"(e) (3) That the licensee shall maintain the project works in a condition of repair adequate for the purposes of navigation and for the efficient operation of said works in the development and transmission of power, shall make all necessary renewals and replacements, shall establish and maintain adequate depreciation reserves for such purposes, shall so maintain and operate said works as not to impair navigation, and shall conform to such rules and regulations as the Commission may from time to time prescribe for the protection of life, health, and property. Each licensee hereunder shall be liable for all damages occasioned to the property of others by the construction, maintenance, or operation of the project works or of the works appurtenant or accessory thereto, constructed under the license, and in no event shall the United States be liable therefor.

"(d) (4) That after the first twenty years of operation out of surplus earned thereafter, if any, accumulated in excess of a specified reasonable rate of return upon the actual, legitimate net investment of a licensee in any project or projects under license the licensee shall establish and maintain amortization reserves, which reserves shall, in the discretion of the Commission, be held until the termination of the license or be applied from time to time in reduction of the net investment. Such specified rate of return and the proportion of such surplus earnings to be paid into and held in such reserves shall be set forth in the license. "(e) (5) That the licensee shall pay to the United States reasonable annual charges in an amount to be fixed by the Commission for the purpose of reimbursing the United States for the costs of the administration of this Aet title; for recompensing it for the use, occupancy, and enjoyment of its lands or other property; and for the expropriation to the Government of excessive profits until the respective States shall make provision for preventing excessive profits or for the expropriation thereof to themselves, or until the period of amortization as herein provided is raached, and in fixing such charges the Commission shall seek to avoid increasing the price to the consumers of power by such charges, and any such charges for the expropriation of excessive profits may be adjusted from time to time by the Commission as conditions may require: Provided, That when licenses are issued involving the use of Government dams or other structures owned by the United States or tribal lands embraced within Indian reservations the Commission shall fix a reasonable annual charge for the use thereof, and such charges may be readjusted by the Commission at the end of twenty years after the beginning of operations project is available for service and at periods of not less than ten years thereafter in a manner to be described in each license upon notice and opportunity for hearing: Provided further, That licenses for the development, transmission, or distribution of power by States or municipalities shall be issued and enjoyed without charge to the extent such power is sold to the public without profit or is used by such State or municipality for State or municipal purposes, except that as to projects constructed or to be constructed by States or municipalities primarily designed to provide or improve navigation licenses therefor shall be issued without charge; and that licenses for the development, transmission, or distribution of power for domestic, mining, or other beneficial use in projects of not more than one hundred horsepower installed capacity may be issued without charge, except on tribal lands within Indian reservations; but in no case shall a license be issued free of charge for the development and utilization of power created by any Government dam and that the amount charged therefor in any license shall be such as determined by the Commission. In the event an overpayment of any charge due under this section shall be made by a licensee, the Commission is authorized to allow a credit for such overpayment when charges are due for any subsequent period.

"(f) (6) That whenever any licensee hereunder is directly benefited by the construction work or another licensee, a permittee, or of the United States of a storage reservoir or other headwater improvement, the Commission shall require as a condition of the license that the licensee so benefited shall reimburse the owner of such reservoir or other improvements for such part of the annual charges for interest, maintenance, and depreciation thereon as the Commission may deem equitable. The proportion of such charges to be paid by any licensee shall be determined by the Commission. The licensees or permittees affected shall pay to the United States the cost of making such determination as fixed by the Commission. "Whenever such reservoir or other improvement is constructed by the United States the Commission shall assess similar charges against any licensee directly benefited thereby, and any amount so assessed shall be paid into the Treasury of the United States, to be reserved and appropriated as a part of the special fund for headwater improvements as provided in section 17 hereof.

"Whenever any power project not under license is benefited by the construction work of a licensee or permittee, the United States or any agency thereof, the Commission, after notice to the owner or owners of such unlicensed project, shall determine and fix a reasonable and equitable annual charge to be paid to the licensee or permittee on account of such benefits, or to the United States if it be the owner of such headwater improvement.

(g) (7) Such other conditions not inconsistent with the provisions of this Act as the Commission may require.

