has been a mightier advocate than I. That river which, unlike the Niagara flood admitted by Mr. McFarland into some one of these rooms, thunders its cataract over the Falls, spoke to you on the 12th day of July last. You stood in front of it and you looked at it, and if you had ever seen it before I would defy even your acumen to detect a difference in its flow from the time when you first saw it, before there were any mills there at all. I have watched it for 20 years. Our judgment may be biased. That is all right. Charge us with bias; we may be wrong about that. But we insist that our judgment is as good as that of the gentlemen to whom Mr. McFarland has referred when he says "Recent visitors at Niagara Falls report that." Well, we are not "recent visitors at Niagara Falls who report that." We are people who have lived at Niagara Falls. We are the people who have done more in a day to attract attention to Niagara Falls than even the output from Harrisburg. The world has been interested in Niagara Falls as it never was before. The Falls, as Gen. Ernst says, are not conspicuous for their height. The falls in Labrador are higher; the Zambesi Falls in South Africa, and the falls in Norway are higher. Why is it that the people are interested in Niagara Falls? It is because, to use a classic expression, they are "in our midst"; it is because we have invested, and for those who are to come after us we have invested them with human interest, and that I say, with great respect, is quite equal to beauty and to scenic interest. When you have got away from the contrary delusion you realize that what we and others have done has been an addition, a vast addition, to human interest, and I defy you or any man who can speak the language of truth, and keep within the bounds of truth, to say he can detect a difference, visually. I do not quite understand the report of Gen. Ernst when he says "appreciably affect the Falls." Neither last summer, now, or at any time could I willingly be drawn into any statement which seemed to conflict with Gen. Ernst; but I can not believe that when he says "appreciable" he means appreciated by the eye. When we are talking about scenic grandeur and beauty we refer to the eye only, and referring to that organ, I defy anyone truthfully to say that he can detect the difference between the American Falls as they are to-day, with 131,000 horsepower subtracted, and what they were 30 years ago, when less than 10,000 horsepower was being subtracted.1 That, then, leads me to the conclusion-and I hope you may be led to the conclusion from an observation of the conditions-that it is practically demonstrated that the development of 131,000 horsepower produces no appreciable diminution of the American Falls, and, inferentially, that 350,000 horsepower taken from the Canadian side, which is from 6 to 10 times the capacity of the American side and which, as stated by Prof. Clarke this morning, would not affect the American side-I say the inference which you are permitted to draw, and which I believe you will draw, is that the withdrawal of 350,000 horsepower would not affect the Canadian Falls more than the 131,000 horsepower has affected the American Falls. PRIOR AND PREFERENTIAL RIGHT OF CANADIAN NIAGARA CO. In their report the American commissioners say that Capt. Kutz concludes "that there is no sufficient reason for discrimination between the Canadian companies except their relative ability to command the Canadian market." In reaching this conclusion Capt. Kutz, as a layman, naturally enough has failed to take into account the consideration to which in equity our Canadian company is entitled as the prior appropriator and licensee of the water. We annex an Appendix A, showing that at all times our prior and superior rights have been recognized by the Queen Victoria Niagara Falls Park Commission, and perforce by each of the other companies now claiming their subordinate rights. Under the established rules concerning water courses and riparian rights, if by a physical convulsion the waters of the upper Niagara River were to be carried into the American channel so as to leave available for use on the Canadian side only 100,000 horsepower, our company in equity would be entitled to the whole of that power though the two junior lessees were to go dry. Correspondingly, if by the act of law flow of the river available for power transmission to the United States is to be reduced to 160,000 horsepower, then our juniors should first suffer reduction for this purpose to 39,000 horsepower, 1 This also is the view of Chairman Dow and of Dr. Hallock, quoted at length above. for they are not entitled to consideration to the detriment of our prior right to 121,000 horsepower for any and all purposes. The three successive rights of the three principal lessees must in equity be reduced, if at all, in the inverse order of alienation by the Canadian authorities. I make no reference to the International Railway Co., whose rights we do not discuss. Another ground upon which we base our claim to preferential consideration is the comprehensive purpose of the act of Congress of June 29, 1906. The object of this act is to preserve Niagara Falls in their entirety, not the Canadian Falls alone, nor the American Falls alone, but the entire natural wonder for the gratification not of Canada alone or of America alone, but for all mankind. With this generous purpose I heartily sympathize, provided that it shall be accomplished as it can be accomplished with just regard to honest rights in the order of their priorities. In this