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More About The Production of Electricity by Steam Power

( Originally Published Early 1900's )

WANT to give you fair notice that these papers in my hands are I two evening Detroit papers. Possibly as part of the penalty for my manifold sins and offenses which I expect to serve in this world, it is my duty to read them—and I will read them late this evening—but I am not going to spring them on you. This (indicating) is a back number of the Transactions of the American Electrochemical Society. I believe it would be unconstitutional to inflict this on you either, but I may have to refer to it and I have it here for that purpose.

From the Minutes I find that seven years ago, come tomorrow, I talked to your Society in Pittsburgh on the same subject, excepting that the subject of superpower was necessarily absent. It would have been an anachronism. I find I said a number of things which were true then but which the circumstances of these seven years have rendered inaccurate; and I can, I believe, hang this talk tonight to good purpose upon the changes that it would be necessary to make in the record of seven years ago, if it were to be corrected for today's conditions.

I said, among other things, that I had not prepared a paper—that still stands. I have avoided preparing papers excepting when the record has had to be made and when it was necessary that critical examination of the text should be provided for in advance. I am talking now from a rather complete knowledge of my subject, but will take it upon me, as I did seven years ago, to do my talking discursively.

My own contribution to power plant work in the last seven years has been quite small. The details of design, and, in fact, the decision on broad principles, has passed naturally into other hands. I am still responsible, as a rule, for final decisions and some of these decisions are of interest, and I will put them before you when we come to them.

The Boiler Plant

The matters which I spoke about at that time as practices for which I was personally responsible in the United States, were the use of the very large boilers and large furnaces when bituminous coal was to be burned, and in those respects that practice was continued. The power plants for which I have ultimate responsibility are using boilers even larger, and furnaces of still greater cubic capacity per pound of coal to be burned. In that respect experience, as well as practice, have indicated that our departures towards very large boilers, made in 1908 and earlier, were correct. We have had imitators, both at home and abroad, but the general practice has not yet arrived at the point where any such very large assemblies of drums and tubes, with the proportionate furnace and stoker or pulverized fuel devices, are used as in our own practice. Our own practice, with that of Mr. Ford at River Rouge, and with the Genvilliers plant at Paris, and one or two others, still represents the use of the largest single boiler and furnace combinations.

We believe that the theory which I gave you seven years ago is still correct. The very large furnace, the reduced radiating surface, the minimum of controls, the maximum of output under the control of one employe are obtained in that way.

Heat Balance

I spoke then about heat balance. At that time the house turbine was a novelty, and the obtaining of the heat balance by the use of the house turbine was just coming to be the practice. It really had not yet been accepted, but it was very rapidly being accepted. It still continues to be good practice, although the attempt to establish a heat balance by control of the house turbine or house turbines—because the critters are usually plural in a large plant—is now passe. The method of obtaining heat balance now favored is by bleeding from the stages of the larger turbines, the main turbines, so-called. The house turbine continues, however, because of its forming a very reliable link in the chain of service. It enables many things to be done without interference with the main unit, and it has in a large plant this distinct merit, that it may be so adjusted as to cost a good deal less per unit than the equivalent capacity taken from the large turbines. That seems to be a little wrong, but it works out that way. You must remember that in a modern power house your large turbine is likely to deliver its output at very high voltage. In the last power house for which I had personal responsibility, the outgoing voltage varies from 105,000 to 120,000 volts. To step back from that to the voltages required for auxiliaries within the power house involves the use of step-down transformers; it also involves the setting aside of some capacity of the step-up transformers, and it involves the interpolation of some sort of station bus, which is not desirable for many reasons, and it involves a number of complications of switch gear, which are not only complications but are expenses. For some purposes and under some conditions it may absolutely be cheaper to produce the required current for use within the plant on its own auxiliaries by a house turbine of condensing type and convenient voltage. That is not always the case, but the large modern plant is becoming more and more specialized to its local conditions and to its transmission conditions, and it would not be well to generalize on that statement. Seven years ago I was willing to say, and I believed, that the house turbine method was the best method. We have not entirely passed away from using the house turbine, but the method depending upon the house turbine for heat balance is, as I said, now superseded by a more complex method, which involves, however, consideration of the outgoing heat of the gases. All of that is, more or less, in the technical press, and is more or less familiar to those of you who are dealing with power plant questions; but to those of you who are not, let me say this, very briefly: The older method reduced the gases leaving the boiler to a -stack temperature, which gave the necessary draft. That temperature might be reduced still further by the interpolation of economizers, which usually meant the use of induced draft. Instead of depending upon the temperature in the bottom of a high stack to give you the ascending chimney effect, you put in an induction fan and you cooled the gases below the point at which they would have given the draft, by drawing them through an economizer within whose tubes the feed water is - circulated, the feed water robbing those gases of 200 degrees or, it might be, 300 degrees of heat.

Now, if you are going to heat your feed water with steam bled from the intermediate. stages of your turbine, it is quite evident that the feed water will not be cool enough to be of much use in reducing the temperature of the flue gases, and that reduction must be obtained in another way. The present practice tends to the use of air heaters of one kind and another; sometimes tube devices with the gases outside or inside the tube and the incoming air on the other side of the metal of the tube, and at other times with structures of metal which are alternately heated by the gases and cooled by the incoming air, a sort of alternate flow. The air heater is evidently going to have its place. I do not, however, see that it is going to be so commonly accepted as the economizer was —at least, not in the near future. It has some difficulties and some objections, and it certainly does not tend to simplicity. Its use practically controls the selection of the type of boiler and of the arrangement of the flue passes, and it may thereby introduce minor losses that will go a long way to offset the major gain by the recovery of waste heat. Still the air heater has its place.

The modern plant, then, has changed in these respects: The heating of the feed water begins by taking steam from one of the stages of the turbine towards the condenser, where the steam is quite cold. It proceeds by taking steam from another stage, and it may be continued by still taking steam from a third stage, although that is a refinement that is not always justified. It is, of course, in the large power plant, the very large plant. In the smaller plant it probably would not be justified unless the cost of fuel was very high. The last heat is obtained by the live steam drips and waste steam of high temperature, which can be recovered and which goes into the feed water either directly by mixing the drips with the feed water, or indirectly through tube heaters. That heating of the feed water makes it impracticable to use the old style economizer, and the air heater is the most practical method at the present time of recovering the heat that otherwise would be surrendered in the flue gases.

The house turbine continues, but it is not such an essential feature in the heat balance. In one recent design the bleeding of the house turbine is depended upon to heat the premises during the winter months. In this latitude, and in most parts of the United States, the difference between winter and summer temperature is such that the interior heating of the power house has to be provided for, and under those conditions bleeding of the house turbine may be arrived at. It results also that the house turbine has to become in some instances a highly efficient machine itself, and not a relatively simple and inefficient machine.

