gas corporation or electrical corporation organized or existing under or by virtue of the laws of this State, except that a corporation now lawfully holding a majority of the capital stock of any gas corporation or electrical corporation may, with the consent of the commission, acquire and hold the remainder of the capital stock of such gas corporation or electrical corporation or any portion thereof. Nothing herein contained shall be construed to prevent the holding of stock heretofore lawfully acquired, or to prevent, upon the surrender or exchange of said stock pursuant to a reorganization plan, the purchase, acquisition, taking, or holding of a proportionate amount of stock of any new corporation organized to take over, at foreclosure or other sale, the property of any corporation whose stock has been thus surrendered or exchanged. Every contract, assignment, transfer, or agreement for transfer of any stock by or through any person or corporation to any corporation in violation of any provision of this chapter shall be void and of no effect, and no such transfer or assignment shall be made upon the books of any such gas corporation or electrical corporation or shall be recognized as effective for any purpose.

No. 71. Complaints as to quality and price of gas and electricity; investigotion by commission; forms of complaints.—Upon the complaint in writing of the mayor of a city, the trustees of a village, or the town board of a town in which a person or corporation is authorized to manufacture, sell, or supply gas or electricity for heat, light, or power, or upon the complaint in writing of not less than one hundred customers or purchasers of such gas or electricity in cities of the first or second class, or of not less than fifty in cities of the third class, or of not less than twenty-five elsewhere, or upon complaint of a gas corporation or electrical corporation supplying said gas or electricity as to the illuminating power, purity, pressure, or price of gas, the efficiency of the electric incandescent lamp supply, the voltage of the current supplied for light, heat, or power, or price of electricity sold and delivered in such municipality, the proper commission shall investigate as to the cause for such complaint. When such complaint is made, the commission may, by its agents, examiners, and inspectors, inspect the works, system, plant, devices, appliances, and methods used by such person or corporation in manufacturing, transmitting, and supplying such gas or electricity, and may examine or cause to be examined the books and papers of such person or corporation pertaining to the manufacture, sale, transmitting, and supplying of such gas or electricity. The form and contents of complaints made as provided in this section shall be prescribed by the commission. Such complaints shall be signed by the officers, or by the customers, purchasers, or subscribers making them, who must add to their signatures their places of residence, by street and number, if any.

No. 72. Notice and hearing; order fixing price of gas or electricity, or requiring improvement.-Before proceeding under a complaint presented as provided in section 71, the commission shall cause notice of such complaint, and the purpose thereof, to be served upon the person or corporation affected thereby. Such person or corporation shall have an opportunity to be heard in respect to the matters complained of at a time and place to be specified in such notice. An investigation may be instituted by the commission as to any matter of which complaint may be made, as provided in section seventy-one of this chapter, or to enable it to ascertain the facts requisite to the exercise of any power conferred upon it. After a hearing and after such an investigation as shall have been made by the commission or its officers, agents, examiners of inspectors, the commission within lawful limits may, by order, fix the maximum price of gas or electricity not exceeding that fixed by statute to be charged by such corporation or person, for the service to be furnished; and may order such improvement in the manufacture, distribution, or supply of gas, in the manufacture, transmission, or supply of electricity, or in the methods employed by such person or corporation, as will in its judgment be adequate, just, and reasonable. The price fixed by the commission under this section or under subdivision five of section sixty-six shall be the maximum price to be charged by such person, corporation, or municipality for gas or electricity for the service to be furnished within the territory and for a period to be fixed by the commission in the order, not exceeding three years, except in the case of a sliding scale, and thereafter until the commission shall, upon its own motion or upon the complaint of any corporation, person, or municipality interested, fix a higher or lower maximum price of gas or electricity to be thereafter charged. In determining the price to be charged for gas or electricity the commission may consider all facts which in its judgment have any bearing upon a proper determination of the question, although not set forth in the complaint and not

within the allegations contained therein, with due regard among other things to a reasonable average return upon capital actually expended and to the necessity of making reservations out of income for surplus and contingencies.

