FORESTS, RESERVOIRS, AND STREAM FLOW 309 
From the last part of these tables, it is very evident that a royalty 
of $20 per horse-power would turn the scale wholly in favor of steam 
under all conditions of load. In fact, it is reasonably certain that 
$5 per horse-power per annum would be an outside figure, and even 
this would often be prohibitcry. The situation will not necessarily 
be improved by the growing demand for power, but rather by the 
diminishing supply and increased cost of fuel. So long as coal can 
be had for anything like present rates, no very great charge can be 
realized from water-power wherever fuel is readily available. Under 
present conditions $120 per horse-power may be considered as an 
average limit for first cost of a water-power plant, if it is to compete 
with steam. A charge of $20 per horse-power per annum would be 
equivalent to doubling this first cost.* 
A variable element in the cost of water-power development is the 
distance from plant to market, or the length of the transmission 
line. When this is very great, as in numerous plants in the moun- 
tain districts of the West, it makes a large addition to the cost of 
installation and must correspondingly reduce the royalty that could be 
paid for the power itself. 
An interesting example of what the Forestry Service has been 
able to do in this line with unimproved water-powers is that of a 
recent permit for the development of a large power in the Cascade 
Mountains within the forest reserve. The beneficiary of the privi- 
lege is required to pay annually for “conservation,” 10 cents per 1000 
kw-hr.—equivalent to 65 cents per horse-power per year continuous 
running. The right is retained by the Government to increase this 
charge 25% every 5 years for a period of 40 years, after which the 
whole arrangement may be readjusted. The maximum charge at the 
end of the 40 years will, therefore, not exceed $4 per horse-power. 
The only way in which a rental of $20 per horse-power can be 
obtained with any degree of certainty, and that in only a small pro- 
portion of the localities for many years to come, is for the Govern- 
ment to build the plants. It is admitted that this suggestion will grate 
harshly on many ears because of its newness and its departure from 
*Mr. Leighton cites the Falls of the Ohio as an example of an opportunity to 
develop 110000 h. p. by aid of his proposed reservoir regulation. ‘This, he states, 
at $20 per horse-power is 3% interest on $73 000 000. To any one familiar with the 
physical conditions involved in the development of this power, it will appear ex- 
tremely doubtful if any company could guarantee to deliver continuously this 
amount of power, even with the full aid of reservoir regulation, and pay any 
royalty whatever. 