In this latest design I have spoken about, this Trenton Channel plant, which is now in operation, the house turbines are 4,000-kilowatt machines that are, in effect, not inferior to the main units, and they run condensing.

Pulverized Fuel

I said, seven years ago, that in any design in the near future the possible use of pulverized fuel must be considered. The use of pulverized fuel has arrived in modern power plants. It had arrived seven years ago in cement kilns and in a few other narrow uses—by cement kilns, of course, I refer to rotary kilns in which the constituents of Portland cement are calcined before being ground into fine powder which we know as cement. Pulverized fuel has definitely arrived. Its acceptance is due to a number of causes, and there is at least one well known instance, one of the early instances, where its justification was an increase of capacity within furnaces which were entirely inadequate to give the capacity with any other known means. In other instances the attempt has been to improve the total over-all efficiency of the power plant, and, beyond doubt, there is an improvement. It turns upon this particularly, that with the same quality of fuel, if you pulverize it very fine, you can get air, in proper quantity and temperature, to every infinitesimal particle of the fuel. There will be no fuel occluded in slag; there will be no losses of unconsumed fuel under that condition. There should be none, and in practice such losses are negligible. The final dust from the pulverized fuel plant, which corresponds to the cinders of a stoker, is thoroughly burned out. It looks like nothing so much as volcanic ash. It is the nearest approximation in industry to what we know as volcanic ash—it acts much the same way. If you give it a good start in the upper atmosphere, it floats miles before it comes down; so it may be that some of our friends operating plants using pulverized fuel depend upon that method of getting rid of their cinders—they let them go up the chimney. That has merit, and then it may not have merit—it depends on our neighbors. If the neighbors are inclined to be, say, critical, they may object; and at Trenton Channel inasmuch as there was a region that was taking to market gardens on one side and another region that had already taken to being suburban homes on the other side, we thought it best at least to give evidence of good intention by putting in Cottrell precipitators. You chemical engineers know what they are. The fine particles of cinders going up a chimney are caused to adhere to plates, on which they accumulate until they are dislodged by rapping, and they fall in sufficient volume to allow them to be collected. Under very good conditions, with the gases tempered just right, we are assured by the operators of the precipitators who are still operating them, that they are collecting, well, over 90 per cent of the material that is going up the stack, and that seems to be justified. If you take the gas as it comes, however, it is very dry and is not quite so amenable to electrostatic influences as would be the case with a more moist gas, and the actual recovery may be about 75 per cent; but inasmuch as we know that figure is reversed in the common practice of many pulverized fuel plants and 75 per cent goes up the stack and out to the atmosphere and only 25 per cent is accounted for in the flue pockets, in the dust chambers, in the ash pit, and so on, the reversal of the figures, at least, indicates a desirable regard for local sentiment. I don't know whether it is going to pay or not. The Cottrell precipitator is, putting it mildly, a somewhat temperamental somebody—and whether it is going to be a commercial success, I am not yet prepared to say, but I am exceedingly hopeful. It probably will be like most other things of that kind : It will presently reach a form which will represent the resultant of many experiments and in that form will fulfill its purpose for such gases as those that come from a pulverized fuel furnace loaded with very, very fine ash. It will fulfill its purpose of precipitating undesirable constituents, the solid constituents of gases, just as effectively as it serves to recover valuable wastes from the chimneys of smelting plants, and the efficiency may go up quite high. Certainly, the indications are hopeful, and there ought to be a market there for precipitators, and I certainly trust that they will get the market that their good will usefulness deserves.

Now, the pulverized fuel plant, as I say, is essentially more efficient for that one reason, that the atmospheric oxygen can reach every particle of carbon or of other combustible in the fuel, the fuel being ground so very, very fine that its surface is approximately infinity. The grinding is so fine that it is like talcum powder. You must have met that thing in your infancy and, perhaps, use it once in a while now if you go to the barber shop. It isn't the same color, of course, it is somewhat smudgy. But it is so very, very fine, that, as I said, the chemical combination with the oxygen of the atmosphere, which is necessarily a surface action and cannot be anything but a surface action, should be very complete, and is complete, and to that extent resulting in a complete burning out of the combustible. There is an increased efficiency, decidedly so, commercially.

I question whether that thing alone would justify the acceptance of pulverized fuel, but the evidence is quite complete that a number of fuels which do not behave well in some types of stoker are usable indifferently by the pulverized fuel plant. I told you seven years ago that you must picture your stoker to suit your fuel, and I am almost willing to tell you now that if you are going to burn pulverized fuel the only thing you need consider is the amount of fuel that you can burn, that you will be able to burn with high efficiency, no matter what it is, and that it will only be a question of the amount of fuel you can handle in your furnaces. The relation of the ash in the fuel to the combustible will be critical. If the fuel is loaded with ash, you must have more furnace room and more apparatus to handle it than if the grade of the fuel is high. If high in combustible a smaller grinding plant and a smaller number of burners, and presumably, smaller furnace space—although that is a thing which must be very carefully considered from another point of view—will serve. With adequate furnace room, you can burn practically any kind of coal, and a great many things called coal but which aren't coal at all. That, I believe, is a great commercial advantage. Certainly in my own case, having to be the ultimate referee of the question as to whether at Trenton Channel we should attempt to use pulverized coal or use stokers, the decision turned upon the point that we would be less dependent upon certain fields and upon certain railroads coming from those fields for our supply. We would be able to purchase in a much larger assortment of markets, and that under those conditions our supply would most likely be reliable; and, of course, the condition of competition to sell us fuel would be improved by the fact that the product of fields which we now had to turn down, because of the characteristics of the fuel, would be now acceptable. To those of you who are not familiar with such things, I might say that the fusing point of the ash, is important—that is, if your ash fuses at a temperature below that which you habitually operate your furnaces, it will form what we call clinkers, and clinkers behave in a big furnace exactly as they behave in the domestic furnace at home. They blanket the fire and stop the output of steam, and they also carry away much unconsumed fuel. Some kinds of fuel in which the ash constituents are fusible at very low temperatures can be burned on grates which are operated habitually at a low temperature and which do not by stirring up the fuel tend to assist or provoke the formation of clinkers, but that type of stoker does not burn coking coals at all well, and therefore, as I said seven years ago, you must picture your stoker to suit your fuel. That difficulty of having to picture your stoker to suit your fuel is, I think, either eliminated or very rapidly being eliminated when you adopt pulverized fuel. The commercial advantage then lies in the ability to use with minor adjustments a greater variety of coals than you could use with any single type of stoker plant. Let me say that the furnace efficiency is not altered. If you have the same furnace temperature, the same delivery of radiant energy from the burning of an equal amount of combustible, the same temperature of the products of combustion, and, therefore, the same delivery to the same number of tubes of the so-called convection heat carried by the flue gases, it doesn't matter a bit whether the fuel is burned on a stoker or in the pulverized form. Absolutely it doesn't matter. The advantages do not lie in any change in body or any essential change in furnace; they turn simply upon what I said, the reduction of the losses due to unconsumed fuel carried off in the ash, and the commercial ability to use a much greater variety of fuels.

