TABLE NO. 10.-Status of accounting and valuation work with respect to determination of investment

38 22,415, 731 193, 211, 607 5, 219, 696 210, 407, 642 17, 196, 035 159, 796, 154

General Status of Project Accounts and Reports.

The general status of the work of the accounting division is approximately the same as stated in the seventh annual report. It is somewhat further in arrears, for the licenses applied for and issued and the plants constructed since June 30, 1927, have added a greater volume of work to be done than was accomplished during the fiscal year. Under the commission's Orders, No. 27, of May 28, 1928, it is now necessary before applications for licenses or amendments of licenses may be presented to the commission for approval to reach agreements with applicants upon the amount to be entered upon the project fixed-capital accounts as representing the cost, up to the approximate date of application, of the project or part thereof covered by the application. In many cases this will mean an investigation and audit of preliminary expenditures and costs prior to the authorization and issuance of licenses or of amendments of licenses covering additions to existing projects. The effect of this order should be definitely to fix as of a given date the preliminary investments in projects licensed after the date of the order; and since one of the chief accounting difficulties in the past has been the determination of preliminary or prelicense costs, after the issuance of license, it is expected that the accounting problems with respect to projects hereafter licensed will be somewhat diminished.

The filing during the year 1927-28 by a number of licensees of reports showing results of operations of licensed projects has resulted in emphasizing and bringing to the fore questions relating to methods of accounting for depreciation, allocation to projects of general and administrative expenses, taxes, etc., and of determining the net earnings of licensed projects operated in conjunction with electric property not under license. These and similar matters are receiving consideration.

Accounting Regulations and Annual Report Forms.

During the fiscal year there were prepared, and on January 18, 1928, the commission approved, special condensed accounting rules for use of licensees in accounting for investment in and results of operation of small projects. In conjunction with such abridged rules there was also prepared an abbreviated form of annual report; also forms to be used by the licensees of small projects for recording the investment therein. These abridged accounting regulations are to be used only by such licensees as may be designated by the commission acting through its executive secretary, and they are intended for use chiefly by concerns operating mines, lumber mills, pulp mills, and similar businesses where conditions do not justify an elaborate system of accounting. During the year there was also prepared and furnished to interested parties for criticism and

suggestions a proposed revised form of annual report for the large public-utility licensees. It is expected that a revised form of repor will be adopted for use of such licensees in submitting operating reports for the calendar year 1928.

The personnel of the accounting division remains as heretoforea chief accountant, three examiners of accounts whose work is largely in the field, and one clerk-stenographer.

LEGAL DIVISION

No change has been made in the personnel of the legal division during the fiscal year. It consists of the chief counsel, one assistant attorney, and two clerks who are partly assigned to the work of the division.

The administrative work of this division includes the preparation of letters, memoranda, and reports on proposed legislation bearing upon water-power matters, the giving of advice on legal questions arising in the work of the office, reports upon contracts of various kinds proposed by licensees, the examination of applications for preliminary permits and licenses with respect to legal requirements, and the examination of drafts of permits and licenses and of the acceptance by applicants.

The division is engaged in making a digest of the laws of the several States having relation to the development of water power. This digest will include a summary of the statutes relating to water rights, eminent domain, taxation, the regulation of public utilities distributing electric power, and the powers of municipalities to engage in hydroelectric development. The extent of the field to be covered and the limited library facilities of the commission, as well as the other duties falling upon the personnel, make progress in this work slow.

The suit to terminate the trespass of the Southern Power Co. within the Nantahala National Forest in South Carolina, referred to in the seventh annual report, was decided by Judge Watkins, of the United States District Court for the Western District of South Carolina, in favor of the defendant. An appeal to the Circuit Court of Appeals for the Fifth Circuit has been prepared and filed. The legal division assisted the office of the Solicitor of the Department of Agriculture and the district attorney in the preparation of the record and brief.

Reference was made in the seventh annual report to the suit against Georgia Alabama Power Co. to restrain that company from maintaining its dam across the Flint River near Albany, Ga., without license from the Federal Power Commission. The defendant has

agreed to comply with the requirements of the Federal water power act, and action in that suit is suspended awaiting receipt of application for license.

OPERATIONS DIVISION

The force employed during the year in the operations division consisted of the chief clerk, librarian, 2 clerks, 1 clerk-stenographer part time, and 2 messengers.

Additional equipment for the commission's offices to the value of $1.321.80 was purchased, of which $865.70 was expended for map and record filing and index units, both metal and wood.

Seventy-seven authorizations to publish advertisements relating to water-power applications were issued at a cost approximating $950. The usual follow-up correspondence has been conducted, with the result that with but four exceptions evidence of publications in accordance with the requirements of the Federal water power act has been obtained for the commission's records.

During the year the library received 283 volumes, of which 154 were new and 129 duplicates and continuations, and 284 pamphlets. One hundred and thirteen volumes were borrowed from other libraries and 1,402 volumes and 95 photographs loaned. Of the material loaned, about one-tenth was drawn from outside sources, the photographs being wholly from the commission's files. The library has on file 92 negatives and 32 films of project works under license. One hundred and forty-two photographs have been added to the miscel

laneous files.

The total of $240.59 was expended for library stock, of which $181.17 was used in purchase of law books, scientific and technical works, and books of reference, and $59.42 in subscriptions to periodicals.

The work of distributing the commission's annual reports, rules and regulations, and special publications has been handled through this division. The third revised issue of the commission's rules and regulations was published in May, 1928. The work of preparing the commission's report on the water powers of California for the printer was completed in the following month.

Copies of the commission's records have been furnished on application, and $16.20 deposited in the Treasury as fees from this source. Collection, deposit, and accounting for fees from licenses were handled in this division, as in the past, the total of $307,040.30 having been

received.

In the following table are shown the commission's direct expenditures from its appropriations during the fiscal years 1921-1927 and during the fiscal year 1928 so far as now ascertained, together with approximate costs of administering the Federal water power act, 1921-1928.