the assumption by Canada of the obligation to construct, in addition to the Welland Ship Canal, the deep waterway throughout the 69-mile stretch of the St. Lawrence River from St. Regis, N. Y., to Montreal, the United States assumed the obligation to construct or provide all of the navigation and power facilities in the International Rapids section, except machinery and equipment for the development of power and works required for rehabilitation on the Canadian side of the international boundary; (2) the plans of the State and the Province did not provide for the construction of the control dam in and across the St. Lawrence River at Iroquois Point. Canada and the United States have been in agreement for 25 years on this feature, and all plans prepared under authority of the two Governments since 1925 have provided for a control dam to regulate the level of, and outflow from, Lake Ontario, and to protect the city of Montreal. Canada will not agree to elimination of the control dam; and, of course, the United States has made no such request since entering into the agreement of 1941. And (3), the Canadian Government especially desires that the seaway and power facilities be constructed concurrently, and hence adheres to the agreement of 1941, the fulfillment of which would accomplish that result.

Even if Canada should finally despair of getting the naturally expected cooperation under the 1941 agreement and permit a singlepurpose power project to be constructed by non-Federal interests, the United States would not gain but on the contrary would suffer irreparable loss, because, as seems certain, Canada, with the advantage of the improved navigation potentialities thus set up in part by American funds, would then construct the seaway entirely in Canadian territory and fix the toll charges without reference to the United States. American shipping would then pay for the seaway; and the paying would continue not just long enough to amortize the investment but rather as long as the St. Lawrence River flows between the two countries.

Mr. SCUDDER. I think that finishes my questions.

Mr. MCGREGOR. Governor, I notice you mentioned Ontario. Would the same agreement probably be applicable to Ontario that is contemplated with New York? Would that be applicable with Ontario? In other words, as soon as their project was paid for, would it revert back and be owned by Ontario?

Mr. WALLGREN. We do not know what will happen to that project as far as Ontario is concerned.

Mr. McGREGOR. In other words, there is no agreement entered into in any manner, shape or form relative to that?

Mr. WALLGREN. Not to my knowledge.

Mr. DONDERO. I think, Mr. Chairman, that under the laws of Ontario, Ontario would still continue to operate the power project. Am I not right about that?

Mr. WALLGREN. That is what we think.

Mr. McGREGOR. Is there any agreement to that extent?

Mr. WALLGREN. Not that we know of.

Mr. MCGREGOR. That is just surmise?

Mr. DONDERO. However, that is the only agency we are dealing with today, is the Ontario Government, Government of Canada. Mr. LARCADE. Have you completed your questions, Mr. Scudder?

Mr. SCUDDER. Yes.

Mr. LARCADE. Mr. Wood, any questions?

Mr. WOOD. Well, following out Mr. Scudder's line, Governor, we have in Idaho a project which I understand is coming up-the Hell's Canyon Dam-which is to use water, certainly a part of it but not all of it originating in Idaho and forming the boundary between Oregon and Idaho. Does the application for that come to your Commission, Governor?

Mr. WALLGREN. No. That comes up in the Interior Department. Mr. Wood. You do not have to pass upon it?

Mr. WALLGREN. No.

Mr. Wood. Would it occur to you that the same provision should again be made in the building of that dam as has been contemplated in the building of this dam on the St. Lawrence seaway-that the power should perhaps be jointly owned by Idaho and Oregon after the dam is paid for?

Mr. WALLGREN. I have given no thought to that at all. I really think that is going to be a question for Congress to talk about. Mr. WOOD. That is all.

Mr. LARCADE. Thank you very much, Governor.

Mr. WALLGREN. Thank you. It has been a pleasure to appear before your committee.

Mr. LARCADE. We are very glad to have you.

(The letter referred to by Mr. Wallgren to the Speaker of the House is as follows:)

Hon. SAM RAYBURN,

Speaker of the House of Representatives,

FEDERAL POWER COMMISSION,
Washington, December 26, 1950.

Washington, D. C.

MY DEAR MR. SPEAKER: Transmitted herewith is a certified copy of Opinion No. 203 and accompanying order of the Commission, under section 7 (b) of the Federal Power Act, recommending the development of the water resources of the St. Lawrence River in the International Rapids section for both navigation and power by the Government of the United States of America.

