Mr. SWING. If the bill was amended by leaving that out, would that meet your principal objection?

Mr. BALLARD. I think so.

Mr. SWING. Would you withdraw your opposition to the bill? Mr. BALLARD. We are not opposing it. We are merely here in explanation.

Mr. RAKER. Let me read you this. That is what I based all my questions on and my statement a while ago that you have presented to the committee here in the second subdivision something-and there has been some little talk about it, excited and otherwise-which is concretely and definitely stated, a proposition which is diametrically opposed to any action by the Government relative to the construction of the Boulder Canyon Dam; and your position is this. I will read it and see if you have changed it. [Reading:]

This company, if given authority by the States whose water rights are affected, and if given a license therefor under the Federal water power act, is prepared to undertake and itself finance dam construction on the Colorado River, which will not only serve the purpose of hydroelectric power to production, but will also provide the same full measure of flood control and supply of water irrigation or arid lands, as is contemplated under the pending bill. Its application for license to carry on power development of the Colorado River are already on file with the Federal Power Commission and can be referred to for particulars.

That is the position, the crux of your company's position relative to this legislation?

Mr. BALLARD. No; that is not. That. is one element, and if you will read the beginning, the opening of the letter, I think you will get it. Suppose you read the beginning.

Mr. RAKER (reading:)

Your honorable body has had referred to it H. R. 2903, a bill introduced by Mr. Swing, entitled "A bill to provide for the protection and development of the lower Colorado River Basin." This measure authorizes and empowers the Secretary of the Interior to construct a dam and reservoir on the Colorado River at or near Boulder Canyon, and makes appropriation from the United States Treasury of amounts necessary for such purpose, not exceeding $70,000,000. It is assumed that your investigation of this measure will cover not only the question of the desirability and necessity of the proposed works, but also the question of whether agencies other than the United States Government itself are available for the accomplishment of the result desired; and if so, how such agencies can best be utilized with a view to the public interest. As bearing upon this possible phase of your consideration of the measure, Southern California Edison Co., of Los Angeles, Calif., presents the following statement.

Then that statement which I read follows.

Mr. BALLARD. Isn't that clear? That means to me this. This is what it is intended to mean, anyway. If for any reason, the Government finds it inexpedient and does not wish to appropriate money, then the work on the Colorado River need not be stopped, because here is an agency that itself will do the work.

It is not intended as a substitute for this bill, or as a substitute for the proposition of the Government advancing the money, if it

wants to.

I preceded that statement by reading the position of the company, from an interview of Mr. Miller, our president, in 1921, in which we said that we were not in opposition to appropriating money for the building of a dam on the Colorado River.

So, you have this situation. Our objection does not lie to the proposition of the Government appropriating money, but rather to the size of this proposition, from an economic standpoint, pointing out in that case, if carried through, it will not do what is claimed for it, on the one hand, and secondarily, that if the Government does not find it convenient to erect that dam, for goodness sake, give us the permit and we will do it.

It is either the Government or ourselves. That is the position we are putting up.

Mr. RAKER. That is what I have been contending for all the time.

Mr. BALLARD. You, I think, have been trying to make it appear that we are asking here solely and only for a proposition that we shall be given the rights to develop power on the Colorado River. Mr. RAKER. First?

Mr. BALLARD. We have not; no.

Mr. RAKER. Then, I take it, to sum it all up, it means this. That if the Government does not want to develop it and does not want to go ahead by proper legislation, why then, you want the opportunity?

Mr. BALLARD. We feel that the development is so necessary to the future of the southwestern territory, that if you are not going to do it and do it speedily, for goodness sake, get out of the way and let us do it.

Mr. RAKER. But the trouble of it is we find so many obstacles and objections to the Government doing it.

Mr. BALLARD. Well, what objections are those? None that I have raised.

Mr. SWING. You have three different filings on the river, beginning with Glen Canyon on the north, and coming on down to Pyramid Canyon. Just where is Pyramid Canyon?

Mr. BALLARD. It is way below Boulder Canyon.

