition, whereas I have attempted to take it from the other end, the broad policy in reference to the question, as a whole.

Mr. RAKER. It has been explained to the committee by Mr. Merrill that all these conditions named by you are in this bill, with full power given the commission to act upon them, namely, the storage of the water for irrigation purposes, to prevent floods, and also to store water by assisting in draining, and also to get the use out of it for power purposes. It has been explained by Mr. Merrill that all these propositions are in the bill, and the proposed commission would have full authority for that purpose, as you have suggested.

I want to call your attention to the second proposition and ask if it does not present the same thing you have mentioned here in relation to attorneys, experts, and assistants, which you say are so necessary, and which are unquestionably necessary. So that if this bill, which is now before the committee, does provide the same things as are provided in your bill, those questions are eliminated, and therefore, there is no difference, except in the composition of the

commission.

Mr. CHADWICK. Assuming that to be the case, you have two bills that are identical as to their purposes, as to what they propose to do, with the exception of the overlord, or the commission, and that is radical and fundamental. Your bill is fundamentally a power bill with 25 pages of specifications. Ours is not, and in four and a half lines covers all that is required to accomplish every purpose.

It is, of course, naturally within the province of this committee, when it formulates its final bill, to take into consideration all points of view and all the bills which are before it and thrash out the matter thoroughly, and to present a bill which best carries out the purposes they have in mind in the simplest and best way, and I am simply offering these suggestions along that line, but I am opposed to a bill whose sole purpose is power first; other developments second. Mr. HAYDEN. I want to call your attention to section 2 of the bill before the committee which provides that the executive officer of the commission shall be appointed by the President, by and with the advice and consent of the Senate, and that he shall have a salary, and that he is to actually give his entire time and supervision to this matter. Personally, I rather like the idea of having one executive

officer in charge of this work, rather than a commission. It seems to me we have gone wild in the matter of commissions of late years. It is impossible to fix responsibilities on the commissions or on anybody on the commissions, and to say that he is responsible. The habit of passing the buck has grown among a great many of these commis-ions.

Mr. CHADWICK. You would make him not only the executive but the judicial officer, to exercise power and judgment in reference to these various problems, and I do not think you can combine those two things in one man.

Mr. HAYDEN. Hs is named in this bill as the executive officer.

Mr. CHADWICK. That means he has charge of everything and passes upon those matters, and the three secretaries would simply give the work as much of their time as they are able to give, and when he presents a matter to them they have either got to say yes or no. If they say yes, they are merely rubber stamps, and if, on the other hand, they say no, they have to give a good reason why. Have they the time to do it?

Mr. RAKER. This commission is given identically the same powers that the five commissioners suggested by you are given. They are not to be removed except by the President, and then only for neglect of duty or malfeasance in office. I am trying to find out whether you are in favor of this legislation, when, as a matter of fact, all of the provisions in your bill are, in substance, in the bill before this committee, with the sole exception as to the number of members of the commission and how they shall be appointed.

Mr. CHADWICK. I am in favor of general legislation which shall take up the problem of rainfall and handle it in the interests of the people, and that means hydroelectric power as well as other uses. I am strongly in favor of the appointment of a commission that shall have continuous administration and whose sole business is the handling of this problem, and no other.

Mr. RAKER. Is it your theory that one man as a commissioner, with full power and authority to act, would not give as good a result as though you had three or five men on the commission?

Mr. CHADWICK. I have served for 12 years with three commissioners, any two of whom constitute a quorum for the transaction of business, and the opinion of each of whom acts as a stimulus to the thought activity of the others and as a check upon their actions, with a different point of view brought into their discussions, and by reason of the fact that they have equal powers questions are settled that no one living man could properly settle if acted upon by himself alone. One man can be an executive-do what he is told. But so far as the determination of a great policy is concerned, and how it shall be handled, and the matter of the coordination of the various elements, that, in my judgment, is beyond the power of any one man.

The CHAIRMAN. We are very much obliged to you Mr. Chadwick, for your very interesting discussion of the subject which is before us. Mr. CHADWICK. Mr. Chairman, I want to thank you and the members of the committee for the very courteous attention which I have received.

The CHAIRMAN. Mr. Kelley, we will be glad to hear you at this time.

STATEMENT OF C. F. KELLEY, ESQ., 42 BROADWAY, NEW YORK, REPRESENTING THE MONTANA POWER CO.

The CHAIRMAN. Mr. Kelley, will you give your residence and State and whom you represent?

Mr. KELLEY. Mr. Chairman, my eastern address is 42 Broadway, New York. I am here representing the Montana Power Co. I am counsel for that company.

Mr. Chairman and gentlemen of the committee, I regret exceedingly that I was not able to be present at all of the sessions of the committee that I might have heard the discussion which has been had. Had I been able to have been present I would have been able to avoid a repetition, in part of some of the things that undoubtedly have been said to you.

I look upon the present measure, referring to the bill which is now before the committee in the form of a committee print as a substitute for Senate bill 1419, and not to the bill discussed by Mr. Chadwick, as being the subject of mutual congratulations on the part of all people who are interested in water-power legislation, particularly in getting something that will appeal with some security to the financial investment that must be made.

The bill necessarily represents a compromise. There are some things in connection with it that we believe should be changed, and there are some things that we believe could be bettered; we believe that the betterment of the bill in these respects would lead to that which you want, to wit, the encouragement of the development of the water powers controlled by the Government.

You must remember in dealing with this subject that what we are primarily considering is the development of what is an unused asset, of that which is only potentially valuable, and that aside from certain constitutional and other legal questions, to which I do not intend to devote myself at this time, the principal controversy has been as to the tenure which should be provided for in a bill, and the recapture provisions, if such are to be inserted, that should prevail at the end of the license period.

So far as recapture is concerned, I think there has come to be, gradually, a reconciliation of the various views in respect to the principle.

I remember when it was first proposed that there should be a recapture provision in any water-power legislation, the proposition was lcoked upon with a great deal of alarm by the people who had to do with the investment side of the question. But gradually the idea has come to prevail that possibly a plan of recapture can be worked out that will adequately protect the investment, and no bill you can pass is worth anything as a legislative measure, as a constructive measure, unless it is a bill under which financial operations can be carried on with safety. Any legislation should recognize that there must be sufficient inducement and profit, considering all of the ordinary risks and hazards of business, and they are great, to impel men to go into the business as a proposition out of which remunerative returns can be made and the actual investment adequately safeguarded. So much is a statement of mere truisms.

I want to discuss the recapture provision of the present bill. It is, to a certain extent, a departure from anything that has heretofore