Show I PINCHOT ON I Chief Forester Writes Letter Warning Public Against the Danger of Trusts Grabbing All Dam Locations in West TELLS POLICY OF UNCLE SAM TOWARD APPLICANTS Says Conditions Favorable To Toward T Toward 0 ward Monopoly If Not Promptly Checked by Strong Arm of the Government HOW HE APPROVES LEASES Washington Oct 31 The practice of in granting water power concessions is IJ outlined by Gifford Pin Pinchot chot United States forester In a totter letter written to Colonel H L Higginson of Boston Mass a director of the Gen General General eral Electric company The letter follows fol tol follows lows My Iy Dear Colonel Higginson Your letter of ot Oct 4 Is la received You will be b glad to know that I 1 have been misquoted as to the statements you mention First of all I have no desire to prevent or retard the development of water powers by private capital They should be developed by private capital In fn my Judgment under proper government control and not by the nation or the states stat s Secondly I have not said ald either privately private privately vate or publicly that the General Electric company or any other single existing corporation controls or is now seeking to control all the water powers in the country But no one can deny there is a marked tendency toward practical concentration and control of ot the hydroelectric development over very wide areas In some cases this concentration may be a mere community of Inter Interests Interests interests ests evidenced and made effective by directorates In several legally distinct corporations held by b the representatives tives of ot the same Interests or friendly interests In other cases it appears to be brought about by a closer rate relations and In still other cases as for Instance in central California there seems to be a single corporate control con control control of a large and populous territory The report of the commissioner of cor corporations corporations corporations transmitted to congress with his message of January Januar 15 1909 vetoing a bill H B to license the build building buildIng ing leg of ot a dam In James river Mo es establishes esta establishes bUshes ta these facts Opportunity for fop Trust The Increasing radius of ot practicable electric transmission and the recent financial history of at the country as to consolidation of ot other kinds of busi business business business ness seems to justify the belief that there Is a strong tendency toward con concentrated concentrated concentrated control of hydroelectric de development development development In the United States I do not say a single trust has yet been formed As an outsider I have not the Information which would war warrant warrant warrant rant my saying that such a trust has bas been planned but It Is apparent the present tendencies favor such a trust and will produce It If they continue I therefore think It is of the utmost Importance for tor the people to understand these tendencies realize reaUze their import and take effective steps now while there is yet time to retain and effectively ex exercise exercise exercise public control of this vital ne necessity necessity necessity of life This may be done by giving concessions limited In time re requiring requiring requiring quiring a fair rental and imposing con conditions conditions conditions to prevent the evils ells which ex experience experience experience has taught us to expect from unregulated monopoly I am very glad indeed to have your yourI Continued on Page 7 PINCHOT ON POWER SITES Continued from Page 1 statement that the United States should not part with wih this kind of property without fair leases That is precisely the position the forest foret service serice always has ha taken I a copy of the form fon of per permit permit permit mit called caned a special use agreement now used by the forest service in il grant granting gant ing lug all al water power concessions in the national forests Prevents Prevent Speculative Holding I 1 call can your attention to the fact that this permit peri requires that construction be begun and ad completed within a rea reasonable reasonable reasonable time fixed in accordance with wih engineering conditions in order to pro pre prevent pr vent the speculative holding of undeveloped undeveloped undeveloped sites sies that a a small annual mileage and acreage charge be paid pid during con construction construction for the same reason that a reasonable annual charge In proportion to the time electrical output nominal amount at the th outset and gradually in increasing Increasing creasing by moderate Increments in successive periods be paid after operation begins with wih reasonable deductions on 01 account of other oter than na national national tonal forest foret land used by b the tha the plant or forming foring part of the watershed and ad In order to encourage the building of stor storage storage age reservoirs on account of water stor storage storage storage age by the that timber cut or destroyed in construction be paid for forat forat forat at a reasonable stipulated price that the time plant be operated continuously up to a a reasonable stipulated fraction of its it full fun capacity in order to prevent arti artificial art artificial fical scarcity and an the resulting high prices to t consumers that power be sold to the United Unie States when requested at atas atas atas as low a price as to any other consumer er that the te permit perit shall shan not be trans transferred transferred since the transfer of 01 government contracts is expressly prohibited by statute that time the must use reasonable rea precautions to protect the forest by fire fighting etc ec that the permit shall hali thal terminate at the tho Th end of or fifty years but may then be renewed on u such conditions as the government shall shan then fix but that In fixing them neither the permit itself Isel nor the franchises stock or bonds of ot the shall be considered but only the actual value at that time or physical lh works con constructed constructed under the permit this in order that future generations may m not be bur burdened burdened burdened curie to pay py dividends on Inflated se so securities Authority for Permits These Thee permits are Issued under the tha authority of ot a specific statute act Feb 15 1901 31 stat 19 PJ P The attorney general generl has expressly gin his opinion i that tIne he statute empowers empower the govern government gover mont ment to Impose the construction charges and other conditions contained in the permit opinion of attorney general generl vol 6 p and the United States circuit court for Colorado has by ex cx express express press order directed the receivers receiver of the Las Ls Animas Animal Power company to pay the charge and sign sig the permit permit The administration of this statute so far as national forests forest are concerned was transferred to the department of ot agriculture by the act of Feb 1 I 1905 33 stat p 28 but still sti remains remain in inthe Inthe inthe the interior department so 80 far as re reserved re reserved served sered public lands and national parks are ar concerned Under the express statutory author authority authority ity Iy so confirmed confred the v forest service serice is issues issues issues sues permits perit the provisions pr of 01 which I have summarized I hope you will wi agree with wih me that they are fair fair leases Signed GIFFORD PINCHOT Forester |