might require if they were the negotiator, I would like to tell this committee what we have in mind as to what we think the arrangement should be, so that I might feel that if you passed the bill with section 5 therein, that it is your intent, if New York is still in there and I would hope it was that you would follow the plan that I want to outline.

In recent years we have heard much about river-basin developments and more recently about regional developments. Now, Dr. Arthur Morgan, who was the first Chairman of the TVA, has had a very unusual opportunity to observe the forces behind those concepts. in action. When he was before the Senate Committee on Public Works, in March 1948, he was asked, please, to express his feeling, something of his philosophy, relative to this idea of regional government. This is what he reported. Now, it is one man's opinion, but I think he is quite a qualified observer. He reported:

If we get at the bottom of this proposal, we see that it arises from a feeling that State and local self-government is a failure and that it must be displaced by a centralized administration controlled from the National Capital.

Now, we do not like that little straw.

Mr. JONES. Mr. Burton you said that was Mr. Morgan's opinion? Mr. BURTON. I am saying this is one man's opinion.

Mr. JONES. Yes.

Mr. BURTON. I am not putting that in an existing Federal official's mouth. I do not mean that. I do not want it misinterpreted. This is his evaluation of the type of thing he ran into when he was Chairman of the TVA. That is pretty rough for a man of his stature to have to feel that the regional planners find State and local government is a failure.

If State and local government is a failure, God knows what is going to happen to this country. I say State and local government is not a failure. State and local government is going to continue to grow and be more and more responsible and more and more able.

More recently, going right into the Federal reports now, the President's Water Resources Policy Commission reported last November, in a very thick volume, at page 242 of that volume, which in the volume is misnumbered page 244, this statement, which I have to bring out here because it means us:

In certain regions the Federal Government is or presently will become the main source of future power supply and will provide a completely integrated wholesale regional power system for transmitting low-cost power to the major distribution centers in the region.

Then there was a lot of other

Mr. LARCADE. May I interrupt the witness to ask whose statement that is?

Mr. BURTON. It is the statement of the President's Water Resources Policy Commission-Mr. Cook, Mr. Olds, and I do not remember the rest of them. There were a number on the Commission.

Mr. LARCADE. Thank you.

Mr. BURTON. The report went on in that connection:

It may prove desirable

that idea

in northern New York and New England, where the Niagara, St. Lawrence, and New England River Basin developments would afford a splendid interconnected source of power supply in what is now one of the highest electric rate areas in the country.

That is another straw.

Again at page 227 that same Commission reported:

Public plans for the development of water-power resources should be accorded a preference, this preference going first to Federal projects and then to those of States and municipalities.

Those are the straws.

With intent expressed by Congress, I know the power authority can work with anyone. I know we could work with the Department of Interior. But I think a matter of fundamental philosophy, fundamental policy has to be fixed, and we do not want to walk into something with our eyes closed.

We have a plan for the transmission and distribution of St. Lawrence and Niagara power that will gain the cheapest power for the widest possible market without "federalization." We want to express that plan clearly. We do not want to go into negotiations on an arrangement wherein conditions will arise which we know nothing about and wherein conditions will arise that Congress knows nothing about, that are not contemplated by Congress. We do not want a "pig in a poke." Now, we are filing as an exhibit, Mr. Chairman, section 1005 of the Power Authority Act. It spells out in great detail what our powers are and what our responsibilities are. It is like the fine print that you find in bonds, so I am not going to try to read it here. Sentences tumble on and on and on and on-they never know where to put in a period.

I would like to just explain what we can do under it. It is a statutory tool with which we feel that we are fully equipped to gain the objective of the cheapest power for residential and rural consumers by feeding our hydro energy into existing transmission and distribution lines. It is the position of our authority that the St. Lawrence and the Niagara power sites in New York should be publicly developed. Our law says that the St. Lawrence has to be publicly developed. But it is our plan and our law contemplates that the transmission and distribution of the energy shall be handled privately under authority contract and under authority price control.

That is not bus-bar sale. We do not contemplate kissing the kilowatt-hour good-bye at the river bank. Our law requires that we follow that hydro kilowatt-hour or its equivalent right down to the ultimate consumer. It is contemplated that we do that by contract.

