fact that the Hearst papers are not altogether enthusiastic about public-service corporations. This was written by Mr. Forbes after his visit to the Big Creek project of the Southern California Edison Co. I have a few copies here that might interest you. That is the opinion of an outside man about this company, the people's project. Mr. WINTER. How did you come to use Mr. Edison's name? Has he any stock, or any interest in this?

Mr. BALLARD. That company bought, a great many years ago, before there was any regulation of public utilities-the Edison General Electric Co. had the exclusive right to license certain companies throughout the country to use the name "Edison." This company at one time was the owner of one of those licenses which has long since been canceled by the laws of the land. No others than those having such licenses are permitted to use the name "Edison." So the Southern California Edison Co. is a separate company. There is a New York Edison Co. There is the Commonwealth Edison Co., of Chicago; and so on. There are a number of Edison Cos. throughout the country. They are all separate and distinct, but at one time or another they held these licenses from the Edison Co.

Mr. LITTLE. I find here in this booklet that Mr. Forbes says:

Jack Miller, however, didn't see merely what we could see with his eyes. He saw with his mind. He had a vision of what could be. Let him tell how he tackled the task, transforming the vision into actuality.

Does that refer to the president of your company?

Mr. BALLARD. Yes, sir.

Mr. LITTLE. And his vision is what made your company?

Mr. BALLARD. Absolutely.

Mr. LITTLE. Oh, don't lay down so early, friend. There is plenty of room for all of them.

Mr. LEATHERWOOD. Mr. Ballard, going back to another phase of this subject; assuming that the Government should go ahead and develop, as contemplated in the Swing-Johnson bill, and should develop 600,000 horsepower or thereabouts before a market had been created for it. I take it that it would of necessity be a competing factor in the power industry in southern California?

Mr. BALLARD. Yes; it would.

Mr. LEATHERWOOD. Would that sudden development by the Government tend to depreciate securities in the hands of these 67,000 people?

Mr. BALLARD. I think so.

Mr. LEATHERWOOD. Wouldn't that be a factor to be considered by the Congress of the United States in passing legislation?

Mr. BALLARD. I think that should be a factor to be very seriously considered by the Congress of the United States, particularly in view of the passage by this Congress of the Federal water power act of 1920, when the Congress of the United States declared its policy with respect to water power development and all of our developments since, practically without exception, have been made under and in pursuance to that law, and I think we are entitled to protection from the Government in accordance with existing law.

Mr. LEATHERWOOD. Would it not be wrong for Congress to knowingly go out and depreciate securities in the hands of the taxpayers

of this country, just as much as it would be for any other agency to do so?

Mr. BALLARD. I think so, and that may account for one of the reasons which I have been so very frank with this committee. I want this committee to know exactly what the situation is so far as I can explain it to it.

Mr. LITTLE. Well, do you think it was wrong, gentlemen, to build the steam engines and run everybody else out of business?

Mr. LEATHERWOOD. I don't think that is a parallel case, Colonel. Mr. LITTLE. I do.

Mr. WINTER. Why would it depreciate it, because electricity would be sold cheaper to the consumer?

Mr. BALLARD, No; because I don't believe that under this proposal electricity can be sold cheaper than it will be sold at that time under the developments of the Edison Co. Edison's service is becoming cheaper and cheaper all the time. The rates in California are anywhere from 30 per cent to 50 per cent lower than they are in other parts of the country. Already California has a tremendous electrical development. I don't know whether you gentlemen know to what extent California has developed electric power, but I have something here that might interest you. It came to my notice since I came here. It was in the Washington Times of Monday, this week. It gives a statement showing the amount of electrical current consumed by the several States.

Mr. RAKER. You know that these Washington papers have a funny way of doing things. When a piece of legislation is up, they have a peculiar method of just bringing things out that will come the next day or the following day to the notice of the committee. Of course. it is very helpful to get all of this data.

Mr. BALLARD. This article has a "by line" to it, as some of the newspaper people say, "by Samuel Deveraux." I don't know the gentleman; never heard of him. Apparently he is quite a writer, or his name would not be attached to it, as apparently he is willing to stand by what he says.

