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The CHAIRMAN. We will now be pleased to hear from Maj. William B. Ladue, Corps of Engineers, War Department, Washington, D. C.

Maj. LADUE. There are only one or two matters that I wish to say anything about. The whole subject has been pretty thoroughly covered. In the first place let me say, as was said the other day, that the War Department is not in the attitude of urging that it be given charge of the supervision of these permits; but, if the War Department is to supervise the permits it will have to have an appropriation for that purpose. The Burton Act made an appropriation of $50,000 for the necessary expenses for carrying out its provisions. When the Burton Act expires, without further renewal, of course we will not have any money available; and for any further operations which we may be called upon to undertake we will need money.

Mr. GARNER. You had better tell us, Major, how much you will need to provide any supervision that the War Department desires to undertake.

Maj. LADUE. I am not prepared at present to give definite figures; but I would suggest that the unexpended balance of the appropriation made by the Burton Act be reappropriated and made available for expenditure, in connection with any legislation which this committee may have in view.

The CHAIRMAN. How much is that unexpended balance?

Maj. LADUE. About $22,290, as it stands now. In connection with the operations under the Burton Act the Secretary of War caused numerous investigations to be made and held a number of hearings in regard to the issuance of these permits. There is in these reports a good deal of matter which is of value, and which I think will be of value to the committee, which may possibly not be before the committee; and I would propose to leave here, for the information of the committee, copies of these various reports, including the decision rendered by the Secretary of War in 1907, fixing the conditions and limits of the original permits. I will simply lay this on the table. The CHAIRMAN. Have you got that decision, Major?

Maj. LADUE. Yes.

The CHAIRMAN. Well, I think we had better put the decision in the record. We will put it in the record if there is no objection. Maj. LADUE. I will put a copy in the record.

The CHAIRMAN. Now, if there is anything that you have that is not too voluminous that you think ought to go in the record, Major, we would be glad to have you put it in the record as a part of your remarks.

Maj. LADUE. I will add this paper. The other papers I have here I will simply leave on the committee's table for their information. I will also present this set of blue prints showing the variations in the levels of the Great Lakes for a number of years. Gen. Bixby desired me to present to the committee this data as part of the information on the subject, which will be of value to anyone interested in that branch of the subject, in connection with the operations under the Burton Act.

Mr. COOPER. One moment. Would not this be very valuable, this literature, for the record?

The CHAIRMAN. Very well; put it in.

WAR DEPARTMENT, Washington, January 18, 1907.

In the matter of applications under the Burton Act for the issue of permits to divert water for power from the Niagara Falls on the American side and to transmit electrical current, developed from water power on the Canadian side, into the United States.

OPINION BY THE SECRETARY OF WAR.

Ten or more applications have been filed in this department for the issuing of permits by the Secretary of War, part of them for the diversion of water for power from Niagara Falls on the American side, and the remainder for the transmission of electrical currents, developed from water diverted from the Falls on the Canadian side, into the United States. These applications are filed under what is known as the Burton Act, passed June 29, 1906, and entitled "An act for the control and regulation of the waters of the Niagara River, for the preservation of Niagara Falls, and for other purposes."

The first section of the act forbids the diversion of water from the Niagara River, or its tributaries in the State of New York, except with the consent of the Secretary of War, as authorized in section 2, with a proviso, the meaning of which is not here important.

