by limiting the grants to 50 years, by reserving the right to revoke the grant at any time for public uses upon payment of reasonable value for works constructed, and by directing that consideration be given to the bearing of any proposed plan on a comprehensive scheme of development. The act also directed that charges be collected sufficient to reimburse the United States for costs of investigations made or of works necessary to restore prior conditions of navigability, and as compensation for the benefits received from headwater improvements or forested watersheds operated or maintained by the United States. No provision was made for the collection of charges for the privilege itself or for the disposition of the properties at the termination of the grant, and the right was reserved to amend or repeal the act at any time with respect to any dam constructed under its provisions, without any liability on the part of the United States.

In the two years following the approval of the amended act 16 new or amended grants were authorized by Congress. Then executive disapproval was again expressed and the Coosa River bill was vetoed on August 24, 1912, by President Taft because the amended act still failed to make provisions for collecting charges for the privileges granted.

No developments of consequence were made under either the act of 1906 or the act of 1910. The possibility that the grantee might be required some time in the future to undertake at his own expense navigation improvements of unknown character and cost, the failure of both acts to make any provision for disposition of the properties or extensions of grants on termination, and the reserved right to alter or repeal any grant at any time without recourse in the grantee or liability in the United States, made financing practically impossible. Only two further authorizations appear to have been granted by Congress after the veto of the Coosa River bill. Proposals for general legislation to amend the act of 1910 were, however, constantly before Congress, but without results achieved until in the second session of the Sixty-fifth Congress proposed legislation with respect to navigable waters was merged with similar proposals respecting the public lands. The combined bill approved on June 10, 1920, finally broke the deadlock that had existed for more than a decade in Federal water-power legislation.

RESPECTING INTERNATIONAL BOUNDARY STREAMS.

The statutes of the United States relating to water powers in international boundary streams affect only those streams which form or cross the boundary between the United States and Canada. Due to fears which had been expressed that the diversions of water being made from the Niagara River both in the United States and in Can

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ada would injure the scenic beauties of Niagara Falls, Congress on June 29, 1906, passed the Burton Act (34 Stat., 626), which limited diversions on the American side to 15,600 cubic feet per second, pending negotiations which it recommended should be entered into with Great Britain for the purpose of execution of a treaty covering the whole subject of navigable waters.

The treaty proclaimed on May 13, 1910 (36 Stat., 2448), created an International Joint Commission with jurisdiction over diversions from boundary streams for other than domestic, sanitary or navigation purposes, and over constructions in streams forming or crossing the boundary which would affect the level of waters on the other side of the boundary. Each country, however, by the terms of the treaty reserved to itself jurisdiction and control over the use and diversion of waters on its own side of the boundary in or from streams which in their natural channels would flow across the boundary or into boundary waters, but provided that any such diversion on either side which resulted in injury on the other side should entitle the party injured to the same legal remedies as if the injury took place in the country where the diversion was made.

The provisions of the Federal Water Power Act affect in no degree the jurisdiction of the International Joint Commission, but the Federal Power Commission becomes the agency of the United States with authority to grant, within the limits of its jurisdiction, permits or licenses in accordance with which applicants may construct, maintain and operate on the American side of the international boundary such power projects as may have received the prior approval of the International Joint Commission.

THE FEDERAL WATER POWER ACT.

In place of the uncertain tenure and unknown requirements of previous legislation an applicant for a power project under the Federal Water Power Act may secure a license for a term not exceeding 50 years. The license is a contract between the Government and the licensee, expressly contains all the conditions which the licensee must fulfill, and, except for breach of conditions, can not be altered during its term either by the Executive or by Congress without the consent of the licensee. If a licensee fails to commence construction under his license it can be canceled by Executive action, but after construction has started, only by judicial action, and then only if no other appropriate legal remedy is available.

When the license period expires the United States may take over the properties of the licensee for its own use, permit them to be taken by another, or issue a new license to the old licensee. If the properties are taken away, the licensee must be paid his "net investment" in the properties, an amount equal to the actual investment

plus severance damages and less such sums in depreciation and amortization reserves as have been accumulated during the period of the license after having received a fair return upon the investment. If the license is renewed, it must be "upon reasonable terms." While "unearned increment" and intangibles are not to be recognized, the basis of payment protects every dollar of actual, honest investment in the properties.

The licensee is required so to plan his project that it will conform to a scheme of development providing for the fullest reasonable utilization of the resources of the stream. He must maintain his plant in good operating condition, make the necessary replacements of worn out or obsolete equipment, provide out of earnings adequate depreciation reserves for such purpose, and maintain a system of accounting in such form as may be prescribed. He must also pay reasonable annual charges for reimbursing the United States for a proper share of the cost of administration of the act and for recompensing it for the use of its land or other property.