Last year it says that the total consumption of electrical energy for the entire country was-this is 1923-55,927,388,000 kilowatt hours, as compared with 47,599,019,000 kilowatt hours in the previ

ous year.

New York holds the record as the largest user, with a total of 8,222,000,000: New Mexico is at the foot of the list with a total of 18,279,000, or one-fifth of 1 per cent as much as is used in New York. California is the third largest user and is credited with 5,081,561.000 kilowatt hours, and is vieing with Pennsylvania, which used 5,436,868,000 kilowatt hours for second place. Ohio runs fourth with 3,587,157,000 kilowatt hours.

In other words, the consumption of electricity in the State of California last year was the third largest of any State in the Union, exceeded only by New York and Pennsylvania.

To my mind that is a perfect demonstration that there is not only a very extensive development, but a very useful and popular development of electricity in California, because the population of California in no way compares with that of New York.

In other words, on the basis of population we should multiply California consumption by about four to equal New York.

Mr. WINTER. About how many customers does your company supply!

Mr. BALLARD. We supply approximately 250,000 customers directly and then we furnish energy at wholesale to a number of municipalities which we figure is in the neighborhood of serving about 150,000 additional.

Mr. WINTER. That would figure about 400,000. Do you supply San Francisco?

Mr. BALLARD. No, that is separate.

Mr. WINTER. It seems to me that I heard a statement brought out here about the comparative rates of San Francisco and Los Angeles. Do you know about that, about the difference to the consumer? Mr. BALLARD. In a general way, yes.

Mr. WINTER. I would like to have you state that.

Mr. BALLARD. I think if the Los Angeles rate were applied to San Francisco consumers that the reduction to the consumers in San Francisco would be in the neighborhood of $600,000 as compared with this, the payment of the San Francisco company in taxes which are not paid by Los Angeles, the payment of the taxes by San Francisco being-I would not say exactly how much-about 10 per cent

of the

gross.

Mr. WINTER. How do you account for that difference?

Mr. BALLARD. For what?

Mr. WINTER. For your company being able to supply electricity there in the same State cheaper to the consumers of one city than it is furnished to the consumers of another city?

Mr. BALLARD. The first element is that the San Francisco company, being a private company, is required to pay taxes both to the State and to the Federal Government. The second consideration is that the securities of the San Francisco company are not tax exempt, and therefore the holders of those securities must pay taxes to the Federal Government, and because of that reason require a larger interest rate than the tax-exempt securities. The third reason is that the San Francisco Co. or companies furnishing the supply in San Francisco are part of a large system supplying not only San Francisco, but a large surrounding territory, including many thousands of acres of farm lands, with lines stretching away out into the country.

Mr. WINTER. Pumping water?

Mr. BALLARD. Pumping water for irrigation, and under the system of regulation of the railroad commission of California there has been a difference in favor of farming communities for the purpose of building up the back country. In other words, that company, as in our own company, has a rate that has been a little bit more than would be the rate based strictly on the cost of service in that city if that could be accurately determined, in order that rates to the farming communities outside could be lowered.

Those three reasons account for the difference in rates.

Mr. WINTER. So that if the Government develops this project it will be tax free and the consumers would get the electricity cheaper than if developed by a corporation?

Mr. BALLARD. No. I say no to that question. Those conditions I have just outlined-my judgment is that a development such as is

proposed under the Swing-Johnson bill would make the rate to the consumers higher than the development of the same power interconnected with the so-called private company's business, for the one particular reason, above all others, of very great diversity in the time of use as between the different companies, the farm lands, the electric railways, the big manufacturers, that are located outside of the cities, nearly all of them-the largest of them, reducing that cost. My judgment is that the rates to consumers under the Public Service Corporation development of that river would be lower than under the plan as proposed in the Swing-Johnson bill.

Mr. WINTER. I thought you stated one of the reasons Los Angeles could sell cheaper, was, in fact, that they were tax exempt, tax free. Mr. BALLARD. That is one reason. It has its effect.