Now, I want to make one more clarification there. If the utilities in our State and the adjoining States do not want to put in the necessary transmission lines or cannot put in the necessary transmission lines, in fairness to their investors, we are empowered to build them ourselves, but we have got to explore fully the possibility of the private utility using its existing system or strengthening its existing system to carry our juice. If they cannot do it, they will tell us so, and then we can fill in the links that are necessary to strengthen the system.

We look forward in every sense of the word to a partnership between public and private enterprise to gain most effectively the goal of cheaper power in our area. We expect the potential 14 billion kilowatt-hours per year of St. Lawrence and Niagara power to do a double job of price reduction. First, you just average down the price to the residential and rural consumer by bringing in the cheap hydro as against the expensive coal, steam-produced energy. But beyond that,

in order to do it so that you can push that power just as far as you can do it technically and physically, you have got to bring about an integration. You have got to bring about a stronger interconnected system of our private companies in New York and the New York area to do that. In doing that, you gain a saving also.

In other words, integration of the existing system today would give you some saving. Cheap hydro gives you a lot more saving. And you put the both of them together. So that our hydro is going to go out and do more than just be cheap water power. It is going to get a good integrated system.

If we do not have the full cooperation of our private utilities we will not achieve the greatest benefits of cheap electricity for the domestic and rural consumers contemplated by our act. That is where our act says it shall go-to the domestic and rural consumers primarily. Industry shall be served to keep the load up, a high load factor, so that you are going to have cheaper power for the domestic and rural

consumer.

Our act permits also during the emergency that power be put into the defense plants. That is a first concern.

We feel that if we had to build duplicate transmission lines the real cheapness of hydro is going to be lost. We want that St. Lawrence and Niagara power to reach out to Buffalo, New York City, Albany, Jamestown. And when you put with it the decreased cost of an integrated system and the strength of an integrated system to move it far, you are going to take that cheapness right straight over the State lines, I think, into Ohio, Pennsylvania, New Jersey, New England.

Today we are dragging out of Massachusetts, New Jersey, and Pennsylvania the product of 195,000 kilowatts capacity in order to get the juice up to the new aluminum plant over our new power line. We are not doing it. Niagara-Mohawk had to go outside the State and buy that power.

With that kind of cooperation from those States to us today, we are certainly going to cooperate with them when we have got a possibility of having a better over-all electrical generating system in

our area.

We are confident we can bring this about just as soon as we have got the 6 billion plus of St. Lawrence hydro and a little bit more, 7 billion and some, of Niagara hydro. Then we are in a position to encourage, push along, nudge this integrated system into being.

I feel that is the way to do it. There is the place for Government and there is the place for private enterprise, and I think in our State they can work together. I think they can do that in a way where private enterprise is going to be strengthened. Their own systems are going to be stronger. They are going to be much better off by such a system getting that cheaper power out to their customers. I think they never need fear being pushed out of business by an arrangement like that.

The CHAIRMAN. Mr. Burton, what radius would this power cover? Mr. BURTON. What radius?

The CHAIRMAN. Yes.

Mr. BURTON. It is difficult to say, Mr. Chairman, and we are spending a great deal of time in developing this system of integration. It is said that electricity can be transmitted economically 300 miles.

The CHAIRMAN. Well, then, you are not going to get near New York City.

Mr. BURTON. But we are not talking about getting any Niagara kilowatts, blue ones-if Niagara kilowatts were all blue. We are not going to get those to New York City. But you keep squeezing it along, with one system strengthening the other system. It is like when we were kids and we took dominoes and set them up in a line and then tipped one and they all fell over. If you use this integrated system you are taking the strength of one system and moving it right along the line, and you can reach New York City.

Mr. Leerburger is consulting engineer to the power authority, working particularly on this matter of integration. Can we reach New York City, Mr. Leerburger?

Mr. LEERBURGER. Yes.

The CHAIRMAN. Did I understand Secretary Chapman to say, when he was a witness at this hearing, that from the Niagara and the St. Lawrence the power would reach within a radius of about 340 miles.

Mr. LEERBURGER. If it were directly transmitted that is probably the limit. But by cascading the systems so that, as Mr. Burton described it, one system supported the other, the limit is extended far beyond the 300 miles.