No. 73. Forfeiture for noncompliance with order.-Every gas corporation and electrical corporation and the officers, agents, and employees thereof shall obey, observe, and comply with every order made by the commission under authority of this chapter so long as the same shall be and remain in force. Any such person or corporation, or any officer, agent, or employee thereof, who knowingly fails or neglect to obey or comply with such order or any provision of this chapter shall forfeit to the State of New York not to exceed the sum of one thousand dollars for each offense. Every distinct violation of any such order of this chapter shall be a separate and distinct offense, and in case of a continuing violation each day shall be deemed a separate and distinct offense.

No. 74. Summary proceedings.-Whenever either commission shall be of opinion that a gas corporation, electrical corporation, or municipality within its jurisdiction is failing or omitting or about to fail or omit to do anything required of it by law or by order of the commission, or is. doing anything or about to do anything or permitting anything or about to permit anything to be done contrary to or in violation of law or of any order of the commission, it shall direct counsel to the commission to commence an action or proceeding in the supreme court of the State of New York in the name of the commission for the purpose of having such violations or threatened violations stopped and prevented either by mandamus or injunction. Counsel to the commission shall thereupon begin such action or proceeding by a petition to the supreme court alleging the violation complained of and praying for appropriate relief by way of mandamus or injunction. It shall thereupon be the duty of the court to specify the time not exceeding twenty days after service of a copy of the petition within which the gas corporation, electrical corporation, or municipality complained of must answer the petition. In case of default, in answer or after answer, the court shall immediately inquire into the facts and circumstances in such manner as the court shall direct, without other or formal pleadings, and without respect to any technical requirement. Such other persons or corporations as it shall seem to the court necessary or proper to join as parties in order to make its order, judgment, or writs effective may be joined as parties upon application of counsel to the commission. The final judgment in any such action or proceeding shall either dismiss the action or proceeding or direct that a writ of mandamus or an injunction, or both, issue as prayed for in the petition, or in such modified or other form as the court may determine will afford appropriate relief.

No. 75. Defense in case of excessive charges for gas or electricity.-If it be alleged and established in an action brought in any court for the collection of any charge for gas or electricity, that a price has been demanded in excess of that fixed by the commission or by statute in the municipality wherein the action arose, no recovery shall be had therein, but the fact that such excessive charges have been made shall be a complete defense to such action.

No. 76. Jurisdiction.-The words "proper commission," when used in this article, mean the commission of the district within which the person or corporation affected supplies or proposes to supply the whole or the greater part of the service rendered by it. But nothing herein contained shall be construed to deprive the commission of either district of the power of supervision and regulation within its district. And either commission shall have power to enter and inspect the plant of such corporation, wherever situated.

No. 77. Powers of local officers. If in any city of the first or second class there now exists or shall hereafter be created a board, body, or officer having jurisdiction of matters pertaining to gas or electricity service, such board, body, or officer shall have and may exercise such power, jurisdiction, and authority in enforcing the laws of the State and the orders, rules, and regulations of the commission as may be prescribed by statute or by the commission. The CHAIRMAN. The committee will now hear Mr. Morris Cohn, jr. STATEMENT OF MR. MORRIS COHN, JR., REPRESENTING THE HYDRAULIC POWER CO., NIAGARA FALLS, N. Y.

Mr. CонN. Mr. Chairman and gentlemen, I live at Niagara Falls; I am counsel for the Hydraulic Power Co. of Niagara Falls. That company is engaged in the development of hydraulic and mechanical

power only. It operates by taking waters from the Niagara River through a surface canal and carries the water through the canal to a point below the Falls of Niagara, where it has its power plants

proper.

The company started operation and the canal was built in 1853, so this is no new enterprise, and it has been a development of over 60 years to get it to its present situation.

