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Mr. BALLARD. I do not know as to that.

Mr. RAKER. That information we would have to get some place else?

Mr. BALLARD. Yes.

Mr. SWING. Right there, won't you tell us whether Mr. Harry Chandler is or has been a stockholder in your company?

Mr. BALLARD. I do not think he is or ever has been.

Mr. SWING. You would know?

Mr. BALLARD. If he is now, he is not a stockholder of any amount. Mr. SWING. Would you testify under oath that he is or is not? Mr. BALLARD. I would not testify under oath that you are not a stockholder. You ought to be.

Mr. RAKER. Mr. Rose related a conversation before the committee. I tried to get it, but couldn't. Possibly you read it or have been advised about it. It was a conversation at which yourself, Mr. Miller, and others were present in the city of Los Angeles, about a year ago. You remember a meeting by Mr. Rose and Mr. McFarron with the officers or members of the Edison Co. in Los Angeles? Mr. BALLARD. Yes; I remember it very well.

Mr. RAKER. Tell us who were present, Mr. Ballard.

Mr. BALLARD. Well, I do not know that I can tell you all who were present.

Mr. RAKER. As near as you can.

Mr. BALLARD. But I can recite to you the meeting, as near as I can recollect, who were there and what happened. The meeting was called by the engineer of the State of Nevada in conjunction with the engineer of the State of Arizona, for the purpose of seeing if they could bring what they thought were the two contending parties concerning the Colorado River development together, to see if they could work out a plan under which development might go forward.

Mr. HAYDEN. The engineer of the State of Arizona?

Mr. BALLARD. Mr. Norveil. He was the water commissioner for the State of Arizona. There was present Mr. Scrugham, who was the engineer for Nevada. Mr. Scrugham told me the day prior they had their meeting with the power officials of the city of Los Angeles. They asked us to attend a meeting at which the directors of the Imperial Valley Irrigation District would be present, and my recollection is they were all there, five in number. My recollection is that Mr. Scrugham was present and presided over the meeting; that at that time the water commissioner of Arizona, Mr. Norveil, was present. Mr. Miller, the president of our company, was present; and Mr. Ward, the vice president; also Doctor Hoxie, Mr. Barre, our executive engineer, and Mr. Reppy, our general counsel. I am not sure whether Mr. Brackenridge, our senior vice president, who is himself one of the country's great engineers, was present; but I think so.

The purpose of the meeting was the consideration of the proposed Edison development on the Colorado River. The Edison plan was thoroughly discussed. A map showing the advantages of the dam at Glen Canyon for flood-control purposes and the following natural power developments were discussed. All seemed to be very much interested in the plan, and the position of the Edison Co. was asked for and was given by the president of the company. I have a copy of

that here. The statement of the president was prepared in advance of the hearing and signed and delivered, read at the meeting. That statement is as follows:

MEETING OF AUGUST 3, 1921

Memorandum of statement made by John B. Miller, president of Southern California Edison Co., before representatives of the States of Arizona and Nevada and of the Imperial Valley, relative to development of the Colorado River:

We are in a position to meet the demands of the States bordering on the Colorado, affording them the protection they are entitled to and meeting the requirements of the Imperial Valley and neighboring lands, without cost to them, except in so far as they individually desire to join with us as stockholderpartners.

The project must be developed from the standpoint, first, of flood control; second, irrigation; and third, power development. Fortunately, there is no conflict between these interests, as a proper development of the Colorado River will insure adequate provision for flood control, irrigation, and power.

The experience of many years of water-power development and long-distance transmission of electric power, during which time world's records were constantly broken, in building one of the largest power developing and transmission systems in the world, has so trained our executive and engineering forces that they do not look with apprehension upon the difficulties which must be overcome in making this enormous development, probably the greatest in the world. The growth of water-power development in popular favor and the continuous success in financing our properties over a period of 20 years have attracted to our projects some of the largest and most successful investment bankers in the country, who may be relied upon to provide the funds for the purchase of bonds and to distribute these bonds to the individual investors throughout the entire country, thus insuring more than two-thirds of the cost of the project. The remaining part of the cost is to be secured through the sale of dividend-paying stock in the enterprise to the people generally through the entire Southwest, along lines exactly similar to those being followed successfully by our company. The actual ownership of the project will be by the people at large through the sale to them of capital stock; thus vesting the ownership in the people served.

With the granting of the final States' permits and Federal power commission authority, we will be in a position immediately to begin construction work on the project. The whole project would be developed under a 50-year license from the Federal power commission, by the terms of which the Government would retain the right to take over the property as a going concern at the end of the period by paying only the actual investment.