The second, fourth, and fifth sections of the act I set out in full as follows: "SEC. 2. That the Secretary of War is hereby authorized to grant permits for the diversion of water in the United States from said Niagara River or its tributaries for the creation of power to individuals, companies, or corporations which are now actually producing power from the waters of said river, or its tributaries, in the State of New York, or from the Erie Canal; also permits for the transmission of power from the Dominion of Canada into the United States, to companies legally authorized therefor, both for diversion and transmission, as hereinafter stated, but permits for diversion shall be issued only to the individuals, companies, or corporations as aforesaid, and only to the amount now actually in use or contracted to be used in factories the buildings for which are now in process of construction, not exceeding to any one individual, company or corporation as aforesaid, a maximum amount of eight thousand six hundred cubic feet per second, and not exceeding to all individuals, companies, or corporations as aforesaid an aggregate amount of fifteen thousand six hundred cubic feet per second; but no revocable permits shall be issued by the said Secretary under the provisions hereafter set forth for the diversion of additional amounts of water from the said river or its tributaries until the appoximate amount for which permits may be issued as above, to wit, fifteen thousand six hundred cubic feet per second, shall for a period of not less than six months have been diverted from the waters of said river or its tributaries, in the State of New York: Provided, That the said Secretary, subject to the provisions of section five of this act, under the limitations relating to time above set forth is hereby outhorized to grant revocable permits, from time to time, to such individuals, companies or corporations, or their assigns, for the diversion of additional amounts of water from the said river or its tributaries to such amount, if any, as in connection with the amount diverted on the Canadian side, shall not injure or interfere with the navigable capacity of said river, or its integrity and proper volume as a boundary stream, or the scenic grandeur of Niagara Falls; and that the quantity of electrical power which my by permits be allowed to be transmitted from the Dominion of Canada into the United States shall be one hundred and sixty thousand horsepower: Provided further, That the said Secretary, subject to the provisions of section five of this act, may issue revocable permits for the transmission of additional electrical power so generated in Canada, but in no event shall the amount included in such permits, together with the said one hundred and sixty thousand horsepower and the amount generated and used in Canada, exceed three hundred and fifty thousand horsepower: Provided always, That the provisions herein permitting diversions and fixing the aggregate horsepower herein permitted to be transmitted into the United States, as aforesaid, are intended as a limitation on the authority of the Secretary of War, and shall in no wise be construed as a direction to said Secretary to issue permits, and the Secretary of War shall make regulations preventing or limiting the diversion of water and the admission of electrical power as herein stated; and the permits for the transmission of electrical power issued by the Secretary of War may specify the persons,

companies, or corporations by whom the same shall be transmitted, and the persons, companies, or corporations to whom the same shall be delivered.

"SEC. 4. 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 the rapids in said river. "SEC. 5. That the provisions of this Act shall remain in force for three years from and after date of its passage, at the expiration of which time all permits granted hereunder by the Secretary of War shall terminate unless sooner revoked, and the Secretary of War is hereby authorized to revoke any or all permits granted by him by authority of this act, and nothing herein contained shall be held to confirm, establish, or confer any rights heretofore claimed or exercised in the diversion of water or the transmission of power."

The third section provides a punishment for violations of the act, and the method of enforcing it.

The plain purpose of the act is to restrict, as far as lies in the power of the Congress, the diversion of the water from the Niagara River above the Falls in such a way as to reduce the volume of the water going over the Falls, and the plan of Congress in so doing is to effect this purpose of directly prohibiting the diversion of water on the American side, and by taking away the motive for diverting water on the Canadian side, by denying a market for electrical power generated on the Canadian side in the United States. The prohibition in the act is not absolute, however. It is clear that Congress wished, so far as it could, to accomplish its purpose with as little sacrifice of the pecuniary interests of those who had actually made investments, on the faith of the continued unrestricted diversion of water on the American side, or the continued unrestricted transmission of electrical power from Canada into the United States, as was consistent with the preservation of the integrity and volume of the Niagara River passing over the Falls.

The International Waterways Commission, a body appointed under a statute of the United States to confer with a similar body appointed under a statute of Canada to make recommendations with reference to the control and government of the waters of the Great Lakes and the valley of the St. Lawrence, have looked into the question of the amount of water which could be withdrawn on the American and the Canadian side of the Niagara River without substantial injury to the cataract as one of the great natural beauties of the world, and after a most careful examination they have reported, recognizing fully the necessity of preserving intact the scenic grandeur of the Niagara Falls, that it would be wise to restrict diversion to 28,600 cubic feet a second on the American side of the Niagara River (this to include 10,000 cubic second feet for the Chicago Drainage Canal), and to restrict the diversion on the Canadian side to 36.000 cubic feet a second. This report was in answer to a resolution of Congress calling for an expression of opinion, and thereupon Congress provided that the Secretary of War should be permitted, but not required, to issue permits in the first instance for the diversion of 15,600 cubic feet on the American side of Niagara River and the Erie Canal to persons or corporations actually engaged in the diversion of water and its use for power on that side for six months, with leave to increase the same after six months shall have shown the effect of such diversion, if it will not affect the scenic grandeur of the Falls. Congress further provided in the act, with reference to the power generated on the Canadian side, that the Secretary of War should be authorized, but not required, to issue permits for the transmission of 160,000 horsepower from the Canadian side to the markets of the United States, and then provided that he might issue revocable permits for the transmission of a larger amount, provided that the total amount transmitted, together with that generated and used on the Canadian side, should not exceed 350.000 horsepower, or the equivalent of the diversion from the falls of about 28,000 cubic feet of water.

