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Oregon entirely ready to buy all or part of any system. This bill will speed readiness. Our P. U. D.'s are not yet operative. They are in the courts or have not voted revenue bonds. Very naturally, you and I must know what is to be done with the acquired properties not bought by any governmental unit within a reasonable time. Bonneville does not plan to operate the local distributing systems.

The committee should have, from some representative of the Bonneville Administration, or from other sponsors of this bill, a clear picture of the proposed routine, step by step. There are some questions in my mind which have not been answered. I believe it would clarify the situation and strengthen the position of those who, like myself, are, in principle, committed to a Columbia River Authority, if these details could be set forth before we go further.

RESOLUTIONS OF APPROVAL

In conclusion, I desire to file with the committee, letters and telegrams about the bill received from organizations in my district. Two of the strongest State-wide organizations in Oregon have sent me word of their interest and their approval of this bill. They are the Oregon State Grange and the Oregon State Federation of Labor. These bodies are both meeting in annual session at this time and the committee will, undoubtedly, have current resolutions from them. The Second District organizations giving public expression of approval of the principles of this legislation are as follows:

The Granges are: Blue Mountain Grange No. 345; Malheur Pomona Grange No. 33; Jefferson County Pomona Grange No. 35; and Hood River County Pomona Grange No. 8.

The Public committees are: Klamath Falls Public Power Committee (city); and Klamath Public Power Committee (county).

The R. E. A. is the Central Electric Cooperative, Inc. (Redmond). The labor organizations are the Central Labor Council of Klamath Falls, the Oregon State Federation of Labor, and Columbia Power Trades Council.

The peoples' utility districts are Northern Wasco County Peoples' Utility District (represented here by Mr. W. J. Seufert, of The Dalles, who has been heard); Hood River Peoples' Utility District; and the Union County Peoples' Utility District (represented by Mr. Vernon Bull of La Grande, whose statement has been or will be read to you).

HEARINGS IN NORTHWEST

I quote two telegrams requesting hearings in the Pacific Northwest:

BEND, OREG., June 13. 1912. Feeling growing in Oregon that hearings on amendments to Bonneville Am should be held here thus giving opportunity for fullest possible presentation of the views of interested citizens; expense of trip to Washington and inability of nan persons to leave their work in these days and to devote necessary time m pearance before committee now in session makes it impossible for «EI TE secure full understanding of Oregon attitudes toward bill. W po present committee and support before it request that hearings be be in Omena other parts of Northwest. Know of your approval of Bone at some feel sure you will recognize justice of request and importance ETTEI opportunity to be heard on this important question. I hope te farielle YEL” That is signed by Robert W. Sawyer.

The other is dated at Hood River, Oreg., June 14, 1942, reading as follows:

Suggest you support hearings in Pacific Northwest on Bone power bill and give your people chance to express themselves on this vital point.

That is signed "Ball, editor, Hood River News.”

I now wish to summarize my remarks, as follows:

1. I favor a Columbia River Authority and the purchase by it of private utility systems.

2. I recommend that the Authority be composed of three members— a businessman, a lawyer, and an engineer-appointed for a definite term by the President, confirmed by the Senate.

3. The Authority to appoint all employees and officials.

4. Protect the wholesale rate of $17.50 per kilowatt-year, the same to be increased only by act of Congress. (Increases in the wholesale rate at Niagara, have prevented the full development of this natural water fall, and, through contracts, have encouraged monopolistic control by Alcoa. It was the rate monopoly situation which kept the automobile industry from expanding at Niagara.)

5. We should preserve congressional authority. Keep the funds separate, for review by Congress and the Budget. I think that is right. 6. That the Federal Power Commission be the designated body to make allocation of costs of Coulee as between power, irrigation, and flood control.

