establishment has been delayed as a result of the Utah case decision, and the attitude of the financial houses subsequent thereto with regard to water-power development financing. Very respectfully, COMMITTEE ON PAPER, AMERICAN NEWSPAPER PUBLISHERS' ASSOCIATION, The CHAIRMAN. We will now hear Mr. Houghton. Mr. Houghton, will you please state your name, your address, and whom you represent? STATEMENT OF MR. AUGUSTUS S. HOUGHTON, 111 BROADWAY, NEW YORK, REPRESENTING THE CONSERVATION COMMISSION OF THE STATE OF NEW YORK. Mr. HOUGHTON. My name is Augustus S. Houghton; my address is 111 Broadway, New York City; and I represent the Conservation Commission of the State of New York. I may say, Mr. Chairman, for the last three years I have been the secretary of the conservation commission. I am not now the secretary of that commission, having resigned that position three weeks ago to resume my practice. The commissioner asked me to appear before your committee as the representative of the conservation commission. As I understand the question of boundary waters is not before this committee, I shall confine myself as to what is the State law in regard to the development of water power and ask that, if possible, the bill be changed in one or two particulars without impairing the purposes of the bill, so that it will conform with our law, as regards New York State only, so that there will not be that conflict that might arise by reason of the variations of the provisions of this bill with the present law of the State regarding its inland waterways. The CHAIRMAN. I will state, Mr. Houghton, in order to make it perfectly clear, that we will favor an amendment to the bill which will make it perfectly clear that this bill does not intend to deal with boundary waters. That is the purpose of the committee. Mr. HOUGHTON. I also understand it does not include the taking of the water from Lake Michigan for the Chicago Canal. We are very much interested in that. The CHAIRMAN. Lake Michigan, I suppose, is somewhat of a boundary water. Mr. HOUGHTON. Under the treaty with Great Britain it becomes a boundary water. Under the treaty with Great Britain Lake Michigan is included in the boundary stream. The CHAIRMAN. Although it is not physically a boundary water. Mr. HOUGHTON. Although it is not physically a boundary water; yes. The Conservation Commission of the State of New York has jurisdiction, among other things, over the inland waters of the State. It has jurisdiction over hydroelectric development, over river regulations, and over the impounding of waters for the regulation of floods. The State of New York has been very slow in favoring any policy for the development of the water powers of the State. It is estimated that there is about 2.500.000 potential horsepower water power in the State of New York, of which about 650,000 has been developed. Of the 2,500,000 of potential power the State claims an interest in about 1,100,000, which can not be developed without the consent of the State of New York. Gov. Whitman in his message to the legis lature this year made four recommendations regarding the development of water power in the State. Before making these recommendations last year he appointed the Attorney General of the State, the State Engineer, the Superintendent of Public Works, who happens to be Gen. Wotherspoon, formerly Chief of Staff of the Army, and the conservation commissioner as a committee to investigate and make a report to him with recommendations. The committee made its report. The governor prefaced his recommendations with this statement: In reading the report of the committee appointed by me, whose recommendations I heartily indorse, I hope you will bear in mind the distinction between the State's selling water power and the generation of electricity which will result from the power furnished by the State. The committee is opposed to the State's entering into the hydroelectric business, but believes that the State should reserve to itself the right to dispose of the latent power of the impounded water. These are the recommendations: First. To amend the constitution so as to take from the legislature the power to grant away by private bills the water powers of the State. Second. To repeal article 7-a of the conservation law which provides for river regulation by storage reservoir. Third. The immediate passage of appropriate legislation to enable the State to develop the undeveloped water powers of the State through a commission to be appointed by the governor and to market the power thus developed under the direction of such commission. Fourth. The immediate passage of appropriate legislation authorizing the superintendent of public works, with the approval of the canal board, to dispose for proper returns, by lease, of surplus water power created as a result of the construction of the barge canals. The conservation law, section 22, provides that No structure for impounding water on any part of the canal system of the State, and no dock, pier, wharf, or other structure used as a landing place on waters not a part of the canal system of the State shall be erected or reconstructed by any public authority or by any private persons or corporations without notice to the commission, nor shall any such structure be erected, reconstructed, or maintained without compliance with such conditions as the commission may by order prescribe for safeguarding life