comprehensive view of the subject it is to be considered that the two companies now represented by me are substantially one and that their developments have been and are mutually interdependent. For this reason we have not resorted to the semblance of a contract between them. Thus considered, it will become evident that the Niagara Falls Power Co. is suffering more than any other company, for it has been forbidden to proceed under its charter right to construct in New York a second tunnel for 100,000 horsepower, for which it has acquired its right of way and has made large expenditures. It is also hindered from proceeding under the charter right of the Canadian Niagara Co. to complete the second half of its wheel pit, already excavated, for the erection of six 11,000 electric horsepower turbines and dynamos. As the greatest sufferers, we submit that nothing should be conceded to our juniors because of their lesser and inferior deprivations. THE ONTARIO Co.'s POSITION. The Ontario Power Co., in its printed memorandum, has submitted certain claims for special consideration, to which, in our view, it is not entitled. (a) The claim of the Ontario Co. to special consideration on the ground that it uses the water more economically than any other company is not accepted by Capt. Kutz (p. 13, clause 27). It may not be irrelevant also to suggest that as this economy is due to the construction of a power house directly and conspicuously in front of the Falls, it is unlikely to be regarded as a merit by those who are seeking to protect and preserve the scenic grandeur of Niagara. The construction of this power house directly in Niagara Gorge was the subject of timely and vigorous protest by Mr. Andrew H. Green and his associate commissioners to the Canadian commissioners, as fully considered in their seventeenth report at page 9. (b) The suggestion that the Ontario Co. is entitled to special consideration because it is paying twice as much rent as any other company is incomplete. It should have been added that for each of its grants each of the three Canadian companies pays the same initial rent of $15,000. The Ontario Co. has two grants, of which one is upon the Welland River, which it does not now choose to use, but which it is at liberty to use. After the rents, covering 40,000 electric horsepower, each of the three companies is to pay exactly the same rent for all of its power. Upon the sale of 40,000 electric horsepower two of the companies will pay $37,500 and the Ontario Co. will pay $47,500. As the Ontario Co. asserts that it has contracted to sell more than 40,000 horsepower it would seem as though now its rental will be not materially more than that of the other two companies. If the amount of rental is of consequence, the Canadian Niagara Co., which has been paying rent since 1892-eight years longer than any other companyclearly is specially entitled to consideration. These payments up to 1906 are shown as follows by the commissioners' reports (19th, p. 11; 20th, p. 16): Canadian Niagara Co---- Electrical Development Co $239, 577.73 140, 000. 00 37,500.00 (d) The plant investment in August, 1906, of the Ontario Co. proper ($5,542.000) is not greater, but is less than that of the Canadian Niagara Co. ($6 250,000). (See Capt. Kutz's report, p. 7, clause 7; p. 10, clause 16.) The additional expenditures by the Ontario Co.'s customer-the Niagara, Lockport & Ontario Co.-are insignificant compared with those of the Canadian Niagara Co.'s principal-the Niagara Falls Power Co.-and its subsidiary companies in Niagara, Tonawanda, and Buffalo, with their four transmission 28305-12-24 lines, and the many customers all exhibited to Capt. Kutz. The actual investment on the faith of this development of the Canadian Niagara Co. has been and is more than that of all the other Canadian companies and their subsidiary companies combined. (e) The prospect of service rendered or to be rendered by the Ontario transmission line is highly colored by hope, as shown by the cold facts arrayed by Capt. Kutz in section 10 of his report. Proceeding from a present actual delivery of 700 horsepower and a present firm contract for only 14,240 horsepower, the Ontario Co. deludes itself into the plea that it is to be considered on the basis of an actual contract for 90,000 horsepower if not for 180,000 horsepower. It is notorious that power is used not in sparsely settled country districts but in centers of population. The Ontario transmission line runs through 150 miles of rural territory to reach Syracuse, a city with less than one-third of the population and with only of the manufactured products of Buffalo, to which, with its contiguous outlying districts, the Niagara Falls Power Co. now is actually supplying 40,000 horsepower with a demand for 5,000 more.' We respectfully invite the Ontario Co. to show exactly how much power it is actually supplying in Syracuse or elsewhere, and also how much power it is bound to supply there or elsewhere to any customer other than its subsidiary transmission company, i. e., itself. POWER DELIVERIES BY OUR TWO COMPANIES. Upon this point of actual delivery of power, it may be well now to exhibit somewhat more clearly than heretofore the necessities of our two combined companies, the Niagara Falls Power Co. and the Canadian Niagara Co. To the amount of 85,000 horsepower, stated on pages 8 and 14 of the brief of the Niagara, Lockport & Ontario Co., and on page 2 of the brief of the Ontario Co., and stated also on page 11, paragraph 20, in Capt. Kutz's report, as the electrical load of the "combined companies" (The