“(h) (8) That combinations, agreements, arrangements, or understandings, express or implied, to limit the output of electrical energy, to restrain trade, or to fix, maintain, or increase prices for electrical energy or service are hereby prohibited.

"(i) (9) In issuing licenses for a minor part only of a complete project, or for a complete project of not more than one hundred horsepower installed capacity, the Commission may in its discretion waive such conditions, provisions, and requirements of this Aet title, except the license period of fifty years, as it may deem to be to the public interest to waive under the circumstances: Provided, That the provisions hereof shall not apply to annual charges for use of lands within Indian reservations."

SEC. 207. Section 14 of the Federal Water Power Act is amended to read as follows:

"SEC. 14. That Upon not less than two years' notice in writing from the Commission the United States shall have the right upon or after the expiration of any license to take over and thereafter to maintain and operate any project or projects as defined in section 3 hereof, and covered in whole or in part by the license, or the right to take over upon mutual agreement with the licensee all property owned and held by the licensee then valuable and serviceable in the development, transmission, or distribution of power and which is then dependent for its usefulness upon the continuance of the license, together with any lock or locks or other aids to navigation constructed at the expense of the licensee, upon the condition that before taking possession it shall pay the net investment of the licensee in the project or projects taken, not to exceed the fair value of the property taken, plus such reasonable damages, if any, to property of the licensee, valuable, serviceable, and dependent as above set forth but not taken, as may be caused by the severance therefrom of property taken, and shall assume all contracts entered into by the licensee with the approval of the Commission. The net investment of the licensee in the project or projects so taken and the amount of such severance damages, if any, shall be determined by agreement between the Commission and the licensee, and in ease they cannot agree, by proceedings in equity instituted by the United States in the district court of the United States in the district within which any such property may be located: by the Commission after notice and opportunity for hearing. Provided, That, Such net investment shall not include or be affected by the value of any lands, rights-of-way, or other property of the United States licensed by the Commission under this Act, by the license or by good will, going value or prospective revenues; Provided further, That nor shall the values allowed for water rights, rights-of-way, lands, or interest in lands shall not be in excess of the actual reasonable cost thereof at the time of acquisition by the licensee: Provided, That the right of the United States or any State or municipality to take over, maintain, and operate any project licensed under this Act at any time by condemnation proceedings upon payment of just compensation is hereby expressly reserved."

SEC. 208. Section 17 of the Federal Water Power Act is amended to read as follows:

"SEC. 17. (a) That All proceeds from any Indian reservation shall be placed to the credit of the Indians of such reservation. All other charges, except charges fixed by the Commission for the purpose of reimbursing the United States for the costs of administration of this title, arising from licenses hereunder shall be paid into the Treasury of the United States, subject to the following distribution: Twelve and one-half per centum thereof is hereby appropriated to be paid into the Treasury of the United States and credited to 'Miscellaneous receipts'; 50 per centum of the charges arising from licenses hereunder for the occupancy and use of public lands, national monuments, national forests, and national parks shall be paid into, reserved, and appropriated as a part of the reclamation fund created by the Act of Congress known as the 'Reclamation Act' approved June 17, 1902; and 371⁄21⁄2 per centum of the charges arising from licenses hereunder for the occupancy and use of national forests, national parks, public lands, and national monuments,

from development within the boundaries of any State shall be paid by the Secretary of the Treasury to such State; and 50 per centum of the charges arising from all other licenses hereunder is hereby reserved and appropriated as a special fund in the Treasury to be expended under the direction of the Secretary of War in the maintenance and operation of dams and other navigation structures owned by the United States or in the construction, maintenance, or operation of headwater or other improvements of navigable waters of the United States. The proceeds of charges made by the Commission for the purpose of reimbursing the United States for the costs of the administration of this title shall be paid into the Treasury of the United States and credited to miscellaneous receipts.

"(b) In the case of delinquency on the part of any licensee in the payment of annual charges, a penalty of 10 per centum of the total amount delinquent shall be added to the total charges, which shall apply for the first month or part of month so delinquent with an additional penalty of 5 per centum for each subsequent month until the total of the charges and penalties are paid or until the license is canceled and charges and penalties satisfied, in accordance with law."