For these reasons I take it that the use of pulverized fuel is going to increase. In the meantime there is a plague of pulverized fuel systems and a plague of people selling systems who will tell you that if you buy their system you will solve all your operating difficulties. Don't you believe them. Advertising of that sort of stuff has the same merits as the advertising, we will say, of Palmolive soap. If you look at the perfectly beautiful figure that advertises the soap, you will believe, as some ladies do, that all your complexion difficulties will vanish. If you read 98 and so many percent pure, you believe it, and so on; but at the present time there are just about as many fuel contraptions of one kind and another as there are soaps, and you want to be just about as careful in making your decision. Some fine day we may get to the place where soaps are rapidly getting to, and that is, that any of them are good enough, but in the meantime you may lose a plaguey lot of money on experiments.

There is an honorable gentleman present here tonight, whose blushes I will save by not pointing him out, who told us that it would cost about $750,000 to get the kinks out of the Trenton Channel pulverized fuel plant. I think he is about right; maybe he underestimated it. I only hope to goodness I shall not have to write it all off in any one year.

Pressure and Temperature

Now I do not know that there is any other radical or important change in design, but there has been a steady increase in steam pressure. When I spoke to you seven years ago, 225 pounds was about the top of good practice. There were plants operating above that—there is always somebody who is a pioneer—but 200 to 225 pounds gauge pressure was about the practical getting off place. The figure today is about 375 pounds to 400 pounds, and the steam turbines of today of any good make are quite capable of taking care to good purpose of the additional energy which can be delivered to them, by the use of the higher pressure steam. The problem tends to be one of boilers and valves and steam pipes, rather than of turbines. It tends to be one of temperature, rather than of pressure. The temperature characteristic of 400-pound steam is not unreason-ably high, but what I said to you seven years ago, that somewhere around 700 degrees was about the highest working temperature that it was good to attempt to use in steam—the excess temperature, of course, being added in the form of superheat—still stands now. That limit is fixed by the characteristics of steel. We do not yet know just what happens to the tensile strength and the elastic limit, and other important characteristics of steel when the temperature- is carried up through the industrial ranges of temperatures, but we do know that somewhere near 700 degrees there is a marked and very rapid reduction, beginning at about that point, in the tensile strength. Now it becomes evident that if you are going to have steam in a pipe or in a boiler drum and you heat that steam up to 700 degrees, that the tensile strength of the pipe or of the boiler drum is of vital importance. I say vital with the full sense of the term, for if that drum doesn't stay put some people will get into the vital statistics right away. The fact also remains that in respect to safety valves and such, the alloy has not yet been found that will stand the abrasive effects of steam at 400 pounds pressure and 700 degrees temperature. In brief, if you let your safety valves blow you can just go and buy new safety valves, or you can at least make up your mind that you are going to take them off and put new seats and disks in them. The practice is today, in fact, to operate the plant at a point 15 or 20 pounds below the setting of the safety valves; and the safety valves are, of course, set for the point which corresponds to the permissible pressure upon the boilers and other equipment, and to have little snifting valves which will begin to blow if the steam rises above the customary working limit; and you can, of course, afford to replace those little snifting valves, and you have a chance, if there is a 15 or 20 pounds margin, to deal very quickly with your fires and prevent the pressure rising. The fashion of popping safety valves just to see if they are all right is not going to continue. It is going to cost too much. As I have already said a safety valve blown for a few minutes at 400 pounds pressure with 700 degrees temperature is a spoiled safety valve, and the same thing holds true of valves of other sorts. You are handling steam of great density—and please remember the high grades of steel are not available. You have to use some non-ferrous metal to prevent sticking and rusting. There is no material yet that will stand the abrasive effects of steam wiredrawn through valve openings, and that limit is quite a serious one. I may point out to you that one of the claims for pulverized fuel is that when you are getting up towards the popping point of your safety valves, you can shut off the burners very quickly, and it is probable with the type of furnace lining, water back and water screens which are just now beginning to come into use, which have merit, it is quite possible that the response of the boiler to the shutting off of fuel by shutting off burners is going to be even more prompt than it is now. As it stands now, if you have a great big chamber lined with refractories which are at high temperature, the process of cooling down is still slow; and it must be so, otherwise you will have spawling of your refractories. That matter, by the way, of refractories is just where it was seven years ago. We in the power plants, like you yourselves in the electrochemical industries, know a little more about them, but we are still lacking in basic absolute information about the characteristics of refractories, such characteristics as we must needs become familiar with if we are going to work at such excessively high furnace temperatures. The practical limit today is the cost of refractories. I have recently been told that the maintenance of the furnace chambers of some stoker fired boilers of the 15,000-square-foot size, or thereabouts, in a plant where high temperatures were sought ran to $6,000 per boiler per year. I think that figure is just a bit high, but I imagine it is merely a little well meaning overstatement and not a lie out of whole cloth, because I have seen the linings of furnaces driven under the conditions of the last few years come down in a fashion that no refractory ought to come down in, and one might wonder whether they had not been lined with, well, molasses candy instead of fire brick.

The problem is still unsolved as to what the actual physical conditions are in a boiler tube. We don't know; we know you may have 3500 degrees F. outside and 500 degrees or 600 degrees inside, the inside being water, but what the temperature gradient is from the outside to the inside we don't just know yet, and we don't know entirely what happens at the contact surfaces. We know that there is a tremendous difference at the point of contact between the furnace gases and the steel and that there probably is a similar difference, although of not such an order, at the point of contact between the water or the steam and the inside of the tube. These are matters which also are limits upon our progress. The big limit, however, is that we have not yet the metals which we can depend upon at temperatures above 700 degrees, and that at or about 400 pounds pressure, boilermaking tends to depart and must depart from its present standards.

Now to most of us a boiler is a device of plates and tubes. We don't see, of course, in this kind of practice the old style Scotch boilers, which are great big chambers formed of plates. Our modern boilers are drums with tubes extending outwardly from the drums, and the making of those drums for a pressure like 400 pounds is a very serious matter. You have two questions to consider: One is how many tubes you can get into the drum. If you can't get enough tubes into it then the cost of your boiler goes up a great deal. The periphery of the drum itself must be reasonably extensive in order to insert the number of tubes that should go with a drum of that size and cost in order to keep down the total cost of the boiler. The heating surface is, of course, essentially in the tubes, so that a multiplicity of quite small drums is not profitable, because you can't get enough tubes into them per drum, and the cost, of course, goes up proportionately to the number of drums.