N. F. P. Co. and C. N. P. Co.) must be added, approximately 8,500 horsepower, the amount of the Niagara Falls Power Co.'s hydraulic load delivered to the International Paper Co., and not converted into the form of electricity. As a matter of fact, Capt. Kutz somewhat underestimated the maximum electrical load of the combined companies. During the winter of 1905-6, it was 'substantially 90,000 electric horsepower. Adding 8,500 horsepower hydraulic, we have, at that time, a combined load closely approximating 100,000 horsepower. (See Appendix C.) With the adequate provisions for reserve and for necessary repairs, in prac tice and under present conditions, the American electrical plant working to its capacity can not be relied upon for 85,000 horsepower. The printed statement made by the Niagara Falls Power Co., and submitted to Capt. Kutz, under date of July 27, 1906, gives the power contracts of that company in detail, and shows an aggregate of 167,740 horsepower subject to call thereunder on the American side. The originals of these contracts also were all submitted to Capt. Kutz, and those for larger amounts of power were gone over in detail by him and by his associate, Mr. Faust, of the Department of Justice. The printed statement of the same (Niagara Falls Power) company to the Secretary of War, dated July 3, 1906, gives the amount called or in use under each of these contracts. This amount then aggregated 102,550 electric horsepower. Since that time several power consumers have increased or called for additional power in a considerable amount-notably the Niagara Electro-Chemical Co. which is now installing additional electrical apparatus to use up to a maximum of 4.500 electric horsepower; The Pittsburgh Reduc As may be seen by reference to Census Bulletin 57 already quoted, the value of manufactured products in 1905 was as follows: Buffalo Niagara Rochester Syracuse Lockport $172, 115, 100 82, 747, 370 $189, 030, 886 123, 378, 959 312, 409, 845 The lighting and transportation requirements keep pace with the manufacturing eonditions. tion Co. to use up to a maximum of approximately 10,000 horsepower, and the Union Carbide Co. up to 25,000 horsepower. The Cataract Power & Conduit Co., the Buffalo distributing agent of the combined companies, already during the present month has called upon our combined companies to provide at their power houses, a maximum which with the Tonawanda demand will call for 40,000 electric horsepower, and during the month of December will require provision, at the power plants, of not less than 5,000 electric horsepower in addition to the amount last mentioned. The amount of 25,000 electric horsepower which the Canadian Niagara Co. is transmitting under the provisions of its temporary permit has been barely sufficient to supply the pressing demands of the present use of our combined companies. Except for the fact that on account of unexpected difficulties in construction and in crossing certain properties with its cables, the Canadian company was delayed, the entire amount of the present temporary permit already would have been used in Buffalo alone, in which case the American company would not have been able to supply the present enlarged demand on its own lands in the city of Niagara Falls, N. Y. It is true, as stated in the memorandum of the Niagara, Lockport & Ontario Co., that our original application for 121,500 horsepower is for an amount which, in the opinion of Capt. Kutz, exceeds by 500 horsepower the present capacity of the plant, which he states "were designed for the production of 121,000 horsepower"; that is, 11 units each of a capacity of 11.000 horsepower. His deduction of one of the units as a spare, so as to put the company on the same basis with the other two Canadian companies, disregards the fact that in the case of our company reserve will be provided by the Niagara Falls Power Co. on the American side; and therefore our original application should have been not for 121,500 horsepower, but for 121,000 horsepower, which, as stated in Capt. Kutz's report, is the ultimate full capacity of our Canadian plant. When the installation of the electrical machinery above referred to is completed, the combined companies, at times of maximum load, will require the entire available output of both the American and Canadian plants in order to supply the power demands now under contract. THE CLAIMS OF THE TWO TRANSMISSION COMPANIES. To the separate claims of the two transmission companies, the Niagara, Lockport & Ontario Co. and the Niagara Falls Electrical Transmission Co., we consider it unnecessary to make separate reply, for their claims are merely in support of their several principal companies in Canada. With reference to the Niagara Falls Electrical Transmission Co., it does not appear that it is legally authorized “both for diversion and transmission " so as to come within the scope of the second section of the act. THE CLAIM OF THE ELECTRICAL DEVELOPMENT CO. The claim of the Electrical Development Co. for equality of treatment does not seem to us unreasonable if disposed upon the basis of priority of the three companies in the order of their establishment. In other words, we would not deny that in fairness each of the three companies should be permitted to transmit to the extent of its capacity as developed or really in course of bona fide development prior to congressional action. But if it shall become necessary to limit the exercise of these rights, then, equitably, the discrimination should be inversely in the order of priority. CONCERNING INTERNATIONAL