I have already said that the object of the act is to preserve Niagara Falls. It is curious, however, that this purpose as a limitation upon granting of permits by the Secretary of War is only specifically recited in reference to his granting of permits for diversions of additional amounts of water over 15,600 cubic feet on the American side, which are to be limited to "such amount, if any, as, in connection with the amount diverted from the Canadian side, shall not interfere with the navigable capacity of said river or its integrity and proper volume as a boundary stream or the scenic grandeur of Niagara Falls." This peculiarity in the act is significant of the tentative opinion of Congress

that 15,600 cubic feet of water might be diverted on the American side and 160,000 electrical horsepower might be transmitted from the Canadian side without substantial diminution of the scenic grandeur of the Falls. Undoubtedly Congress left it to the Secretary to reduce this total thus indicated in the matter of permits if he differed with this intimation of the congressional view. Acting, however, upon the same evidence which Congress had, and upon the additional statement made to me at the hearing by Dr. John M. Clark, State geologist of New York, who seems to have been one of those engaged from the beginning in the whole movement for the preservation of Niagara Falls, and who has given close scientific attention to the matter, I have reached the conclusion that with the diversion of 15,600 cubic feet on the American side, and the transmission of 160,000 horsepower from the Canadian side, the scenic grandeur of the Falls will not be affected substantially or perceptibly to the eye. With respect to the American Falls, this is an increase of but 2,500 cubie feet a second of what is now being diverted, and has been diverted for many years, and has not affected the Falls as a scenic wonder.

With respect to the Canadian side, the water is drawn from the river in such a way as not to affect the American Falls at all, because the point from which it is drawn is considerably below the level of the water at the point where the waters separate above Goat Island, and the waterways commission and Dr. Clark agree that the taking of 13,000 cubic feet from the Canadian side will not in any way affect or reduce the water going over the American Falls. The water going over the Falls on the Canadian side of Goat Island is about five times the volume of that which goes over the American Falls, or, counting the total as 220,000 cubic feet a second, the volume of the Horseshoe Falls would be about 180,000 cubic feet. If the amount withdrawn on the Canadian side for Canadian use were 5,000 cubic feet a second, which it is not likely to be during the three years' life of these permits, the total to be withdrawn would not exceed 10 per cent of the volume of the stream, and considering the immense quantity which goes over the Horseshoe Falls the diminution would not be perceptible to the eye.

I have given full hearing to the American Civic Association and to others interested in the preservation of the Falls, but nothing has been brought forward that really has any evidential force to affect the soundness of these conclusions.

By my direction, Capt. Charles W. Kutz, of the Corps of Engineers, United States Army, made an investigation into the circumstances of each corporation applying for permits for diversion or transmission. The subjects upon which Capt. Kutz was ordered to report are described in my memorandum opinion of July 14, 1906, as follows:

"It is necessary that the Secretary of War should know, before final action is taken by him, in the matter of permits for transmission, the capital already invested in the Canadian companies; the degree of completion of the plant; the amount likely to be sold on the Canadian side of the current; the time when the plant shall be ready for operation; the amount now actually produced; the amount now actually transmitted to the United States; the amount invested not only in the production of the current but in the plant and machinery for its transmission, including the poles and wires, and all the details; and also the capital invested by the American companies who are to receive in the first instance the current thus produced; the form in which that capital is, and the contracts into which they have entered, both with the Canadian companies and with the companies or persons to whom they expect to sell the current; the dates of these contracts, and all the circumstances tending to show the extent of the injury that a refusal to grant the permits requested would cause to the investment of capital, together with the question of when the contracts were made upon the claims for the use of current are based, with a view to determining the good faith with which these contracts were entered into; and whether the threatened passage of law induced their making."