The first point that I raise may be somewhat old-fashioned, but we have always taken the position that we were entitled at common law, as riparian owners, to divert waters from the Niagara River. That claim has been sustained in litigated cases in the courts of the State of New York. We always appreciated we held this right to divert the water, subject to the right of the Federal Government, if it desired, to interfere for any purpose in which the Federal Government was interested, to wit, if it affected navigation the Federal Government might interfere; if it affected the national defense the Federal Government might interfere. But we certainly never appreciated, until this bill was introduced, that the Federal Government claimed any property rights in the matter and that it would attempt in so complete a way to take jurisdiction of the whole subject matter and try to control and regulate each and every feature of it.

The State of New York, of course, has claimed always to be the proprietor and sovereign of the lands under water and has assumed property rights in the matter.

This whole bill is based upon a new theory, as it seems to me, and ought not, as I view it, be applied solely to power development upon the Niagara River. If the bill is right in principle, it ought to be applied to every navigable stream in the United States. Our position is no different than the power developments upon the navigable streams in the New England States or other power developments upon international streams, and yet we are singled out here for legislation of this peculiar character.

The specific objections that I make to the bill, if the Federal Government is to assume jurisdiction of the whole matter, are these:

First, the bill provides that "no permit shall be granted hereunder except to a State or municipal corporation, or political subdivision thereof, or to a public-service corporation, or to a public-service agent of a State duly constituted and authorized to engage in the business of furnishing to the public light, heat, power, or electric current."

The CHAIRMAN. Are you connected with the hydraulic company that claims to furnish only power?

Mr. COHN. Hydraulic and mechanical power. We have been in this business for over 30 years.

The CHAIRMAN. You furnish that power to electric companies? Mr. COHN. To one electric company and to several manufacturing companies, in the form of hydraulic or mechanical powers. Some of them use the raw water just as they did 40 years ago. There is no change in their method of utilizing the water.

The CHAIRMAN. What percentage do you furnish to the electrical company?

Mr. COHN. I should say about 50 per cent to an electrical company, which distributes it. About 50 per cent is delivered to other customers in the form of mechanical or hydraulic power. When I

say "hydraulic power" I merely mean falling water-the right to draw water from the canal.

The CHAIRMAN. What do they turn it into?

Mr. CоHN. They just turn it on a water wheel and run their plants with it as they did 40 years ago.

The CHAIRMAN. Then either connect by shaft or belt or something of that kind with certain of your customers?

Mr. COHN. Other customers take power to transmit, attach their own generators, develop the power, and use it themselves; but some of the companies, you see, we have nothing to do with them except to furnish them water. They have their mill sites upon this canal; they draw the water from the canal and use the water as they see fit, and that has been so from time immemorial.

Under the provisions of this act the company which I represent would not probably be able to obtain any permit under the bill at all, because it is neither a State nor a municipal corporation, nor a public-service corporation, nor a public-service agent of the State; and there are three places in the bill which would have to be amended to enable us to receive a permit under this act; that is to say, in the State of New York corporations are organized and supervised in different ways-maybe a bank, an electric light company, a railway company, or a business corporation.

The CHAIRMAN. I suggest just here that the stenographer make a note and take your suggestions in regard to amendments later, which we will consider.

Mr. COHN. I will furnish the stenographer a memorandum covering the amendments which would enable us to receive a permit, and it can be included right at this point.

(The paper referred to was subsequently submitted and is here printed in full, as follows:)

FEBRUARY 10, 1917

AMENDMENTS PROPOSED TO H. R. 20047 ON BEHALF OF THE NIAGARA FALLS POWER CO. AND HYDRAULIC POWER Co. OF NIAGARA FALLS, NOT INCLUDING PROPOSED AMENDMENTS TO BRING LOWER RIVER DEVELOPMENT WITHIN TERMS OF THE BILL.

Page 2, line 2, strike out the word "revocable" before the word " permits." Page 2, line 5, before word "diversion" insert word "daily" and after word "diversion insert words "at the rate" and on line 6 strike out the words "at any one time."

On page 2, at the end of line 8, add the words " and with due regard to the provisions of article V of the treaty between the United States and Great Britain proclaimed May thirteen, nineteen hundred and ten."

