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any year, at any time we can see, when the market will absorb in one lump some 600,000 horsepower without displacing something else. Mr. RAKER. What do you mean by that?

Mr. BALLARD. Either one of two things must happen; either somebody must build plants in the meantime with a capacity up to 600,000 horsepower to meet the market, or the market will not be there, and if somebody does not build those plants the people will not come, because they will not live in California without electric power.

Mr. WINTER. Wouldn't cheapening of the power add to the demand from the new plants?

Mr. BALLARD. The cheaper the power, of course, the result generally is the larger the consumption. That is the general result. I wonder if you get that point clear? If we are going to have a use for 600,000 horsepower of electric power at any one time, there has got to be some plan or some vehicle for furnishing that, building it up day by day. not all at once.

Mr. RAKER. These people tell us that they are ready and waiting to take over this entire power if we will construct the plant. How can you answer that?

Mr. BALLARD. All right. Where do they propose to take it from! Mr. RAKER. Over in San Diego and Los Angeles, the Imperial, and all the 46 cities you have been talking about.

Mr. BALLARD. Well, most of those cities take power now from the Edison Co., so if you take the power which is now furnished by the Edison Co. and place it in this Boulder Canyon development, what position does it leave the Edison Co. in?

Mr. RAKER. That is just the point I want to bring out. That being the case-and let us be just as open and frank as we can.

Mr. BALLARD. I like to be that.

Mr. RAKER. Yes; it seems to me that you are trying to present the facts as they appear to you. Your position is that your company ought to use every endeavor within its power, legally, to defeat this legislation.

Mr. BALLARD. We have taken no position at all on that.

Mr. RAKER. Just a moment. Let us not dodge that hastily. The very life and existence of your company, as you have now presented it to the committee, depends upon the continuation of your present development, adding to it, as you suggested, this needed power from the Colorado River. Now, if the Government comes in and constructs this dam, you people are out about 600,000 horsepower business?

Mr. BALLARD. If the Government constructs and brings in at one time more power than the new market will absorb.

Mr. RAKER. Does it not amount then to this, as a business proposition? Your company is opposed to the construction of this dam by the Government under the present legislation?

Mr. BALLARD. This particular dam under the present legislation! Mr. RAKER. Yes.

Mr. BALLARD. We are opposed to it; yes.

Mr. RAKER. Doesn't it go further, that you are prepared to use every honorable means-I use the word honorable advisedly-for the purpose of defeating the present legislation?

Mr. BALLARD. We have not given that subject any consideration

at all.

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Mr. BALLARD (interposing. The position of our people, myself included, and our board of directors, is that this particular project, this particular bill, is so top-heavy that it will fall of its own weight when the facts are brought out.

Mr. LITTLE. Isn't it a fact that it will be impossible to accumulate any such amount of water power that the people will not make a demand for it?

Mr. BALLARD. I think finally the proposition will pay.

Mr. LITTLE. Well, any proposition will pay. There are a lot of people in the world and that seems to be a good place for them. I have never seen any great utility built up that they did not come and utilize it. As you suggest, there may be a period when somebody is going to lose some money.

Mr. LEATHERWOOD. You exclude Muscle Shoals?

Mr. LITTLE. I didn't vote for that either.

Mr. BALLARD. I think you have in mind the public utilities you have seen built up, which have been built up under the proper direction and the construction of plants to meet the market, and not far in advance of the market.

Mr. LITTLE. It always turns out better than we think it will.
Mr. BALLARD. Not always.

Mr. LITTLE. It is getting bigger, it is a bigger thing all the time.
Mr. BALLARD. Not always.

Mr. LITTLE. In other words, I think we will make you money. The more power we put in, if we do, the more people would come there.

Mr. RAKER. I think that is a question that has been asked you by the Congressman.

Mr. BALLARD. I thought it was a statement. I think it is generally so that the greater the power development the more possibility there is of increase in population. I think that is generally true, provided you do not saturate your market.

Mr. LITTLE. Oh, there is a limit to everything.

