Letter Transmitting a Report of the New York Power Authority.

My dear Mr. Chairman:

I am enclosing for your information an extremely interesting letter and report on Government Hydro vs. Private Steam Power from the Trustees of the Power Authority of the State of New York.

In view of the widespread publicity given to statements and figures issued by private individuals or private committees, I believe that this report will be of interest and help to you and to the public.

It is in the public interest that if there are two sides to any question both sides should be fairly and freely laid before the public. Conclusions and figures submitted by the Power Authority of the State of New York are so amazingly different from the conclusions and figures heretofore given out by certain private interests that I feel certain that they may be considered to be of national concern.

Very sincerely yours,

Honorable Lister Hill,

Chairman, Committee on Military Affairs,

House of Representatives,

Washington, D.C.

November 22, 1937

The President

The White House Washington

Dear Mr. President:

On behalf of the Trustees of the Power Authority of the State of New York I am submitting herewith a Report on Government Hydro vs. Private Steam Power.

The Power Authority was forced to take cognizance of widespread propaganda fostered by the Committee of Utility Executives, designed to mislead the public into accepting the unwarranted assertion that steam power is cheaper than hydro power and that, in consequence, the government power program is unsound. The Trustees recognized that this propaganda, if not controverted, might prove a serious obstacle to the accomplishment of New York State's plan for the public development of its St. Lawrence River power resources.

The present report is designed to expose the nature of this propaganda, to show how its erroneous conclusions have been given the semblance of authority, to reveal the fallacious technical assumptions upon which it is based, to correct these assumptions, and to arrive at technically sound conclusions on the basis of the corrected assumptions.

The propaganda, refuted in this report, is designed to thwart all governmental effort to free consumers of electricity throughout the country from their present bondage to excessive electric rates by sustaining the monopolistic position now enjoyed by private power combines.

The Power Authority finds that the development of this propaganda has progressed through the following stages:

REVELATION in a U.S. Chamber of Commerce Report, dated March, 1936;

JUSTIFICATION in a paper by F. F. Fowle, former consulting engineer of the National Electric Light Association, before an engineering conference in March, 1936;

SANCTIFICATION in a section on power prepared by A. A. Potter for the National Resources Committee's Report on Technological Trends, issued in June, 1937. Mr. Potter, formerly associated with the National Electric Light Association, is now a member of the Prime Movers Committee of the Edison Electric Institute; and

EVANGELIZATION through the wide publicity given excerpts from Mr. Potter's section, in a pamphlet entitled "Administration Experts Declare Water Power is More Costly Than Steam," released by the Committee of Utility Executives in September, 1937, on the eve of your visit to the Bonneville development.

The Power Authority report shows that this propaganda is based on incorrect figures. It finds that the group of major government water power projects, which served as the basis for the propaganda, will actually deliver electric power to markets, involving 200 miles transmission, for a corrected average of approximately 3.3 mills, as compared with a corrected steam power cost of from 5.6 mills to 6.3 mills, depending upon the cost of fuel in the areas served.

The report, by establishing a technically sound method of appraising the economy of contemplated government hydro undertakings, reveals the certainty that hydroelectric projects will prove economically sound as integral parts of the government river basin conservation program.

Respectfully,

FRANK P. WALSH, Chairman