Senator BONE. No. That was put in because the War Department did not want to relinquish control of the dam, and because many people in Washington and in the Administration felt that the War Department should retain control of the structure. So, in practical effect, that simply means that the Department must carry in its budget the required amounts for new generating equipment, and that is all. That is what it means.

Senator BURTON. But it says that they shall enlarge it when the Administration thinks that it should be enlarged.

Senator BONE. The plant was built for a power plant as well as for navigation in the river, and, of course, as the power load increased, someone has to enlarge it. I drew a bill last year which turned all of the power facilities, the dam and everything, over to the Administration that we seek to set up here, but that did not meet with approval in some quarters, and we went back to the original formula which has worked all right, of the War Department year by year putting more generation at Bonneville, and there has been no protest that I know of. If this relationship had not worked out smoothly, we would have known about it.

Mr. SMITH. It has been in effect 4 or 5 years.
Senator BONE. It has been in effect since 1937.

Mr. PETERSON. As I recall, the Bonneville project as originally reported by the War Department would require an additional sum of money to complete the project-I believe around $11,000,000.

Mr. SMITH. The cost of additional generating equipment and, of course, for the completion of transmission lines, and substations. Mr. PETERSON. This sentence which the Senator referred to here might be construed, might it not, as an authorization on the part of this committee for the appropriation of that additional fund? Senator BONE. I do not think so, because all of those items have to be carried in the War Department budget, and they have been adding to power installations there as rapidly as they could because of the pressing need out there for aluminum production.

Mr. PETERSON. Where would they get the additional funds? Senator BONE. The War Department puts that in its budget. In other words, that budget has to come before Congress and be approved.

Mr. PETERSON. I understand that the budget does, but this would seem to come very close to being an authorization on the part of Congress to appropriate these additional funds.

Senator BONE. As a matter of fact, there has been previously a full congressional appropriation for the full power installation at Bonneville, so the question would be moot in any event. I have forgotten how many generators have been authorized.

Mr. SMITH. There have been 10 authorized.

Senator BONE. Full generation has been authorized, so, in any event, that question is water over the dam. We have authorized all the power units they could use.

Senator BURTON. "Water over the dam" is a particularly appropriate phrase in that connection.

Senator OVERTON. Both figuratively and literally.

Mr. SMITH. Of course, this same provision has been on the books for 5 years, and we have had to go back to Congress for any addi

tional funds that have been required, and Congress has had to appropriate those funds.

Now, resuming my statement: I am convinced, however, that the new duties that we impose upon the administration of the tremendous Columbia River development make the position of Administrator one that should properly be filled by appointment by the President with the advice and consent of the Senate.

In rewriting this section we have dispensed with the advisory board of representatives of the Secretaries of War, Agriculture, and Interior and of the Federal Power Commission. Since the Columbia Power Administration is simply a power sales agency, this board does not seem appropriate or necessary to the administration of this program. Mr. DONDERO. May I ask at that point if the language is the same as that applying to the T. V. A., with regard to the General Accounting Office?

Mr. SMITH. It is, substantially.

Senator OVERTON. What provisions of the bill are you referring to? Mr. SMITH. Section 2 (f).

Senator OVERTON. It is section 6 in the present bill.

Mr. SMITH. It is section 6 in the present bill.

Senator OVERTON. Suppose you read the language.

Senator BONE. The language in the T. V. Ă. Act is not the same as this. It is on page 5.

Mr. SMITH. That is at the bottom of page 5:

Section 2 (f) of the said Bonneville Act is hereby amended by adding at the end thereof the following:

"Other provisions of law governing the expenditure of public funds shall not apply to the Administration's expenditures or to its contracts, agreements, and arrangements. The Secretary of the Interior may prescribe by regulation the Administration's procedure for authorizing or approving its expenditures, contracts, agreements, and arrangements; and the Secretary's determination as to whether this Act authorizes particular expenditures, contracts, agreements, or arrangements of any kind or class shall be final and conclusive upon all officers of the Government."

