(2) As to transmission of power from Canada into the United States, Mr. Simmons's bill, following the provisions of the treaty, is silent, and as the Burton resolution will expire with the enactment of the legislation you now have in contemplation, and as nowhere else except in the Burton act is there any restriction on bringing power from Canada into the United States, it follows that if you adopt Mr. Simmons's bill, all restrictions on bringing power from Canada into the United States (so far as United States laws are concerned) will disappear. On the other hand, Mr. Smith's bill contains elaborate provisions the purpose of which was to insure that the consumer in the United States should pay no higher price for power than is paid by the consumer in Canada under like conditions and at equal distances from the Falls. I think that Mr. Smith's bill was drafted under a misapprehension as to the facts. I do not believe that he or any member of this committee intends that several millions of dollars of capital invested in good faith by American citizens shall be deprived of any return or profit whatsoever. Yet such would be the effect of Mr. Smith's bill if adopted. What has happened in the Province of Ontario is this: The Province has created a government body entitled "the hydroelectric power commission," with very extensive powers for the purpose of generating or buying and transmitting Niagara power to various municipalities in the Province, and the essence of the law is that there shall be no profit whatsoever to the commission. When the law was passed the commission considered the construction of its own power plants in which to generate power, but before taking any active steps in that direction it applied to the different power companies for prices, and after long negotiations it did make a contract with the Ontario Power Co. for such amounts of power, not less than 8,000 nor more than 100,000 horsepower, as it might require during a period of 30 years. The price named was, in the opinion of the commission, not much in excess of what it would cost them to generate their own power, and therefore they decided not to build their own power plant, but to make the contract above referred to. Having made this contract, the commission proceeded to borrow, on the credit of the Province, nearly $4,000,000, and it sold its 4 per cent bonds at 102. It entered into contracts with nearly 30 municipalities for varying amounts of power, and it is stipulated in each contract that the price which the municipality is to pay for the power is the sum total of the price paid by the commission to the Ontario Power Co., plus actual expenses of operating the transmission lines, interest on the bonds, sinking fund, maintenance, and depreciation, but without any profit whatsoever to the commission. The $4.000,000 realized from the sale of the bonds was used to build stations and transmission lines to all the towns and villages between Niagara Falls and Toronto on the east and London and St. Thomas on the west. You will thus see that the Ontario Power Co. sells to the Province of Ontario which is its landlord, a certain amount of power delivered at the wall of the powerhouse at the generator voltage; the same company sells to the Niagara, Lockport & Ontario Power Co. another amount of power at a distance of 6 miles from the powerhouse wall and at a voltage of five times the generator voltage. The Niagara, Lockport & Ontario Power Co. buys this power at the international boundary line and distributes it through about 450 miles of transmission lines in western New York, covering the territory between Syracuse and Oswego on the east and Dunkirk on the west, as above stated. In the purchase of land and the construction of stations and transmission lines, the Niagara, Lockport & Ontario Power Co. has invested nearly $9,000,000. Its bonds bear interest at 5 per cent and they had to be sold at a considerable discount. I trust that I have made it clear that the conditions on the two sides of the Niagara River are entirely unlike. On the one side is a Government commission owning the transmission facilities, which have been constructed on the credit of the Province of Ontario and on a basis of less than 4 per cent, and in pursuance of a law the fundamental principle of which is that there shall be no profit. On the American side is a commercial corporation covering nearly twice as much territory, whose transmission lines have been constructed with money costing practically 6 per cent. I am sure that this committee will not deny to the owners of the Niagara, Lockport & Ontario Power Co. a reasonable return upon their investment. The company has as yet paid no dividends on its stock. The interest on its bonds has been promptly paid, but the large equity in the property over and above the proceeds of the bonds has yet had no return whatsoever. This, I think, might be considered as one proof that its charges were not exorbitant. Another proof, perhaps equally convincing, is that while this New York corporation operates the trolleys on nearly 500 miles of railroad and supplies the current for lighting and other miscellaneous public uses in many cities throughout western New York, no complaint has ever been made that its charges were not just, fair, and reasonable. Now, I venture to suggest for the consideration of your committee that it is no part of the business of the United States to regulate prices on electricity within the different States. That is a subject which belongs to the States themselves, and the State of New York in particular has fully met the case by appropriate legislation. The first and most important act of Gov. Hughes's administration when he became governor of New York in January, 1907, was the creation of two public-service commissions, one for the city of