Page 2, strike out lines 8, 9, 10, 11, 12, 13, 14, 15, and that part of 16 to and including the word “conducted" and insert in place thereof:

"SEC. 3. No permit shall be granted hereunder, except to the State of New York or a municipal corporation or political subdivision thereof or to a corporation of such State authorized and lawfully entitled by the laws thereof to engage in the work of developing such power."

Page 3, line 3, strike out all of said line.

Page 3, lines 14 and 15, strike out words "light, heat, power and electric current" and insert in place thereof words "power for illuminating, industrial and other purposes."

Page 4, line 6, at end of line insert new sentence to read as follows:

"The permittee may take by eminent domain lands and other rights necessary for the construction and operation of said works or the several parts thereof in the manner provided for the condemnation of land for public purposes by the laws of the State of New York."

Page 4, line 12, strike out word "two" and insert in place thereof five." Page 4, lines 14 and 15, strike out the words "not more than two years." Page 4, lines 17 and 18, strike out words "and transmission of electric current" and insert in place thereof the word "of."

Page 4, at end of line 23, strike out period and insert:

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Provided, however, that Bending the granting of the permits hereinabove specified and the completion of construction hereunder the Secretary of War may authorize by interim license any company now diverting waters from the said river within the United States for the production of power to continue to divert temporarily such waters for said purpose to the extent that permits for diversion hereinabove specified shall be unissued or unused."

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Page 5, line 2, strike out word "twenty" and insert in place thereof words "nineteen mechanical."

Page 5, line 20, after word "permittee," insert “or other person or corporation lawfully utilizing any part of the water diverted under its permit.”

Page 9, line 10, after word " may," insert words "modify or"; and on same page, line 15, after word “ may," insert words “modify or"; and on same page, line 18, after word "shall." insert words "modify or."

On page 10, in line 7, strike out the words "not longer than."
On page 10, at the end of line 11, add the following words:

"Present users of water of said river who have constructed power plants under grants of authority from the State of New York shall have a preference in the granting of permits hereunder to the extent of the amount of water now diverted by them, but not in excess of any limitation by law or by treaty." Page 10, strike out lines 12, 13, 14, 15, 16, 17, 18. and 19 and insert in place thereof:

"SEC. 10. If hereafter there shall be enacted general water-power legislation, requiring persons, associations, and corporations engaged in the business of developing and operating power plants upon, in, or along the navigable rivers of the United States to pay a fixed excise tax or other fixed compensation to the Federal Government for the right and privilege of making and operating such development, then, and in that event, any person, association, or corporation developing power under a permit granted pursuant to the terms and conditions of this act shall immediately be and become liable to the United States in the same manner and to the same extent for the payment of such excise tax or other compensation."

Alternative: On page 10, strike out all of lines 15, 16, 17, 18, and 19 and insert in place thereof the following words:

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States during the continuance of such permit of a reasonable annual charge to be fixed by the Secretary of War not exceeding per annum for each

horsepower produced by the use of the water diverted."

Page 10, line 20, strike out all of section 11.

Alternative: Page 10, line 25, and page 11, lines 1 and 2, strike out the words" and all contracts therefor, whether heretofore or hereafter made, are declared to be violative of public policy and void."

Mr. CоHN. The first amendment consists of three changes, as follows [reading]:

Page 2, strike out lines 8, 9, 10, 11, 12, 13, 14 and that part of 15 to and including the word “conducted," and insert in place thereof

"No permits shall be granted hereunder except to the State of New York, or a municipal corporation, or political subdivision thereof, or to a corporation of such State authorized and lawfully entitled by the laws thereof to engage in the work of developing such power."

Page 3, lines 14 and 15. strike out words "Light, heat, power, and electric current." and insert in place thereof the words “ power for illuminating. industrial, and other purposes."

Page 4, lines 17 and 18, strike out words "and transmission of electric current" and insert in place thereof the word "of."

Mr. СOHN. The above three amendments are designed to enable the Hydraulic Power Co. to make application for and receive a permit under the bill. This company is the oldest power company at Niagara Falls, but it now is and it and its predecessors always have been, purely water-power companies, and they have not now and do