Senator OVERTON. It seems that that provision removes all jurisdiction of the General Accounting Office. That gives the Administrator sole and exclusive right to make such expenditures as he deems proper, and his findings are final and conclusive with respect to all officers of the Government.

Mr. SMITH. Of course, in the marketing and sale and distribution of the power, which involves doing a general power business the same as would be engaged in by a private company, it is necessary to vest discretion in those who are in charge of the project. If we have sufficient confidence in those men to have them named to these positions, they are responsible; they are under bond; and I think there is an oath of office required also in the act under the present law which is retained in this amended act. These are all matters of policy, it seems to me, as to the wisdom or lack of wisdom in making these expenditures. The purpose of the General Accounting Office is one of bookkeeping and accounting, it seems to me.

It has been claimed and asserted-I think with some degree of justification-for many years and more recently that oftentimes the General Accounting Office the Comptroller General-will attempt to usurp the function of the administrative officers and decide whether an expenditure should or should not be made, involving

merely a matter of policy, which, of course, I do not believe was contemplated by law and is in excess of what should be the power and authority of the General Accounting Office and the Comptroller General.

That is the evil we are seeking to correct by that provision.

Senator OVERTON. What this bill does in that connection-I may be wrong; if I am wrong, correct me-considering other provisions of the bill in addition to the one under discussion, is to put it in the discretion of the Administrator in the name of the Columbia River Power Administration, and all funds are to go into that particular fund, whether appropriations are made by the Congress or whether revenues are derived from the sale of electric energy; and the Administrator can then draw out those funds and use them as he sees fit, without being subjected to any supervision by the General Accounting Office or by Congress. I just want to get that clear.

Senator BONE. I would like to direct your attention to the provision on page 15, in section 10, of this bill, where it says:

The forms, systems, and procedures prescribed by the Comptroller GeneralSenator OVERTON. Where is that?

Senator BONE. Page 15, section 10. They are also required to be in accordance with the requirements of the Federal Power Act with respect to accounts of electric operations of public utilities. There is an audit here by the General Accounting Office.

Mr. DONDERO. I had in mind that a great deal of criticism has been leveled at the T. V. A. because it is an empire unto itself. My purpose in bringing up the question is to see if this bill might be so framed to avoid that criticism, so that there would be an accounting that would be satisfactory to the Government and to the public.

Senator BONE. Under this set-up, Mr. Dondero, it would be required to keep its accounts precisely the way the Federal Power Commission requires. They would be subject to audit by the General Accounting Office.

Mr. DONDERO. You think that under the section you just called attention to on page 15 there would be a certain practice?

Senator BONE. There is no question about that.

This language is different from that in the T. V. A. Act. This concern is going to be nothing but a sales agency, largely; it may in the course of its operations acquire some additional power plants, although under the act these may be sold in case some districts or cities or towns want them and can finance the purchase.

In the main this will be a sales agency and it will be required to keep its accounts precisely the same as the Federal Power Commission requires private business organizations to conduct their accounting systems. I think it is a very wholesome provision,

Senator OVERTON. Suppose they make expenditures according to the rule prescribed by section 10.

Senator BONE. Well, they are required to preserve their accounting system.

Senator OVERTON. If we vest authority in the Secretary of the Interior to make expenditures

Senator BONE. In the scope of the bill, for instance, in the hiring of men and in ordinary operations in the sale of electric energy, he

will have to meet precisely the same conditions that a private concern meets.

My thought has been throughout the whole contemplation of the problem that if this concern is going to do business, it ought to do it as nearly as possible with the freedom a private company enjoys. It is not a benevolent institution. It has got to pay its way. It will derive the funds it gets for the purpose of expansion through the acquisition of these utility systems, by the sale of revenue bonds. They are hedged in by a great many restrictions that are imposed by the nature of the instrument itself, the bond, much more so than if you use general obligation bonds. I happen to have had considerable contact with that type of security.

I feel that it would be a sad blunder to compel an administrator of a system to submit every little $5 account to someone back here in Washington for approval when he is under oath, under bond, and his accounts are checked, and he has to submit reports regularly, and they will be subject to the scrutiny of Congress, the Treasury Department, and everyone else interested in the operation.

