Mr. ANGELL. But in Washington they do follow county lines, do they not?

Mr. SMITH. That is true.

Mr. ANGELL. Senator Bone under the Washington law, do the public-utility districts have to follow the county lines to the extent of including the entire county?

Senator BONE. It is a county or a part of a county. I think that there is a provision in the law-and I will verify that recollection by looking the bill over-that permits two or more to go together by a vote of both groups, but that has never been done so far as I know.

Senator OVERTON. I see that Mr. Hart is trying to say something. Mr. HART. May I add that each public-utility district has statutory authority to serve outside of its own boundaries if economies can be effected by doing so.

Mr. ANGELL. But then it would be serving not its own people, but those outside of a district, like a municipality would serve an outside district?

Mr. HART. I believe that that is correct.

Senator OVERTON. I think that we ought to look into how the Bonneville Administration is being conducted at the present time, for Mr. Tugman on the witness stand stated that you had established a regional office in Eugene, where you do not distribute any power, that Eugene was taking very little, if any, of its power from Bonneville.

First, have you a regional office there?

Dr. RAVER. Yes, sir.

Senator OVERTON. Why do you have one there?

Dr. RAVER. Because we are a regional agency, and from the point of view of economic administration, we have tried to decentralize some of our activities as much as possible. We have divided up the area into five regions from an administrative point of view. One of them is the Puget Sound area with headquarters at Seattle. One of them is the Yakima area; one of them the Spokane area, another the Portland area, and another south of Portland, and all the rest of that territory in Oregon, and that office is at Eugene.

Some of those offices have more activity than others. Obviously the Seattle office is a very busy place, because of the tremendous amount of customer activity and contacts that we have there.

Eugene is a Bonneville customer. Regardless of what Mr. Tugman may have said or how strenuously he may have tried to prevent Eugene from ever becoming a Bonneville customer, the fact is that it is a Bonneville customer, and our relationships are established by contract. And, not only that, but you will notice in that southeast Ŏregon territory that our lines go through probably the richest valley in Oregon.

Mr. ANGELL. May I say, in the world.

Dr. RAVER. In the Willamette Valley-all right, I will agree with Congressman Angell, and say the world.

Mr. DONDERO. Do not stop there.

Senator OVERTON. Do not overlook the lower Mississippi Valley. Dr. RAVER. I will say that it is one of the most beautiful valleys I have ever seen. We have a number of customers along there. One was at McMinnville, one at Albany or Corvallis. The largest cantonment in the United States is being constructed at Corvallis at the present time, and our facilities are going in there.

Over on the west coast, we have participated in the negotiations for the acquisition of the West Coast Power Co. for those public-utility districts over there.

Now, there are countless numbers of people continually coming in to inquire about this, that, or the other thing, saying that if they have to run into Portland every time, that they wear out their rubber, spend their gasoline and their time, and we feel that for certain purposes we should have regional offices.

At Eugene there is nobody there except Mr. Brazil and a secretary. That is the organization in Eugene. If Mr. Tugmen and the people of Eugene decide that they do not want us in there, we will discontinue that office and put it some place else.

Senator OVERTON. The question is, has it been determined as necessary to have an office at Eugene for the purpose of carrying on your work, or, on the other hand, is it merely a political office?

Dr. RAVER. It is not a political office. None of these offices are political offices, and our organization is not a political organization.

In addition, I should have mentioned that four large R. E. A.'s who are our customers, are served right in the area just below Eugene. Senator OVERTON. Eugene, then, is a logical point for the establishment of an office in order to serve that area?

Dr. RAVER. That is right, and Mr. Brazil is an operating man; he is an old-time operator from the private utility companies and, if our customers have something wrong with their service, he can tell them what it is, and whether we should get out a maintenance crew or what is necessary to be done in order to keep the service going.

Senator OVERTON. Is there very much cost attendant on the transportation of bauxite, say from Arkansas up to Washington and Oregon, there to be processed into aluminum? Is the cost of such transportation very heavy?

Dr. RAVER. I would rather give you those figures in proportion-I have those figures, but I just cannot recall what they are.