Mr. SWING. Your filings cover the most available-known power sites between those points, do they?

Mr. BALLARD. The best known; yes.

Mr. SWING. What is the aggregate horsepower of all of the sites covered by your filings?

Mr. BALLARD. I think about 3,000,000 horsepower.

Mr. SWING. And you stated you filed those in good faith and within a week after your permit was granted you would go to work? Mr. BALLARD. Yes.

Mr. SWING. And go to work at the rate of $30,000,000 a year?
Mr. BALLARD. That is the statement at present; yes, sir.

Mr. SWING. The first unit of development would be a 300,000 horsepower of electricity?

Mr. BALLARD. I can not say that definitely. Of course, that would be

Mr. SWING (interposing). Wasn't that your statement?

Mr. BALLARD. Excuse me a minute. We are not free agents in that respect. That would have to be decided by the Federal Water Power Commission.

Mr. SWING. It was your idea?

Mr. BALLARD. It is our idea that that would be the best.

Mr. SWING. How soon, at $30,000,000 a year, could you get that into operation; that is, the 300,000 horsepower into production? Mr. BALLARD. I think inside of two years.

Mr. SWING. Inside of two years?

Mr. BALLARD. Yes.

Mr. SWING. How soon, following that, in your opinion, should further development take place?

Mr. BALLARD. As soon as the market needed it.

Mr. SWING. Well, you have in mind the curves of the increase of market demand. You have your engineers who advise you. What is your present idea on that point?

Mr. BALLARD. I have not any.

Mr. SWING. The manager of the company has not any idea what the demands of the community you are serving would be 10 years from now?

Mr. BALLARD. Not beyond further development of 300,000 horsepower on the Colorado River.

Mr. SWING. Do you stop there?

Mr. BALLARD. Not if the market requires more. We are in the business of selling electricity.

Mr. SWING. Well, when you said you would proceed to develop at $30,000,000 a year, you mean for two years only?

Mr. BALLARD. As long as the market needed it.

Mr. SWING. Well, it was not facetiousness on your part in referring to the tremendous development of the Southwest a while ago. You really anticipate and are planning or looking forward to a development which will call for practically the full development of 3,000,000 horsepower covered by your sites, are you not? Mr. BALLARD. In the course of time, yes.

Mr. SWING. Well, give me your best estimate of how soon you would go from 300,000 horsepower on the Colorado River to 600,000 horsepower?

Mr. BALLARD. I can not make an estimate at the present time. Mr. SWING. You can, as well as any member of this committee. Mr. BALLARD. Well, I do not think any member of the committee can, either; nor you.

Mr. SWING. Call it a guess, if you want to. But give us some idea of what you think the future market will be.

Mr. BALLARD. There are too many factors involved for a man, particularly in a proceeding of this kind, to make an estimate of that kind.

Mr. SWING. But all those factors you have in mind?

Mr. BALLARD. I have in mind so many of them that I would not be prepared to make an estimate.

Mr. SWING. Would you say that there would not be a market for 600,000 horsepower under 10 years?

Mr. BALLARD. No.

Mr. SWING. There could reasonably be a market for 600,000 horsepower within 10 years?

Mr. BALLARD. There could reasonably be; yes. But there would not be a market for 600,000 horsepower for any one year additional. That is what is the matter with this proposition.

Mr. SWING. Well, we will discuss that later on in another way. What is your outstanding indebtedness at the present time; that is, the outstanding indebtedness of the company?

Mr. BALLARD. We have $102,000,000 of bonds and I have just received a telegram from the president that he is selling $14,000,000 more at the present time.

Mr. SWING. You have no funds or resources available at the present time with which you could do any work on the Colorado River, have you?

Mr. BALLARD. We have the financial structure and the banking associations or connections that would make it easy for us to get the money, and we are very confident there would be no trouble in getting it.

Mr. SWING. You are confident you could sell bonds and stock? Mr. BALLARD. For a proportion of it, yes.

Mr. SWING. Your tentative idea is to have three-quarters bonds and one-quarter stock?

