organized in the corporate or other forms of ownership association substantially burdens and affects the flow of commerce.

From these major laws have stemmed other important laws defining labor policy including the Wagner-Peyser Act, which establishes the United States Employment Service within certain limitations, and the Fair Labor Standards Act of 1938, which is virtually the minimum wage law for all workers and also establishes maximum hours of work.

In view of this national labor policy, it seems to us unthinkable that the Congress, the guardian of the democratic tradition, should expect any other suggestion or petition from the workers of the Columbia Power Trades Council except the one I am now presenting, asking for collective bargaining rights and for the materialization of this efficient, democratic, and productive plan of employee relations on the great Northwest project.

Senator OVERTON. Are all of the employees of the Bonneville and Grand Coulee Dams connected with the Columbia Power Trades Council?

Mr. HEDGES. That is right. I could give you a list of them.
Senator OVERTON. Do they operate as a closed shop?

Mr. HEDGES. That question has not arisen, Mr. Chairman. The council provides representation for every kind of labor organization that operates on the Grand Coulee and on the Columbia.

Mr. SMITH. Does that include office workers and clerical workers and bookkeepers?

Mr. HEDGES. Yes.

Mr. SMITH. They are all represented?

Mr. HEDGES. That is right.

Senator OVERTON. It is not necessary to be affiliated with any organized labor group in order to obtain employment, is it?

Mr. HEDGES. NO. Our people are not affiliated with any of them. Mr. DONDERO. They are independent unions operating these dams? Mr. HEDGES. You mean organizations that are not affiliated with the A. F. of L.?

Mr. DONDERO. But there are unorganized workers?

Mr. HEDGES. There are unorganized workers.

Senator OVERTON. Are there any C. I. O. organization workers there?

Mr. HEDGES. There are no C. I. O. in that particular project, I believe. I am not certain of that.

Senator OVERTON. I mean, Bonneville and Grand Coulee.

Mr. HEDGES. That is right.

Senator OVERTON. They are all A. F. of L.?

Mr. HEDGES. That is right.

Mr. DONDERO. The relationship is entirely separate?

Mr. HEDGES. You mean the management?

Mr. DONDERO. Yes.

Mr. HEDGES. Yes.

Senator OVERTON. Have there been any strikes?

Mr. HEDGES. No strikes.

Senator OVERTON. None at any time?

Mr. HEDGES. I do not know about at any time, but there have been no major interferences with work.

Senator OVERTON. There have been no major ones?

Mr. HEDGES. That is right.

Mr. SMITH. Mr. Hedges, can you state how long ago it was that the Tennessee Valley Labor Trades Council was organized?

Mr. HEDGES. About 5 years ago; 5 out of the 9 years of the existence of the T. V. A.

Mr. SMITH. And during that entire period there have been no strikes or interferences with work or labor trouble there at all?

Mr. HEDGES. That is right. And I believe that management was as partial to this form of labor relations as labor on the T. V. A. Mr. SMITH. I feel certain that the Columbia Labor Trades Council will be equally as successful.

Mr. HEDGES. I thank you for that remark.

Senator BONE. Mr. Chairman, we have a short witness here, Mr. David Levine, who will only take 5 or 10 minutes. May we put him on now?

Senator OVERTON. Yes.

STATEMENT OF DAVID LEVINE, A MEMBER OF THE CITY COUNCIL, CITY OF SEATTLE, WASH.

Mr. LEVINE. I remember once upon a time appearing before our city council. There were 12 councilmen. A fellow said, "If you will not make a speech, I will vote for the bill." So I have always borne that in mind, and that is the kind of speech that I am going to make now.

