permit only, and the other using the phrase "authorized by Congress" which had been adopted in 1899 for the express purpose of avoiding (as to new structures) the judicial construction of the old phrase. See Wisconsin v. Illinois, 278 U. S. 367, p. 412.) When Congress in 1920 deliberately selected the old phrase instead of the new phrase to use in the Federal Power Act it clearly indicated its preference for the old phrase and must have understood the difference between the two, not only because of the judicial construction of the old phrase but also because of the obvious contrast between them. If Congress had intended, as the Commission holds, to make a Federal permit a prerequisite to the continuance of an existing dam it is unthinkable that it should not have used the language of the 1899 act.

It seems only proper that if a person were authorized by State law prior to June 10, 1920, to maintain a dam, etc., on a navigable river, that the Federal Power Commission should not be allowed to require such person to take out a license under the act and subject himself to the jurisdiction of the Commission because of the continued maintenance of such dam, etc., after 1920. However, unless this proposed amendment to the Federal Power Act is made the Federal Power Commission can successfully continue to assert its jurisdiction.

WINDSOR LOCKS CANAL CO.

The Commission, for example, has recently asserted jurisdiction over the Windsor Locks Canal Co., which owns and operates a dam and canal at Windsor Locks, Conn. The authority to erect this dam can be traced to May 1824, when the predecessor of the Windsor Locks Canal Co., the Connecticut River Co., received a charter from the General Assembly of the State of Connecticut which authorized it to lock the falls at Enfield, Conn., on the Connecticut River, and to construct a canal on either bank of the river near the falls and to construct a dam. From available records, this dam and canal was completed around 1830. In 1845, when a railroad line was constructed from Hartford to Springfield, Mass., the business of the Connecticut River Co. was seriously affected and about this time the company began to lease land and water to various manufacturing industries which were then being established in Windsor Locks. The business of the company from that time to date has consisted principally of the sale or lease of water to these industries. However, despite the fact that the Windsor Locks Canal Co. has been operating under valid State authority for more than a century, the Federal Power Commission has claimed that it is doing so unlawfully because it is not doing so pursuant to a license from the Commission. It is the position of the Commission that the existence of any form of State authority does not obviate the requirement of a Federal license.

CONSTRUCTION COMPLETED PRIOR TO JUNE 10, 1920

This amendment to scetion 23 (a) of the Federal Power Act also makes it clear that the provisions of part 1 of the act do not in any way affect any permit, valid existing right-of-way, claim or authority granted by any State of Federal law prior to June 10, 1920, nor are such provisions of the act applicable to any dam, water conduit, reservoir, powerhouse, or other works incidental thereto lawfully constructed prior to June 10, 1920, pursuant to any Federal or State permit, right-of-way or authority. However, anyone holding or possessing such a permit, right-of-way or authority may apply to the Commission for a license. In other words, it is made clear that at least from June 10, 1920, the Federal Power Act operates with respect to obstructions in "navigable waters" prospectively and not retroactively. The Commission has successfully claimed that the act operates retroactively and even the existence of a Federal permit for the construction of a dam does not allow its continued maintenance except pursuant to Federal Power Commission license.

SECTION 3 OF H. R. 2973

Section three, the final section of H. R. 2973, amends subsection (b) of section 23 in certain particulars specifically described in the following paragraphs. Subsection (b) of the act among other things makes it unlawful, for the purpose of developing electric power to construct, operate or maintain any dam, water conduit, reservoir, powerhouse or other works incidental thereto (hereinafter called "project") across, along or in any navigable waters without a license from the Federal Power Commission or without a permit or valid existing right-of-way

granted prior to June 10, 1920. This prohibition the Commission claims applies to manufacturers as well as public utilities and to any power so developed whether or not sold in interstate commerce. The first proposed amendment is to insert in the third line after the words "for the purpose of developing electric power" the words "for the sale thereof at wholesale in interstate commerce”This amendment would eliminate the necessity of a manufacturer as contrasted to a public utility from becoming licensed by the Federal Power Commission_ It would also eliminate the necessity of a public utility engaged only in the sale of power in intrastate commerce from becoming licensed by the Federal Power Commission. However, this amendment would not allow a manufacturer or intrastate public utility to construct any project in navigable waters wholly irrespective of Federal law. The last proviso of the proposed amendment requires such a person to conform to the lawful requirements of the Federal Power Commission with respect to navigation or the effect of the project on navigation. Since section one of H. R. 2973 defines "navigable waters", reference to this fact is made in this section 3 by striking out in the sixth line after the words "navigable waters" the words "of the United States" and inserting "as herein defined". This amendment is purely formal.

