UTILITIES

F. P. C. Troubles

Small and practically impotent is the Federal Power Commission, set up in 1920, as an orphan agency to control billions of dollars worth of U. S. water power rights. Its job is to license power companies to construct plants along navigable streams, to check their investments, to regulate interstate power rates, to maintain govern-ment options to buy back licensed plants after 50 years. The nominal commissioners are the Secretaries of War, Interior & Agriculture. They sit about five hours a year. The actual work of the commission is carried on by Frank E. Bonner, its secretary, Charles A. Russell, its solicitor, and William V. King, its accountant.

Last week the Senate Interstate Commerce Committee, probing the Power Committee's affairs, uncovered a state of war among its personnel that threatened its useful existence. Solicitor Russell and Accountant King charged that Secretary Bonner was partial to the power companies, that he was not enforcing the Federal Water Power Act against them. Secretary Bonner's defense was that Messrs. Russell & King were politically ambitious, that they tried to "persecute" utility companies and "try their cases in the news-papers."

Solicitor Russell told the Senate committee that Niagara Falls Power Co. had claimed a value of $77,000,000, when in reality $30,000,000 of that sum was nothing more than its right to water covered by its U. S. license. This the power company denied. Solicitor Russell also testified that power companies included in their valuations large sums used for lobbying. Accountant King told similar stories of his efforts to get at the facts of utility investment, only to be blocked by Secretary Bonner who called him "too meticu-lous." He openly charged Secretary Bonner with being more in sympathy with the power companies than with the law. Secretary Bonner, slender, gaunt-faced, grey-haired, denied all, insisted he was executing the water power act "with success." He told the Committee that his Commission had 418 license applications under consideration. He submitted a list of 19 power companies with $27,000,000 in their capital accounts which the Commission questioned. He grew abusive toward Solicitor Russell, openly charged him with running away from his personal debts in Montana. Mr. Russell jumped to his feet to shout back that he was paying off his debts, incurred by long illness, as rapidly "as the Lord lets me."

Before the Senate Committee appeared Oscar Charles Merrill, onetime Secretary of the Commission. He testified that the Commission in 1928 had submitted to the House a report in which were cited examples of alleged inflation of capital assets by power companies, including the Niagara Company's $30,000,000. Political pressure, he claimed, was brought to bear on the then Commissioners--Dwight Filley Davis (War), Hubert Work (Interior), William Jardine. (Agriculture)--who recalled the report and deleted the samples of "power padding" lest they "cause a rumpus" by the companies.

Quite aware of the Power Commission troubles, President Hoover summoned Senator Couzens to the White House where it was agreed that the Commission must be overhauled if it were to serve as a protection to U. S. water rights. In accordance with the President's wishes Senator Couzens returned to the capital to introduce a bill for a full-time com-mission of three members (salary: $10,000 per year) with an adequate staff.

Meanwhile Nebraska's Senator Norris and North Dakota's Senator Nye demanded the dismissal of Secretary Bonner, charged him with being a "power man trying to cripple the commission so that it cannot inquire into these steals."

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