7. The interest to be fixed at the lowest possible rate on the money invested in the Grand Coulee power project.

8. The users of electric energy are not to pay any losses that may be incurred by reason of irrigation.

9. Have a declaration in the bill that it will not interfere with any irrigation project or irrigation rights.

10. Acquisition of each private utility by the Authority to be safeguarded by a certificate, to be published for 3 consecutive weeks in two papers in the district affected. The certificate to show the number of meters and the mortgage on each, the estimated value of the property for taxation purposes, and the estimated value of the property for rate-making purposes. Require a certificate of valuation from an engineer appointed by the Secretary of the Interior, that certificate to show the private utility's income and expenses.

11. Let the cities and public utility districts which may buy the properties sit in at the bargaining table.

12. If revenue bonds are issued, an early callable date should be required.

13. The Authority should be given the right to build competing lines. I regard that as fundamental.

14. If electric energy must be sold by the Authority under the interconnection order, make the contract for as short a period of time as possible.

15. That payment of revenue bonds and interest be limited to income from property purchased from proceeds of those bonds.

Those are my conclusions after a good deal of thought and study of this legislation. I offer them to you with the best intentions, not to hinder the bill, but to help it.

Mr. DONDERO. That was a very fine statement, Governor.

Mr. SMITH. I want to concur in that. You have made a very comprehensive statement, Governor.

Senator OVERTON. I have a few questions that I should like to ask you. There are two or three points, Governor, that I would like to ask you to elaborate upon.

Mr. PIERCE. All right.

Senator OVERTON. Does the present bill as it is now written provide for a board to be appointed?

Mr. PIERCE. Yes; a real board-not an advisory board.

Senator OVERTON. There is the suggestion that was made by different agencies that there should be a board of three or of five. They have made different representations as to what the authority of that board should be. Do you think that that board should have the power that is now vested in the single Administrator, or should it be, as somesuggest, rather an advisory board?

Mr. PIERCE. I do not see anything in an advisory board. I think it is just a useless appendage.

As to the number on the board, I will admit that there are arguments for a one-man board. I would make it, as I said in my main statement, a board of three.

I would put one lawyer on the board. I would let him head the legal department. I would put an engineer on it, one with some skill and with some training. I would let him handle the engineering department. Then I would have a businessman.

Whoever was made chairman by the President let him preside at the meetings. That board would decide the policies, and have full authority to appoint all employees.

Senator OVERTON. Those who advocate the advisory board state that it would so function that it would come in contact with the general public throughout Oregon and Washington and would have its pulse on public sentiment and public views, and present them to the Administrator; that if that purpose is served, that would be sufficient without. having a three-man board vested with full authority.

Mr. PIERCE. Just as I said in my statement, I do not regard that as absolutely fundamental. But if I were to vote on it, I would vote for a real board of three.

Senator OVERTON. Now, Governor, you have followed, I am sure, much more closely than I have, the T. V. A. development?

Mr. PIERCE. I have.

Senator OVERTON. It has a board of three?

Mr. PIERCE. Yes.

Senator OVERTON. It has been stated that, while it has a board of three, it is a one-man board. What is your observation about that? Or are you willing to make any?

Mr. PIERCE. In some ways it looks like it.

Senator OVERTON. What has been your observation throughout the years as to a three-man board? Does it not finally degenerate, if I may use that expression, into a one-man board?

Mr. PIERCE. Well, in a way.

It seems to me that you are going to have two strong departments; one is going to be the engineering department and the other the legal department. They will be the ones who will keep it out of trouble. and keep it out of losses.

I think that this is the way it operates now at Bonneville: There is the head of the legal department. He is not recognized as being a member of the board, but he has very close contact with the management. I would make him a member of the board. I would put him on there and place responsibility on his shoulders.

Then I would take some outstanding engineer and let him handle all the engineering_work, planning the transmission lines and all those things. And I would let him be a member of the board and let him carry some of the responsibility. That is the result of my studies. That is my view of it.

Senator OVERTON. Governor, would you suggest that for the personnel of this board, in the event the board was established, the best talent throughout the United States should be available?

Mr. PIERCE. Yes.

Senator OVERTON. Or that it should be confined to residents of Washington and Oregon?