The present subsection (b) of section 23 of the act does not prohibit the construction, operation, or maintenance of any project in accordance with the terms of a permit or valid existing right-of-way granted prior to June 10, 1920. Therefore, after the date in the eleventh line there has been inserted the phrase "pursuant to applicable State or Federal laws," to make it clear that a State or Federal permit or right-of-way protects one from the necessity of becoming licensed under the Federal Power Act. This is in conformity with a similar amendment to subsection (a) of section 23 contained in section 2 of H. R. 2973. A proviso is inserted after the first sentence of the present subsection (b) of section 23 to make it clear that if any person constructed prior to June 10, 1920, pursuant to Federal or State law any project, such person can without license of the Federal Power Commission continue to repair, reconstruct, operate, or maintain such project. Section 2 of H. R. 2973 similarly amended subsection (a) of section 23.

The present subsection (b) also requires anyone intending to construct a project on a nonnavigable tributary of a navigable stream to file a declaration. with the Commission. If the Commission finds that the interests of interstate commerce would be affected by the project it is made unlawful to proceed without having secured a license from the Commission. The proposed amendment changes this to require a declaration from only those who intend to construct a project for the purpose of developing electric power for sale at wholesale in interstate commerce. The manufacturer or intrastate utility would not have to file a declaration but, as pointed out above, would still have to comply with any rules of the Commission with respect to the effect of such project on navigation. The proposed amendment to this subsection also requires that before the Commission may require a license of such a project on a nonnavigable tributary of a navigable stream it must find not that the interest of interstate or foreign commerce would be affected by such project, but that the navigable capacity of the navigable stream would be adversely affected by such proposed project on the nonnavigable tributary.

Lastly, the proposed amendment to this subsection provides that no license is required for the repair, reconstruction, operation or continued maintenance of a project on a nonnavigable tributary of a navigable stream if such project was constructed under a Federal or State permit, right-of-way or authority granted prior to August 26, 1935, the date of the last amendment to the Federal Power Act. Prior to August 26, 1935 anyone intending to undertake a project on a non-navigable tributary could in his discretion file with the Commission a declaration of such intention. The filing of the declaration of intention was made mandatory by the amendment of August 26, 1935. Hence, it seems proper that anyone who prior to that date lawfully constructed a project can continue to repair, reconstruct, operate and maintain such project without license from the Commission.

NO LICENSE REQUIRED OF MANUFACTURER

Section 23 (b) was written into the Federal Water Power Act on August 26, 1935 as a part of the Public Utility Act of 1935 which, as is well known, dealt with electric utilities. It is believed that the purpose of this section was to forbid unlawful interstate hydroelectric projects in or along navigable streams. It is submitted that it never was nor is it now the intent of Congress to require

a manufacturing company generating electric energy for its own use to become licensed under the Federal Power Act. However, the Federal Power Commission has taken the position that under the Federal Power Act no distinction is made between manufacturing plants and public utilities and that, therefore, the Commission is obliged to require manufacturing companies to become licensed under the Federal Power Act as well as public utilities.

It is my belief that a review of the legislative history of the Federal Power Act and its predecessor the Federal Water Power Act discloses that the Federal Power Commission has in the administration of the act gone far afield of what Congress intended should be the sphere in which the Commission should operate.

HISTORY OF ACT INDICATES MANUFACTURERS NOT SUBJECT

In form, in history and in purpose, the Federal Power Act is dual. The statute that became law in 1920 as the Federal Water Power Act (June 10, 1930, ch. 285. 41 Stat. 1063) and the additional parts enacted in 1935 (under title II of the Public Utility Act of 1935, August 26, 1935 Ch. 687, 49 Stat. 803), had as common subject matter the Federal regulation of certain aspects of the electric power industry through a governmental agency known as the Federal Power Commission. An examination of the legislative history and the events leading to the enactment of the Federal Water Power Act and the Federal Power Act make it clear that what was being regulated was the production by public service companies of electricity and at no time did anyone consider that what was being regulated was the use of water by manufacturing companies for manufacturing purposes.

