Senator PHIPPS. And then your one-third to one-fourth cent production at the aqueduct plants, when that is delivered in the city. that is put in with the other power that you pay 8.2 mills for? Mr. SCATTERGOOD. And averaged in; yes, sir.

Senator PHIPPS. And the result is in mills, isn't it? I think that at Santa Monica we paid more than that. If

Mr. SCATTERGOOD. If you were on the end of that 600-mile line, you would pay more than twice what you pay at Santa Monica, or about that.

Senator PHIPPS. I think not; Senator Ashurst may know. I haven't any idea of the retail cost down there.

Mr. SCATTERGOOD. Well, I have been told, Senator Ashurst, that Arizona-by Arizonans-contemplate certain developments in southern Arizona, and will not be interested in Boulder Canyon power for some years. And that is why I excluded it in a statement which I wanted to be safe and conservative.

Senator ASHURST. If you were told anything by an Arizonan, I would be inclined to believe it, of course.

Mr. SCATTERGOOD. The city of Los Angeles, of necessity as well as choice, and in conformity with an overwhelming vote of its people, recently and in conformity with the advice to the city government of the citizen's committee of 15, which I have referred to, stands ready to contract with the Federal Government for all of the Boulder Canyon power that is not needed and desired by other States or other communities in southern California; and the city of Los Angeles stands ready to finance the proportionate share of the cost of the dam and storage reservoir in proportion to the power allotted to it in toto or in such amount as may not be provided by Congress toward the cost of that dam.

The CHAIRMAN. May I ask you at that point-that is the most interesting point-the dam would cost fifty millions and Los Angeles would want a tenth of the power; they would be willing to advance, in construction of the dam $5,000,000? Is that your point?

Mr. SCATTERGOOD. To whatever extent Congress wishes that the Southwest should finance it; yes; or whatever the cost may be in excess of any that Congress may see fit to appropriate; yes; if it is all of it, so far as the dam and reservoir are concerned.

Senator DILL. Do I understand that other communities would finance part of it in the same way?

Mr. SCATTERGOOD. Other communities might see fit to have private companies develop the portion which they need and desire, or they may do it themselves, or the Federal Government may appropriate some money so that it would not have to be all provided locally, which we hope they will do; it is the logical thing that they should do, considering the feature of flood control.

Senator PITTMAN. You have just stated that Los Angeles would be certain to use a certain proportion of power. Now, speaking for the southeastern part of Nevada. As you have already indicated. the use of the power there would be chiefly for mining and for the development of certain commercial ores there that would require electricity, and for manufacturing in connection with those minerals? Mr. SCATTERGOOD. Yes, sir.

Senator PITTMAN. Now, of course, as you have also stated, time is necessary to prepare for the receipt of that power, and it is essential that there be some guaranty that if the capital is invested and the matter undertaken that the power will be available when they are ready for it. Now, how would it be if there should be a tentative apportionment of the prospective needs of power in advance, allowing each of the States, you might say, to become, as your municipality is, a kind of subscriber for that much power, and in the event they did not use it then it would be turned back into use where there was some demand for it? Would that be a feasible proposition? Mr. SCATTERGOOD. That was suggested by the director of reclamation at one time, with the understanding that it was agreeable so far as Los Angeles was concerned; yes.

Senator PITTMAN. I thought so; that is the reason I wanted to inquire about it.

Senator ASHURST. I am reluctant to interrupt you, but I read on page 141 of the Senate hearings on the Swing-Johnson bill, hearings last January, Mr. Criswell, a citizen of this city, said:

Mr. CRISWELL. Where private capital is available. You will find that not only in one but in several of their reports and in speeches before organizations, etc.

The question has been raised as to the market and whether this 600,000 horsepower can be absorbed. I am authorized by the responsible officials of the city of Los Angeles to say to this committee that after all the power has been absorbed by other communities which they desire, the city of Los Angeles will enter into a contract to take all of the remaining power at a royalty that may amortize the bonds for the building of this dam in a period of 30 or 40 years.