New York (which contains about one-half of the population of the State) and the other for the rest of the State. The law is known as the public-service commissions law, and you will find it in the volume of New York Statutes for 1907. I have brought and now submit for the information of the committee a copy of the law in pamphlet form. You will find by referring to sections 71 to 75, pages 73 to 76, that the public-service commissions have full and complete power to regulate, fix, and establish the prices at which electricity shall be sold within the limits of the State of New York. If any municipality or any reasonable number of citizens are dissatisfied with the price at which electricity is sold, they can complain to the public-service commission, and it is then mandatory upon the commission to hear such complaint, to make a finding of fact, and if the finding be that the prices are unreasonable, then they are to fix a reasonable price, and the corporation which does not comply with their order is subject to heavy penalties. Ample provision is given in the law to enable the commission to carry its orders into effect. The public-service commission of the second district, State of New York, has complete jurisdiction at every point in the State where Niagara power is at present being used or to which it can be transmitted. This law has been in operation now for nearly five years. It has given entire satisfaction, not only to the consumers of power and light, but, so far as the second district at least is concerned, to all the corporations which are under the jurisdiction of the commission. In short, then, the State of New York has provided a tribunal with ample jurisdiction over the matter referred to in the provisions of Mr. Smith's bill. This tribunal is fully established. It is in operation. It has the confidence of the community of all classes, and incidentally, I may say it is now considering a complaint from the city of Buffalo that the prices at which electricity is sold in that city are unreasonable. No other complaint has been lodged with them from any other community which uses Niagara power. If such complaint should be lodged, they would immediately proceed, as they are required to do by the law, to hear it and to provide the remedy if on the hearing the complaint is sustained. It will thus be seen that the State of New York has already enacted complete legislation for controlling the prices of electricity. It has established proper tribunals, clothed them with power to enforce their decrees, and established an administrative system which is now in full working order with satisfactory results to all concerned. JANUARY 18, 1912. FRANCIS V. GREENE. STATEMENT OF EDWARD T. WILLIAMS. Mr. WILLIAMS. I am from Niagara Falls. I represent the city of Niagara Falls. I am here simply to say upon the authority of the mayor of Niagara Falls that we living at Niagara Falls and along the Niagara River regard ourselves as the most jealous guardians of the scenic beauty of this great cataract and that, having seen this power development from its inception, I am of the opinion that there has been no appreciable effect upon the flow of the river or upon the beauty of the falls. The attitude of the city of Niagara Falls is that it believes that water can be diverted up to the limits proposed or incorporated in the treaty without having any appreciable effect upon the flow of the river or upon the beauty of the falls. Mr. Chairman, that is practically all I have to say. The CHAIRMAN. I would like to ask you a couple of questions. The people of Niagara Falls, as I understand it, have no objection to the Government giving this additional 4,400 feet? Mr. WILLIAMS. That is their position, as I understand it. The CHAIRMAN. And they would like to have the restriction regarding the importation from Canada removed? Mr. WILLIAMS. Yes, sir. The CHAIRMAN. You doubtless have looked over both bills before this committee. Which bill do you prefer? Mr. WILLIAMS. Why, I have not reached any conclusion in the matter. I am simply here to say on behalf of that city that we desire the treaty to be fulfilled. Mr. LEGARE. One of your principal duties is to bring conventions to Niagara Falls to see the place? Mr. WILLIAMS. No, sir; no, sir; to encourage industry. Mr. COOPER. It is a matter of industrial and commercial development, is it? Mr. WILLIAMS. Yes, sir. The CHAIRMAN. There is more or less typhoid fever at Niagara Falls, is there not? Mr. WILLIAMS. There has been some. The CHAIRMAN. And that is on account of the pollution of the waters? Mr. WILLIAMS. Yes, sir. The CHAIRMAN. How, in your judgment, could that best be stopped? Mr. WILLIAMS. I would say that the city has now installed a new water works and filtration plant which has had some good effect and will have more. The CHAIRMAN. Do you think it would be a good idea for Congress to confer upon the National Waterways Commission the right to do everything in its power to stop the pollution of the waters between Canada and the United States? Mr. WILLIAMS. I am in favor of stopping not only the pollution of the waters between Canada and the United States, but also the waters of Lake Erie. The CHAIRMAN. And that is very important? Mr. WILLIAMS. Yes, sir. The CHAIRMAN. If you have any views upon that subject, we would like to have you give them to the committee. Mr. WILLIAMS. I think-I have been here before to confer with the Surgeon General of the Army Mr. COOPER. For what purpose? Mr. WILLIAMS. For the stoppage of the pollution of the waters. The CHAIRMAN. And the consequence is that in Erie, Pa., for instance, the people have epidemics of typhoid? Mr. WILLIAMS. Yes, sir; we think that is an uncivilized way to dispose of sewage. Mr. COOPER. Berlin derives large revenue from its sewage system. Mr. WILLIAMS. Yes, sir. STATEMENT