Water Power Act was passed. Private development of hydroelectric plants has been seriously retarded, not only on Federal waters but on nonnavigable tributary streams which the Federal Power Commission now claims to be equally subject to its licensing jurisdiction.

I am informed that in the Southeast, with the exception of two wartime plants constructed by the Aluminum Co. of America without any requirement of Federal license, not a single major hydroelectric dam and reservoir project has been built with private funds since the early 1930's. However, during the same period there has been a notable increase in the construction of steam plants just as there was during the uncertain and unfavorable years prior to the passage of the original act in 1920. For example, as Mr. Hammond has pointed out, the Georgia Power Co. has added more than 300,000 kilowatts of steam generation to its system since 1930; is now engaged in the construction of additional steam facilities having a generating capacity of 145,000 kilowatts, and has on order an additional steam-generating unit of 60,000 kilowatt capacity for delivery by 1950.

The result is that today hydroelectric generation in the Georgia Power Co. system amounts to only about 45 percent of the total as against 98 percent prior to 1930. This decrease in percentage of hydro capacity has taken place in a State which is noted for the abundance of its water power.

The figures which I have quoted take into consideration only the Georgia Power Co.'s own system. They do not reflect the additional steam facilities which have been brought into the interconnected Southeastern system by the Alabama Power Co. and other affiliates during the same period. I am informed that the latter facilities will equal, if not exceed, the capacity of steam plants by the Georgia Power Co.

The national trend appears to be the same as in Georgia and the Southeast. Thus at the end of the fiscal year 1946, there were only 43 more major licenses outstanding than at the end of 1931 (Twentysixth Annual Report of Federal Power Commission, 1946, p. 27). The 43 major licenses granted during the last 16 years include many licenses for small hydro-electric plants with generating capacities of less than 500 kw.; many licenses for publicly-supported and taxfinanced projects, and some licenses for plants constructed prior to the act and which the Commission has been successful in bringing under its jurisdiction as a result of recent litigation-so that the situation as to new private hydroelectric developments is even more discouraging than the quoted figures would suggest. A more accurate picture is presented by power statistics compiled by the Commission and which show that between the end of the year 1935 and the end of year 1940, the capacity of privately owned hydroelectric plants in the Nation increased only about 30,000 kilowatts or from 8,437,063 kilowatts to 8,468,840 kilowatts, whereas the capacity of privately owned steam plants increased approximately 2,460,000 kilowatts-or from 23,091,315 kilowatts to 25,550,975 kilowatts (Electric Power Statistics, 1920-40 (FPC), table 2, p. 3). Between the end of 1940 and the end of 1945, when the total electric generating capacity of the Nation increased by more than 8,000,000 kilowatts (from approximately 41,639,000 kilowatts to approximately 50,102,000 kilowatts.) (Preliminary Report: Electric Energy Production, Generating Ca

pacity and Fuel Consumption (FPC) March 20, 1946, table B), I am informed that not a single major hydroelectric project was initiated by private capital.

The recourse to steam plants in lieu of hydroelectric plants has taken place and is taking place despite the fact that the costs of fuel for steam plants has materially increaesed so that, given any encouragement or incentive, the Georgia Power Co. and other utilities would normally prefer to build hydroelectric plants.

Thus, the drain on our fuel resources-more critical than ever before-has been renewed. I do not say that the 1935 amendment and the change in the Commission's concept of its jurisdiction and responsibility are solely to blame. I do say that they are at least partly responsible and I believe any person familiar with utility operations and financing will agree. I realize that during the 1930's, we were in a great depression and that new construction naturally fell off to some extent on account of economic factors then at work, also that material and manpower shortages in the years immediately preceding and during the War substantially interfered with new construction. But there were years during the 1930's and before and after the War when private companies, in my opinion, would have undertaken the construction of hydroelectric projects except for the impact of such Commission rulings and court decisions as those rendered in the New River, Furman Shoals, Bellow's Falls, Holtwood, and Wisconsin Public Service Corporation cases, which were referred to in the excellent. analysis which Olcott D. Smith, Esquire, presented to the committee earlier this week. Certainly the depression of the early 1920's did not prevent such developments, as the Commission pointed out in its first Annual Report. Nor is the trend to steam generation due to any lack of suitable undeveloped water power, for the Commission has estimated, in its latest report, that "upwards of 80,000,000 kilowatts of installed generating capacity is potentially available at sites which are considered to be capable of economic development" (Twenty-sixth Annual Report of Federal Power Commission, 1946, p. 36). Nor has it been due to any lack of demand for power since the years following VJ-day have witnessed the greatest peacetime demand for power in the history of the Nation (Twenty-sixth Annual Report of Federal Power Commission, 1946, p. 1).