SEC. 209. Section 18 of the Federal Water Power Act is amended to read as follows:

"Sec. 18. The Commission shall require the construction, maintenance, and operation by a licensee at its own expense of such lights and signals as may be directed by the Secretary of War, and such fishways as may be prescribed by the Secretary of Commerce. That, The operation of any navigation facilities which may be constructed as a part of or in connection with any dam or diversion structure built under the provisions of this Act, whether at the expense of a licensee hereunder or of the United States, shall at all times be controlled by such reasonable rules and regulations in the interest of navigation, including the control of the level of the pool caused by such dam or diversion structure as may be made from time to time by the Secretary of War; Such rules and regulations may include the maintenance and operation by such licensee at its own expense of such light and signals as may be directed by the Secretary of War, and such fishways as may be prescribed by the Secretary of Commerce and for willful failure to comply with any such rule or regulation such licensee shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished as provided in section 25 hereof." SEC. 210. Section 23 of the Federal Water Power Act is amended to read as follows:

"SEC. 23. (a) That The provisions of this aet title shall not be construed as affecting any permit or valid existing right-of-way heretofore granted or as confirming or otherwise affecting any claim, or as affecting any authority heretofore given pursuant to law, but any person, association, corporation, State, or municipality holding or possessing such permit, right-of-way, or authority may apply for a license hereunder, and upon such application the Commission may issue to any such applicant a license in accordance with the provisions of this aet title and in such case the provisions of this Act shall apply to such applicant as a licensee hereunder: Provided: That when application is made for a license under this section for a project or projects already constructed, the fair value of said project or projects determined as provided in this section shall for the purposes of this aet tille and of said license be deemed to be the amount to be allowed as the net investment of the applicant in such project or projects as of the date of such license, or as of the date of such determination, if license has not been issued. Such fair value may, in the discretion of the eemmission; be determined by mutual agreement between the commission and the spplicaant or, in ease they cannot agree, jurisdiction is hereby conferred upon the district court of the United States in the district within which such project or projects may be located; upon the application of either party; to hear and determine the amount of such fair value shall be determined by the Commission after notice and opportunity for hearing. "(b) It shall be unlawful for any person, State, or municipality to construct, operate, or maintain any dam, water conduit, reservoir, power house, or other works across, along, or in any of the navigable waters of the United States, or upon any part of the public lands or reservations of the United States (including the Territories), or for the purpose of utilizing the surplus water or water power from any Government dam, except under and in accordance with the terms of a permit or valid existing right-of-way granted prior to June 10, 1920, or a license granted pursuant to this Act. That Any person, association, corporation, State, or municipality intending to construct a dam or other project works across, along, over, or in any stream or part thereof, other than those defined herein as navigable waters, and over which Congress has jurisdiction under its authority to regulate com

merce between foreign nations and among the several States may in their diseretion shall before such construction file declaration of such intention with the Commission, whereupon the Commission shall cause immediate investigation of such proposed construction to be made, and if upon investigation it shall find that the interests of interstate or foreign commerce would be affected by such proposed construction, such person, association, corporation, State, or municipality shall not proceed with such construction construct, maintain, or operate such dam or other project works until it shall have applied for and shall have received a license under the provisions of this Act. If the Commission shall not so find, and if no public lands or reservations are affected, permission is hereby granted to construct such dam or other project works in such stream upon compliance with State laws.

SEC. 211. Section 24 of the Federal Water Power Act is amended to read as follows:

"SEC. 24. That Any lands of the United States included in any proposed project under the provisions of this aet tiile shall, from the date of filing of application therefor, be reserved from entry, location, or other disposal under the laws of the United States until otherwise directed by the Commission or by Congress. Notice that such application has been made, together with the date of filing thereof and a description of the lands of the United States affected thereby, shall be filed in the local land office for the district in which such lands are located. Whenever the Commission shall determine that the value of any lands of the United States so applied for, or heretofore or hereafter reserved or classified as power sites, will not be injured or destroyed for the purposes of power development by location, entry, or selection under the public-land laws, the Secretary of the Interior, upon notice of such determination, shall declare such lands open to location, entry, or selection, for such purpose or purposes and under such restrictions as the Commission may determine, subject to and with a reservation of the right of the United States or its permittees or licensees to enter upon, occupy, and use any part or all of said lands necessary, in the judgment of the Commission, for the purposes of this aet title, which right shall be expressly reserved in every patent issued for such lands; and no claim or right to compensation shall accrue from the occupation or use of any of said lands for said purposes. The United States or any licensee for any such lands hereunder may enter thereupon for the purposes of this aet, title, upon payment of any damages to crops, buildings, or other improvements caused thereby to the owner thereof, or upon giving a good and sufficient bond to the United States for the use and benefit of the owner to secure the payment of such damages as may be determined and fixed in an action brought upon the bond in a court of competent jurisdiction, said bond to be in the form prescribed by the Commission: Provided, That locations, entries, selections, or filings heretofore made for lands reserved as water-power sites, or in connection with waterpower development, or electrical transmission may proceed to approval or patent under and subject to the limitations and conditions in this section contained: Provided further, That all provisions of the laws and regulations affecting permits, rights-of-way, or other authority on lands of the United States or waters under its control for water-power purposes shall be administered by the Commission, except as to the authority reserved to the several departments under the provisions of this title." SEC. 212. Sections 1 to 29, inclusive, of the Federal Water Power Act, as amended, shall constitute title I of that Act, and section 30 of such Act, as amended, is repealed.

Mr. DEVANE. I might say in connection with the proposed amendments to the Federal Water Power Act

Senator HASTINGS (interposing). Is that the second title II? Mr. DEVANE. That is title II, beginning at page 78 of the bill. Senator HASTINGS. Are they proposed as amendments to the Water Power Act?

Mr. DEVANE. Yes, sir. Beginning on page 78 of the bill are proposed amendments to the Federal Water Power Act. And these proposed amendments go from page 78 to page 104 of the bill. These amendments are, perhaps I might say, self-explanatory; they are the result of the experience of the Federal Power Commission in the administration of the act.

Senator WHITE. May I ask you a question right there?

Mr. DEVANE. Certainly.

Senator WHITE. Are these proposed amendments to this title II necessary in order to make effective title I of the bill, or are they just something additional and distinct from the proposals contained in title I of the bill?

Mr. DEVANE. They have no relation either to title I of the bill or to the second title II. What I mean by the

Senator WHITE (interposing). Then this is a sort of omnibus bill? Mr. DEVANE. What I mean by that is this: That the amendments to the Federal Water Power Act are offered as amendments that should be made to that act without regard to what is done with title. I or the second title II of the bill.

Senator WHITE. I am prompted to ask why they were incorporated in this bill dealing with holding companies. Why weren't they sent up here as a separate bill? What is the reason for projecting them or putting them in this holding-company bill?

Mr. DEVANE. Well, I had nothing to do with that, and therefore I am unable to explain the reason for it.

Senator HASTINGS. I was about to ask that question of the chairman of the committee.

The CHAIRMAN. What is that?

Senator HASTINGS. Can you answer Senator White's question? The CHAIRMAN. All that I can say to you is that it was suggested to me by administration people that they be placed together.

Mr. DEVANE. There were titles I, II, and III in the House bill, that is, title I with reference to holding companies, and then the amendments the Senator is speaking of, and then the provision for the regulation of gas.

Senator HASTINGS. Was this bill presented to the House in the same way?

The CHAIRMAN. In the same way, except that title III for the regulation of gas, is not in this bill, S. 1725.

Senator WHITE. It makes a bill, by reason of joining these things together, of 140 pages. That part of the bill, S. 1725, which deals only with holding companies is about all that a man can hope to

master.

The CHAIRMAN. Well, if the committee sees fit we can separate them when the time comes. That is a question of policy for the committee to take up at some later time.

Senator HASTINGS. I thought it was all one subject.

The CHAIRMAN. No. We have been dealing entirely, up to this time I mean, with the holding company situation, title I of the bill.

"Mr. DEVANE. It is all one subject. They all relate to the electrical industry. But title I of the bill deals with the holding company side of the matter, and the second title II deals with operating companies.

Now, in that connection I should like to say that among the operating companies are those companies that now have licenses from the Federal Power Commission under the Federal Water Power Act. There are certain amendments that should be made to that act. When you begin to deal with holding companies on the one side, and with operating companies on the other, and you have as a part of