982 



AMERICAN FORESTRY 



DIVERSION DAM I-OR PLANT NO. 2 OF THE PACIFIC LICIIT AND POWER CORPORATION 



Tliis is on Big Creek, Sierra National Forest, Californa. Practically all the land used by this company is within the Sierra National Forest. Fur- 

 ther develoitments contemplated by this company on the same forest will utilize power sites botli on Big Creek and on the San Joaquin River. 



Let US admit the force of these art^uments. Business 

 must lie profitable to exist, and the welfare of many 

 regions depends largely on the prosperity of certain large 

 enterprises. 



ISut. is it impossible to do business with Uncle Sam, 

 and cannot the general welfare be better protected in this 

 way? Water power representatives answer enii)hatically 

 No! Regulations are burdensome; they reduce profits; 

 and uncertainty of tenure through re\'ocal>le leases, makes 

 it impossible to secure capital for such investments ex- 

 cept at greatly increased rates. It is asserted that those 

 who insist that the nation should retain its property in 

 waterpowers do not grasp the intricate financial and 

 engineering problems involved in waterjiower develop- 

 ment, and are enemies of true conservation, for while 

 they hamper and prevent cajjital from developing these 

 powers, millions of horsepower are running to waste, 

 never to be recovered or used ! 



The specific claim made by opponents c^f national own- 

 ership is, that the retention of public lands controlling 

 waterpower and the system of leasing under permit has 

 retarded and hami)ered the development and conserva- 

 tion of these western waterpowers. To prove this, statis- 

 tics can be cited to show that the ratio of developed to 

 lotal available power in western states is very low when 

 compared to states east of the Mississippi. This is true, 

 but doi-^ it prove the point? JJ'atcr poi^'cr is a coiii- 

 iiuxlitv. icliick iiiiist he nuirkctcd ami used. To utilize 

 ]iowcr we iiiu^l h.-ive factories, lighting systems, large 



towns, a reasonably dense population, and many natural 

 resources to use as raw materials in manufacturing. 

 Profits depend, first upon the market for power, second 

 upon the cost of installation and service, third, upon the 

 price of power. National ownership exerts no influence 

 upon demand for power, and its effect upon costs is con- 

 fined to a small, almost insignificant charge based on the 

 amount of power developed, and to the "intimidating" 

 effect on borrowed capital or bonds, which might increase 

 the rate of interest or prevent the financing of the enter- 

 prise. It is self-evident that investors would prefer to 

 own these powers outright, and that insistence on the 

 principle of leasing has probably caused delay and dis- 

 satisfaction in many instances. In spite of this, the 

 waterpower industry in uiaiiy portions of the z^'est is at 

 present overdeveloped. In California alone, for the year 

 T.U f, the maximum demand for power was less than (iO 

 per cent of the installation. (Hearings before Committee 

 on Public Lands, \}. S. Senate, G;3rd Congress, 2nd Ses- 

 sion. Page .j.jG.) The power development under lease 

 on national forests is increasing, at present, relatively 

 much faster than elsewhere. During 191 1 there was an 

 increase of 'Mi per cent in the total capacitv of all ])ros- 

 pects for which permits hat! been granted, and the actual 

 outi)Ut of electric energy increased in this one vear 150 

 per cent, or from 111,000 to 2()(),000 horsepower. If, as 

 indicated, there is a surplus of waterpower in excess of 

 m.irket requirements, in the west, lamentations at the 

 waste of unused powers seem strangely out of pl.ice ,inil 



