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We believe in the conservation of the flood waters of the river.. in order that there may be a more reliable source of irrigation water for the lands now under cultivation, and also that there may be an additional supply for new lands which may be brought under cultivation. Because the merchants and the people of the city of Los Angeles buy a great deal of their products from those valleys, and we also sell to them their supply.

And we have the same interest that anyone else would have in the humanitarian aspect. But I will say, frankly, that our great interest, our selfish interest, in the matter is in the hydroelectric development that will be made in connection with the project.

The city of Los Angeles has been in the business of generating and selling electric energy since the year 1916. Three different bond issues have been authorized by the people of the city for this purpose, a total of $23,500,000 that we have invested of bond money in generating plants, transmission lines and distributing system.

We have five power plants on our aqueduct system. Normally, at these five plants we generate an average of 90,000 horsepower, which is not sufficient to supply our customers in the city, and we are therefore purchasing from the Southern California Edison Co. normally about 50,000 horsepower. The demand for electric energy in Los Angeles increases, or has increased in past year, at a rate a trifle more than 21 per cent, and we figure that it doubles every four years.

We are paying to the Edison Co. for that power which we purchased from them a trifle more than 8 mills per kilowatt-hour. Our generating cost at our own plant is about 3 mills per kilowatthour; perhaps a trifle more than that.

And by generating cost I mean the cost of maintenance, of operation, and of interest upon the bonds and the portion of the sinking fund to retire the bonds.

We are paying the Edison Co. an average of about $160,000 per month for the power which we purchase, which we figure that we could generate for ourselves at about $75,000 per month, including all of those costs. And the power which will be generated at the Colorado River project, if that project is consummated, our engineers tell us can be laid down at the central substation in the city of Los Angeles at a cost of about 4 mills per kilowatt-hour, including a reasonable royalty to the Government.

In that connection, our engineers have figured that the practical unit to be figured upon for a development there by the city would be something like 250,000 horsepower. The generating work and the transmission line for that amount of power would cost approximately $25,000,000.

Now, last May at the municipal election there was a bond issue submitted to the voters of $35,000,000, of which $10,000,000 was for additions to our distributing system, and $25,000,000 was for the purpose of building generating works and the transmission line of Boulder Dam when the Government erected the dam there. We had a very short campaign, only about three weeks. We simply put the proposition on the ballot in order to test out the feeling of the people, without any hope that it would receive sufficient votes to make it effective.

Both of the power companies in business there were opposed to the bond issue. The Southern California Edison Co. opposed it because they saw the loss of a good customer in case the city built additional generating works. The Los Angeles Gas & Electric Corporation opposed the proposition because they did not want the city to have any money to extend its distributing lines.

The bond issue was defeated. That is, it had a majority, a very substantial majority; but under our city charter it requires a twothirds affirmative vote to authorize a bond issue, and we failed of getting that two-thirds vote. I do not have in mind the exact figures of the vote for and against; but I do remember that of the 862 precincts in the city, 535 of those precincts gave majorities in favor of a bond issue, and of that number, 142 precincts gave more than the two-thirds majority which was required by the charter. Mr. LEATHERWOOD. Can you get that total vote, Mr. Criswell, sometime before you leave?

Mr. CRISWELL. I am leaving this afternoon, Mr. Leatherwood; and and as soon as I get home I can get it and file it with the committee. Mr. LEATHERWOOD. I would like to have it go in the record, Mr. Chairman, if Mr. Criswell can furnish it sometime before the hearings close.

Mr. CRISWELL. I can do that.

(The statement referred to is as follows:)

In favor of the bond issue.

Against the bond issue.

Total vote cast at that election

41, 406

38, 304

86, 590

Mr. RAKER. Was the opposition of the electric companies quite stiff?

Mr. CRISWELL. It was not only the electric companies that opposed us, but our own chamber of commerce opposed the bond issue. Their argument was that the Government had not yet signified its intention of building any dam any place upon the Colorado River and that there would be ample time for the city to vote a bond issue after the Government had signified its intention to do this work.

And, of course, that was an argument that we could not meet very well. Our only argument was that we wanted to show that we were interested so that Congress might have that fact before it—that we were ready to cooperate.