Mr. BALLARD. There is a limit to everything, and our mature judgment, without any desire on our part to influence the United States Government from building a dam on the Colorado River for flood control, and for the development of power, if it wants to, is that as a business proposition the Government should not undertake so large a development and bring it in and expect it to pay.

Mr. RAKER. Do you put it before the committee now, representing your company as you do, that it is not objecting to this pending legislation?

Mr. BALLARD. No; I do not put it that way. I think I have answered your question several times. I will state it again. The company is not opposed to the construction by the United States Government of a dam on the Colorado River at whatsoever point the Government desires to construct that dam for the purpose of flood control, and also if the Government so desires, for the pur

pose of power development. We simply state to the Government that if the Government expects the proposition to pay, as a business proposition, then it should use sanity in the construction plans and have them fit the market, or somebody will lose.

Mr. RAKER. Let us forget the sanity proposition for a moment.
Mr. BALLARD, Oh, well-

Mr. RAKER (interposing). Let us do it just for this answer.
Mr. BALLARD. I hope I never can. I hope I never will.

Mr. RAKER. I know; but just as a hypothetical question, let us forget the sanity proposition. Then, if the Government wants to go in and construct a dam on the Colorado River of any size or capacity it sees fit, and spend any amount of money it sees fit, so far as the Edison Co. is concerned, they haven't any objections, or are not making any objections. Is that a fair statement?

Mr. BALLARD. No; that is not a fair statement.

Mr. RAKER. Well, I did not get your point, then.

Mr. BALLARD. Well, in the first place, I would rather eliminate from the question both the element of being insane-I hope none of us will ever be insane-and also eliminate the idea that we are talking about something hypothetical, because I am talking about cold, brass facts, and when you say that the company would have no objection to the proposition, I would not answer that in the affirmative, because the company would object to the representatives of the people of the United States saddling upon those people in unwise development.

Mr. RAKER. Well, now, is that the only objection?

Mr. BALLARD. Yes. So far as anything the company would do in the way of trying to defeat the legislation, I would like to make this statement: This company, the Southern California Edison Co., is not in politics. It has no political machine. It does not dabble at all with questions political.

Mr. RAKER. I know; but you had a dandy machine last election. Mr. BALLARD. Which election do you refer to?

Mr. RAKER. The election when the water power act was up.

Mr. BALLARD. That was not a political question.

Mr. RAKER. Well, I say it was a business proposition, concerned with the development of water power.

Mr. BALLARD. It was not a question like this. I think there is a very great distinction.

Mr. LITTLE. Now, if you will let me put your feet back on the ground. You have visited the big cities in the Orient, have you not, Japan and China?

Mr. BALLARD. No; I am sorry to say I have not.

Mr. LITTLE. You know how big they are, millions of people are herded there together. They have no water power; they have no resources, and yet they have been built up for a thousand years, those cities. Don't you see that it will be impossible to accummulate enough water power around there so that there will not be enough people to use it? If Peking can build up as big as it is, with nothing to go on but a stone wall around it, don't you see that you people can handle all the resources God Almighty put there and all will get rich? Am I wrong on that?

Mr. BALLARD. I think so.

Mr. LITTLE. How do you explain Peking or Shanghai?

Mr. BALLARD. I think I will explain it this way; that as a true and loyal Californian I would hate very much to make a Peking out of even Los Angeles.

Mr. LITTLE. If those poor people can do all that, there is no limit to what you folks can do. I was out looking at you last summer. Mr. BALLARD. Well, we are fine people. We admit it.

Mr. LITTLE. Well, you are. I will admit it, too. Do not be discouraged if they put too much power in there. It will never hurt you.

Mr. WINTER. You spoke about a dam producing 300,000 horsepower. Have you figured on the height of the dam?

Mr. BALLARD. About 300 feet.

Mr. WINTER. What is the estimated cost?

Mr. BALLARD. I think a dam of that size, with the necessary electrical generator and transmission, could be built for approximately $45,000,000.

Mr. WINTER. So that the $45,000,000 that you would spend on the Colorado River would mean a cessation of expenditures on your other hydroelectric projects in California?