Mr. BALLARD. Well, about 70 per cent bonds, I think.

Mr. SWING. That is, you feel that this Colorado River is such a feasible source of supply of an immense amount of cheap power, and southern California is such a reasonably certain market for that power, that you would have no difficulty in selling whatever amount of bonds was necessary to make the development on the river which you have in mind, and which you have narrated to this committee? Mr. BALLARD. Your question is too involved to permit of a single answer. You should strip from the question southern California being the big market.

Mr. SWING. Well, the southwest.

Mr. BALLARD. You had better expand the question to say the Southern States, the market for the power for the Southern States. Mr. SWING. The available market around Boulder Canyon, or any dam built thereabouts would be such that you would consider that you would have no trouble in convincing the financiers of the country that it was a proper bond issue to underwrite, would you? Mr. BALLARD. For what?

Mr. SWING. For the development. You have filings, you say, in good faith, aggregating 3,000,000 horsepower, and you are prepared to go to work at the rate of $30,000,000 a year. You mean it? Mr. BALLARD. Yes.

Mr. SWING. You say it because you have some reason back of you? Mr. BALLARD. Yes.

Mr. SWING. That is your faith, and you could put the bonds on the market to support it?

Mr. BALLARD. Yes. As part of your question was a statement that we feel that the market in and about Boulder Canyon is such, I will say that we do not feel that at all.

Mr. SWING. The market in the Southwest that could be reached from a dam located at that place .

Mr. BALLARD. No. The market of the Southwest would not be reached from a development of Boulder Canyon. Three million horsepower takes the whole river, practically. That is part of the river below Lees Ferry.

Mr. SWING. Yes; but I meant ultimately, 600,000 at or about Boulder Canyon and the rest of it where you had filings.

Mr. BALLARD. We think it would be a very long time under any economic plan before 600,000 horsepower could reasonably and economically be developed at Boulder Canyon.

Mr. SWING. It would have to be brought on gradually over a number of years?

Mr. BALLARD. Gradually and not all at Boulder Canyon.

Mr. SWING. Possibly over a period of 10 years?

Mr. BALLARD. Yes, sir. Some of it would have to be higher up on the river in Arizona.

Mr. SWING. Mr. Ballard, this proposal of yours to the committee to take off of the Government and off of the taxpayers of the country the burden of building this dam and placing it upon your stockholders is substantially the same one that you yourself personally made to the Department of the Interior at their hearing December, 1921, at San Diego, and which offer was then turned down, was it not?

Mr. BALLARD. I made no offer to the Department of the Interior at San Diego.

Mr. SWING. You read a written proposition at that time, did you not?

Mr. BALLARD. Yes; read a written proposition at a meeting over which Secretary Fall presided.

Mr. SWING. And in which you offered to expend from $30,000,000 to $40,000,000 a year, the same proposition you have made here? Mr. BALLARD. At that time; yes.

Mr. SWING. I say, the same proposition which you made then you are making now?

Mr. BALLARD. We made that offer publicly at a hearing presided over by Secretary Fall.

Mr. SWING. And which was considered by the department and turned down by them?

Mr. BALLARD. I never heard of that.

Mr. SWING. Subsequently, they made a report, a recommendation that the Government do it and not yourself?

Mr. BALLARD. Well, who made the report?

Mr. SWING. The Interior Department.

Mr. BALLARD. Is that the same Interior Department we have today?

Mr. SWING. I think the same engineers.

Mr. BALLARD. Are you sure about that?
Mr. SWING. The same organization.

Mr. BALLARD. Are you sure about that?

Mr. SWING. Well, what I am talking about is this. It is the same offer.

Mr. BALLARD. We made that offer publicly at San Diego.

Mr. SWING. That is all.

Mr. BALLARD. By the way, Mr. Chairman, if you are nearly through, there are

Mr. RAKER. No, before you go ahead, I wanted to ask you a few questions. Are any of the directors interested in this company or in the National Bank of Los Angeles, so far as your connections are concerned, interested in the lands across the border in Mexico or Lower California?