Mr. RAKER. Did they make this a contest in the newspapers, as well as on the ground?

Mr. CRISWELL. Yes.

Mr. RAKER. Who led the contest?

Mr. CRISWELL. Against the bond issue?

Mr. RAKER. Yes.

Mr. CRISWELL. The Los Angeles Times was very much opposed to it: also the Los Angeles Express, an evening paper; the other papers. were for it.

Mr. RAKER. Who owns those two papers?

Mr. CRISWELL. Mr. Harry Chandler is the owner of the Los Angeles Times. The other paper is owned by Messrs. Dixon and Kellogg. And their only opposition to the matter was that Congress had not yet signified its intention of building anything on

the Colorado River, and that there would be time enough for the city to vote bonds when an appropriation had been made by Congress authorizing the erection of a dam upon the river.

Mr. RAKER. Well, those papers said, too, did they not, that they were not ready, the dam had not been started or anything, and both papers are very strong in favor of public ownership and the city controlling its own electric energy and power?

Mr. CRISWELL. The Los Angeles Express has, I think, on practically all occasions taken the attitude that it was in favor of the city owning, controlling, and distributing electric power in the city. The Los Angeles Times has taken the attitude that it is opposed to public ownership; it is opposed to public ownership on principle. Their argument is that a private corporation can do the work better and cheaper than can the public do it for itself.

Mr. RAKER. They just take the attitude that they are opposed to public ownership and in favor of private ownership as a principle, and have no interest behind the argument?

Mr. CRISWELL. That is the attitude which they take; yes.

The CHAIRMAN. Have you any plans for holding another election?

Mr. CRISWELL. Yes; we have. There is to be a special city election on the 6th of May, and some of us who are rather sanguine on this subject had hoped that we might get a report out of this committee before that date, and that we could put that proposition on the ballot again in May.

If we are not able to do it at that time, the matter can not be voted on until May of next year, unless we hold a special election, and a special election costs us about $100,000, and we would not care to do that.

Mr. HUDSPETH. Is there a provision in your city charter that provides for a two-thirds vote for passing on bond issues, or is it a State law?

Mr. CRISWELL. It is the city charter.

Mr. HUDSPETH. Most of the cities in my State require a majority vote. Can you not change your charter?

Mr. CRISWELL. We have changed it on many occasions.

Mr. HUDSPETH. It does not require an act of the legislature to change it, does it?

Mr. CRISWELL. Yes; it must be ratified.

Mr. PANTER. It is a matter of the State constitution.

Mr. ALLGOOD. About how many years do they figure that it would take to build this dam-about five years?

Mr. CRISWELL. It would require more than that.

Mr. ALLGOOD. Why the haste, then? If it takes five to seven years to construct the dam, why the haste in having this election?

Mr. CRISWELL. For the reason that the city could go along contemporaneously with the building of the dam, in building its generating works and transmission lines. The work could be carried on at the same time, and as soon as the water was available we could commence generating power, instead of waiting until the dam was completed and then putting several years in building our generating works and transmission lines.

Mr. RAKER. What is your opinion as to the people voting bonds for this work, if the dam is authorized and the work is started?

Mr. CRISWELL. There is no doubt in my mind as to that. There is no doubt that we can secure the two-thirds vote. We have on three different occasions. At one time there was a bond issue of $2,500,000 authorized. The next election authorized $6,500,000; and our last bond issue was $13,500,000; and in all of those cases

Mr. ALLGOOD (interposing). Can you pay the interest on this bonded indebtedness and sell your electricity at one-half the rate of those private companies can you sell it as cheap again as you get it from the Edison Co.?

Mr. CRISWELL. We are now doing that.

Mr. RAKER. I say, you think you will be able to pay the interest on your bonds, and refund that to the Government, and still sell your electricity as cheap again as you can get it from the Edison Co.?

Mr. CRISWELL. Well, not sell as cheap again. We are paying the Edison Co. now a little more than 8 mills kilowatt-hour.

per

Mr. ALLGOOD. You manufacture, though, for about 3 mills? Mr. CRISWELL. We manufacture for about 3 mills, or a little more than that.

Mr. ALLGOOD. That does not enable you to sell it, then, for that. Mr. CRISWELL. No; our base rate is 53 cents per kilowatt-hour; that is the residence rate.