or property against danger therefrom. I have read that section because in one of my suggested amendments I want to cover that point. I have just briefly stated the jurisdiction of the conservation commission, and have stated that the commissioner asked me to come down here as the representative of the commission. I had not known when I came down here that the bill did not refer to boundary waters, and that has changed my position considerably since I got here. I have a few suggested amendments to make, if I may. My first suggestion is that the title be amended by inserting, after the word "navigation," the words "in other than boundary waters." I would like to say in passing that I think the term fixed for the executive officer of five years would not enable the commission to get the kind of man it should have, nor to get a competent man who would come to take up this work. It seems to me that the period should at least be 10 or 15 years, so that the man who took that position would be sure he would be able to carry out any policies he might inaugurate, and also to make it worth while for him to give up that which he would have to give up, if you are going to get the man you should get to carry on this very important work under the Federal Power Commission. The CHAIRMAN. You think that man would be the maker and shaper of the policies of the commission? Mr. HOUGHTON. Absolutely. We feel that way in New York, and the term in our proposed legislation is 15 years for the commissioner to be appointed. On page 5, line 11, I suggest this amendment: After the words. parts thereof." insert the words "other than boundary waters." I think that is necessary, because all through the bill you speak about any of the navigable streams of the United States, and it should be limited to the definition in your construction clause. I I have spoken about the jurisdiction of the commission regarding the building of structures in the waters of the State, and so I suggest that on page 14, section 9, which now reads "that each applicant for a license hereunder shall submit to the commission." would like to suggest that that be changed to read in this way, inserting after the word "that" the words "no permit shall be granted hereunder until." and in line 2. page 14, change the language so that it will read, instead of "shall submit to the commission," "shall have submitted to the commission"; because it might be a serious question as to any licensee under this bill being able to construct Some of the necessary works unless he has complied with the requirements of the conservation commission. ་་ Then I have to suggest this further amendment. On page 14, line 10, after the word “applicant," insert the following: "has obtained the consent of the duly constituted authorities of the State or States within which the proposed project is to be located, and." Then, to make the sense right, I suggest that you strike out the word "the before the word "State," and insert the word "such," on page 14, line 11; and also on page 14, line 12, strike out the words "within which the proposed project is to be located." I merely suggest that in order to make the sentence read correctly. With those changes, subsection (b) would read as follows: Satisfactory evidence that the applicant has obtained the consent of the duly constituted authorities of the State or States within which the proposed project is to be located and has complied with the requirements of such State or States with respect to application for the right to appropriate, divert, and use water for power purposes, and for the right to engage in the business of developing, transmitting, and distributing power, and in any other business necessary to affect the purposes of a license under this act. Also, in view of the provisions I read from the conservation law of New York. I call your attention to the provision on page 15 of the proposed bill, which says: That except when emergency shall require for the protection of navigation, life, health, or property, no substantial alteration or additions not in conformity with the approved plans shall be made to any dam or other project works constructed hereunder of a capacity in excess of 500 horsepower without the prior approval of the commission; and any emergency, alterations, or additions so made shall thereafter be subject to such modification and change as the commission may direct. I suggest that in line 13, page 15, there be inserted after the word 66 commission," and before the semicolon, the words "and of the proper authorities of the State or States within which the proposed project is located." Then there is another question which I merely suggest, which is a constitutional question, which I do not propose to discuss. On page 16, paragraph (d), the bill provides for the payment of an annual rent or charge. Under the decisions as I read them, the beds of the navigable streams within a State are the property of the State, and under the decisions the water in the stream does not belong to any individual, but belongs to the State itself, and the people have only a right to use it. Now, it seems to me if the Federal Government is going to charge somebody for the use of the water in the State of New York which belongs to the State of New York, that is not quite fair to the State of New York. It is practically taking its property away. I understand the decisions hold that the