Senator ASHURST. Do you say when all other communities get what they desire when Arizona, Nevada, and the California counties that are interested have put in their demands for their necessities-Los Angeles will take the balance?

Mr. CRISWELL. Los Angeles will take the balance, and not only will take the balance but we would probably wish that it was more.

Senator ASHURST. So that the 600,000 horsepower of hydroelectric energy proposed to be generated at Boulder might be considered to be already bargained for and ready to be taken?

Mr. CRIS WELL. All of it is already taken, every kilowatt-hour.
Senator JOHNSON of California. Yes; every bit of it.

Now, is that what we are to understand?

Mr. SCATTERGOOD. Yes; that is what I tried to say.

Senator ASHURST. Then we have no need to worry about the power market, because all that could be generated there is ready to be taken?

Mr. SCATTERGOOD. More need to worry about lining up the second development on the Colorado River.

Senator ODDIE. What estimates have been made as to the amount that might be taken by transcontinental railroads if they should electrify?

Mr. SCATTERGOOD. It would be a pure guess, based on an uncertain

memory.

Senator ODDIE. Just guess at it.

Mr. SCATTERGOOD. It seems to me it is something like 150,000 horsepower that the Reclamation Service figured out some five years ago for the use of railroads that would be likely to electrify.

Senator ODDIE. One particular line or more?

Mr. SCATTERGOOD. No; the Santa Fe and Southern Pacific, adjacent to the Boulder Canyon, the most nearly adjacent to it. Of course, the Union Pacific was not, if I recollect, included within that at all. I dislike to give you any figure so uncertain, but it is something of that magnitude.

Senator ODDIE. Just approximate is all we wanted.

Mr. SCATTERGOOD. The Senate has on record a statement of the figures submitted by the bureau of power and light, which has charge of its electrical development, the city of Los Angeles, which shows a surplus of some $3,000,000, which is being used for amortization of its bonds, two-thirds for betterments. That surplus is increasing; it was a little less last year under very low water, but will be more this year, and is increasing and will be probably $4,000,000 per year by the time any demand on the power bureau's surplus might be realized toward reimbursing the Government for annual charges or for interest on construction money. But we have that surplus available for those purposes and are in a position to finance and do the work so far as our end of it may be. I thank you very much.

Senator PHIPPS. Mr. Scattergood, reverting to our little talk about the cost of production on the aqueduct line, I do not want the record to carry a wrong impression, but I understood you to say that the cost of production of hydraulic power in those aqueduct plants was 1.3 or 1.7 mills?

Mr. SCATTERGOOD. No, sir; I said it was a little under one-third of 1 cent per kilowatt hour, which would be a little over 3 mills.

Senator PHIPPS. I misquoted you then in repeating your statement, which I did not mean to do, of course; but 3 mills, say, to 4 mills; in that you are not making any allowance for the cost of constructing the aqueduct line at all, are you?

Mr. SCATTERGOOD. Yes, sir..

Senator PHIPPS. You are charging hydraulic production with its proportionate share of interest and amortization on the aqueduct and on the power plants and on your transmission lines?

Mr. SCATTERGOOD. So far as that should be, considering the uses made of that combined project in the opinion of the officials of Los Angeles for the last 12 years as they have come and gone.

Senator PHIPPS. Then your figure, including all of it, is exactly comparable to the figure that you also gave as the cost of the Boulder Dam power delivery 300 miles from the source of the production? Mr. SCATTERGOOD. It is comparable, the one being 0.33 cent and the other 0.35. The cost of power as figured and stated to you, from the aqueduct plants, includes interest and amortization of power bonds invested in the aqueduct. The division of costs between power and water on the aqueduct was worked out many years ago by the board of public works and the city council. The aqueduct is operated from the standpoint of water and not from the standpoint of power. And if it were operated from the standpoint of power instead of water the power could afford to pay the interest on cost of the aqueduct and still be something like as well off.

Senator PHIPPS. But on the Boulder Canyon you have not only hydraulic power, but you are to have reclamation.

Mr. SCATTERGOOD. Well, the assumption was that the whole cost of Boulder Dam is charged against power.