If additional copies should be desired for distribution among Members of the House of Representatives the Commission will be glad to supply the desired number upon request.

Sincerely yours,

THOMAS C. BUCHANAN,
Acting Chairman.

FEDERAL POWER COMMISSION, IN THE MATTER OF THE POWER AUTHORITY OF THE STATE OF NEW YORK, PROJECT NO. 2000

By the Commission:

OPINION 203

The Power Authority of the State of New York on July 16, 1948 filed an application for a license under the Federal Power Act for a power project to be located along the International Rapids Section of the St. Lawrence River in St. Lawrence County, N. Y. Notice of intervention was filed by the Public Service Commission of the State of Vermont. The National St. Lawrence Project Conference and the Aluminum Co. of America, together with the latter's wholly owned subsidiary, the St. Lawrence River Power Company, were granted the right of limited participation. A hearing on the application was held in 1948 and briefs were filed, after which the Hearing Examiner rendered his decision that the application be not approved but that the matter be referred to Congress under the provisions of Section 7 (b) of the Federal Power Act. Exceptions to the Hearing Examiner's decision were filed and oral argument was heard thereon.

The applicant was created by the Legislature of the State of New York to develop the St. Lawrence River and to dispose of the power generated at such

development. It proposes to construct, under plans prepared by the Corps of Engineers, United States Army, and to operate the Long Sault dam, near Massena, New York, connecting the American mainland with the upstream end of Barnhart Island, and a powerhouse extending from the foot of Barnhart Island to the midpoint of the main channel of the St. Lawrence River which marks the boundary between the United States and Canada. In the powerhouse it proposes to install 18 generating units with a combined installed capacity of 1,100,000 horsepower at an 80-foot head. The applicant also seeks authority to make certain channel improvements and to construct dikes and other facilities necessary for the operation of the proposed dam and powerhouse, including appurtenant transmission facilities.

The facilities which the applicant proposes would be connected at the international boundary with similar facilities constructed by The Hydro-Electric Power Commission of Ontario, an agency of the Province of Ontario, Canada, which would install an equal number of generating units. The power produced at the proposed project and its Canadian counterpart would be divided equally between the United States and Canada. If we should give our approval to the applicant, both the applicant and the Ontario Commission would be required to secure the approval of the International Joint Commission before construction could be commenced.

The principal question which we feel called upon to decide initially is whether in our judgment development of the water resources of the St. Lawrence River should be undertaken by the United States itself. This conclusion was also reached by the Hearing Examiner. We believe this question should be answered in the affirmative, and it is not necessary at this time for us to consider in detail collateral questions.

The facilities proposed by the applicant would constitute a large portion of the facilities known generally as the St. Lawrence Seaway and Power Project as designed by the Army Corps of Engineers. In addition, the seaway and power project calls for deepening the St. Lawrence River and the connecting channels of the Great Lakes System, including the Detroit, St. Clair and St. Marys Rivers, with installation of navigation locks generally comparable to those existing on the Welland Canal at the present time.

In 1941 the Governments of the United States and Canada entered into an agreement known as the "Canadian-American Great Lakes-St. Lawrence Agreement of March 19, 1941", providing for completion of the St. Lawrence Seaway and Power Project. This agreement was, by its terms made subject to approval by the Congress of the United States and the Parliament of Canada. It provided for completion of the entire development from Duluth to Montreal, including the power facilities now proposed by the applicant. Although repeatedly submitted to Congress, this agreement has never been ratified. In our opinion, however, the critical international situation now facing the world calls for immediate commencement of construction of the combined project.

