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was forced into a painful position and had to take that or nothing. In these cases, as I understand it, the situation was simply one of having the main and important part on one's own property and a part for a transmission line on government property. In short, it has been a case of duress, or, as Yankees would put it, forceput. We have had to do with several water powers, and in two cases have seen very bad results, although the rights were not revocable; that is, the cost of construction has been much greater than was expected, accidents have happened, and the use of the water powers has been much smaller than was expected. These companies have given us a great deal of pain.

You understand how careful we, as bankers, must be in asking our clients to go into these new ventures. We must study the case with great care, we must see that the figures more than bear us out, and then we must run a considerable risk. Therefore, as to the original proposition, we repeat that no one could venture to offer a property with revocable rights, nor could a fresh company be established in that way. A house offering bonds based on revocable rights would be issuing a swindle and nothing else.

May I add that I have just consulted a first rate investor, who laughed when I talked of revocable rights, and said that an issue of them would be an impossibility.

Securities of water power companies must be based on facts, else that are false in their origin and nature.

May I add that we all have considered this proposition carefully, and we are giving you our deliberate opinion based on the intention to speak the truth.

With best regards, I am,

Very truly yours,
HENRY L. HIGGINSON.

ESTABROOK & CO.
Boston, November 17, 1913.

Professor George F. Swain, Chairman,

Water Power Committee, Conservation Congress,

Washington, District of Columbia.

Dear Sir:

In the discussion of a possible water power bill to provide for rights that may be granted on public land, it has been intimated that revocable permits, while perhaps undesirable, do not prohibit financing.

It is probably true that water power companies have, in some cases, accepted revocable permits and have still been able to finance their needs, but we believe this to be of no value as evidence regarding the general question.

We should not consider the bonds of a company adequately protected if the rights on which the business rested could be revoked without full compensation, and we would not offer such bonds to our customers.

Whether revocable rights on some parts of a water power development would be acceptable or not, would depend upon their influence on the integrity of the development as a whole. If the revocation of these rights still left the securities protected with the irrevocable rights that remained, they would not be serious, but if the revocation of the rights would leave insufficient security, we should not consider the bonds good enough to sell.

We trust that the Congress will see clearly, before making recommendations, the vital point in this matter.

Yours truly,
ESTABROOK & CO.

E. H. ROLLINS & SONS.

New York, November 17, 1913.

George F. Swain, Esq., Chairman, National Water Power Committee, National Conservation Congress, Washington, D. C. Dear Sir: We have taken a great deal of interest in the work you are doing in connection with the regulation by the United States Government of water power companies whose properties are located within the national domain. We have handled the securities of a very large number of water power companies and are familiar with the conditions which companies of this character have to meet. As we understand the matter, the laws which have been passed by Congress as they are construed by the various Federal Departments in Washington will not permit the development of a water power on Public Domain except through a permit which is not only revocable at the discretion of certain Federal officials, but is also subject to arbitrary changes and the imposition of additional burdens without any redress on the part of the investing public. While the conditions which these permits impose may not be in themselves overburdensome, the mere fact that they are subject to revocation and change, in our opinion, makes the financing of water power projects based upon such permits almost impossible and at best extremely expensive. If all the water power developments are made by states, municipalities or public service corporations as the states' agents and in the interests of the people, we submit for your consideration whether or not every public interest cannot be adequately preserved and protected by effectual regulation under grants which protect the investing public in no uncertain terms against confiscation. We believe that when the developments are made by the states or through their agents, the public service corporations, adequate regulations will fully protect the people, and if in connection with this the investors are protected against confiscation, we are certain that meritorious water power enterprises can be financed at lower interest rates and much more readily than under the present laws.

May we also state that in our opinion a very large proportion of the water power development in the arid states will in the future be needed for pumping water to higher elevations which cannot be irrigated by gravity. It has been our observation in the west that it is almost impossible to settle an irrigation district with home builders unless the actual settlers get a perpetual water right running as a covenant with the land, and we do not see how this is possible except on the basis of permanent tenures of the water power companies, subject, of course, to any governmental agency taking them over at a fair value and as a whole, and assuming their pumping and other contracts. A provision of this kind will allay any fear on the part of the investing public that their property is going to be, in effect, confiscated or taken without due process of law.

We do not believe that public service corporations object in the slightest to the fullest possible regulation, but it is of course important that they be regulated either by the Federal or State Government, but not by both.

Very truly yours,

E. H. ROLLINS & SONS.

WHAT THE CONSERVATION CONGRESS ACCOMPLISHED

A Statement by Charles Lathrop Pack, Re-elected President

Among the fourteen hundred delegates present in Washington at the Fifth National Conservation Congress were more foresters than had ever heretofore attended any similar meeting in this country. The forestry work accomplished, as evidenced by the twelve printed reports in pamphlet form prepared under the direction of the Forestry Committee, is considered by forestry experts and lumbermen to be the best work that up to this time has been done for American forestry and lumbering. These results alone would justify all the effort that has been made and the presence in Washington of such a representative body of men.

The adoption by the Conservation Congress of the recommendations unanimously presented by its Committee on Water Power was a long step forward in the development of a definite governmental policy, recognizing clearly the principle of Federal control; and also recognizing clearly the necessity of offering to the investor opportunity to invest his time and money in the development of water power under conditions which safeguard both the public interest and his investment.

The Committee on Water Power included ten men, exceptionally qualified by knowledge of this subject in all its aspects. Under the able chairmanship of Dr. George F. Swain, President of the American Society of Civil Engineers, it worked out and presented not a mere declaration of principles, but concrete and specific recommendations which should be of great value to the Government in framing the legislation that is needed to convert the present comparative inactivity in water power development into a period of active conservation by use.

The fact that a committee composed, not only of professional experts of the highest distinction, some of whom are actively associated with the water power interests, but also such men as ex-Secretary Henry L. Stimson, Mr. Gifford Pinchot and Mr. Lewis B. Stillwell, were able to agree upon a definite and constructive program and that this program received the emphatic endorsement of the Conservation Congress, is a demonstration of the public spirit of the committee and the ability of the Congress to accomplish effective and constructive work. All true conservationists will hope that our National Government will promptly enact the legislation that is so greatly needed.

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