Federal Government, in connection with navigation, can dispose of the power generated, by reason of the improvement to navigation by the Federal Government; but I do not feel that this is a proper provision, to have the Federal Government make a charge for the use of the water which belongs to the State in a case such as here provided for. I have not any suggestion to make as to how it is to be modified, except to strike it out. The CHAIRMAN. Suppose the National Government provided for a charge; would that prevent the State from making a like charge and exercising its power as proprietor? Mr. HOUGHTON. I suppose if the State endeavored to make a charge there might be some question as to who was to get the money. The CHAIRMAN. The statement of Mr. Merrill was that it is intended to make the charge only equivalent to the cost of the administration of the law. Mr. HOUGHTON. Is the expense of the administration of the law going to be such an amount as to make it worth while to come in conflict with the States on such a small matter? Section 21 confers the right of eminent domain upon the licensee, and section 19, page 25, contemplates that the licensee may not be such a corporation as under the New York State constitution alone can exercise such a right. The State constitution in Article I, section 6. provides that "private property shall not be taken for public use without just compensation." The courts have held that the permission to take private property for public use implies that it shall not be taken for any other use. Private property can not be taken for private use. This power may not be exercised by a private corporation. In connection with that matter the Supreme Court, in the case of Dusenbury . Mutual Telegraph Co., said: The power of appropriating private property for public purposes, and deferring payment is not vested, and can not be constitutionally exercised by a private corporation. Private corporations are created for commercial purposes. In the case of Embury e. Conner, in third New York, page 517, quoting Chancellor Kent, the court says: I apprehend that the decision of the court was founded on just principles, and that taking private property for private uses, without the consent of the owner is an abuse of the right of eminent domain, and contrary to fundamental and constitutional doctrine in the English and American law. To the same effect is the decision of the court in the case entitled Matter of Niagara Falls. Whirlpool Railroad," to be found in one hundred and eighth New York, page 375. Under the provisions of subsection (d) of section 4 of this bill, which provides for the issuance of licenses to citizens of the United States or to any association of citizens or to any corporation, State, or municipality, there is an opportunity for an individual who is not a public utilities corporation and therefore not amenable to the public-service law, under which the right of eminent domain can be exercised, to come in here and try to condemn property for use which, it may be claimed. is for public use. The Supreme Court of the United States has held that where a State court has held the taking of property to be for public use it has the right of review under the fourteenth amendment of the Federal Constitution, to see whether or not it is taking it for public use. But where the State courts have held that the land appropriated or sought to be appropriated has not been taken for public use, that being entirely within the jurisdiction of the State, and the property in question being within the jurisdiction of the State the Federal court will not review such a determination by the State courts. I think giving the right of eminent domain in this broad way to individuals or corporations other than public utility corporations is going to lead to considerable conflict in the State of New York. The Hydro-Electric Power Co. of Niagara has received water from the Niagara River, and it claims it is not subject to the public-service commission, because it does not generate and sell electricity, but all it does is to sell power to subsidiary companies who make electricity and sell it and who are subject to the public-service commission. That might happen in many instances under this provision as it is now drawn. Mr. RAKER. You say in New York the State courts have held that the first company that supplies all the electrical energy to the various large concerns is not considered a public-service corporation? Mr. HOUGHTON. Electrical energy? Mr. RAKER. Yes. Mr. HOUGHTON. Water-power energy. Mr. RAKER. They furnish water-power energy to the different concerns, and they therefore hold that they are not a public-service corporation and entitled to the right of public domain. Mr. HOUGHTON. The company holds that. Mr. RAKER. The Supreme Court has not held that? Mr. HOUGHTON. I know they do not admit the jurisdiction of the public-service commission. Mr. RAKER. They may not admit it Mr. HOUGHTON (interposing). They are not making their rates subject to review by the public-service commission. Mr. RAKER. Has the public-service commission gone after them to make them give proper rates? Mr. HOUGHTON. Mr. Kohn, who represented them at the hearing last year said that they had resisted them successfully, so far. I do not know whether that means that the commission has been after them or not; but I think it would be subject to that interpretation. |