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a beneficial effect on the reduction of the pollution content of the waterway. Of primary importance to the local and regional welfare are the recreational values that are attached to the large bodies of clear water. Although these benefits are not utilized in the economic analysis, they are quite large. For instance, nearly 4 million persons are reported to have visited the completed projects during the calendar year 1954. Millions of dollars have been invested by the public about the reservoirs for recreational developments and in sporting equipment. The income derived from these activities has been an important factor in improving the standards of living in those areas and has offset the disruptions that necessarily resulted from construction of the projects. The total business transactions in 1954 at the three major reservoir areas have been estimated at $23 million. The value of such business has been increasing steadily since the impoundments were made, with indications that the growth will continue.
I should not like to infer that all of the improvements have been the results solely of work by the Corps of Engineers. In all of our planning and management of the project, full use is made of the services and technical know-how of other Federal, State, and local agencies concerned with water resources problems. For instance, our work is coordinated fully with the fish and wildlife interests to assure that the maximum public benefits are obtained from this source. As an example of how this coordination has promoted conservation of fish and wildlife, the reservoirs each year are so regulated during the spring months as to promote suitable water conditions for the spawning of fishes. Releases are also made from the reservoirs during lowflow periods to maintain the proper habitat for cold-water species below the impoundments. Continuing studies are made of fish and game populations and encouragement is given to wildlife interests to provide improved habitat for wildlife.
Our management program is coordinated with the activities of the United States Soil Conservation Service and the United States Forest Service to preserve and improve Federal lands bordering the reservoirs and in the tributary watersheds. Large areas have been made available to the State agencies and to local groups for public parks, game refuges, and group camps, in order that the outdoor recreational values of the impoundments may be realized by as large a segment of the public as is possible. In all of our management practices, the primary objective is to assure the greatest maximum sustained benefit to the public from the reservoirs. Technical assistance is made available at all times to the participating groups in promoting and enhancing the value of their developments.
You may be interested to know the disposition that is made of the power generated by our Cumberland River projects. Owing to the proximity of the Cumberland River to the Tennessee River, it was logical that the output be integrated into the Tennessee Valley Authority's transmission system. In accordance with outstanding law, the Southeastern Power Administration is charged with the arrangements for the sale of power. In following this concept, the SEPA has consummated an agreement with the TVA for the sale of the power from Corps of Engineers project. The generation schedules are fitted into the needs of the TVA system and releases made in accordance with system demands. Adequate control is maintained, however, by the Corps of Engineers, to assure that other purposes are adequately served.
All moneys collected by SEPA from TVA as well as our other revenues, are covered into the United States Treasury. Operation and maintenance funds for the projects are obtained from the Congress each year through regular budgeting procedures.
Availability of water for releases and other regulation procedures are based on hydrologic data obtained for immediate use from our own special collection centers, together with supplemental information obtained from the Weather Bureau, the TVA, and the Geological Survey. In turn, our data are furnished those agencies for their use and for their permanent records. Funds are transferred to the Weather Bureau and the Geological Survey for stations in which we have an interest in connection with operation of the projects. All the collected material is complementary, and no duplication of effort and expense is involved.
I believe it is pertinent to mention how the existing projects have functioned to provide the benefits anticipated in the original authorizing documents. It is estimated that since construction, flood damages in the amount of $8 million have been averted within the Cumberland River Basin alone. As recently as March 1955, the city of Nashville was saved some $3,600,000 through operation of the three headwater reservoirs. The continuing expansion of this community is partial evidence of the value of protection now being afforded. The growth of this area and the region surrounding it is also reflected in the abundance of electric power available. Navigation is a thriving industry along the river with further increases expected when the full improvement plan is a reality. No shortages of water supply at the communities along the improved streams are to be expected by virtue of the controlled releases, and pollution problems will be greatly reduced.
As you may have noted, the plan of the Corps of Engineers for the Cumberland River Basin that I have briefly presented is concerned with the development of the major resources of the basin. Our interest, however, does not stop here. We also are concerned with all phases of development within the watershed and their effects upon the major improvements. The Watershed Protection and Flood Prevention Act of 1954 directs the Department of Agriculture to investigate the flood-producing potentialities of small watersheds and provide necessary measures for their prevention where economically justified. The Corps of Engineers and the Soil Conservation Service are fully coordinating their efforts in furthering this program.