OF MR. MORRIS COHN, JR., OF NIAGARA FALLS, N. Y.. Mr. COнN. I represent, as counsel, the Hydraulic Power Co. of Niagara Falls. That company is the owner of the hydraulic canal, which was constructed in about the year 1853, and this company and its predecessors have been conducting power works under a claim of riparian rights ever since without criticism, except that the State of New York, claiming as a riparian owner, made some objection to the use of water without its permit and it, as has been stated, gave by grant to the Hydraulic Power Co. the right to take such water as would be necessary for the purposes of its canal. Mr. COOPER. You have not been generating electric power all the time during that 50 years? Mr. CоHN. No, sir. Mr. COOPER. What was it before that? Mr. COHN. Just mill rights; hydraulic power and mill race. The plant of this company is the oldest along the Niagara River. It has the greatest equities and interests in this legislation; it has as lowest riparian owner the strongest legal rights; and therefore I think it is quite proper that it shall have the least to say. In 1902 the International Waterways Commission was authorized to investigate the subject of Niagara River power development. In 1906, as the forerunner of the Burton Act, the International Waterways Commission made a report, in which it recommended that the Secretary of War be authorized to grant permits for the diversion of 18,500 cubic feet of water per second and no more from the waters naturally tributary to Niagara Falls. It was recommended in that report that 18,500 cubic feet per second be allowed to be diverted at Niagara Falls, as that could be allowed without injuring the scenic beauty of the Falls, and of that amount 9,500 cubic feet per second be allowed my client. It also recommended that 36,000 cubic feet should be diverted on the Canadian side. The matter coming before the Rivers and Harbors Committee of this House, they made a report in which they recommended that, instead of 18,500 feet, 15,600 feet be so diverted. The result of it was that the Niagara Co. got 8,600 feet and the Hydraulic Co., instead of getting 9,500 feet, got 6,500 cubic feet per second. In a report which accompanied the bill it was stated that the final settlement of the matter must rest until the result of diplomatic negoiations be embodied in a treaty, but that it was, however, necessary that legislation should be enacted to furnish a basis for diplomatic action. That was all that the Burton Act was intended to coverto hold the matter in statu quo until the respective countries could get together and confer about a treaty. Section 4 of the Burton Act provides: That the President of the United States is respectfully requested to open negotiations with the Government of Great Britain for the purpose of effectually providing, by suitable treaty with said Government, for such regulation and control of the waters of Niagara River and its tributaries as will preserve the scenic grandeur of Niagara Falls and of rapids in said river. Negotiations have ripened into a treaty and the Burton Act still remains. We think that it is unfair that this act should remain on the statute book after the purpose it was intended to serve has been accomplished. The act provided specifically that it should be in effect for the term of three years, and then it was continued for two years more. So that it was never the purpose of the law that we should be deprived forever of the right to apply for additional water. The temporary reason having gone by, Congress should discontinue the act. Mr. COOPER. How much water did your company divert 20 or 25 years ago? Mr. СOHN. Oh, a very much less amount. It was not until after the electrical development that the diversions became large; I don't know; I would not say exactly how much. Mr. COOPER. Before the State of New York took action, were you at any time using as much as you are using now? Mr. COHN. Oh, no; the growth of electrical development has increased the use of water. Mr. COOPER. How far above the precipice do you divert the waters? Mr. COHN. Port Bay, three-quarters of a mile above the Falls. Passing the question of whether we have the legal right, which has been argued here so forcibly (and, I think, well), because we have for years diverted water as riparian owners, and as the Supreme Court of the State of New York has said, that was a corporeal hereditament which was like a rock or a tree, we say Congress should give to some tribunal the right to grant permits to the amount of the additional 4,400 cubic feet per second. Mr. COOPER. What competition is your company getting on the American side with any other company? Mr. COHN. We are in direct competition with the Niagara Falls Power Company. Mr. COOPER. Both use the water? Mr. COHN. Yes, sir. Mr. COOPER. Is there any competition as to the volume of business or as to the rates charged? Mr. COHN. I think both. I think the people who come to Niagara Falls for electric power go to one company and then to the other, and make the best bargain they can. Mr. COOPER. Is there any identity on the board of directors? Mr. COOPER. There is a competition? Mr. COHN. Well, a competition as competition goes in such matters. Mr. COOPER. You would not call it real, fierce, cutthroat competition? [Laughter.] Mr. CoнN. I don't think there is anything like that. I think it would be absurd when they make contracts for 20 or 25 years. People might go into cutthroat competition for 20 days. Mr. COOPER. Has your company been prosperous financially? Mr. COOPER. So that you don't need the additional water to enable you to succeed financially? Mr. COHN. No, sir; I don't say that. I say that while we can do without it, the people need it. Mr. COOPER. And at the same time you say it would not hurt the Falls? 28305-12-8 |