Senator PHIPPS. Then we get back to this point: Under your statement it costs you but a fraction more to produce hydraulic power in your present aqueduct plants than you expect it to cost for producing at the Boulder Canyon Dam plus the delivery charge 300 miles distant.

Mr. SCATTERGOOD. Yes, sir; because the fund has paid a good deal in connection with that aqueduct and power project and not nothing, as has so often been repeated, and because they are smaller plants and therefore cost more.

Senator PHIPPS. In the light of that, if you do double the amount of water that you had coming through your aqueduct that you now have, which would double your production of hydroelectric power, it would not cost you any more than the power you propose to make at Boulder Canyon?

Mr. SCATTERGOOD. Senator, the cost of the Boulder Canyon is $0.35 from the aqueduct plant at the present time. $0.33. It is already a little less. When the aqueduct is full and those plants completed the cost of those plants on our present Owens River aqueduct will be 0.25 cent, very much less than the Boulder Canyon power. They are not completed. Most of the investment is there, but only two-thirds of the machinery. The aqueduct water has not been developed to the full, and there has been no occasion for it: but it is gradually being developed to the full, and the basis for that development is not quite worked out at the present time.

Senator ODDIE. What estimate have you made of the percentage of loss in transmission from the Boulder Canyon?

Mr. SCATTERGOOD. The average per cent of loss is 10 to 12. I don't recollect exactly what we did find the average energy lost.

Senator ODDIE. From Boulder Canyon to Los Angeles?
Mr. SCATTERGOOD. Yes.

The CHAIRMAN. According to our schedule, two additional witnesses were contemplated to-day, but inasmuch as it is now 12 minutes after 5 and the committee has another obligation for 5.30, we will adjourn at this time, and we will resume in the morning at 10 o'clock.

(Whereupon an adjournment was taken at 5.15 o'clock p. m. until Tuesday, October 27, 1925, at 10 o'clock a. m.)

COLORADO RIVER BASIN

TUESDAY, OCTOBER 27, 1925

UNITED STATES SENATE,

COMMITTEE ON IRRIGATION AND RECLAMATION,
Los Angeles, Calif.

The committee met at 10 o'clock a. m., pursuant to call of the chairman, in the ball room of the Hotel Biltmore, Los Angeles, Calif., Senator Charles L. McNary presiding.

Present: Senators McNary (chairman), Johnson, Shortridge. Ashurst, Kendrick, Pittman, Oddie, Phipps, and Dill.

The CHAIRMAN. According to the program, Shirley C. Ward is the next witness. I believe you are the chairman of the citizens committee?

Mr. WARD. Yes, sir.

The CHAIRMAN. You are to address the committee upon the subject of the interest of Los Angeles in securing additional power. You may proceed. Prior thereto, Senator Ashurst has an announcement. Senator ASHURST. Mr. Chairman, I desire to announce for the purpose of the record that Mr. Fred T. Coulter, Mr. F. A. Wade, and Mr. Ralph Murphy have been duly appointed to represent the Governor of Arizona at this hearing in response to an invitation generously extended by the people of California; the governor has sent these three gentlemen.

The CHAIRMAN. Thank you, Senator.

STATEMENT OF SHIRLEY C. WARD, CHAIRMAN OF CITIZENS

COMMITTEE

Mr. WARD. Mr. Chairman and members of the Senate committee. I esteem it a great privilege to have been chosen to present this aspect of this question to this committee. My theme is not exactly the interest of the city of Los Angeles, but the attitude of the city of Los Angeles as represented by the last nonpartisan expression on the problems involved in this controversy. You gentlemen realize in your large experience the difficulty of getting from a purely ex-parte hearing the truth on any problem. This city has been disturbed for a good many years, ever since the Colorado River project-ever since we began to agitate it-as to the advisability and necessity of going there. There was the attitude of the Los Angeles Bureau of Power and Light and Water, with which you are well familiar, in favor of going; there was the attitude of the southern California Edison Co. and a large coterie of sympathizers with this investment and the preservation of its investment against going; and it was almost impossible to reconcile and has been up to date, was almost impossible to reconcile those conflicting contentions. The situation