In keeping with the intent of Congress and the spirit of the President's Executive Order No. 10584 implementing the act, agreements between our agencies and the States have been consummated. These agreements provide that all elements be given the opportunity to express their interest in each watershed under study, to exchange information and to cooperate in the studies when desired. All the agencies are given the opportunity to work together at all stages of the investigation, from the time of application for assistance, through the development of the final work plan.
To date, the Nashville District has cooperated with the Soil Conservation Service in reviewing and commenting on a number of watershed applications from the States of Alabama, Kentucky, North Carolina, and Tennessee, and has been represented in several field reconnaissance examinations. In addition, we have furnished pertinent available information to the work parties.
Thank you for the opportunity of presenting to you a résumé of the plan for the integrated development of the Cumberland River Basin. I feel that the plan is well conceived, utilizes to the best advantage the potentialities of the major water resources, and provides the public a sustained, economic benefit.
Mr. JONES. Thank you very much, Colonel. We have had two excellent statements.
Now I would like to go back to the most recent modification of the authorization contained in the 1953 act.
Colonel PERSON. Yes, Mr. Chairman.
I have here for insertion in the record a copy of Public Law 780 of the 83d Congress, 2d session, section 101 of which authorizes the lower Cumberland project in accordance with the report from the Chief of Engineers published as Senate Document 81, 83d Congress, 2d session. A copy of that report is also provided for the record.
(An excerpt from the document referred to follows:) Cumberland River, Kentucky and Tennessee: Senate Document Numbered 81, Eighty-third Congress; and a monetary authorization not to exceed the estimated cost of the Dover and Eureka dams as described in House Document Numbered 761, Seventy-ninth Congress, “Cumberland River and its tributaries, Tennessee and Kentucky”, authorized by the River and Harbor Act of July 24, 1946, is hereby authorized to be expended for partial accomplishment of the project hereby approved : Provided, That such authorization shall include the acquisition of lands necessary for wildlife purposes as outlined in said Senate Document Numbered 81;
Mr. JONES. Would any members of the committee like to examine those documents before we excuse tlie colonels?
Colonel PERSON. Mr. Chairman, I have also the original 1946 authorization for the lower Cumberland Dam project, but you are not interested in that, I assume.
Mr. Jones. We will include that by reference, if you will designate it to the reporter.
Colonel PERSON. Yes, sir. That is Public Law 525, 79th Congress, 2d session, approved July 24, 1946, authorizing a plan for the development of the lower Cumberland which differed in that it was a low-dam plan, from the 1945 authorized project. That report was House Document 761, 79th Congress, 2d session.
You do not want that included in the record ?
Mr. JONES. No. Just by reference. But we did want to insert a copy of the public law including the recent authorization and modification of the project.
Mr. LIPSCOMB. Colonel, do Dale Hollow, Center Hill, and Wolf Creek all have hydroelectric installations ?
Colonel DORLAND. Yes, sir. They do.
Mr. LIPSCOMB. Can you expain how it operates now? It is sold to Southeastern Power Administration?
Colonel DORLAND. Southeastern Power Administration has a bookkeeping transaction.
Mr. LIPSCOMB. And then what happens ?
Colonel DORLAND. They sell it to TVA and TVA at the end of the year computes the payment, or Southeastern Power Administration presents a bill to TVA, and TVA gives a check to the Treasurer of the United States for the value of the power generated. It operates
as a matter of measurement on the cubic feet of water released, but that is merely a matter of the mechanics of the agreement.
Mr. LIPSCOMB. Does Southeastern Power Administration run the powerhouse?
Colonel DORLAND. No, sir. It is run by the Corps of Engineers and employees of the Nashville district. The dispatch, because of system dispatch operations, operates out of the TVA dispatch center at Chattanooga, with a subdispatch office here in Nashville. They are connected to the powerhouse with microwave carrying telephone circuits on the high-tension lines, and within the terms of the basic agreement between the Corps of Engineers and TVA as to quantities of water at different stages of the reservoir, which operate on a seasonaltype basis, we go ahead and dispatch power to fit into our system operation. The computation is made at the end of the year and the check is written to the Treasurer.
Mr. LIPSCOMB. Is the computation made at the end of the year or is it on a firm contract?
