Mr. BONNER. Major Newcomer says he thinks not. The CHAIRMAN. Is that all you care to say, Mr. Tyler? Senator PITTMAN. I would just like to ask the Colonel's opinion on one or two things. You, of course, are in favor of the regulation of power companies? Lieutenant Colonel TYLER. Yes, sir. Senator PITTMAN. And those that are engaged in interstate commerce can not be regulated by State organizations? Lieutenant Colonel TYLER. I think that is true. Senator PITTMAN. And the development nowadays is toward the point of connecting up companies to the extent that they are practically all interstate commerce. Lieutenant Colonel TYLER. Practically all in interstate commerce. Senator PITTMAN. Well, the committee is down to the proposition now that somebody has got to regulate them. That regulation possibly at the present time is in the Interstate Commerce Commission. Lieutenant Colonel TYLER. Yes, sir. Senator PITTMAN. But they have never exerted that authority. I do not believe that the law gives any regulatory body the right to fix rates. I mean any interstate-commerce body. Now the question is: The Interstate Čommerce Commission has not attempted to regulate these power companies, and they have no authority to fix rates, probably. Should this committee recommend that the Interstate Commerce Commission regulate power companies, telephones, telegraph, and things of that kind and give them authority to fix rates? Is that your idea? Lieutenant Colonel TYLER. Yes, sir, that is my idea, that some body, whether it be the Interstate Commerce Commission or any other body which Congress will set up primarily for the purpose of regulating the issuance of securities and finding out what the real rate base is and all that sort of thing, should do that class of work. Senator PITTMAN. And that then they should go to the War Department for its auditors and engineers? Lieutenant Colonel TYLER. Oh, no, no. My only thought is this, that the Federal Government owns a certain number of water-power sites that are located on Government property. The real purpose of the property is something else. But these water-power sites may be developed. As an owner, that is simply a matter of making the lease under such conditions as Congress has set up, and, if you like, they can go farther and determine what the investment is in the property on that land. Now, having determined that, I think they have gone as far as they properly can in this water-power business; that that investment should be turned over to the body that is going to go into all these questions, not only for the limited number of water-power sites owned by the Federal Government, but waterpower sites that are in private ownership, steam plants, transmission lines, everything else that goes into the business. In other words, the Federally owned sites are such a small part of the big problem that I do not see I may not be seeing very clearly, but I do not see how you can hang the big job on to such a small thing. Senator PITTMAN. I do not think there is any intention of this committee to do that. I do not have that in mind at all. Lieutenant Colonel TYLER. Well, I hope I have not gone too far in taking your time. Senator PITTMAN. No, no. I thoroughly agree with you there, that it is very unfortunate that the commission did not avail itself of the organization it had in each department already. Lieutenant Colonel TYLER. You see, Senator, we did it with the engineers, and we really have done very well on that without big headquarters force. We send these reports out and they are dealt on and they come back in a reasonable time. Senator PITTMAN. That is all I want to ask. The CHAIRMAN. Is the Senator correct in his assumption that the Interstate Commerce Commission has the right to regulate rates on power in interstate commerce? Senator PITTMAN. No; I said it has not the right to regulate it. It has not any legal authority to make rates. That is where the defect comes in. The CHAIRMAN. Any questions, Senator Brookhart? Senator BROOKHART. I wanted to ask a few questions about the amount of this business in interstate commerce. The percentage you have given is only the sites that have government permits? Lieutenant Colonel TYLER. The installed capacity, Senator. Senator BROOKHART. Now then, a good many of these other companies are already connected up with these? Lieutenant Colonel TYLER. Yes, sir. Senator BROOKHART. And are engaged in interstate commerce with them? Lieutenant Colonel TYLER. Yes, sir. Senator BROOKHART. And they are interchanging their services. So that as a matter of regulating interstate commerce we would already have a big percentage of the waterpower of the country that would come under the Federal Commission? Lieutenant Colonel TYLER. Well. the only territory with which I am personally familiar is down in the southeastern section. We operated the Muscle Shoals plant and sold power to the Alabama. Power Co. under a short term agreement that could be cancelled in 30 days if Congress took any action. And there practically all the power which was sold to the power company from the Muscle Shoals plant in effect went down through Alabama and over into Georgia. Senator BROOKHART. And then over into South Carolina? Lieutenant Colonel TYLER. Well, I don't know just where it went from there, but really, of course, that power was not the same power, because Muscle Shoals put the power into the Alabama Power Co.'s system, and then their plants put theirs over into Georgia. But it gave a very close figure on the amount that was transferred, because we were paid on that basis. Senator BROOKHART. I read one account of that that showed some of the power transferred clear over into North Carolina. Lieutenant Colonel TYLER. Yes, sir; clear up into Virginia at times. But that is done by stepping over. the power pushes its own farther on. its load farther. Each station that takes over It results in the last one pushing Senator BROOKHART. It seems to me that both physically and legally that was interstate commerce. Lieutenant Colonel TYLER. I