The Federal Power Act, which was approved June 10, 1920 as the Federal Water Power Act, is for the greater part a compilation of those provisions which were finally considered to be the most acceptable provisions of many legislative bills, dealing with the subject of water power, introduced into Congress from 1508 to 1918. Agitation started with respect to water power around 1908 and from this time until the passage of the Federal Water Power Act in 1920 two types of bills were pursued. The first type covered power sites on the public domain, and the authority provoked was that of United States proprietorship. The second type covered power sites on navigable waters of the United States and these were based on sovereignty under the commerce clause of the Constitution.

The agitation which began around 1908 was a part of the program of the so-called conservation movement which covered the preservation or wise use of everything in the way of natural resources. In 1914, in transmitting the Ferris bill (H. R. 14893, a precursor of the Federal Water Power Act of 1920) to the House, Secretary of Commerce Lane wrote as follows, which I quote because it summarizes the reasons back of the passag of the Federal Water Power Act in 1920:

"Under existing conditions, due largely to inadequate laws relating to the matters, a condition of stagnation exists and water-power resources are not fully used. If these resources are to be developed, such inducements must be offered capital as will cause it to undertak› the work, but at the same time conditions must be imposed which will fully protect the public interest and preserve control not only over present developments, but over the future use of the sites should conditions later require the adoption of a different method of handling the waterpower resources.

"The present development and use of electrical energy is in my opinion merely the beginning, and it is impossible to predict the scope and extent of future development or the varied uses to which this resource will eventually be (Hearings before House of Representatives Committee on Public

put
Lands, 63d Cong., 2d sess., on H. R. 14853.)

I quote this letter because I think it shows clearly that the legislation finally culminating in the Fedral Water Power Act arose because of the belief in the necessity of developing the water-power resources of the country for the development and sale of hydroelectric energy.

The Ferris bill did not pass. Congressional sessions rolled on. The House and the Senate were always at an im asse. When Congress adjourned in 1917 without coming to any agreement on water power, President Wilson requested the Secretaries of War, Interior, and Agriculture to write a bill joining the public domain and navigable waters phases of the power development matter. The three Secretaries wrote a bill (H. R. 3184) which was not passed in 1918, but on

June 10, 1920, with a few minor changes, the bill as originally written by the Secretaries became the Federal Water Power Act of 1920.

To examine the legislative history of the Federal Water Power Act it is essential to read the hearings held in 1918 before a joint Water Power Committee on H. R. 3184 (the bill of the three secretaries). In House Report No. 61, the Committee on Water Power in its report to accompany H. R. 3184 to the Sixtysixth Congress, which House Report is found in House Reports, volume 1 for the Sixty-sixth Congress, first session 1919, appears the following:

* * *

"The increasing need of power resulting through our participation in the war and growing shortage in certain sections of our coal and oil supply, compelled attention to the urgency of immediate and comprehensible water power legislation * The need for legislation for the development of hydroelectric power at the present time is clearly set forth by Secretary of Agriculture Houston in a recent report as follows "The power requirements of this country will not be met until we develop our water powers, tie them in with steam plants located at the mine itself and operate all in great interstate systems'." I direct your particular attention to that last phrase "great interstate systems". In Senate Report No. 180, the Committee on Commerce in its report to accompany H. R. 3184 to the Sixty-sixth Congress, which Senate report is found in Senate Reports, volume 1 for the Sixty-sixth Congress, first session 1919, appears the following:

"It is unnecessary to point out the need for or the beneficent results to come from water power developments * * We should do one of two things. We should pass legislation which will also provide capital and enterprise to develop these resources under such regulations as will give consumers good service and cheap power or the Government itself should proceed to make this development. This bill proceeds on the theory of private development with ultimate public development possible."

The foregoing are the high spots of the background of the Federal Water Power Act. I think that the legislative history of the act makes it apparent that the accomplishment desired was the passage of legislation which would promote the development of the electric industry so that more and cheaper power could become available in the United States. Congress was thinking in terms of the development of the electric industry. Congress was not thinking of manufacturing companies or mills located upon navigable rivers of the United States which might develop for their own use, as contrasted to sale, electric energy. Congress did not wish to conserve water power sites by requiring a license of one who used the water mechanically. It wished to encourage the electric industry. It did not wish to discourage manufacturing.

The amendments made in 1935 to the Federal Water Power Act did not detract from the characterization of the act as one dealing with utilities and not with manufacturing companies. It will be remembered that in 1935 the Federal Water Power Act was amended by the passage of Senate bill 2796, title I of which provided for the control and limitation of public utility holding companies operating in interstate commerce and title II of which provided for the regulation of the transmission and sale of electric energy in interstate commerce, for the amendment of the Federal Water Power Act and for other purposes. In the Senate and House reports (No. 621, Senate and No. 1318, House) the bill was called and continually referred to as "Public Utility Act of 1935." Title II of the bill is termed in the House report thereon "Amendments to Federal Water Power Act; Regulation of Interstate Electric Utility Companies." In both the Senate and House reports of the bill it is apparent that the problems involved were those pertaining to interstate public utilities.