There is another question, which is that boilers, after all, do have to be cleaned internally, and the man who has to do the cleaning has serious objections to working in a 24-inch pipe. He wants a little more room. It reminds me of the very, very old story which was told to me way back in the days of my youth when I was dealing with tubular boilers and various devices for keeping scale from forming on boilers, and . one of those was potatoes. The argument was that scale never formed inside the pot in which your mother boiled her potatoes. It didn't, but you just consider what mother did to the inside of that pot. Nevertheless the idea that something of the nature of potatoes might be a deterrent to the formation of scale is quite correct. It works back to colloidal chemistry, which is an invention of the last few years. I don't know who in heaven or hell invented it. The matter of potatoes, as I say, as a preventive is a matter of colloidal chemistry, and there may be something to it; but the man whose opinion I am much guided by in such matters says there is just one way to use potatoes to clean a boiler, and that is to feed potatoes to a big husky Mick and put him inside the boiler with a hammer and chisel. Now the man who has to do the work in-side of a boiler drum likes to have a diameter of at least 42, and if you give him 48 or 56, so much the better. With such diameters of drum you get a good distribution of tubes of standard sizes. I may be giving away a secret of the boilermaking trade, but it may be helpful to you when you come to deal with such things to know there is a critical point in selecting the diameter of a drum so as to allow the attachment of a profitable number of tubes, and there is the other question of a man getting inside. These two things tend to come to a compromise with the rules governing the necessary strength of materials to resist the internal pressure, and with the costs, which also must be compromised with, at pressures of 375 to 400 pounds. When we put the question cold to the best known firm of makers in the country, assuming a type of boiler we are familiar with and have been using many years, with a drum not to be less than 48 inches internal diameter, at what pressure does the cost begin to shoot up because of the difficulty of manipulating the plates, we arrived again at this point of somewhere between 375 and 400 pounds. In other words, had we decided for Trenton Channel to go beyond that pressure, we would almost of necessity had to use another type of boiler and that would have meant another type of furnace and meant a lot of new constants we are not familiar with and a departure from our present boiler practice which has reached a very high efficiency combined with a very great convenience. The thickness of the plates for those 48-inch drums is almost exactly 2 inches, and I want to point out to you that it is no joke to roll a tube into a reamed hole in a 2-inch plate and have that rolled joint stay tight. No hand-rolling will do it. It is a job for power rolling. Pneumatic power rolling devices for expanding tubes into 2-inch plates have been developed and put into service. It is out of the question for the old style boilermaker to get in there and set up his expanding rig and expand any such joint.

You may say this then, if you go beyond 400 pounds you are going into highly specialized boilers. There is another point, which is that somewhere near 400 pounds steam pressure is the limit on the turbine, which has all its blades in one case; in other words, it's the limit of the one cylinder turbine. Now when you go to two cylinders for any turbine unit you, of course, increase the cost. You introduce twice as many glands; you introduce additional bearings; you introduce cross connections of one kind and another; and you introduce a number of other complexities which have led, incidentally, to the development of the so-called cross compound turbine, in which one cylinder sets alongside of the other and drives a separate generator. All these conditions, therefore, justify me in saying that the power plant of today, which represents not the extreme practice, but the best commercial practice, has that pressure that I have stated, of about 400 pounds, and is very likely, indeed, to have steam turbines having all their diaphragms and blades, or their moving blading and stationary blading, in one cylinder. That combination of commercial advantages illustrates the operation of present technical and practical limits, to fix the standard of this date.

Costs and Rates

Now, what has been done in the way of economy? Not a great deal; not so much as you would expect. The reduction in the turbine itself, taking one condition with another, taking the fact that turbine blading does erode rather rapidly and the ordinary working facts of life, variable load, etc., really doesn't represent a startling advance. It represents in turbine efficiency 15 per cent or possibly 20 per cent over seven years, in practical everyday efficiency. When you come to the very high efficiencies that are possible, you are getting into highly specialized machines, and there, of course, you run into costs.

About costs of a power plant, I find by reference to those minutes that I told you that a good plant could be built in those days, various things left out that might tend to economy but still a very good commercial plant which would make power cheaply, at about $60 per kilowatt. You can't do it any more. Prices have not gone back and, moreover, every one of those improvements of efficiency means a greater cost of construction of machinery, of boilers, turbines, steam piping and the whole bag of tricks, with a result that the power plant today is not going to cost, under most favorable conditions, if it is going to give you the efficiency we have been talking about and will continue to talk about, less than $100 per kilowatt as against the $60 of seven years ago. That means an increase in fixed charges, and let me point out to you that an increase in fixed charges in these days is much more serious than merely proportional, because the cost of money is still up—that is, the cost of money for investment in power plants is permanently up 1 per cent, and the cost of taxes is up very much. The increase in the initial cost means an increased appropriation for depreciation reserve or its equivalent, so its effect is not a straight-line effect represented by the ratio of $60 to $100 or $110. I do not think that we will ever get back to the old costs, and, on the other hand, I am not willing to move forward, as are some of my friends, into costs of the order of $130 to $140 per kilowatt. No public utility company can afford to do that. Let me point out to you who are not public utility men—some of you may be public utility men and the rest may think in terms of the public utility—one of our living conditions is to keep peace with our public, whether it be represented by a public utility commission or not, and the public represented by the commission is exceedingly suspicious of the return on our investment. It seldom finds fault with our operating expenses in general, and never with the wages we pay. The inclination, therefore, is to keep down capital costs and to be a little easy about operating expenses. That is a psychological balance. It is not a true engineering balance, not the sort of balance that lies between operating cost and fixed charges, but it is a psychological balance which arises from the fact, as I said, that we are under public supervision and public criticism. It is the same thing that tends to make any government department which is peculiarly responsive to the public, quite inefficient, and to run to slackness of one sort or another, either too much pay or too little, the last being the more common case. Taking government servants as a whole they are not overpaid, but they do turn in mighty little work to the dollar.