do not see how there can be any question about that. Senator BROOKHART. Well, if we would count all those plants in, that would increase your percentage very greatly? Lieutenant colonel TYLER. Yes; but those other plants are not plants over which the Federal Government has any authority through its ownership of the sites or anything of that kind. Senator BROOKHART. Well, when they go into interstate commerce it is a different thing. Lieutenant Colonel TYLER. Then I think the Government would have the right to go out and find out what is invested there and set up a rate base. But my theory is that that is not a proper assignment to the bodies that control the water-power sites. That that is just a case of leasing some water. Senator BROOKHART. It seems to me that the commission with a bureau or employees under it could perform these duties of valuation that you talk about, the same as the Interstate Commerce Commission does. They send out their accountants and investigators and they report back to the commission. It seems to me that any commission could do it that way, and it would be awkward to divide it into two commissions. Lieutenant Colonel TYLER. I do not think it would be. Senator BROOKHART. One would be subsidiary to the other. Lieutenant Colonel TYLER. We have got to figure what the purpose is. The purpose is on these federally controlled water-power sites to lease them or license them under such terms as Congress sets up, and it is an engineering problem almost entirely. Senator BROOKHART. When they are licensing they get quite a lot of information that is very important in determining the rates afterwards, and if the same commission is doing it all that will not be lost. Lieutenant Colonel TYLER. Well, if the same commission can do the valuation work and all that. But the same commission that handles the whole power business throughout the country can not go into this question and make these leases for these sites without running into direct conflict with the departments which control the sites and must continue to control them in the interests of the major purpose for which they were secured. Senator BROOKHART. Well I should not say that it was a conflict for one department of the Government to have business with another department of the Government. That is not a conflict. Lieutenant Colonel TYLER. Not to have business; no, sir. But my thought is, if I may continue, sir, that the War Department is charged with certain specific duties by Congress with respect to navigable waterways. The CHAIRMAN. Do you mind my interrupting at that point? I think the committee gets your point very well. I was wondering if something along this line would meet your views so as not to separate the responsibility from the administration. That we have an assistant secretary from each department who would give his whole time to this commission, and be appointed by the President, and 97646-30-PT 26 subject to confirmation by the Senate, rather than to have the responsibility upon the Secretary? Lieutenant Colonel TYLER. I think that would be very satisfactory, sir. The CHAIRMAN. And then we would have full time commissioners responsible to the departments and the administration? Lieutenant Colonel TYLER. Yes, sir. The CHAIRMAN. And it would overcome some of the difficulties which you have enumerated and some of the suspicion that the administration is trying to unload this power problem on to an independent body. Senator PITTMAN. They would constitute a board. The CHAIRMAN. Yes; that the three Assistant Secretaries constitute a full-time board. Are there any other questions? Senator BROOKHART. No. The CHAIRMAN. We will adjourn until 10 o'clock to-morrow morning, to hear Mr. Merrill. (Whereupon, at 12.10 p. m., an adjournment was taken until 10 o'clock a. m. the next day, Wednesday, February 26, 1930.) INVESTIGATION OF FEDERAL REGULATION OF POWER WEDNESDAY, FEBRUARY 26, 1930 UNITED STATES SENATE, COMMITTEE ON INTERSTATE COMMERCE, Washington, D. C. The committee met at 10 o'clock a. m., pursuant to adjournment on yesterday, in Room 416, Senate Office Building, Senator James Couzens presiding. Present: Senators Couzens (chairman), Pine, Brookhart, Glenn, Kean, Hastings, Pittman, Dill, Wheeler, and Tydings. Present also: William C. Green, special counsel to the committee. The CHAIRMAN. The committee will be in order. Mr. Merrill, will you come around and be sworn? Mr. MERRILL. Certainly. The CHAIRMAN. You do solemnly swear that the testimony you will now give before this committee in the hearing now pending before it, will be the truth, the whole truth, and nothing but the truth, so help you God. Mr. MERRILL. I do. TESTIMONY OF O. C. MERRILL, CHAIRMAN OF THE AMERICAN COMMITTEE OF THE WORLD POWER CONFERENCE, 917 FIFTEENTH STREET, NW., WASHINGTON, D. C. (The witness was duly sworn by the chairman of the committee.) The CHAIRMAN. Mr. Merrill, I wish you would give, for the purpose of the record, your full name, your occupation at the present time, and what you have done in the past few years. Mr. MERRILL. I am at present chairman of the American committee of the World Power Conference. Senator WHEELER. What is that organization? Mr. MERRILL. It is an international organization made up of representatives of 50 different countries, which international organization has as its purpose the promotion of power development throughout the world, more particularly in the less developed countries, industrially speaking; the international exchange of information, data, and so forth; interchange of experience in operation for general cooperative benefit. Senator WHEELER. How is it financed? Mr. MERRILL. It is financed in the United States by the dues of its individual members, and by the support of certain corporations that are interested in the international aspects of power and trade. Senator WHEELER. Who are they, I mean in the United States? Mr. MERRILL. In the United States there are the National Electric Light Association, and- Senator WHEELER (interposing). What do they contribute to it? |