By the way, the committee might be interested in this item-or 1 will give it as a reason why the people will authorize a bond issue: When the city entered into the distribution of electric energy in 1916. we fixed the base rate, the lighting rate, at 5 cents per kilowatt hour. We had only a small distributing system, covering not more than about 25 per cent of the city. In that section of the city that was covered by the city's municipal lines, the other two companies, the Edison Co. and the Los Angeles Gas & Electric Co., made the same rate as the city, 5 cents per kilowatt hour; but in the territory where the municipal lines did not reach, their rate was 5.5 cents per kilowatt hour.

After the war, when the price of labor and the price of materials had advanced considerably, we increased our rate from 5 to 5.6 cents per kilowatt hour. And immediately these two companies, in that portion of the city that was served by the city, increased their rate to 5.6 cents per kilowatt hour; and in that portion outside of this district they increased their rate to 6.2 cents per kilowatt hour, keeping just ahead of us.

Now, when the city sold these $13,500,000 of bonds which I spoke of, we purchased the distributing system of the Southern California Edison Co., all of their system in the city, and we covered the entire city.

The city immediately reduced that price to 5.6 cents per kilowatthour: and it was followed by the other company.

So that we have had an actual demonstration in the city of the ability of the municipal plant to save money for the people; and we have no hesitancy-we have no feeling but that the people will support the bond issue.

Mr. HAYDEN. I would like to have you discuss, Mr. Criswell, the charge that the electric light and water operations of the city of Los Angeles are conducted at a loss, and that your deficits are made up by a general property tax?

Mr. CRISWELL. Why, I suppose, though, the best way to discuss that would be to say this, and to say it exactly: That, taking this year's levy of taxes in the city, there is not one penny of tax levied in the city of Los Angeles for the payment of any interest, or any sinking fund upon any bond issue for the bureau of power and light-not one penny. That is all paid out of the revenues of the department.

Mr. HAYDEN. Is any part of the expenses of the bureau of power and light paid from general taxation?

Mr. CRISWELL. Not one penny; not one penny of the tax paid by the general taxpayer goes to the bureau of power and light in any way, shape, or manner.

Mr. HAYDEN. That was true in this year; has it been true in pre vious years?

Mr. CRISWELL. That was true last year. It was not true of the first two years. There was a graduated increase of the amount which the bureau took care of each year, until they arrived at the point where they absorbed it all.

Just as with our harbor development. In the harbor development, bonds in the amount of something like $30,000,000 have been authorized, and a large amount of that sold and issued. The harbor department commenced only this year to pay any interest and sinking fund charges. Heretofore, those were paid by the taxpayer, but this year, they paid a portion of it; the next year they paid an increased amount; and so on through a term of years, until they take up the entire thing-just as was done by the power department.

Mr. ALLGOOD. Do you know anything about a grand jury report in Los Angeles as to the extravagance of the city officers?

Mr. CRISWELL. No.

Mr. ALLGOOD. You have not seen that?

Mr. CRISWELL. I have never heard of any such report.

Mr. ALLGOOD. I have received a copy of paper from there this week treating on that.

Mr. CRISWELL. Not Los Angeles, Mr. Allgood; I think you must be mistaken. I never heard any such charge.

The CHAIRMAN. That has reference to some irrigation district, Mr. Allgood, not the city of Los Angeles.

Mr. ALLGOOD. Possibly so. I connected it up with Los Angeles, and thought it related to Los Angeles.

Mr. LEATHERWOOD. Mr. Criswell, is 53 cents per kilowatt hour the ordinary household rate?

Mr. CRISWELL. It is the household rate.

Mr. LEATHERWOOD. You have a different rate for manufacturing? Mr. CRISWELL. For manufacturing we have a different rate: it runs down below a cent.

Mr. ALLGOOD. I believe that was a school district that that newspaper article I referred to dealt with.

Mr. LEATHERWOOD. Do you collect a ready-to-serve charge? Mr. CRISWELL. We collect a ready-to-serve charge on manufacturers.

Mr. PANTER. On power?

Mr. CRISWELL. On power. Mr. Panter, one of the engineers of that department, will follow me in addressing the committee, and he knows about that.

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