The St. Lawrence River System, in conjunction with the Gulf of St. Lawrence on the east and the Great Lakes on the west, provides a continuous waterway extending 2,347 miles from the Atlantic Ocean at the Strait of Belle Isle to Duluth, Minnesota. The river itself approximately 342 miles in length, is one of the largest rivers of the world in volume of flow, and is unique among the large rivers of the world in point of uniformity of flow. The average flow at the outlet of Lake Ontario, where the river begins, is about 237,000 cubic feet per second, the mean monthly average ranging from a maximum of about 314,000 c. f. s. to a minimum of about 144,000 c. f. s. This large and remarkably steady flow, resulting from the natural regulation afforded by the Great Lakes, makes the St. Lawrence River unique and invaluable as a possible source of water power and as a possible highway for large volumes of commerce. In comparison, the maximum natural flow of the Columbia River at Bonneville was 33 times the minimum flow, and the Tennessee River at Florence, Alabama, had a maximum natural flow 115 times the minimum. Consequently, since the maximum flow of the St. Lawrence River is only slightly more than twice as much as the minimum flow, and the average flow is so substantial, it is obvious that the potential water power of this stream can be of inestimable benefit to the region within economic transmission distance, both in the United States and Canada.

A dependable capacity of some 700,000 kilowatts can be made available in this plant for electric service in the United States, some 570,000 kilowatts of this capacity being potentially available continuously. The average energy output on the United States side will be approximately 6.3 billion kilowatt-hours a year, for which the at-site cost is estimated at only 1.72 mills per kilowatt-hour. Eighty

81181-51-pt. 1——21

percent load factor power from this source can be delivered to load centers in New York State from Utica eastward and in Vermont, New Hampshire, and Massachusetts, at an average cost of about 3.2 mills per kilowatt-hour. While the economic distance for transmission and distribution of this power may be as much as 300 miles, actually the power may be utilized in large part at load centers located fairly close to the plant in the States mentioned, and within such smaller area it will supply a substantial portion of the load.

With this sizable power potential, consideration should also be given to the relationship between the marketing of power from the St. Lawrence project and the additional power potentialities of the Niagara River in the west and the undeveloped water power of the New England States to the east. Through a new agreement with Canada ratified last August, a substantially increased diversion may be made from the Niagara River which when utilized will increase the dependable electric capacity at Niagara Falls by some 1,132,000 kilowatts. In approving this agreement, the Senate stipulated that no further power development can be made at Niagara Falls without the express authorization of Congress. This may call for consideration of the interests of Ohio and Pennsylvania as well as New York.

When this power potential is considered as being an additional benefit which will neither injure nor interfere with the seaway, but will be rather an important adjunct to it, it is obvious that development of the complete project is crucial for both the United States and Canada at this time. The economic and industrial strength of the vast area adjacent to the Great Lakes should be made accessible to ocean-borne traffic, and the power-short area in the region of the proposed plant should be assisted by full utilization of this water-power resource.

The St. Lawrence River is both a navigable water of the United States and an international boundary stream, and there can be no serious question as to the plenary jurisdiction of the United States over it. The Examiner calls attention to the failure of the State of New York to recognize this basic jurisdictional fact, although there has been ample opportunity for the State Legislature to remove any doubt on this score. The Examiner also mentions other features of the State legislation which he considers to be of sufficient importance, with other points, to justify denial of the application.

In view of the serious questions which have been raised as to the legal right of the applicant to proceed with construction if a license should be authorized, there is a strong possibility that litigation might delay construction by the applicant indefinitely.

While we do not determine any of these questions now, since we have a more basic objection to the issuance of a license to the State of New York at this time, they do suggest doubt as to whether the applicant would be able to proceed promptly with construction if a license should be authorized.

Conclusion

We are convinced that this matter should be referred to Congress..

The construction of the St. Lawrence seaway and power project and the development of the power potential of the International Rapids Section are vitally important to the economy and defense of the United States and of Canada. Both Canada and the United States have vast midcontinent areas which need to be connected with the sea and both have extended areas near the St. Lawrence which are deficient in low-cost electric power and in which the deficiency is hindering the growth of industry. Also, in Canada lie vast quantities of iron ore which need to be transported to the steel mills of the United States, and such transportation will be possible only when the seaway is completed.

The proceeding before us on the pending application, of course, covers only the economic importance of the power development, a matter of which we are fully aware. Nevertheless, the vitally important seaway would still await action by Congress if the power development here proposed should actually be constructed, and it appears to us, on the basis of the national aspects of the power development, combined with the national and international benefits to be obtained from the seaway that it is highly desirable for Congress to pass upon the proposal in its entirety rather than on a piecemeal basis.