The potential power possibilities of the Colorado River are very great, and all of this power may be developed under our proposed cooperative plan of associating with us in the management and retail distribution power companies throughout the entire area to be served, comprising all or parts of seven States. The millions of horsepower of cheap water power to be developed, would be distributed to consumers under public regulation of States and of the Govern ment itself, without discrimination as between individual consumers or communities. No one is in position, at this time, to say how low these rates will be, but regulation permits of only a reasonable interest return upon the investment, retaining for the sole benefit of the rate payers the lower cost of construction and more efficient operation under private initiative.

Our project provides for complete control of the river from the standpoint of flood protection and irrigation, and locates the dam high up on the stream, making possible the repeated use of the water for power purposes through a chain of power houses, which may eventually be seven in number, developing over 4,000,000 horsepower.

The present demands for power in southern and central California are a little more than 500,000 horsepower: in addition to which there are pressing demands for new developments in the bordering States. The sum of these demands is, however, not sufficient to immediately absorb two large developments and duplicate investment of many millions of dollars in parallel dams. Therefore, in order to secure the most economical development from all standpoints, including flood control, irrigation, power, and lowest rates, with good service to the people, the project must be considered as a whole, and the power

Under parallel

development made in such units as the market will absorb. construction the interest on idle investment would be so great as to seriously delay, if not to completely jeopardize, the whole development.

Because of the size of the undertaking, and its unquestioned tremendous benefits to all in the southwest territory, complete understanding and earnest cooperation on the part of the people is necessary to insure its development at an early date. Misunderstandings result only in delay.

Mr. SWING. That was the opening statement?

Mr. BALLARD. That was the statement, and around that statement the whole discussion was carried on. Mr. Rose's testimony made some mention of having asked somebody to put up a bond of $10,000,000, and somebody would not do it: therefore the deal was off. But I think Mr. Rose is entirely mistaken. That bond of $10,000,000 was never mentioned by anybody. Mr. Rose also said the meeting was called by our company. He was entirely mistaken. It was called by the engineers of the States of Nevada and Arizona.

Mr. RAKER. It was stated that if the Imperial Valley would get off and let this alone, you folks would develop it.

Mr. BALLARD. There was another fallacy in the statement of Mr. Rose, in which he said that the company's officials asked the Imperial Valley directors to back up the company's developments as against the bill of the Government to develop the river.

I call your attention to the fact that the date of this meeting was August 3, 1921, and the date of the introduction of this bill in the prior session of Congress was April 25, 1922. This conference was held before any bill at all was introduced or was even in contemplation by anyone, for Government development.

Mr. SWING. You do not mean that there was not any bill in contemplation?

Mr. BALLARD. Not that I know of. There followed a suggestion from Senator Fall that probably the Government might make such appropriation.

Mr. SWING. The bill has been in contemplation by the Imperial Valley for a number of years. You may be wrong about that.

Mr. BALLARD. This meeting was held on August 3, 1921. The first Swing bill was introduced in the last Congress, whatever its number was, in 1922.

Mr. SWING. We are simply waiting.

Mr. BALLARD. The first intimation we had that the Government anticipated any legislation to provide an appropriation was Secretary Fall's statement, which Mr. Miller, September 16, 1921, a little over a month after this meeting, answered or commented upon in the public press of Los Angeles, and I read to you this morning that statement, in which he said we were not opposing Government development.

Mr. SWING. The Kinkaid Act reported by this committee directed the Reclamation Service to make an investigation and report, and promptly following that report it was always the intention of the Imperial Valley to have a bill introduced to carry out whatever that report might be.

Mr. BALLARD. That may have been their intention, but we have no record of it. The record is very clear. Mr. Rose is entirely mistaken in three or four statements that he made to this committee.

There is one other statement I would like to clear up, if you will give me one more minute. Some other statements were made by Mr.

Mulholland and a few others. In fact, I think, gentlemen, that some of these men must have gotten together in a room somewhere to see if they could find a goat and I was it, coming out one after the other with statements of what I did say. Most of the things I did not say. There were some conclusions and even paraphrasing of what I did say, which has gone into this record.

There was another meeting with the publishers of newspapers in Los Angeles, at which Congressman Swing was present. Mr. Mulholland was present, and Mr. Criswell was present. From that meeting some statements have drifted into this record. I have also a memorandum of what I said at that meeting regarding this development. I may say it is our custom in public meetings to keep some form of a record of what we do say.

Mr. SWING. You do not mean at that time that your remarks were in writing and that you read them?

Mr. BALLARD. No. I mean that our general counsel, Mr. Roy V. Reppy, in whom you probably have great confidence

Mr. SWING (interposing). Yes.

Mr. BALLARD. He is a brother lawyer.

Mr. SWING. Oh, yes.

Mr. BALLARD. He made this memorandum after the meeting as to what occurred at the meeting, giving in substance what I said. Mr. SWING. As he remembered it?

Mr. BALLARD. As he remembered it. He has a trained legal mind, such as yours.