TREATY. Mr. McFarland rests his two "emergency" calls particularly upon the propositions, first, that congressional legislation will prove ineffectual unless supplemented by an international treaty; and, secondly, that "confidential advices from the State Department at Washington indicate the improbability of success in negotiations with Canada for the treaty unless the United States shows a real desire to preserve the Falls." Thereupon Mr. McFarland proceeds to make the following statements: (a) "The United States is now in a position to either save or ruin Niagara Falls. If we freely admit all the electricity the Canadian companies want to send in, we divert the water from the Falls as directly as if we had control of the Canadian frontier. If the United States denies admission to this power it will not be produced, and the glory of Niagara will continue." (b) "Insist respectfully that he (Secretary Taft) refuse to admit any power from Canada not now being admitted, because in so refusing he will be preventing the depletion of Niagara." It is hardly conceivable that the author of these two sentences above quoted could have seriously considered their effect upon an effort to promote an international treaty, which must be written, if at all, with the free will of Canada. How could he, or those who think with him, possibly expect that the friends of Canada would concede a treaty to those who by indirection and through American authorities are virtually proposing in this particular to accomplish the "control of the Canadian frontier"? The fair disposition of the Canadian authorities is plainly shown in the unanimous conclusion of the members of the International Waterways Commission, both of the United States and of Canada, as embodied in the report of May 3, 1906, transmitted to Congress by President Roosevelt under the date of May 7, 1906. (See pamphlet entitled " Preservation of Niagara Falls, H. R. 18024," p. 283.) In this report the commission stated that while it was not fully agreed as to the effect of the diversion from Niagara Falls, all were of opinion that more than 36,000 cubic feet per second on the Canadian side of the Niagara River or in the Niagara peninsula, and 18,500 cubic feet per second on the American side of the river, could not be developed without injury to Niagara Falls as a whole. Accordingly the International Commission confined its recommendation to these figures, conceding twice as much draft upon the Canadian side as on the American side, probably because of the greater depth of water at the Horseshoe Falls. But it was stated expressly by the Canadian members that their assent to these conclusions was given only upon the understanding that any treaty or arrangement for the preservation of Niagara Falls should be limited to the term of 25 years, and should also establish certain principles, including the right of each country to an equal share of the diversion of international waters whether navigable or nonnavigable. In the face of this reasonable declaration, how could anyone imagine that an international treaty would be facilitated by the suggestion that by discriminating against Canadian diversion and importation the United States in this particular may virtually control the Canadian frontier? We should all concur in the unanimous conclusion of every member of the waterways commission, Canadian as well as American, that "it would be a sacrilege to destroy the scenic effect of Niagara Falls"; but we must recognize also that while Niagara Falls is a wonder, "fair play is a jewel." Such an indirect attempt to control the Canadian output certainly would not lead to the Canadian belief that we were disposed to play fair. To a considerable extent the Canadian Niagara Co. represents Canadian capital, but to a still larger extent, American capital. Nevertheless, it is a Canadian company, entitled to the protection of its Canadian contract, and cheerfully recognizing and prepared to fulfill its Canadian obligations under that contract. As stated by me at the July hearing, it desires the opportunity to use in the United States all of its power not required to meet the Canadian de mands under that contract, to which demands, when received, it will make prompt and cheerful response. The counsel of the Electrical Development Co. of Ontario have misapprehended my statement, when they say that our "company is not desirous of entering into any contracts with the Province of Ontario." Of course the Canadian Niagara Co. is desirous of remunerative business in Ontario as well as elsewhere, and has submitted a most reasonable bid to the Ontario Government. Here and now the Canadian Niagara Co. rests its case upon a consideration of its rights as a Canadian corporation, and not upon any pretense that, representing American capital, it has therefore any particular right of hearing which is not open equally to the Electrical Development Co. of Ontario, representing especially Canadian and English capital. The three applications of the three Canadian companies for the right of transmission can not be, and will not be, decided by you upon a consideration of the nationality of the holders of the corporate securities. How essential is the right of transmission, even in the view of the Electrical Development Co. of Ontario, is stated in the brief of that company at page 3, where it points out that if the amount of power which can be sold by interested parties in Canada is to become a basis of division of power to be imported into the United States, "each of the companies would doubtless willingly abandon |