Senator OVERTON. What I am thinking about is whether it would be more economical if plants were established over in Arkansas, these aluminum plants, for then they would not have any freight to pay on the transportation of the raw product into the Northwest.

Dr. RAVER. There are two problems in connection with that, without trying to give you any specific figures as to the cost of the freight rates. The first is that supply of bauxite in Arkansas is insufficient to take care of this Nation's needs for any great length of time. The second point is

Senator OVERTON. But it is the main source of bauxite in the United States.

Dr. RAVER. In the United States; yes.

The second point is that in Arkansas, so far as I know, they do not have either developed or the possibility of developing the power supply that is needed to take care of aluminum production.

Senator OVERTON. They have almost unlimited natural gas resources that could be obtained at cheap rates; but if you have not gone into that, I shall not question you about it.

Dr. RAVER. I would not say that the natural gas is not just as good as water power, except that I know that natural gas eventually will run out. So far as I know, the Columbia River will always be running.

That might be one of the reasons why the Aluminum Co. of America, and Reynolds and other corporations decided to go to the Northwest.

Senator OVERTON. The main reason is priorities; they cannot get the equipment.

Dr. RAVER. That may be true, for the building of these plants.
Senator OVERTON. I am through.

Senator BONE. I would like to ask Congressman Angell if Oregon still has the certificate of convenience and necessity law as applied to power companies.

Mr. ANGELL. My understanding is that it has.

Senator BONE. I have before me a reference to the case of Yamhill Electric Company v. The City of McMinnville, 174 Pacific, 118, which was decided January 22, 1929.

The city of McMinnville owns a small municipal plant, and it was attempting to serve a few customers outside. It is my recollection that this case dealt with an attempt to serve a golf course, or something close to the city, but I would not want to be pinned down as to the nature of the customer that it intended to serve.

The complaint of the private utility contained this statement, and in reading it, I wondered whether we had adopted the feudal system America. [Reading:]

The complaint sets forth that the company

meaning the private company

has for a long time served the territory

meaning the outside territory—

and expended large sums of money

and so forth, serving the people of Yamhill County

and that by reason thereof, the whole of Yamhill County, Oreg., with the exception of the said city of McMinnville, Oreg., now is, and for a long time prior hereto continuously has been, the territory belonging to the said plaintiff as a public utility in the furnishing and sale of electric power and light.

That is the first time I have seen one of them brazen enough to assert that a whole section of country "belonged" to them, that they had a feudal right to it. I thought that the feudal system had been shot to death in the French Revolution.

Mr. DONDERO. We will transfer that from the private companies to the Federal Government by this legislation.

Senator BONE. The people of my State upon a number of occasions have voted down certificate of convenience and necessity laws applying to power systems.

There can be no better court finally to determine that question than the people themselves at the ballot box. I am sure you will agree with me on that.

Mr. ANGELL. Senator, do you not think that that is perhaps akin to the situation of the Congressman who speaks about his district, or "my district"? Sometimes a Congressman wakes up after election and find out that he no longer has a district.

Senator BONE. But there is no question that the people have a right to make their own kind of government. I was astonished to see that kind of language employed.

Mr. DONDERO. Undoubtedly the intent of that statement was to indicate to the court that that was the territory they were serving. Maybe it was not couched in proper language by as good a lawyer as yourself, or they would have used more diplomatic language.

Senator BONE. But I was interested by the choice of the language employed by counsel in that case.

Mr. SMITH. Will you allow me, right on that point, to say this? Senator Bone said, "let the people decide," and, to show you how difficult it is in the State of Oregon to even let the people decide, I would like to call your attention to a clipping from the Seattle Times of June 12. This is a United Press dispatch from Salem, Oreg., and the title is "Law Is Barrier to P. U. D. Vote," and it reads

A proposed election to determine establishment of a Portland peoples public utility district appeared temporarily doomed today after an opinion by Attorney General I. H. Van Winkle.