Now, there is a question in public utility psychology that is not just germane at this present moment, but I must not overlook it. It is this: We public utility companies are under an obligation to the small consumer, the residence customer, and we plumb have to take care of him. If we don't he will just vote us into trouble. We have to take care of the small consumer because he is the small consumer, and we have to take care of public uses, such as the lighting of the streets and to some extent the operation of street railways used by the great masses who have not yet acquired flivvers or who can't find parking places. The street car, of course, is a public service, and we are all now selling current to them. These things we must do; we plumb have to do them. When we come to consider the small merchant, he is on the same footing with the man who is running a five-horse power motor to operate a little shop. He and the residence consumer are the public. He talks and votes--he talks as well as votes, and he is much more likely to talk than to vote unless there is a religious question up at the primary, the way it was the last time here when the entire vote turned out. Our attitude, however, to the large consumer, and most electrochemical industries fall into that class, is different. He doesn't know about it. He won't trade with us unless we show him it is worth while. Conversely, we don't want to trade with him unless it is worth while. There is no earthly use of swapping a new dollar for an old one—and the other fellow may have a double-headed dollar up his sleeve and you'll not break even. Quite a good many of us public utility people who have been matching dollars only break even with the electrochemical consumer. We have been traded down to the lowest possible point by reason of the fact that the electrochemical consumer is more or less of an engineer himself and he is willing and usually ready to make his own power if we don't furnish it cheap. In other words, he will not buy from us unless we give him a competitive price. There are collateral advantages if, as is the case here, I sell half my output to local industries of one kind and an-other. I build large plants, I operate on a large scale, my overhead is spread over a large output, my operating units are large and my efficiencies will be high, and I will have a day load which tends, of course, to give me a better load factor; and in this lucky town there is no real interference between local industries and local lighting be-cause of the fact that we run our clock a half-hour fast by the sun all the year round, and we don't play any monkey business with summer time either, and we are the only city in the United States that can say that. In 1915 we set our clock permanently 32 minutes fast and it has stayed there ever since, even during the war. That means in a town of eight-hour industries that the industrial load is off or rapidly falling before the evening lighting load comes on. These advantages of a larger output, greater spread for overhead, larger units, and greater load factor and diversity, are reached by taking on a certain amount of industrial load, but the industrial load has characteristics of its own. One of its great difficulties is that it doesn't stay put, not even in the so-called essential industries. They don't quite continue to function in poor times just the way they do in good times. In good times they are all yelling for power, and they want it the day before yesterday, but when poor times come along and they say, "We can't pay the fixed charges in this contract; what are you going to do about it?" If you don't talk nice to them they say, "All right, we're headed for a receivership." These people, for instance, will guarantee you so much payment every year for the use of your equipment that you are going to finance and erect for the service of their industry, but there is absolutely no security against a receivership, and some industries in 1920 were running pretty close to receiverships. Receiverships are not so frequent as in the older days of panics before we had a Federal Reserve System and a few other convenient things which may cost us more than they are worth, but still are convenient. In 1920 I had a load in midsummer of 210,000 kilowatts in town here and some load outside. Well, that load shot down to 160,000 kilowatts—I dropped 50,000 kilowatts, and when I came to inquire about it I found that it was mostly automobile business that had fallen off, and I began to wonder whether we were running a public utility or an automobile factory.

Now we have to consider all these things, and it is something that has not been preached and put before you people, who are possibly public utility consumers, the way it should be, and I would like to take this chance to put it up to you. We are obliged to serve the small consumer, and our profits are limited in our service to him. On the other hand, when there is an actual provable increase of costs, any fair minded commission will allow us somewhat to in-crease our rates. The grievance that we have is not that we are not allowed to increase our rates but that we are not allowed to increase them promptly. The commissions assume jurisdiction over our industrial power rates also, but they have not recognized and are very slow to even consider the possibility that in doing so they 'may be establishing a condition which is inconsistent with the regime of all industrial activities. Every industry expects to have good years and bad years; it expects during a good year to make more money than it really needs and salt it away, if it is wise, against bad years—but the public utility which happens to make a little money this year is promptly told to reduce its rates. Now with a great majority of absolutely essential users, with a great majority of small consumers, we know collections may be had, but still people will use electric light. We can depend on breaking even with the aggregate of small consumers but we can't expect to break even with an industry that isn't making any money, unless when that industry is doing well we can make a good stiff price and are allowed to keep it against the years when that industry will not be doing well and a large part of our equipment is made idle. If we overdevelop our public utility plants to serve local industries or industries all over the country, we will not be allowed, I am quite certain, to collect from the small consumer who must stay on our lines, the necessary fixed charges upon the equipment which we put in to serve industries which for the time being are idle. That's the difficulty about electric power to mines, and coal mines in particular; that's the difficulty about selling public utility power to the steel industry. Andrew Carnegie said years ago that in steel there was either a feast or a famine, and the public utility is exceedingly unwilling to take a chance on the famine if it isn't given a blamed big helping when the feast is on. I would like to put that idea up to you. We may he willing to go out and raise money to build our power plants for your service; if we do, however, there will have to be two assurances: One is that you will agree to give us an extra return when you are making money, and the other is that the public utility commissions will allow us to salt that away against the days when you are not making money. Please look at it that way for a little, and see if it isn't reasonable. It has nothing to do with power plant costs, but it does certainly tend to affect the attitude of public utility companies towards large industrial loads.

Now, going back to my figures of 1917—these were Connors Creek figures. I am still required at intervals to produce the figures and publish the figures for Connors Creek. This year by some special dispensation it's October before I am asked by an official or semi-official authority to produce Connors Creek figures for the twelve months ending June 30th, and let them be published. In all these years of operation—that plant has been running for nine years—every six months we have turned in the figures of cost for the preceding twelve months.

It is necessary to take twelve months' figures, as I explained to you seven years ago, because you must take the winter and summer sea-sons together to get a comparable figure, so that the figures are for the twelve months from midsummer to midsummer. If you want the figures six months later they will have to be the twelve months from midwinter to midwinter. These figures which I gave to you then—they are in your minutes and would have been on the screen at that time if the magic lantern had worked—those at that time showed operating cost per kilowatt-hour of the Connors Creek plant 0.248 of a cent—less than one-quarter of a cent per kilowatt-hour for the period from the midsummer of 1915 to the midsummer of 1916. The figures which we published for the immediately post-war period showed that that figure had shot up from 0.248 to 0.846—it's down again. Those figures for 1923 to 1924, that's the midsummer of last year to the midsummer of this year, were 0.482. The plant is slightly more efficient. It is slightly more efficient because we scraped up a few little odds and ends here and there. On the mere showing of turbine efficiency it ought to be measurably more efficient, but after turbines get about so old there are always sure to be one or two out of six that will have blade erosions, and things of that kind, that tend to pull down their efficiency by 7 or 8 or 10 per cent, and consequently the efficiency of a plant with three new turbines is going to be a little higher, as long as the new condition continues, than the efficiency of the same plant after these have reached the average condition.