Mr. PIERCE. I do not think that there should be geographical limits to it. I do not think that geography should be the first consideration. Senator OVERTON. Is it your suggestion that the appointment of the Assistant Administrator, the general counsel, and the chief engineer should be made by the President and confirmed by the Senate? Mr. PIERCE. NO. I would have them appointed by the Board. Senator OVERTON. By the Board?

Mr. PIERCE. By the Board.

Senator OVERTON. That is, a board of three?

Mr. PIERCE. A board of three.

Senator OVERTON. Suppose that there is only a single man or a one-man board or a single authority.

Mr. PIERCE. I would make him appoint them, because the responsibility lies there.

Senator OVERTON. I think that that is the provision of the bill. Mr. PIERCE. No. The provision of the bill is that the Secretary of the Interior appoint all of those lesser officers, which I do not think is a good plan.

Senator OVERTON. Your suggestion is that instead of the Secretary of the Interior appointing the subordinate officers—

Mr. PIERCE. I would not let him do it.

Senator OVERTON. Have them appointed by the Administrator? Mr. PIERCE. By the Administrator.

That is because you might have a lot of friction. Suppose that the Secretary of the Interior says, "I want this man to head the legal department." Then the Administrator says, "I don't want him at all." Perhaps he may be absolutely opposed to the Administrator, appointed by the President.

I would not do that; not for a minute. The man to whom he has to report, the Administrator or the Board or the Authority, is the man who should make that appointment. It so seems to me.

Senator OVERTON. Would you suggest an amendment to the bill providing that there should be no increase in the present wholesale rate?

Mr. PIERCE. Yes; except by act of Congress.
Senator OVERTON. Except by act of Congress?

Mr. PIERCE. Yes. I think that that is fundamental.

In that way we can avoid some of the possible danger, Senator, that ruined the effect of Niagara on the American side as a regulator of rates in New York and Pennsylvania and in your country, Mr. Dondero. You got no advantage of the cheap power from hydro at Niagara.

Mr. DONDERO. We are beyond the distribution limit, Governor. Mr. PIERCE. I am not talking about that. I am talking about the effect on the whole country about there.

The idea is that that is the way Alcoa built up its monopoly at Niagara.

Senator OVERTON. Just exactly what amendments do you suggest, if any, to give Congress full authority over this Administration? Your summary is that we should preserve congressional authority and keep the funds separate, for review by Congress and the Budget.

Mr. PIERCE. In reading the bill I found places where the reports are made to the Secretary and then on to the President, instead of to the Congress, where the authority lies. They ought to come to the Congress. I could not cite exactly the place, but I will be glad to find it for you, if you would like.

Senator OVERTON. I think you are right about that.

Mr. PIERCE. I think the funds should be kept separate, so that they can be reviewed by the Congress. We are going to have in the Congress I have seen several things pointing to it in the Housesome kind of a check ultimately on the funds that we vote, to insure that they go where we intend them to go.

Of course, the Comptroller General is supposed to do all of that. But I have heard several of the experienced men on the Appropriations Committee speak very strongly about following through the activities of the bureaus to see that the moneys were used as intended by the Congress.

Senator OVERTON. Are you satisfied with the provisions of the bill with reference to such authority as is given to the General Accounting Office?

Mr. PIERCE. Yes. I think that is where authority should be.

There is another provision of the bill that I forgot to mention earlier. It concerns organized labor. I approve of those provisions. Senator OVERTON. You suggest that the Authority should be given the right to establish competing lines?

Mr. PIERCE. I do.

Senator OVERTON. I assume that that is for the purpose of making these private companies, if I may use the expression, behave themselves?

Mr. PIERCE. That is it exactly.

Senator OVERTON. But the Administrator will have the right of condemnation.

Mr. PIERCE. Yes. He should have it.

Senator OVERTON. When he exercises that right, the court will determine what the value of the property is and what the price is that is to be paid. Is not that a sufficient protection without the Administrator being given authority to indirectly accomplish that purpose by driving private power companies out of the field or making them

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