Instead of making a speech, I am just going to read to you this resolution of the city council, as follows:

Whereas there is now pending before the Senate of the United States, Senate bill No. 2430, a bill to amend the Bonneville Act to authorize the acquisition of utility systems and to coordinate the operation of the Government's power facilities on the Columbia River, and for other purposes; and Whereas the city of Seattle is definitely committed to the principles of public ownership of power; and,

Whereas the city of Seattle owns and successfully operates its own light and power system: Now, therefore, be it

Resolved, by the City Council of the City of Seattle, That Councilman David Levine, be, and he is hereby, directed to appear before the Senate hearing on the aforesaid Senate bill No. 2430, and then and there to apprise the committee in behalf of the city council, that the City Council of the City of Seattle is definitely in favor of public ownership and operation of electrical energy and power, and of principles and purposes of Senate bill No. 2430.

Adopted by the city council this 5th day of June 1942, and signed by me in open session in authentication of its adoption this 5th day of June 1942. I remember a question that you were discussing here awhile ago. I would like to answer it.

I have before me-I just got it last night-a report of the City Light of the city of Seattle. It would be illuminating, perhaps, since you were discussing the question of taxes, for me to read you

something from this. I have just glanced at it. Here is a report of our City Light & Power Co.

The taxes paid and contributions made by the department to the support of the National, State, and city governments for 1941 amounted to $640,471.68. Mr. DONDERO. How did it come that you paid taxes to the Federal Government?

Mr. LEVINE. I do not have the details. That is our City Light report. That is the best that I can tell you.

Mr. DONDERO. Do you have any break-down of it?

Mr. LEVINE. I have not had a chance to look that over, because I just got it last night.

Mr. DONDERO. It has been said here that public utility bodies do not pay Federal taxes.

Mr. LEVINE. The explanation of some of the Federal taxes may be because in addition to producing power and light we also sell merchandise. That may be a portion that is included there.

Mr. SMITH. You sell electrical appliances?

Mr. LEVINE. Yes. We sell electrical appliances. That may be a portion of it.

We are not enumerating all of the various services that we perform. For instance, we have one of the cheapest lighting rates for the purposes of street illumination in the country. And I think that we have one of the best-lighted cities.

Now, when you were discussing here awhile ago you were asking some questions as to the regulation of rates by our utility commission.

In Seattle we have not had any trouble with the utility commission, because we reduce the rates and the company has to meet them. So whatever reductions are made there have been made on the initiative of the City Light, and the company, of course, meets them.

The franchise of the Puget Sound Power & Light Co., which will run only for 10 more years, and which I cannot imagine will be renewed, puts the investors in the Puget Sound Power & Light Co. in the position that they have a business that will be out of business completely in about 10 years as far as the city of Seattle is concerned. And consequently, if this bill passes and it enables the Authority to purchase the Puget Sound property, the investors in the Puget Sound property will get something back on our money.

So much so is that true that the stock of the Puget Sound Light & Power Co., which was down to almost nothing, just the minute the announcement was made about a year ago that we were negotiating for the purchase of the Puget Sound Power & Light Co., the stocks went up.

So, you see, the stock became a much more desirable investment when they knew that we were going to take them over, than they were when they thought that we were not going to take them over. Mr. DONDERO. Have you taken them over?

Mr. LEVINE. No.

Mr. DONDERO. I was intrigued by your statement that as soon as you reduced your rates, the power company reduced their rates. Are both the municipal plant and the private power plant serving the city?

Mr. LEVINE. That is right.

And that is why, by the way, our rates are somewhat higher than are the rates in the city of Tacoma, where the franchise of the company has expired and consequently they do not have two duplicating systems competing with each other.

I am very much interested in the protection of private property; but it seems to me that there are certain types of business that ought to be in the nature of a monopoly.

You would not think of having two telephone companies. We tried that once upon a time, and gave it up because it was just not very good business. And consequently we have these businesses that by themselves form a monopoly.

Then the next question is, Who shall own the monopoly? Should it be owned by private investors or should it be owned by the public? I have heard some very good arguments on that; but after I listened to the chairman, I think he answered that question much better than I can dream of answering it. In other words, if the Government and the people, the public, should not own the electrical power, the source of which is our rivers, and have that light our country, who should?

