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(a) above, at recurring intervals of not more than ten years the amount of compensation to be paid to the Government for the privilege and all the terms and conditions of the grant during the next succeeding period of not more than ten years shall automatically come up for determination by the granting officer of the Government. (d) The privilege shall be unassignable except with the approval of the Government in order to safeguard the interests of the Government against speculation in water powers and against appropriation without prompt development. (e) The privilege shall be granted only on condition of development of the whole capacity of the power site as rapidly as the granting officer may from time to time require, giving due consideration to reasonable market demands and conditions and also on condition of continuous operation, subject to such demands and conditions. (f) The right to receive compensation for the value of the privilege varying according to the proper conditions of each case shall be reserved to the Government, state or Federal, from whom the privilege comes. We believe that the reservation of such a right to compensation is a vital essential towards the end of proper regulation. It is not sufficient to trust that the public will always receive its proper share by means of regulation of rates alone. Local authorities may neglect or may be unable, under conflict of jurisdiction, or for other reasons, to exact in the interest of the public the full value of the public's right. The value of a water power may in the course of time increase far beyond the power of local regulation to adequately distribute its benefits. At the same time, the method of exacting compensation must be carefully safeguarded so that in case full compensation by rate regulation is exacted by local authorities, an additional burden shall not be imposed. We believe that in normal cases the best method is for the Government to share increasingly exceed a certain reasonable percentage, the right of the Government being recognized otherwise merely by the imposition of a small annual fee or its equivalent. (g) The Government shall have the right to prescribe uniform methods of accounting for the grantee and to inspect its books and records.
(h) Upon revocation of a privilege by the Government the grantee shall be paid a compensation equivalent to the fair valuation of its property, exclusive of franchise and consequental damages; this compensation shall include such appurtenances as are necessary for the operation of the water power and the transmission of electricity therefrom but shall not include such properties as railroads, lighting systems, factories, etc., which are of themselves separate industries.
In such transfer all contracts for the sale or delivery of power made in good faith previous to such notice of transfer should be assumed by the transferee so that the said grantee may operate and maintain the power business during his occupancy of the property under such stable guarantees as may beget confidence therein by prospective long term contractors, provided, that the Government or said transferee shall not assume any contracts made at a price or under conditions which shall be determined by the proper administrative officer of the Government to be unreasonable or confiscatory.
GEORGE F. Swain, Chairman
B. M. HALL
FIFTH NATIONAL CONSERVATION CONGRESS
WASHINGTON, D. C.
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