Capt. Kutz has made a report both with respect to the companies applying for permits on the American side and those applying for permits on the Canadian side, and I wish to express my great satisfaction at the thoroughness and spirit of judicial fairness with which Capt. Kutz and those who are associated with him have done their work.

Taking up first the applications for permits for diversion on the American side, there is no room for discussion or difference. The Niagara Falls Power Co. is now using about 8,600 cubic feet of water a second and producing

about 76,630 horsepower. There is some question as to the necessity of using some water for sluicing. This must be obtained from the 8,600 cubic feet permitted, and the use of the water for other purposes when sluicing is being done must be diminished. The Niagara Falls Hydraulic Power & Manufacturing Co. is now using 4,000 cubic second-feet, and has had under construction for a period long antedating the Burton Act a plant arranged to divert 2,500 subic second-feet and furnish 36,000 horsepower to the Pittsburg Reduction & Mining Co. A permit will therefore issue to the Niagara Falls Hydraulic Power & Manufacturing Co. for the diversion of 6,500 cubic second-feet, and the same rule must obtain as to sluicing, as already stated.

As the object of the act is to preserve the scenic beauty of Niagara Falls, I conceive it to be within my power to impose conditons upon the granting of these permits, compliance with which will remedy the unsightly appearance that is given the American side of the canyon just below the Falls on the American side where the tunnel of the Niagara Falls Power Co. discharges and where the works of the hydraulic company are placed.

The representative of the American Civic Association has properly described the effect upon the sightseer of the view toward the side of the canyon to be that of looking into the back yard of a house negligently kept. For the purpose of aiding me in determining what ought to be done to remove this eyesore, including the appearance of the buildings at the top, I shall appoint a committee consisting of Charles F. McKim, Frank D. Millet, and F. L. Olmsted to advise me what changes at an expense not out of proportion to the extent of the investment can be made which will put the side of the canyon at this point from bottom to top in natural harmony with the Falls and the other surroundings, and will conceal as far as possible the raw commercial aspect that now offends the eye. This consideration has been kept in view in the construction of works on the Canadian side and in the buildings of the Niagara Falls Power Co. above the Falls. There is no reason why similar care should not be enforced here.

Water is being withdrawn from the Erie Canal at the lake level for waterpower purposes, and applications have been made for permits authorizing this. Not more than 400 cubic feet is thus used in the original draught of water that is not returned to the canal in such a way as not to lower the level of the lake. The water is used over and over again. It seems to me that the permit might very well be granted to the first user. As the water is taken from the canal, which is State property, and the interest and jurisdiction of the Federal Government grow out of the indirect effect upon the level of the lake, the permit should recite that this does not confer any right upon a consumer of the water to take the water from the canal without auhority and subject to the conditions imposed by the canal authorities, but that it is intended to operate, and its operation is limited to confer, so far as the Federal Government is concerned, and the Secretary of War is authorized, the right to take the water and to claim immunity from any prosecution or legal objection under the fifth section of the Burton Act. I shall refer the form of the permit with these directions to the International Waterways Commission to prepare it.

I come now to the question of the permits to be granted to the applicants for the right to transmit electrical current from plants generating it on the Canadian side from the Niagara River.

The applicants are four: The International Railway Co., which applies for a permit for 8,000 horsepower; the Niagara, Lockport & Ontario Co., speaking in its own interest and that of the Ontario Power Co., for 90,000 horsepower; the Electric Transmission Co., speaking for itself and the Electrical Development Co., for 62,500 horsepower; and the Niagara Falls Power Co., speaking for the Canadian Niagara Power Co., for 121,500 horsepower.

Capt. Kutz recommended that the International Railway Co. be not granted any permit, but that out of the 160,000 horsepower 2,500 be reserved in order that it might be granted to the International Railway Co. when that company shall have otbained permission from the commissioners of the Queen Victoria Niagara Park to transmit the current through the park. The question of the company's right is pending before the Dominion Government. Some years prior to 1901 this railway company, which owns all the railways in Buffalo and neighboring cities and towns, bought a Canadian electric railway running from Chippewa to Queenstown, together with a bridge just below the Falls, and one at Lewiston, so as to make a loop with the railways on the American side. For this Canadian railway the applicant paid $1,333,000.

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