Mr. BALLARD. To some extent; yes. In other words, I think that we would substitute the Colorado River development for some contemplated future development.

Mr. WINTER. Now, a dam of that height-how about flood control? Mr. BALLARD. Our engineers tell me, and I believe, that that would control the floods.

Mr. WINTER. Would that be at Boulder Canyon?

Mr. BALLARD. Somewhere in the lower section of the river, but it need not necessarily be there. The same result would be obtained with the dam at the upper stages.

Mr. WINTER. Regarding the flood control, it could be just as well installed at another place?

Mr. BALLARD. Yes.

Mr. RAKER. The colonel sort of broke up my thought with regard to that machine, and I want to get back at it.

Mr. BALLARD. Are you getting back to China, now?

Mr. RAKER. No; I don't want to get back to China. The witness spoke about that voluntarily. Now, you did have a very strong organization and spent a large sum of money to defeat the act which you thought would interfere with your company's development in southern California, did you not?

Mr. BALLARD. Which act do you refer to now?

Mr. RAKER. The water power act.

Mr. BALLARD. Yes; we worked very actively against the adoption of the water power act in California, which was an act attempted to be put over by the initiative.

Mr. RAKER. And you expended about how much money?

Mr. BALLARD. That act was, as you remember, under an initiative petition. It was not an act of an authorized governing body, such as this.

Mr. RAKER. It was regularly on the ballot.

Mr. BALLARD. By the initiative petition.

92265-24-PT 3- -6

Mr. RAKER. And you folks took an active part in it, as an organi zation, and spent how much?

Mr. BALLARD. The record shows on that. My recollection is that we spent about $125,000 or so.

Mr. RAKER. Now, then, let us get back to this matter. I understand that you folks are opposed to the legislation contemplated by this bill?

Mr. BALLARD. How many times have you asked me that?
Mr. RAKER. Well, you haven't answered me yet.

Mr. BALLARD. Well, I don't know that I can answer it further. We are opposed to the Swing-Johnson bill as now written, calling for the appropriation of $70,000,000 for the erection by the Government of a dam at Boulder Canyon on the Colorado River, and some other provisions, whatever they may be, and particularly the provision of that bill which gives to political subdivisions an undue and, we think, unwarranted preference far greatly in excess of the preference under the present law of these United States.

Mr. RAKER. And your opposition goes further, and is that you believe it will interfere with the business of the Edison Co.? Mr, BALLARD. We think it would.

Mr. RAKER. And that is more your reason of objecting than it is that the people would have to pay more for their electricity than they otherwise would?

Mr. BALLARD, No; I can not answer that in the affirmative. I do not believe you have our conception of what the Southern California Edison Co. is. We believe the Southern California Edison Co. is of and by the people. Not only do the people, those who want to, own it, as I have stated to you, as is shown by these vast numbers owning small amounts, but it is a public-service commission under the public utility act of California, dedicated to the proposition of furnishing service to all the people, a public-service corporation. Mr. SWING. Mr. Ballard, when you think of the Edison Co., your opinion is," We are the people?"

Mr. BALLARD. No, sir.

Mr. SWING. Isn't that your opinion?

Mr. BALLARD. No, sir. We consider the Edison Co. the people's project; and if you would like me to I will send you a copy of my address on that subject.

Mr. SWING. I have read your advertising.

The CHAIRMAN. Send me one.

Mr. BALLARD. It is good reading.

Mr. SWING. What is that? Let us see what it is. Maybe we want it in the record. What is it?

Mr. BALLARD. An address I made once, which was printed. I do not often make an address which is printed, by the way. It was on the subject of "The people's project, the Southern California Edison Co."

Mr. SWING. Over half of your stockholders own 3 shares or less; three-quarters of them own 10 shares or less?

Mr. BALLARD. I have an article here which might interest you, as giving a reflection on the Southern California Edison Co. It is an article by B. C. Forbes, one of the great financial writers for the William R. Hearst service, and you probably are familiar with the

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