122 BULLETIN 102, VOL. 1, UNITED STATES NATIONAL' MUSEUM. 



quired, fuel is usually the most convenient source. For purposes 

 of generating electricity the primary power is ready at hand in the 

 case of operations already established on a steam-power basis, while 

 for the service of expanded or newly projected operations the simple 

 expedient of enlarging or at most erecting a steam-power plant is 

 all that is necessary. In either case the first cost is low, and the 

 chief element in outlay is the expenditures under the heading of fuel 

 purchases, which follow along steadily, but are distributed over the 

 subsequent years of operation. The current proceeds from these 

 operations are counted on to care for this train of expense; hence, 

 from a pecuniar}'^ standpoint on the part of a given industrial ac- 

 tivity, there is no occasion for advance effort in capitalization under 

 this head beyond the amount called for in connection with the sub- 

 ordinate item of cost for the erection and equipment of a steam- 

 power plant. In the case of hydroelectric development, on the con- 

 trary, the conditions are reversed, and the whole weight of emphasis 

 falls at the outset on the initial cost of power-site development. The 

 running cost of hydroelectric power consists mainly in the single 

 item of interest money on the capital represented in the initial out- 

 lay. An analogous condition would obtain on the side of coal- 

 generated electricity if a given enterprise were called upon to pro- 

 vide an adequately equipped coal mine in addition to the power plant 

 itself. In the one instance, as matters now stand, the coal mines are 

 already established in lavish numbers and do not enter into invest- 

 ment calculations; in the other, the power sites, with choice excep- 

 tions, still lie fallow and have yet to be developed if they are to be 

 used. This is the situation facing any given industrial enterprise, 

 liowever large, in respect to establishing its source of power. For 

 the hydroelectric alternative to be chosen, it must present more than 

 equal advantage. Indeed, it must be decidedly preferable, for 

 projects in process of formulation or expansion are apt to find their 

 capitalizing ability pretty fully exercised without taking on the de- 

 velopment of any special source of power, whether in the nature of 

 a coal mine or a water-power site. Hence, in the process of natural 

 selection exerted by business enterprise, water power is usually set 

 aside as presenting claims inferior to coal. 



This holds true not merely for manufacturing projects but for 

 purely electric-power projects as well. No exception is found even 

 in these common instances of municipal electric-power supply, where 

 the bulk of the consumption is on the basis of pay the price or do 

 without. "What is the use, in these cases, of undertaking the tre- 

 mendous extra effort connected with developing a special water- 

 power source, even granted an ultimate saving in cost? A public- 