This is merely by way of clearing the record. I make no point of these things. As Judge Raker said, I want to be frank in all these matters. I want to have the whole thing clear, so that we may understand where we are all, and perhaps, with that understanding, we will get somewhere. We, all of us, are in very great hopes that we shall.

At this meeting, held at the athletic club, May 28, 1923, the Edison representatives were there and representatives of the city of Los Angeles were there; and Mr. Rose and two other directors, and Congressman Swing were present. Mr. Dickson, editor of the Los Angeles Express, presided at the meeting.

The meeting was called by Mr. Dickson. It was an endeavor to get together with respect to a $35,000,000 bond issue proposed by the city of Los Angeles, which I was advised this morning was defeated.

Mr. Barr, representing the Los Angeles Herald, was present; and Mr. Miller, an editorial writer on the Los Angeles Express, was present throughout the meeting.

I have a little joke on Congressman Swing. Somebody-I think it was the Los Angeles Examiner-in error, said that Mr. Miller, president of the Edison Co., was present; and the Congressman in several speeches said that Mr. Miller the president of the company was present. The Mr. Miller who was there was not the president of the company at all, but an editorial writer on a newspaper.

Mr SWING. At that time, I thought from the authority with which you spoke, that you were the president.

Mr. BALLARD. Mr. Chandler, of the Los Angeles Times, was present; Mr. Young, of the Los Angeles Examiner, was present; Mr.

Sanders, of the Los Angeles Record; and Doctor Barhan, of the Herald.

There were representatives of the five newspapers present, and the idea was to see what could be done. This is what Mr. Ballard said:

Mr. Ballard opened by stating that the company had a sympathetic interest in the problems of the Imperial Valley; that we were not opposing the ambitions of the valley in any way, but were desirous of helping them. He referred to the negotiations of the chamber of commerce looking to a cooperative arrangement between the company and the city for development of Colorado River power, and referred to recent meetings with the chamber of commerce at which the chamber's proposition had been put up to Mr. Ballard, involving a Federal corporation for building generating plants on the Colorado River and joint ownership of a transmission line to Los Angeles in which the city and the Edison Co. would share, and stated that he had tentatively accepted such a proposition in principle at that meeting, but that the city officials had subsequently rejected it. He argued that, owing to the problem of lead factor and high cost of initial installation the only economical method of developing the Colorado was cooperation between the city and the company. He pointed out two false items of the city's position. One was the assumption that 225,000 horsepower would be immediately absorbed; and second, that it would be absorbed on the basis of 65 per cent load factor; both of these assumptions being necessary to the realization of the .44 per cent per kilowatt-hour cost estimated by the city. He explained his rough formula for determining the horsepower needs of the city at the rate of 15.000 horsepower per 100,000 population, and showed that the city would have to have 2,000,000 population before all of the power proposed would be utilized. He read extracts from a pamphlet issued by the bureau of power and light. and charged that certain statements made therein were dishonest, and issued with the deliberate intent to deceive the voters. One was the statement that at the present rate of growth the city would need some 500,000 horsepower in 1927 or 1928. This calculation, he showed, was based upon the assumption that electric railways would be customers of the city and that the electric railway load would grow at the rate of 15 per cent per annum compounded, both of which assumptions were false.

The other false statement to which he referred, was the statement that Edison wholesale power cost 1 cent, while Boulder Canyon power would cost only .44 cent. He showed that the cost of Edison power under P-3 schedule, furnished in quantities such as were contemplated to be delivered at Boulder Canyon, would be in the neighborhood of 8 mills, of which 10 per cent was represented by taxes. He showed, furthermore, that the cost of power from Boulder Canyon during the development period, when the city was gradually gaining load to utilize the entire investment would be something in the neighborhood of 2 cents, and that with the full utilization of the ultimate development the cost would be .44 cent only, on the assumption of 65 per cent load factor, and stated that with all the diversity enjoyed by the Edison Co., it had never yet attained any such load factor, and gave it as his opinion that the city would never be able to obtain such load factor.

Another false statement he denounced was that the city had reduced the rates after acquiring the Edison system. He called attention to the fact that the city had increased the rates during the immediate post-war period, and that after acquiring the Edison system they had reduced them to a point slightly in excess of their previous level, a thing which they could accomplish because of the fact that they escaped the large tax burden which the company had been paying. He called attention to the fact that the rates in Los Angeles to-day are slightly higher than they were at the time the Edison Co. operated it in 1917. With respect to the Colorado River situation, he felt that the voting of these bonds would complicate the situation very greatly, and would thereby retard the flood-control development for the benefit of the Imperial Valley.

He stated that the $25,000,000 proposed to be restricted to Boulder Canyon could be used for any purpose, under the general language of the bond ordinance. Some suggestion had been made by Mr. Dickson that the parties in interest join in advocating the passage of the bond issue, and then take up the discussion of the cooperative plan to which the $25,000,000 could be made

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