Dealing specifically with title II of the bill the House report (p. 7) is as follows:

"Title II of the bill makes certain amendments to the present Federal Water Power Act and establishes for the first time regulation of electric utility companies transmitting energy in interstate commerce. The amendments to the Water Power Act appear to the beginning of the title. The present Water Power Act is made part I of the amended Federal Power Act. Two new parts are then added: Part II consisting of the substantive provisions for the regulation of interstate operating companies, and part III containing the general provisions applicable to both licenses under part I, and interstate utilities under part II."

It is obvious that when in 1935 Congress was considering Senate bill 2796 and its predecessor Senate bill 1725 it was considering a bill dealing with public utilities engaged in the sale or transmission in interstate commerce of electric

energy. It was not considering a bill dealing with manufacturing companies who might generate hydroelectric energy for their own use. Nor as will be pointed out later was it considering a bill that concerned public utilities who might generate hydroelectric energy for sale within the State of generation.

Mr. DeVane, counsel for the Federal Power Commission, in making a statement to the Committee on Interstate Commerce of the United States Senate, Seventy-fourth Congress, first session, with respect to those portions of title II of the Federal Utility Act which amended certain sections of the Federal Water Power Act, spoke as follows:

"Title I of this bill relates exclusively to holding companies and both title II and title III relate to the operating companies in the electric field." (P. 224.) "These amendments are perhaps, I might say, self-explanatory; they are the result of the experience of the Federal Power Commission in the administration of the act." (P. 232.)

"It is all one subject. They all relate to the electrical industry. It, title I of the bill, deals with the holding companies' side of the bill and the second title II deals with operating companies."

"Now in that connection we should like to say that among the operating: companies are those companies that now have licenses from the Federal Power Commission under the Federal Water Power Act. There are certain amendments that should be made to that act. When you begin to deal with holding companies on the one side and with operating companies on the other, and you have as part of these operating companies licensees under the Federal Water Power Act, it appeared obvious that the time to take care of the necessary amendments to the Federal Water Power Act was the same time." Pages 233–234. "The proposed amendments to the present provisions of the Water Power Act are all minor and are designed to meet situations which have arisen in the course of its administration." Memorandum appearing on page 235. Similar statements made by Mr. DeVane may be found in the hearings beforethe Committee on Interstate and Foreign Commerce of the House of Representatives, Seventy-fourth Congress, first session, on H. R. 5423. See part I of hearings before the Committee on Interstate and Foreign Commerce, pages 449 through 496.

Likewise, in the statement of Commissioner McNinch, Chairman of the Federal Power Commission, before the Committee on Interstate and Foreign Commerce of the House of Representatives, on pages 383 appears the following:

"These amendments are suggested out of the experience of the Commission in its administration of the Federal Water Power Act and because of the character of these amendments, being as I have said primarily for the purpose of clarifying the act at various places. it is thought that you may not want any extended discussion of those particular amendments."

Certainly, if as Commissioner McNinch and Mr. DeVane said the amendments were only formal, it cannot be argued that in 1935 there was any intention to include manufacturing companies within the jurisdiction of the Federal Power Commission.

LANGUAGE OF ACT EXCLUDES MANUFACTURERS

Further indications that Congress did not have in mind licensing manufacturing operations appear in the language of the statute itself. Under the act the Commission licenses "projects". This is a word of art which as defined in section 3 (11) of the act contemplates a complete generating and transmitting plant. Obviously, a manufacturer who does not sell to the general public energy does not operate a "project." Section 4 (a) of the act, which outlines the powers of the Commission, speaks about the investigation of water resources, the waterpower industry and its relation to other industries, and to interstate and foreign commerce, and the location, capacity, and development costs in relation to markets of power sites. Section 4 (e) of the act authorizes the Commission "to issue licenses for the purpose of constructing, operating, and mantaining dams, water conduits, reservoirs, powerhouses, transmission lines or other project works necessary or convenient for the development and improvement of navigation and for the development, transmission, and utilization of power across, along, over or in any of the 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" [Italics supplied]. Section 4 (g), which outlines the investigatory powers of the Commission, gives it