The Bonneville-for-Portland Committee, sponsor of the proposed P. U. D. had requested the State hydroelectric commission to hold an election on the issue in concurrence with November's general election.

On the basis of the law stipulating that such an election must be held "in not less than 50 days and not more than 60 days" following the request, the attorney general ruled the commission was without authority to hold the election in November.

Moreover, Charles E. Stricklin, secretary of the hydroelectric commission, announced the time limit for the election had expired since a second election on the same issue must be announced within 2 years after the original election. The proposal was defeated in 1940.

Stricklin said it still was possible to call an election if proponents of the measure started from the bottom again by circulating new preliminary petitions and followed the course prescribed by law.

Mr. DONDERO. You are not quarreling with the Oregon statute, are you?

Mr. SMITH. I am pointing out how difficult it is for the people to express themselves on these matters, and this proves it.

Mr. DONDERO. There is a question that I want to ask Dr. Raver.

I was interested in one statement that you made in your discussion, which was that you wanted to eliminate the profit motive as far as possible and pass that on to the people in this area.

Isn't that the basis on which this Government was founded, the profit motive?

Dr. RAVER. Yes; certainly.

Mr. DONDERO. And if that is destroyed, then everything on which this Nation grew is destroyed with it.

Dr. RAVER. I will agree with that, but I do not think that anything that I have said would indicate that I believe that the profit motive should be destroyed.

We are talking now about the relationship between a Government agency and a private monopoly in the same territory. That is all that I am talking about, and my own point of view and feeling is that far from destroying the private profit motive, and far from destroying the system of Government and the system upon which our whole economic activity rests, we are opening up by this particular legislation and this program tremendous new opportunities for private profit which have been locked up in that region. They have been locked up in part by a monopoly which we have tried to cope with in the past by State regulation.

Now we have been trying to cope with it by putting the Federal Government right into the business. If we are going to have them in the business, we might as well have them in all the way, on a businesslike basis.

Mr. DONDERO. The entire objective of the bill is to place the Federal Government in that field alone. Let us be brutally frank about it.

I do not think anybody denies it.
Dr. RAVER. That is right.

Mr. DONDERO. That is the intention. But if that one system is carried just a little further, under your philosophy one system is better than two, and one barge-line system is better than two, and you can apply that to railroad systems, steamboat systems, and truck systems, and then the very profit motive and competitive spirit that has been the incentive of the American people to go forward will be destroyed in this country, to that extent in that area you are going counter to what has been a fundamental principle in this Nation.

Dr. RAVER. I recognize the difficulties of that problem, but I just feel that we have to stop this monopoly some place if we are going to keep the channels of private initiative open, because every time you have just one operator left in the field, you close off the opportunity for anybody else to exercise his initiative and ability in that field.

Senator ÖVERTON. Pardon me, but are not these utilities necessarily monopolistic? Where they invade a certain territory, they remain in control of that territory.

Dr. RAVER. That is what I have been leading up to, that, after all

Senator OVERTON. I was going to say, in reference to the illustration just given with respect to barge lines, that that illustration would be perfect if we were to say that here the Government has given a monopoly to one barge line to operate on a stream, and the question then would resolve itself as to whether that sort of a monopoly is a right monopoly.

Mr. DONDERO. But in this area you have not done that. You have given this right to eight different companies that compete with each other.

Senator OVERTON. They do not move up and down the same stream, and they do not pass one another. They do not reach the same places and serve the same distribution centers.

Mr. DONDERO. That is because they are regulated by State law. Dr. RAVER. No. It is because they divide their territory.

Mr. DONDERO. That is where they have already established their transmission lines and generating systems.

Dr. RAVER. But they have no competition in their market areas whatsoever.

Mr. SMITH. Is it not also true that, of these eight companies, most of them are absentee companies, that is, operating under remote control, from New York principally?

Dr. RAVER. That is only true of some of them. It is not true of all.

Mr. SMITH. It is true of the big ones. Isn't it true of the three largest companies that they are a part of a big nationalistic monopoly, you might almost say, which has its headquarters in the East?

Dr. RAVER. That is true of two of the three large companies.