Senator OVERTON. You would not think of the Federal Government granting a franchise to a private barge company to monopolize the Mississippi River?

Mr. LEVINE. That is exactly the situation. And I think, Mr. Chairman, you presented a much better argument than I could.

So for these reasons I believe that our people are in favor of this bill.

There is another reason. If we would go out and condemn that portion of the Puget Sound Power & Light Co.'s properties which are tributary to us, it will not be very good business for ourselves or for the company. But if the company's holdings are condemned as a whole by this Administrator, and we get that portion of the property which we are particularly interested in, the property that serves our city, it makes better business for the Puget Sound Power & Light Co., because they sell their business as a whole instead of selling it piecemeal; and it makes better business for us, because each one of our units does not have to go through condemnation proceedings and the expense involved, but we can depend upon the Federal Government doing their job.

Mr. DONDERO. Do you have a generating plant under your control? Mr. LEVINE. We might have in order to meet the work that we have. We might need one of their plants. We are now negotiating for

Mr. DONDERO. What I mean, and I don't mean to confuse you, but after the Federal Government takes over these power plants. the whole system, and then sells it back to your city, does your city wish to buy the generating plant?

Mr. LEVINE. No. I was trying to answer that.

While we can get along without the purchase of any of their grenerating plants, we are good neighbors; and if the Federal Government, after they acquire the property, will allocate to us portions of the burden that we have to take, the cost or the savings tim will have by doing away with the duplicating competitive syste will be worth while to us.

T

Senator OVERTON. How are the Federal buildings served? By the municipal plant or by the private plant?

Mr. LEVINE. By the municipal plant.

Senator OVERTON. Does the municipal lighting company charge for lighting these Federal buildings?

Mr. LEVINE. Yes. They pay the regular rate, the same as we charge ourselves.

Of course, after all, the municipal power company, while it is a branch of the city government, it is not the government and does not function in a government capacity. It has to function as a business. It has to meet its interest on bonds and indentures, and even to create a good reserve.

Senator OVERTON. Does it charge the city of Seattle for lighting the streets?

Mr. LEVINE. Yes. It charges them for everything at the regular rates. If it would not, of course, it would go out of business.

In other words, it does not function as a public institution. It acts like a business institution, with the exception that its growth and development and profits go to the public as a whole instead of to a private institution.

Senator OVERTON. Senator Bone, is that true in your State?
Senator BONE. Yes. It is exactly the same situation.

And I might add that the city council-and I am sure that my good friend Dave Levine will agree with me-has taken an unconscionable advantage of the lighting system at times and has cast burdens on it shat should not be placed on it. But that is because the city owns that and can take advantage of it. But in both cities they are run like private corporations, and in order to do that they must be run on a business basis.

I noticed that Mr. Levine in connection with one item of contribution mentioned that there were $138,000 of contribution in lieu of social-security taxes.

Mr. LEVINE. That is an account of our private pension system.

I may say this also, due to the fact that a question was asked here as to whether these taxes that we were paying, State taxes and city taxes we have a city occupational tax of 2 percent and a State occupational tax of 2 percent-but a question was asked on another matter as to whether these taxes are passed back to the consumer.

We have a gas company, the Seattle Lighting Co., that manufactures illuminating gas and heating gas. They, of course, pay the 2-percent tax in exactly the same manner as does the City Light and the Puget Sound Power & Light Co. But, because the Puget Sound Power & Light Co. and the City Light are competing companies, they absorb the tax.

Mr. DONDERO. Who absorbs the tax?

Mr. LEVINE. The Puget Sound and the City Light. The customer is not paying it. But, because the gas company is not a competing company, they wrote to our utility commission and they are passing the 2-percent tax right on to the people.

Mr. ANGELL. How about the Federal taxes?

Mr. LEVINE. Of course, since we are not paying Federal excise taxes—well, we are paying this license fee of $10,000 to the Federal