Mr. Justice Roberts' gloomy prediction in the New River case that if the test of navigability there adopted should be followed, then "every creek in every State of the Union which has enough water, when conserved by dams and locks or channeled by wing dams and sluices, to float a boat drawing 2 feet of water, may be pronounced navigable" was more than fulfilled in our Furman Shoals case.

In that case, although the proposed project was to be constructed on a section of the Oconee River which the Commission made no attempt to classify as navigable, nevertheless, the plant was held to be subject to license on the theory that the operation of the plant might affect the capacity of downstream waters. The Commission completely disregarded the fact that such effect, if any, would be beneficial inasmuch as the release of waters from the storage reservoir would tend to increase flows below the dam during a large portion of the year when the natural flows would otherwise be very slight. It also disregarded the fact that all effects would be materially ironed out at Oconee, Ga., (42 miles below the proposed project) and com

pletely so at Dublin (71 miles downstream). It gave no weight to the fact that during a period of 114 years, only three or four attempts had been made to use boats on the river above Oconee, Ga., and those trips had only been made at widely separated intervals and during periods of unusually high water. It considered the fact that boats in question had drafts of only 20-24 inches wholly unimportant. The fact that all efforts to improve the river by open-river methods had completely failed and that the Army engineers had reported the controlling depth of the river below Milledgeville as only 1 foot during 9 months of the year and only one-half foot or less during the remainder of the year was likewise treated as immaterial.

No attention was paid to the fact that there was absolutely no navigation or commerce of any kind on the river and that the Army engineers had concluded that no commerce would develop in the future unless a channel with a controlling depth of at least 6 feet should be created by means of locks and dams which would cost, on the basis of 1933 estimates, not less than $37,000,000, exclusive of the cost of lands, flowage easements, and so forth. Even with such artificial canalization, the Army engineers had estimated that annual benefits of only $350,000 might be expected. In finding that there was navigable capacity in the river from Milledgeville to its mouth, the Commission relied upon the testimony of its own chief engineer to the effect that, in his opinion, boats "drawing not more than 18 inches" might operate between Milledgeville and Balls Ferry, 44 miles downstream. His testimony was based solely upon spot measurements which were declared to be wholly unreliable by Col. F. W. Altstaetter, United States Army engineer, retired, who was for 7 years district engineer in charge of the United States Engineer's Office at Savannah, Ga., with direct supervision over all maintenance and improvement work on the Oconee River. Finally, it should be remembered that on such doubtful evidence, the Commission not only found that the river was navigable, but found that it was "navigable for purposes of interstate commerce" despite the fact that the river, together with its entire watershed and all of its tributaries, was located wholly within the State of Georgia. When its ruling in that case was affirmed by the Circuit Court of Appeals, Fifth Circuit, the Commission proudly announced that the decision had sustained the Commission's conception of the extent of Federal jurisdiction over the country's rivers and its powers over development of such rivers and had upheld its claim that Federal jurisdiction did not depend upon an adverse effect upon the present and existing navigable capacity of Federal waters (Twenty-sixth Annual Report, Federal Power Commission, 1946, p. 31). Its exultation in that instance was on a par with its enthusiastic receipt of the New River decision, which it hailed as a "fitting climax to the Commission's 20 years of work" (Twentieth Annual Report, Federal Power Commission, 1940, p. 4).

In conclusion, I would like to urge that the committee amend House Resolution 2973 by adding in line 7, page 3, after the word "right-ofway," the words "or right to construct" and by adding in the same line after the word "granted", the words "or existing"; and my making the same additions in line 10 of page 3 and in lines 13 and 20 of page 4 and in line 21 of page 5. (References to lines and pages relate to the printed copy of the bill, prepared for use of the committee.) These additions are requested for clarification only in order to make it clear

that the provisions of the bill will apply to. companies such as the Georgia Power Co. which operate in states where the legislatures have by general law authorized any electric company owning a dam-site, and authorized to do business in the State and subject to the control of the State public service commission, to construct dams in, along and upon waters within the State for the purpose of generating hydroelectric power. That is the effect of Code Sections 36-801 and 85-1306, Civil Code of Georgia. Those code sections are based upon State legislation enacted in 1897 and 1908, respectively, and all of our dams have been constructed pursuant to them. Without such clarification it might be hereafter contended that the amended section 23 does not apply to dams of the Georgia Power Co. and other utilities similarly situated, merely because no individual permit or right-of-way was obtained prior to their construction.