Colonel DORLAND. Excuse me. There is now a minimum firm contract.
Mr. LIPSCOMB. What is the power worth that is produced at those three dams? Do you have any idea ?
Colonel DORLAND. You mean in dollars? I have a computation here which shows the power data, if you would like it. For example, Wolf Creek's revenues, received from Wolf Creek in fiscal year 1952, show the gross revenue was $1,790,500; fiscal year 1953, $1,125,000; fiscal year 1954, which was one of the lowest or driest years of record in this whole part of the country, $857,100. In fiscal year 1955, $2,083,000. .
I have those figures for the other projects, if you would like them.
Mr. JONES. I would like to call back to the stand Mr. C. M. Everhart.
FURTHER STATEMENT OF C. M. EVERHART, PRESIDENT, CUMBERLAND VALLEY ASSOCIATION, AND EXECUTIVE VICE PRESIDENT, CUMBERLAND RIVER SAND & GRAVEL CO.
Mr. Everhart, I have prepared a telegram to be directed to the Honorable Sherman Adams, Assistant to the President. I want you to pay particular attention to what I have said in this telegram, because I want to see if it is correct. I do not want to present any request to Mr. Adams or anybody else unless it is factually correct. I am going to read it to you and I am going to hand it to you:
Testimony presented at subcommittee hearing today discloses shocking effort by Bureau of Budget to impose a private utility veto on congressionally authorized multipurpose project on lower Cumberland River in Kentucky. Testimony came from Charles M. Everhart, Nashville, Tenn., executive vice president of the Cumberland River Sand & Gravel Co. In company with other citizens, Mr. Everhart was told in Washington, on October 19, by Budget Bureau official iden.
tified as either Mr. Schwartz, Rappaport, or Schad that they would have a much better case for the Cumberland project if they could get the Kentucky Utilities Co. to take over the power features of the proposed dam. The witness added that the Bureau official said only a token payment from the Kentucky Utilities was necessary. This outrageous flouting of the will of Congress is most reprehensible. It is a bargain-counter sale of public property that departs radically from established Federal policy. It should be the subject of immediate inquiry by the Office of the President. I urge you to bring a quick halt to such solicitations by the Bureau of the Budget.
I have signed it, with a copy to be sent to Congressman Earl Chudoff, chairman of the Subcommittee Investigating the Power Policy of the Federal Government.
Is that correct?
Mr. Chairman, I appeared up there solely in the position of president of the Cumberland Valley Association. All the testimony which I presented, which is this document here, was presented on behalf of the Cumberland Valley Association. I notice you have my business connection here. I think that it might be better if that were changed.
Mr. Jones. Will the clerk of the committee get the telegram and make that change? Now go through it carefully, Mr. Everhart.
Mr. EVERHART. I would like to have included, Mr. Chairman, where you say, “if they could get the Kentucky Utilities Co.," I would like to have inserted there, “or other private utilities.
Mr. JONES. The clerk will make a note of that and insert it at that point in the telegram.
Mr. EVERHART. In regard to the sentence which reads, "The witness added that the Bureau official said only a token payment from Kentucky Utilities was necessary." I do not believe the record will show that I said exactly that. The conversation went something like this: That if we could interest some private utilities or the Kentucky Utilities to take over the power features
and my understanding by intimation was to take over the complete facilities for hydroelectric generation.
Now, nothing was said about who would pay for that initial capital investment. They did say then, “and pay the Government a nominal fee for the water which had been stored to drive those hydroelectric generators."
I believe that this particular sentence here indicates that the Bureau officials said only a token payment from Kentucky Utilities was necessary.
Mr. JoNEs. That is in error?
Mr. EVERHART. Yes, sir; I think it is, because there was really no prolonged discussion over any method of taking over a portion of the capital investment; or whether that would just be turned over to them and let them construct it; or whether the Government would construct it and then exact some funds from them. The words that I used were, “then they would expect a nominal payment for the use of the water."
Mr. JONES. Then that is subject to interpretation which you are not sure about?
Mr. EVERHART. That is exactly correct.
Mr. JONES. Which you are not sure as to the meaning of and therefore it should not be included as a part of that telegram?
Mr. EVERHART. The term “nominal payment" which was used was in reference to the future use of the water which had been stored in a