The CHAIRMAN. How much beyond?

Mr. LEERBURGER. Probably doubled or more, because as one system backs off and meets a lull in its requirements it is filled in from the next adjacent system. It is cascaded. It is almost limitless. And it has been attempted in the Pacific Northwest successfully. Mr. BURTON. How far do they go there?

Mr. LEERBURGER. Oh, probably 500 or 600 miles.

The CHAIRMAN. Why does he say that New York City would not benefit directly by this power?

Mr. BURTON. Because he is thinking in terms of direct transmission by Government lines where you would take it from the site to the load center. That is not our plan. Our plan is to use the existing grid that is there and get the owners of that grid to tie their systems tighter together, so when in the neighborhood of Albany you have got a surplus of power that power can flow down into New York City. During World War II the power of New York City went to Massena to build aluminum. That is where the power came from. That is kind of "carrying coals to Newcastle" on that power line we have, but that power line was built to take New York City steam high-cost juice to Massena to build aluminum.

The CHAIRMAN. What was the distance?

Mr. BURTON. How far is it? It is 350 miles. It cost a lot of money to do it, but economy was not the object.

The CHAIRMAN. So it would be the same thing with New York City getting current? It would cost a large amount of money.

Mr. BURTON. Not in an integrated system. In an integrated system you dump power into one fringe of a company's lines, and you do not take that same power out of its other fringe. You take their power. You take the power that they generated near the other fringe and shove it on. So that you are doing this completely by displacement. So that blue and pink kilowatts do not have to go clear to New York City. We use violet ones that came out of Westchester of something like that.

This thing of integration is one of the most facinating things that I think I have run into. It is one of the most complicated things too. But, Mr. Chairman, it can work. It will work. But you have certainly got to have the systems that are in that area right in it one hundred percent working with you or you are going to be restricted to the physical limits of how far you can carry the power to take it to a load center, and that is wrong.

I do not want to see New York City blocked off from getting some effect of this cheapness. Maybe New York City would be for the seaway if they got that idea.

Mr. Chairman, I can conclude very quickly. The one thing further that I want to suggest is that in section 5 the Power Authority of the State of New York is fully prepard to finance all power aspects of the St. Lawrence on our side of the river from the very beginning. We are prepared to enter into an arrangement with any Federal agency with whom we should to provide the money to do it, to do the construction, and then to own and operate the program. We are prepared to save and relieve the Federal Government of any cost whatosever as to power.

We are prepared to put up in the first instance those costs common to power and the seaway. We would expect the Federal Government to pay us back the part that is allocable under the old agreements to the seaway-something in the nature of $45,000,000 or $50,000,000. We are going to make that same offer. For that matter, we are going to submit an amendment to the pending resolutions to provide just that. We are going to secure sponsorship of a bill on Niagara that will do that also.

Mr. WOOD. Mr. Chairman, might I ask the witness a question?
The CHAIRMAN. Dr. Wood.

Mr. WOOD. Mr. Burton, the Department of the Interior is planning to build a dam in the Snake River between Idaho and Oregon at Hell's Canyon. The stated purpose of building that dam and the only one-it is not an irrigation dam at all-is for a power dam. The Department of the Interior is seeking to build it for that purpose alone. The stated purpose is to provide power for the defense projects on the Pacific coast going down as far as California.

It seems a little peculiar to me that the Department of the Interior would state here they they could not push the power from the St. Lawrence seaway project into New York but they can take it a matter of somewhere around about 450 miles from Hell's Canyon to the plants on the Pacific coast and somewhere about 1,400 miles to California to the plants there.

Now, that is the stated purpose of building this Hell's Canyon Dam. As I say, it seems peculiar that the Secretary of the Interior is alleged to have stated, as was just stated by the chairman, that they could not push the power by the Federal lines alone into New York City, but I presume, following your statement, that what they plan on doing is using Bonneville and Grand Coulee and whatever plants generate power on the Pacific coast to push it down into California. Would that be true?

Mr. BURTON. I do not know the circumstances there. Maybe Mr. Leerburger does. Do you, Mr. Leerburger?

Mr. LEERBURGER. No.

Mr. BURTON. There are possibilities of integration. I would not know the circumstances without being on the scene.