GENERAL SUMMAKY. 153 



heavy investment consequent to development, an interest rate of 

 8 to 10 per cent as obtaining in the United States places water 

 power above competition with coal and oil under their present cir- 

 cumstances of overproduction and cheap supply. Such power 

 sites as have developed, aside from those initiated by the Govern- 

 ment under war conditions, have been choice examples with such 

 natural advantages of topography and location as to offset the 

 financial handicap. With no change in financial status, water power 

 can not develop until coal and oil are skimmed of their cream. In 

 the case of oil, this is impending, and in the far West but a few years 

 distant, there merely waiting upon the decline of the California 

 oil fields. 



The provision of a common-carrier system for the transmission 

 of electricity will remove the factor now retarding the generation 

 of carboelectricity ^ in coal fields. It will also relieve hydroelec- 

 tricity of part of its development expense ^ and also reflect a degree 

 of stability upon hydroelectric projects that will secure for them 

 an interest rate comparable with that under which the railways are 

 financed — namely, 5 to 6 per cent instead of 8 to 10 per cent. This 

 will bring a considerable addition of water power into competition 

 with coal and oil. 



As the main default in our present system of power usage is trans- 

 portation, and both carboelectricity and hydroelectricity can be 

 remedied through an improvement in transportation, the fm-ther- 

 ance of this matter attaches itself to the administration which has 

 railway transportation in hand. The ultimate status of the matter 

 will fare alike with the ultimate status of the railways. But at 

 present, a special business organization for undertaking this special 

 activity is desirable, to be brought into being by the Government, 

 ultimately to be either under Federal ownership or else under pri- 

 vate control with Federal oversight, as the outcome of the railways 

 may dictate. The Federal backing, in either event, will give the 

 requisite standing and stability to create the public confidence essen- 

 tial to the success of the enterprise. The organization charged 

 with this matter will naturally confine its operations to the trans- 

 portation of energy, but as this development will open to business 

 enterprise a large and favorable field in the production of carbo- 

 electricity and hydroelectricity, it may fairly exercise a measure of 

 oversight over the operations of these various producing units to 

 the extent of insuring a balanced, coordinated upgrowth and effective 

 operation of the whole matter, at the same time avoiding the impo- 

 sition of any restrictions which might curtail private initiative and 

 enterprise. In this sense, also, the central organization would find 

 an interest in facilitating the by-product consumption of coal in 



1 Electricity generated from coal, as opposed to hj'droelectricity as generated from water power. 

 ' Under present conditions the transmission line is part of the hydroelectric development. 