The figures of cost of 1915 to 1916 were 0.248 of a cent, they went up to 0.846 as a maximum, but they are back now to 0.482. It is interesting to consider in detail how those costs have been affected. I find that they are distributed, and they were distributed in the figures I gave you then, in superintendents' wages—that has stayed substantially stationary—wages of superintendents have gone up, of course, like all other wages, but the amount of output has gone up also so that in overhead distribution the figure is about constant; wages shot away up, and they are back a little again, and there is a tendency in increased output and larger plant to keep the unit figure down. But the important comparison is this: Taking all the employes of this public utility company in the year 1916, the average wage for a 30-day month was $88.20, and they were a pretty well paid bunch. In the year 1917, which was beginning to show the effect of the European war high export business, that figure went up to $100 flat—well, taking that midsummer period, 1916 to 1917, it would be fair to say that the figure was about $94.10. The corresponding figure for the twelve-month period we have just finished is $158.40. There is no loading in that for officers' salaries, or anything of that kind. It is perfectly fair. The figure was taken including everything down to laborers and office boys and not including officers who might be paid on a higher scale—so there is no confusion of fact. The officers' salaries necessarily have gone up, and I am glad of it as I am one of the beneficiaries. Incidentally, the income tax has gone up also. If you spread the officers' salaries over the output of the much larger business that we do nowadays the unit cost will probably be a little less per unit sold. Here is the sequence of the figures by years: $88.20, $100, $117, $137.20, $158.60 and $152.10—and that setback of $6.50 is the only setback on the whole line—the next year it is again up a little, $152.70, and the last year, 1923, $158.40. In other words, the figure has gone up from $88.20 to $158.40, and I think that is a fairly correct figure for pretty nearly any mechanical or semi mechanical industry in the United States, including office help. These figures necessarily being Detroit figures are somewhat high. The town runs to high wages; it always did. It did before Mr. Ford started his $5-a-day plan; it did run to high wages even then, but the graduation from $88.20 to $158.40 is, of course, reflected in costs where wages are any large proportion of those costs; and if you get down to brass tacks there are mighty few things in which wages are not a very large proportion of costs.

Now comes fuel. Fuel shot up through the roof; I am not going to say how far it went at worst, but when I had a contract for coal at $1.75 and the man that had the contract to deliver that coal to me sold it to somebody else at $3, and that fellow put a profit of 25c or 50c on it and sold it to somebody else for $3.50, and after the coal was sold six times it came back to me at $12—I still "got feelings" about that, and I think most of you would feel the same way. But coal cost is like wages—it is up permanently.

I have in my hands here the summarized production costs of a pretty good coal mine—one we happen to own. We have got two of them; one is shut down and we are open to an offer from anybody who wants a coal mine, but the other is operating and will continue to operate. It is not a big operation but just about a nice balance for a drift mine. It got out 23,939 tons in the month of September.

It all came to us so it was all sold. That meant that the men were working about five days a week, which, of course, is much more than the average mine was working during that period; it also meant that a correct balance was being obtained between output and overhead. Car shortages, interruptions of power and so on, were equalized by the fact that a stock was kept at the mine, which very few mines have, which may be as much as 65,000 tons. In fact, the mine was operating at about the nicest balance that was possible for a single drift entry into a 4-foot seam, and that represents fairly the greater number of mines from which the good quality coal of the United States is produced. I find that the labor and material items per ton sold, including superintendence and so on, amounted to $1.42. I find that adding the fixed charges, interest, depreciation, depletion and royalty, and other fixed charges, puts the cost up to $1.79 plus. The wage scale is not the foolish union scale, which is keeping union mines idle; neither by any means the extreme nonunion scale, which I think is unfair and unwise; but a scale that keeps that place supplied with labor, fairly contented—and anybody who assumes that a bunch of coal miners in the Appalachians can be anything more than fairly contented is looking for the Millennium much too soon. Anyhow, the wage scale keeps the place well supplied with labor, and there is a remarkably small turnover. That means that coal under the present conditions with an average rate for mining is costing nearly $1.80 at the mine. There is $2.70 freight on it. Back in 1916 the same coal, just as clean, was delivered at Detroit for $2.40 a ton; the freight is now $2.70 and the coal costs $1.80 to get out of the mine. A large part of course, is a reflex of railroad labor as well as mining labor.

Let me say to you that high freights, which mean railroad labor, are responsible for a whole lot of things. High freights are responsible for much of the talk about the development of water power, and responsible for much of the talk about superpower, which I am going to talk about before I get through. It is responsible for a great many changes of industrial conditions—you know the Detroit automobile plants, for instance, don't assemble their cars to any extent, nowadays. Those of them who are making popular cars are shipping those cars knocked down and assembling them some place else. More and more the industries that produce heavy or bulky materials are discovering that their radius of profitable sale is reduced; and more and more the proposition is correct that electric power can be moved over wires cheaper than coal can be moved over rails. Get that last statement, will you please! It's important. I do not think that freight rates are going to go down very much. With all respect to Mr. Robert LaFollette and other critics of the railroads, I don't believe you can get private money or private management into rail-roads on much better terms than you are getting it into them now. I don't believe you can get the right kind of labor into the railroads on much better terms than you are getting it into them now. I don't believe that you are going to keep up the present quality of service, and that means a lot, at much less cost than you are now. Efficiences will come, and a certain amount of healthy competition and a certain amount of pride in one's own railroad—and, thank God, there is still a little of that left among old railroad men, a little of it that will tend to bring down costs and possibly bring down freights, but make up your mind that the days when you could ship your product to blazes for just about nothing are gone forever, and you must adjust yourself to that change.

Fuel then is costing, in brief, just about double what it formerly cost at the mine. Part of that is the higher price of money, most of it is the higher price of labor. The higher price of labor is, of course, reflected in the higher price of tools, the higher price of powder, and the higher price of everything that goes into operating a mine. The largest change, however, is in the freight rate. That is up, and while it has come down somewhat, it unquestionably will stay up in comparison to 1916.

Please note another condition that prevails, which is that the differentials of freight are more likely to be noticeable and to be important factors in the selection of fuel than they were in the former days. Interstate Commerce Commission regulation tries to have some proportion between the distance in the haul and the freight rate, as well as between the value of the service and the freight rate, and it will continue to do so. When your freight rate from the West Virginia mines to this town was $1.40—once upon a time it was $1.25—the differential of 5 to 15 cents a ton for inferior coal from a nearer district didn't amount to anything; but when the freight gets doubled and the differential doubled, then this question of the choice of fuel becomes serious. The power plant business is being affected by railroad and distribution problems just the same as you people are who have to move your finished product.

No other items amount to much. Maintenance goes up and goes down. During the war you couldn't maintain things for two reasons: You couldn't get material to make repairs and you couldn't have the machines shut down long enough to do the repairing. You all suffered from the same thing. I know I touch a tender point, but these conditions, of course, are sporadic, temporary; they are not permanent, by any means. The other conditions are permanent.