In addition to the issuance and administration of licenses, the Commission created by the act is authorized to make investigations of wide scope, and is given jurisdiction over the regulation of rates, services and securities in intrastate business wherever the several States have not provided agencies for regulating such matter themselves, and in interstate business whenever the individual States have not the power to act or can not agree. The Commission is required to pass upon applications for entry to lands in power-site reserves, to find whether the construction of proposed power projects in the nonnavigable tributaries of navigable streams will affect interstate or foreign commerce, to investigate the value of power available at Government dams and the advisability of the development of such power by the United States for its public purposes, to determine, whenever any licensee makes use of a headwater improvement of another licensee or of the United States, the proper share of the annual cost of such improvement which should be paid by the licensee benefited, and to fix the fair value of any project already constructed which is brought under the provisions of the act.

8. JURISDICTION OF THE FEDERAL POWER COMMISSION.

On neither the public lands and reservations nor on the waters of the United States is the jurisdiction of the Federal Power Commission as broad as the jurisdiction of Congress. The latter has authority over all forms of use; the Commission is limited to the consideration of projects designed to produce water power. Structures or diversions having any other purpose, unless incidental to works constructed for power purposes or a necessary part of a com

prehensive scheme of development, are not within the jurisdiction of the Commission. Projects constructed under any permit or authority granted prior to the approval of the act are, so long as such permit or authority remains in force, exempt from the terms of the act and are not within the jurisdiction of the Commission. The Commission, furthermore, is limited to the licensing of such projects as are undertaken in compliance with the laws of the State with respect to beds and banks, to the appropriation, diversion and use of water for power purposes, and to the right to engage in any business necessary to effect the purposes of the license.

Within the limits above named the jurisdiction of the Commission extends to all public lands and reservations of the United States except national parks, national monuments and allotted Indian lands, and to all dams or other works constructed or owned by the United States. Outside of the public lands and reservations the jurisdiction of the Commission involves two classes of streams; first, those streams which are defined in the act as "navigable waters," over which the Commission has direct jurisdiction, and in which development can not lawfully be made without its prior approval; and second, those nonnavigable tributaries of navigable waters in which power development by altering the natural flow would affect the navigable capacity of the navigable waters. The second class come under the jurisdiction of the Commission only when declarations of intention to construct dams within them are filed with the Commission.

The construction of power projects on streams of the first class, that is "navigable waters," without first securing a license under the Federal Water Power Act would be subject to the penalties prescribed by that act and by the act of March 3, 1899, which prohibits without prior approval "the creation of any obstruction

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to the navigable capacity of any of the waters of the United States." The Federal Water Power Act defines navigable waters as "those parts of streams or other bodies of water over which Congress has jurisdiction under its authority to regulate commerce with foreign nations and among the several States, and which either in their natural or improved condition notwithstanding interruptions between the navigable parts of such streams or waters by falls, shallows, or rapids compelling land carriage, are used or suitable for use for the transportation of persons or property in interstate or foreign commerce, including therein all such interrupting falls, shallows, or rapids; together with such other parts of streams as shall have been authorized by Congress for improvement by the United States or shall have been recommended to Congress for such improvement after investigation under its authority."

Whether a stream has been recommended for improvement, or improvement has been authorized or actually made, is a simple

question of fact. Whether it is used in the transportation of persons or property in interstate or foreign commerce, is also a question of fact which may be determined upon investigation. Whether, if not so used, it is suitable for such use, is a matter of judgment, and decision should rest both upon the character of the stream and upon the probability of the development of commerce in sufficient amount to justify a finding that it is in fact suitable for such use. To establish jurisdiction in the Commission it is not sufficient that a stream carry or be capable of carrying commerce within the limits of a single State; but it must, either alone or in conjunction with other waters, form or be capable of forming a continuous highway over which, with the exception stated in the definition quoted, commerce may be carried on with other nations or between two or more States, in the customary manner in which such commerce is conducted by water. The commerce, however, may be of the crudest kind and may consist merely of rafts or floating logs, if such is the customary character of commerce in the locality.

Anyone proposing to construct a power project in a stream of the second class—that is, streams within the jurisdiction of Congress other than those defined as "navigable waters "-may follow either one of two courses, at his option. He may, in so far as the Federal Water Power Act is concerned, proceed upon his own responsibility to construct his project without reference to the Commission but at the risk of violating the act of March 3, 1899, and of becoming liable to incur the penalties prescribed by that act, and to have his unauthorized structures removed at his own expense. This liability is a continuing one and would be enforcible even if through change of conditions a commerce should develop in the future of which there is no apparent possibility at the time construction is made. He may, on the other hand, file with the Commission a declaration of intention to construct such a project and request a determination of the effect of his proposed structures on the interests of interstate or foreign commerce. The Commission must thereupon make investigation, and if it finds that the proposed construction would affect the interests of interstate or foreign commerce, construction may proceed only under license from the Commission.

In case of doubt it is manifestly advisable to file a declaration of intention, because the same considerations which would move the Commission to determine that the interests of interstate or foreign commerce are affected would be likely to control the actions of any other Federal agency in proceedings under the act of March 3, 1899. Furthermore, if the Commission finds that the project is desirable and justified in the public interest for the purpose of improving or developing a waterway or waterways for the use or benefit of interstate or foreign commerce, authority is given the licensee to exercise