The scope of the Federal jurisdiction is of first importance, because the water-power problem is, in the main, a National one. Much of the power is transmitted across State lines, or is used by interstate carriers. The bulk of the capital that is developing our most important powers comes from interests outside the States where the powers are located, and from the brief survey I have already given of the interrelationships existing between public-service companies it is obvious that State lines and State jurisdiction have no practical relation whatsoever to the sweep of these forces (applause). The hydro-electric industry has been largely nationalized by those who are foremost in it.
The Nation and the State will have to use their full powers to meet the water-power situation. The most effective time to use them is before, not after, private rights accrue. The one certain method is for the State or the Federal Government, to retain its interest, or impose its conditions, at the inception, as a part of the grant. Then public control and private rights go together, as they must if we are to safeguard the public interest in water power. (Applause)
Let there be no unnecessary hampering of hydro-electric development, but let the public be in on the ground floor at the start: for at the start the public must grant the power and for all time the public will be the party chiefly interested in its use. (Applause)
As President Taft very justly said yesterday, when a man talks to you about conservation, you have the right to ask him to specify what steps he desires to take. I am going to specify.
(1) The _status quo_ of all water-power still controlled by the Nation or State should be maintained until we know what we have, and can act intelligently thereon.
(2) No water-power grant should be made except for a fixed period, with at least the reserved right to readjust terms at the end thereof. That period, however, should be long enough to permit adequate financing and complete development.
(3) Complete publicity of accounts and transactions should be required, as well as a record of cost, and the real relation of investment to stock and bond issues.
(4) Power to revoke the grant for breach of conditions should be lodged in a specified public authority. Otherwise there will always be the possibility of protracted litigation to determine the status.