It results then that the unit cost of power from any possible power plant using fuel is higher than it was formerly, and it is going to be high permanently. It results also that it has become profitable to develop water power plants which were formerly unprofitable, and that condition is to continue. The real reason, gentlemen, for the recent boom in the development of the water power plant isn't the palaver that is going on at Washington. The reason is just the same reason that has affected so many other things, and just the same reason I have been speaking about—the higher cost of moving fuel. It is becoming cheaper to move power from a distant power plant over high tension wires than it is to move coal to the place where electricity is to be used.

Representative Power Plant Statistics

Let me answer a question that may have risen in your minds as to whether the Connors Creek figures I reported are representative. They are, in a very interesting way. There has been no great change in the inherent efficiency of the plant; it still runs with-out economizers. The newer turbines are not greatly more efficient than the old ones, and that difference is cancelled by the fact that they are all more or less in average condition and there is never more than one of them at a time just absolutely up to concert pitch. It can't be, you know, and the plant represents not superior practice but high average practice, and the interest in those figures is maintained by the fact that a great many people use them as a base line for comparisons.

It will now be interesting to see what is being done in some of the more recent plants, particularly the pulverized fuel plants. We make an exchange, we and some other companies, of confidential figures, analyzed to a good many points of decimals by very competent men, of the cost of six power plants, which represent all the way, you might say, designs of the late 90's and the early 1900's up to the 1923 model. Connors Creek is rather above the average. If you adjust these to the Connors Creek basis of so many dollars per hundred million heat units in coal and the average labor rate, which I find is written here at 71 cents average per man-hour—if you adjust the costs to common denominators the comparison is quite good. For the purposes of this comparison the figures are slightly different from the others that I gave you. A Connors Creek figure of 52 is comparable with a figure in the most recent of those plants, the St. Louis plant at Cahokia of 39. There is still in that a de-nominator that is not common, and that is the load factor, Cahokia being operated very much as a base load plant. The improvement between the most recent practice and the Connors Creek practice might be represented very fairly by those two figures, 52 reduced to 39, which is not far different from what I gave you in my earlier talk. For an older plant, a quite old plant, a plant of the early 1900's, the comparable figure is 109, so that when I tell you that Connors Creek is better than the average I mean it. Another very good plant, a plant very often referred to, is practically the same as Cahokia at 38 plus. Two excellent plants elsewhere, one of them being our plant at Marysville, are each 49. I warned you that these figures do not check with the cents figures I gave you; they must be taken merely as factors. In other words, taking Connors Creek, which represents good standard practice at 52, the cost in the best plant is substantially 39, and that represents a possible progress of some-thing over 20 per cent in a period of design of about nine years, and the actual result is obtained in a period of seven years. How much further we are going I don't know. The plants which will make extremely good figures on thermal efficiency are going to cost so much under existing conditions that the increased thermal efficiency will emphatically be offset by the increased fixed charges.

Now, another figure that shows up, of course, is fixed charges. I don't know, gentlemen, that I want this sent around, and, in fact, I ask that it be not misunderstood as an exact statement regarding any company of my own, but this I would put before you as a general statement: The cost of money to a public utility in these seven years has increased just about 15 per cent. In other words, if we could get money at an average figure of 6 1/2 per cent, and those of us who were very sound could do so, we are now paying 7 1/2 per cent. We have, of course, to get a certain amount of money by selling common stock. We have to sell a certain amount of junior securities or the mortgage bond buyers won't come in. You may take it for granted that in our industry, as well as in your own, the price that will attract capital has gone up quite considerably, and all the indications are that it is going to stay up. At the moment there is plenty of money; it is money, however, that is only available on short-time loans. Conditions are just reversed in that respect from what they are in some other seasons. Short-time money can be had quite cheaply because people who have money for short-time loans believe that presently they will have a chance to make a good investment. Long-time money, for our industry is costing about 15 per cent more, and tends to be higher, say 15 per cent to 20 per cent more than it cost before the war period.


As to taxes—well, I can't say what I would like to say about taxes and use parliamentary language. I don't mind paying taxes—the U. S. Government has been through my income tax sheets the way it has been through yours, and each time it has ended up by giving me back some money. I am not trying to cheat the U. S. Government or any other tax assessing body; I don't mind paying taxes if I see value for it, but I don't see value for it. My grief, and I think your grief and the grief of all of us, is not only the trouble of taxes but the mighty poor results from the expenditure of taxes, poor management, foolish attempts to do things that could be left undone. There are things undertaken by municipalites that had best be left to private effort. I am not speaking of street railway owner-ship, lighting plant ownership, or anything of that kind, but there are an everlasting lot of things that a municipal department sets out to boss—down to how children blow their noses and how their mothers—excuse me—and the U. S. Government is just as bad as anybody. I was very much tickled, downright pleased, to see a certain article in Mr. Ford's paper. The Dearborn Independent and the New Republic are always worth reading because in each issue with unfailing certainty you will always find something to disagree with and thereby contribute to your good opinion of your own ego—each of them promulgates a whole lot of things that aren't so, but they are always interesting. A recent issue of the Independent came out calling attention to the fact that the Children's Bureau of the U. S. Government was spending a pile of money in doing certain things. Well, the U. S. Government is taking care of us, more or less, at a high expense, telling us how to deport ourselves, how to take care of our health, brush our teeth, comb our hair—if we have any and do all similar things right down from the cradle to the grave. I don't think the U. S. has ordered any government bureau to determine the possible recovery of energy from cremation, but I do know that it has come pretty darn near giving us instructions upon the improvement of the processes that precede the cradle. I question whether these will ever be much altered, and maybe I'm glad of it; but still the government does deal with us from our first holler up to our last dying groan. It is doing things for us that we used to leave to the churches, to people who felt called upon by God to be good to their fellow mortals. It is doing the darnedest lot of fussing and the darnedest lot of meddling, and actually increasing the mean uselessness of human nature by saving a whole lot of critters that aren't worth saving—and we are paying for it.