I do hope that my statement will be helpful to the members of the Committee as they may read it and I want to take this occasion to thank the Members of the Committee, all of them, for their kind indulgence in permitting Mr. Hammond and myself to appear at this late date.

There are one or two additional things that I would like to say. I do not think they will be accumulative of anything that has been said in your previous hearings, and I think they are important as suggesting possible changes which might be made in H. R. 2973.

We earnestly endorse the resolution on the basis of our experience and in the sincere belief that the bill is in complete accord with the original purposes which prompted the Federal Power Act and that it will tend to accelerate the development of hydroelectric power on both navigable and nonnavigable waters. Incidentally most of our potential sites are on what we have heretofore understood as being nonnavigable rivers.

The changes in the resolution which I now refer to are all intended for clarification.

The first relates to the definition of navigable waters. I think that the definition of "navigable waters" as contained on page 2 of the bill, although it is a substantial improvement over the existing law as it has grown up from Commission rulings and court decisions, nevertheless seeks to correct an imbalance that has resulted from the New River, the Michigan-Wisconsin, the Holtwood, and our own Furman Shoals cases by perpetuating a part of the very language which created that imbalance. I refer to that part of the definition which relates to waterway "improvements." To correct that situation, I suggest the following change which I believe will not only provide a realistic basis for evaluating "proposed improvements" but will also eliminate an uncertainty which I visualize in the present language of the bill where it refers to "proposed improvements," by making it clear whose proposed improvements are to be considered in determining navigability. I suggest that for the words beginning with "then proposed", in line 14 on page 2 of the printed bill and continuing to the end of the proposed section 3 (8) in line 21 on page 2, the following language be substituted:

Improvements which have been authorized by the Congress and for which specific and currently effective appropriations have been made for the purpose of furthering navigation in interstate or foreign commerce, including therein all interrupting falls, shallows, or rapids compelling land carriage,

so that the section, as thus amended, if the committee sees fit to adopt my suggestion, would read:

(8) "Navigable waters" means those parts of streams or other bodies of water over which Congress has jurisdiction under its authority to regulate commerce with foreign nations and among the several States, and which at the time of the inquiry are generally and commonly used for commerce of a substantial character consisting of the transportation of persons or property in interstate or foreign commerce

I think that portion of the definition clearly takes care of any stream which in its natural condition is capable of being used for navigation and which the Congress has authority under the commerce clause or any of its other constitutional powers to regulate. Then we come to that shadow-land beyond the clearly navigable waters which are subject to congressional regulation, to those streams which may not be presently navigable, and I suggest that the remainder of the paragraph read:

or have a reasonable probability of being so used either in their natural condition or by improvements which have been authorized by the Congress and for which specific and currently effective appropriations have been made for the purpose of furthering navigation in interstate or foreign commerce, including therein any interrupting falls, shallows, or rapids compelling land carriage.

It may be that upon further reflection I could select better language than that which I have proposed here. I am sure that the committee will be able to select appropriate language to give effect to my suggestion. The purpose of my language is to make it clear that those streams which are to come under regulation by the Federal Government, by virtue of improvability, shall be streams which have been recommended for improvement by the Chief of Army Engineers to the Congress and which it in turn has authorized for improvement and for which it has seen fit to make an appropriation.

In the absence of such a clarification, I am afraid that almost all rivers might be claimed to be within the jurisdiction of the Commission. In this connection, I refer to the President's statement of last summer (approving certain appropriations for river and harbor improvements and for flood control and reclamation projects) in which he pointed out that the Congress over the years, upon recommendation of the Chief of Engineers, had authorized some several hundred projects for construction at some uncertain future date, provided funds were then available, and the need for the projects still existed and the proposed improvements still seemed feasible. Those approved projects cover almost every worthwhile and economically feasible hydroelectric site in this Nation so I am informed. It is to eliminate any idea that a mere authorization forever precludes private development of an otherwise navigable stream or subjects it to federal license and regulation, that I have suggested the above change.

I also suggest that in line 12 on page 5 of the printed bill (which seeks to amend section 23 (b) of the Federal Power Act requiring the filing of a declaration of intention before constructing a project on any stream of doubtful navigability) the last six words, to wit: "under the provisions of this act," be stricken and the following be substituted therefor:

which shall be for 50 years and shall contain only such conditions as are reasonably necessary or appropriate for the protection of the navigable capacity of navigable waters, as herein defined, and to reimburse the United States for the cost of administering the act in relation to the project.