The rights of the States of Vermont and New Hampshire were presented at the hearing on this application; and the rights of all of the neighboring areas to which power can be economically transmitted from this development should not be overlooked in the disposal of the power benefits. The proposal of the applicant 1 Niagara Falls Power Co. v. Federal Power Commission, 137 F. 2d 787 (C. A. 2, 1943); cert. den, and reh. den. 320 U. S. 792, 815.

might not make this power available to as large an area as should be considered and would not provide for immediate construction of the seaway.

We believe that the simultaneous construction of both the power and seaway facilities in the International Rapids Section of the St. Lawrence River as an integral part of the entire project of the Army Corps of Engineers known as the St. Lawrence Seaway and Power Project is best adapted to a comprehensive plan for improvement and development of the St. Lawrence and Great Lakes waterways and water resources for the use and benefit of interstate and foreign commerce, for the improvement and utilization of water power development, and for other beneficial public uses and should be completed at the earliest possible date. By means of tolls from the seaway and revenues from the power facilities, or revenues from the power facilities alone, the project is completely self-liquidating. After repayment of the investment made by the United States Government in the project, the natural resources of the St. Lawrence River will remain a potential source of national revenue at the will of Congress for the indefinite future.

Under these circumstances, we are referring this matter to Congress in accordance with the provisions of Section 7 (b) of the Federal Power Act, and recommending that these water resources be developed by the United States. Inasmuch as the several Departments, including the Army Corps of Engineers, made a full report to Congress on this entire matter only last spring, further studies and analyses by us are not required unless specifically requested by Congress. Accordingly, we shall submit our findings to Congress by an appropriate order.

MON C. WALLGREN, Chairman.
THOMAS C. BUCHANAN, Commissioner.
HARRINGTON WIMBERLY, Commissioner.

Dated at Washington, D. C., this 19th day of December 1950.

Smith, Commissioner, dissenting:

LEON M. FUQUAY, Secretary.

The Commission should, in my opinion, issue a suitably conditioned license to the Power Authority of the State of New York as recommended by our Engineering and Legal staffs before the Examiner more than two years ago. I am not persuaded by the record as made in these proceedings, or by subsequent developments of which we must take official notice, that it is appropriate or wise for the Commission to deny the application and to submit the whole question to the Congress which, as a matter of fact, has had this entire matter, together with recommendations and supporting testimony from representatives of this Commission, under consideration for a number of years.

There is no doubt about either the great need for additional power in the area into which energy from the St. Lawrence Project may reasonably be expected to flow or the desirability of developing as soon as possible the large and dependable power potential of the St. Lawrence. Nor is there present here any issue between public and private power protagonists. For years it has been accepted that any comprehensive hydroelectric development of the St. Lawrence would be through facilities constructed, financed, and operated by public authority. The only question is whether we should now permit this power development to be undertaken as an initial step by the State of New York-which has demonstrated on this record both the desire and ability to proceed in a way which will not conflict or interfere with any navigation project which may subsequently be undertaken by the United States or whether a start on this needed and valuable power development shall be further delayed until such time as the United States may decide to construct the entire St. Lawrence Power and Seaway Project.

To authorize the State to proceed now, subject to approval by the International Joint Commission under the 1909 Treaty, would be entirely consistent with the legislative history of the Federal Water Power Act of 1920 and with the precedents of this Commission over the years since its enactment. It would, furthermore, be in harmony with the history of this particular project and the position taken by this Commission concerning it. In most of the discussion and consideration of the St. Lawrence Project over the years, including the 1946 Report of the Senate Committee on Foreign Relations concerning S. J. Res. 104 and the provisions of bills now pending in Congress, it has been understood that the water-power project should become the property of the State of New York under an arrangement whereby the State would pay for and operate the power facilities even if they were constructed by the Federal Government. Inasmuch as the New York Power Authority has agreed on this record to accept as a part of the license agreement any reasonable conditions protecting adjacent States in their enjoyment of such relatively minor amounts of its low-cost power output as this Commission might determine to be equitable, I see no reason for departing at this time from the