26 BULLETIN 102, 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 pecuniary 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 . 1 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, 
however 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- 
1 See p. 30. 