There is no way of absolutely preventing corruption, but we have penitentiaries open for persons who do that sort of thing, and the doors are quite wide.

Senator OVERTON. Does not the law in reference to the T. V. A. provide a certain fund that can be expended without any particular accounting? I do not recall the amount, but my recollectionSenator BONE. I am not wholly familiar with that.

Mr. SMITH. Is it not limited to a thousand dollars on claims?
Senator OVERTON. Oh, it is more than that.

Senator BONE. Here we restrict the payment of claims to a certain

amount.

Mr. SMITH. Payments of claims I think are limited to a thousand dollars.

Senator BONE. And in the event of a claim above that the claimant has to bring suit in a Federal court. In other words, we are not going to give an Administrator power to settle every kind of claim. If a man has a just claim he can bring it to court unless it be a petty claim.

We do make this institution sui juris. It can sue and be sued, like a private outfit, and it can set up legal defenses that are available to private concerns.

Senator OVERTON. While section 10 does prescribe

The forms, systems, and procedures prescribed by the Comptroller General for the Administration's administrative appropriation and fund accounting shall be in accordance with the requirements of the Federal Power Act with respect to accounts of electric operations of public utilities

and so forth, in section 5 of the bill, pages 5 and 6, it is declared that

The Secretary of the Interior may prescribe by regulation the Administration's procedure for authorizing or approving its expenditures, contracts, agreements, and arrangements; and the Secretary's determination as to whether this Act authorizes particular expenditures, contracts, agreements, or arrangements of any kind or class shall be final and conclusive upon all officers of the Government.

That would be inclusive of the General Accounting Office or anybody else.

Senator BONE. Well, in the course of operations, if they had to come to Washington for approval of every small expenditure, we would not do any business out there. That is the size of it.

Senator OVERTON. I realize that. Possibly it could be amended so as not to be quite so sweeping.

Senator BONE. Under this bill the Comptroller would audit the accounts, and I would assume that if there was anything challenging, he certainly would bring it to the attention of Congress and call attention to it in his report.

Senator BURTON. Mr. Chairman, as I understand this section 10 which we have been discussing, that is an admirable feature. It helps the whole project by putting the public operation under the same regulations as that which Federal Power Commission has prescribed for private and publicly operated concerns.

What the chairman is bringing out is that it does not call for a required audit. Neither the chairman nor anyone else would argue that it should not be put under the same type of control as a private business operation. But there is involved in this, it seems to me, a double feature. One is that the enterprise is authorized by the Government, in the first place, and the other one is that these bonds are revenue bonds that are sold in the open market. It therefore becomes a vital factor in their salability, their market, and their general standing in the industry, that assurance be given of an audit that will safeguard the holders of the these bonds.

Therefore, as a business proposition, I think there is value in setting forth in your act the degree of supervision by someonewhether you call him comptroller or auditor-that will stabilize the confidence of the public in the bonds as well as the confidence of the public in the project. When we eliminate the usual provisions of law governing audits, I think we are under a duty to put in the act some provision stronger than one merely prescribing that the. Secretary of the Interior shall prescribe what he thinks will be suitable. Senator BONE. Well, we have to vest discretion in someone. have to vest it either in someone who is directly running the job or someone here in Washington, 3,000 miles away. Discretion must ultimately be vested in the hands of someone somewhere. I have never been able to escape that fact in working on this legislation.

We

I do not think this bill is perfect, by a million miles, but you have to make some elections and reach some definite decisions. If you vest discretion in one man or another man, it is not a very pleasant thing to suggest any lack of honesty or integrity in either.

With respect to the bonds, you will find in this bill-I do want to make one or two little changes in it in order to tie these ideas together more completely-there is a certification required as to the scope of the use of the revenue bonds that are to be issued. They must and will be made to rest upon a declaration filed with the Secretary by the Administrator as to the acquisition, the amount to be employed, and the utilization of the proceeds of the bond issue. Now, that becomes part of the contract with the bond buyer. It would be so regarded by any court.

Before this bill was introduced it was submitted to men who are interested in that particular type of security, in order to find out