Mr. LITTLE. Has it ever occurred to you that they have a higher standard of average living in southern California than in any other place in the world?

Mr. BALLARD. Yes; I think that is true. I think we helped to make that.

Mr. LITTLE. I think you did, and I think we will help push you along, if you do not discourage us.

Mr. HUDSPETH. Mr. Ballard, I came in late and if you have answered this question, do not answer it again. I take it from the question you answered asked by my friend from Utah that you have certain franchise rights under the water power act. Have you figured what they are? I would like to know just what rights you have under the present water power act?

Mr. BALLARD. We have developed, I think, 21 hyroelectric plants, and I believe all of them are under the Federal water power act, with, maybe, the exception of one or two of the earlier ones which were by special act of Congress.

Mr. HUDSPETH. Then, would the passage of this bill interfere with those rights and franchises that have heretofore been granted you under that act?

Mr. BALLARD. Not with these particular rights, no; execpt as to the market for the power.

Mr. HUDSPETH. Only as to the market for the power?

Mr. BALLARD. Yes.

Mr. HUDSPETH. But it would interfere with the marketing of your power?

Mr. BALLARD. It would interfere for this reason; that the development as contemplated is too much for the market to absorb in new business. To put the load of this plant on, they have got to take that business away from somebody else, and that is where we would lose.

Mr. HUDSPETH. Do you feel that your company has certain vested rights that would be interfered with by the passage of this bill?

Mr. BALLARD. Well, I am not quite sure in my own mind what the definition of "vested right" is. I don't really know what that

means.

Mr. HUDSPETH. I think a vested right is a right that is recognized that was existing at the time of the passage of a certain act. That is my definition of a vested right.

Mr. BALLARD. We have made very extensive developments of electric power for the use of the citizens of California under and pursuant to the Federal water power act, which we understand to be the law of the land.

Mr. HUDSPETH. Well, it is at the present time.

Mr. BALLARD. At the present time, yes, as to how power should be developed. Now, we feel that this act of Congress, as asked by this bill, is something in the nature of special legislation, to single out special enterprises outside of this law and give them special privileges. In this case it happens to be political subdivisions that are asking for this.

Mr. HUDSPETH. You answered another question regarding the height of the dam asked you by the gentleman from Alabama, that would furnish horsepower to the extent of

Mr. BALLARD (interposing). Three hundred thousand horsepower. Mr. HUDSPETH. That was a 300-foot dam?

Mr. BALLARD. Yes.

Mr. HUDSPETH. Now, is it your judgment that this would be sufficient to supply this number of cities that you set forth here, and I believe a number of cities that are supposed to be supplied by the horsepower that would be created under this bill? Would the 300,000 horsepower be sufficient, or is that taken in connection with the horsepower you have in your system?

Mr. BALLARD. The whole thing is taken together. The 300,000 horsepower development would not interfere with our business; would not create any loss in our business, and would make this thing profitable.

Mr. HUDSPETH. Would it be sufficient for the different cities presented here?

Mr. BALLARD. There is no doubt it would be sufficient for a long time to come, and thereafter additional developments could be made up to more than 3,000,000 horsepower.

Mr. HAYDEN. You spoke of the opposition of your company to the enactment by initiative petition of a law in California authorizing the State to engage in the production of water power. I believe you stated that the Edison company spent some $125,000 in the campaign against that measure.

Mr. BALLARD. Yes.

Mr. HAYDEN. You may remember that there was under consideration in the State of Arizona at the last session of its legislature the question of the approval of the Colorado River compact. I would like to inquire of you whether the California Edison company spent any money or in any way endeavored to influence the action of the Arizona Legislature with regard to that compact?

Mr. BALLARD. The answer is "no" to both questions. We did not spend a single cent nor did we attempt to influence anybody with regard to the compact.

Mr. HAYDEN. There was much newspaper talk and otherwise that certain sinister influences were being used for or against the approval of the compact. Whether your company exercises a sinister influence or not, I would not like to say, but I do desire to have your answer so that it will appear in the record.