As a public utility man, of course, I am often asked by an audience which only thinks around one corner and doesn't think around two, why I should worry about taxes when I always collect them from my customers. Gentlemen, I object to being an indirect tax gatherer. If I want to go into the tax gathering business I am going to go into it like the publicans away back who bought the taxes of the district from Caesar. If I am going to be a tax gatherer, confound it, I am going to be a tax gatherer and I am going to get a corresponding amount of profit as a public tax gatherer, because something like 10 per cent of my expenses are taxes, and I can't cut them down. You people in industry don't know what it means to fuss about public utility taxes. You probably are all just as truthful as I am when you come to make up your personal income tax statements; but when you come to argue with the Government about depreciation you are probably cheerful liars, and I don't blame you. When it comes to a public utility trying to dodge, it can't do it. A public utility that is required by rule and regulation and law to certify every expenditure it makes, and that must do it if it is going to collect any return on that expenditure, is in no position to dodge a tax gatherer. Even if our ideas of business ethics made it permissible for us to do so, I don't believe we could get away with it, and when we can't get away with it it is just as well to take credit for being virtuous. You gentlemen in private industry are much more able to "duck" than I am, and as I said already, I don't blame you. You are getting to the place where you agree with the lady in Belasco's presentation of long ago, that very beautifully staged play, "The Darling of the Gods," who said, "It is better to lie a little than to be sorry a great deal." We public utilities catch it, we can't help but catch it, and we are going to keep on catching it. We pay taxes, we collect them, and we are getting awful tired of it, and we sincerely hope that out of this present day hullabaloo there will come acceptance of the general doctrine that a municipality should undertake nothing that can be well and efficiently performed by a private enterprise, that a State should undertake nothing that can be left to a municipality; and the U. S. Government will contribute to the happiness of the nation by attending strictly to its own business—leaving to the States as much as can possibly be left to them.

If ever there was an illustration of the duplication of effort, of futile wasting of taxes, it is in the interrelations of the State and Federal courts. You get into a contentious proceeding, and I don't know how many appeals you can pull before you get done with the State courts, and then you can at least land in one—if you are at all smart about it and have fixed your case as you went along—you can at least land in one of the Federal courts for a primary decision, and then appeal to another, and perhaps to two. Most of that is waste. One of the biggest expenses we have is in our ad-ministration of justice, both civil and criminal. The tendency to-wards arbitration is good, it is most hopeful and good, but there can be a great deal done to improve our legal practice. I would like to vote for a President and a Congress and a Senate and everybody else I could possibly vote for, on the platform that we already have too many laws and the job to do is to get most of them off the statute books. As the cunning joke of all—of course, not to start anything—I would point to the attempted parallel and coordinated enforcement by the States and by the U. S. of the Prohibition Amendment and the laws supporting and intended to enforce the same. It is just the biggest joke on the Detroit River, and I have seen a lot of very funny things on the Detroit River—you know that Canada is just across the creek.


Now I will get down to the last part of my talk—superpower. I listened with a great deal of interest last May at Atlantic City to Gifford Pinchot, a gentleman for whom I have a large remnant of respect. I pretty nearly loved that man in the early days when he was setting out to save the forests; but I did get awful tired of him afterwards, and at present I fear I am still a little bit out of patience with him. Well, I listened with interest to a speech on his part on superpower—as he called it, giant power. He proposed to super-impose on the State of Pennsylvania, and on the rest of the United States, a complete new system of extra high tension lines, 220,000 volts or thereabouts, on steel towers on the proper right of way, and all the rest of it, merely for the purpose of carrying power to places where it may not be available at the present time and for the purpose of equalizing loads, etc. He told us that we had a great many inter-connections now, and that there were many in Pennsylvania, and that his attention had been called by people in the power business to the great number of these connections. He said he understood perfectly, and there was no denying it at all; that there was a practical unity of power circuits from Northern Indiana around through Ohio, clear up into Pennsylvania and from there down into Maryland; and that transmissions in California were of the order of 600 and 700 miles; and so on, and so on. And, he said, "When you build a bridge you ought to build a bridge, but instead of that what you people have is comparable to the contact of the twigs of two trees across which a squirrel may travel." I never heard of a squirrel asking you to spend public money to build a bridge. What's the use of a bridge if you are only going to have squirrels travel on it? It costs a lot of money to build a bridge, it might look pretty, but I don't even believe that the squirrels would appreciate the good intentions. As far as my knowledge goes, squirrels prefer to travel on twigs, and, therefore, if twig contact is adequate for the traffic, why improve it? By all means where there is reason for the transfer of power in large quantities, let us have the suitable means. I am practicing what I am preaching, in that my company is just building something like 150 miles of such lines, 120,000 volts on steel towers for the purpose of distributing and equalizing and of making one plant relieve another, and obtaining all the things that Mr. Pinchot explained to us, all of which, by the way, were written in the text-books ten years ago. Between our own important power plants, that sort of thing is being done by closing a very small link. I can tie up with my nearest neighbors—my nearest neighbor and myself had a dicussion about a year ago as to the possible interchange of power. The nearest neighbor was fussing around with something like 250,000 kilowatts last winter, and I was fussing around with 350,000, and we thought we might exchange 10,000 kilowatts. That isn't exactly what you would call an amount of power that can be shoved over a squirrel track, but certainly it doesn't need a line suitable for 150,000 or 200,000 kilowatts, and putting in such a line for the purpose would be a sheer waste of money. The cold fact about it all is that in a network as large as our own—which is, roughly, 85 miles from northeast to southwest, and an average width of about 45 miles—the shifting of power is a shifting of areas which can be made to overlap. There is no transfer of power from this near end to that far end. There is only just a widening or broadening of the area served from one plant and a similar reduction of the area served from the next one. We have a recent instance in which the people who were concerned can't settle among themselves just how it happened, but power was pushed from western New York clear over into east-central Massachusetts—a very long range when you come to think of it. It was passed over the lines of a great many companies. A certain amount of surplus power from several plants was delivered to a plant which was temporarily crippled, but the delivery was not at any point a notable instance of transmission; it was a shifting, through interconnections already existing, of the burden of the load so as to make the supply coordinate with the demand. That was a true case of interconnection.

As for superpower, the term was invented, I believe, in Great Britain. They have suffered from what I call the parochial plant. Every municipality has its own plant; and in London, you might say almost every little parish had its own little plant, and that is why I call them parochial plants—as a matter of fact there are 15 or 20 plants in London. If every little parish in the metropolitan district didn't build its own electric power plant and let the mayor or the lady mayoress or some local subgod—something or anything from a marquis to a prince—open that plant and make a fuss about it, it really wasn't up-to-date. I won't attempt to remember figures, but I think there were at least 15 different frequencies in London. In consequence thereof, their conditions were so bad they had to do something, and they realized that the building of a few very large plants would be in their interest, and somebody invented the name "superpower plants" for these plants, and this superpower title has caught a good many people.

Governor Pinchot was careful to explain that he wanted to differentiate his idea from what was called superpower—that he was talking about giant power. He even had a different name for it. He explained that he was going to have power plants at the mine mouth and that he was going to pick up waste heat of blast furnaces, and going to pick up all water powers, and in the end there would be a perfectly wonderful system of interconnection all over the United States; possibly not so extensive as the whole United States, but certainly over a very wide area composing many of the states, and that the backbone of this would be those perfectly wonderful transmission lines. The Governor's talk went out to the public as something new, and yet Pennsylvania has several of those mine mouth plants. There is one in Beech Bottom, two of them on the Alleghany River above Pittsburgh, and there are several going in at different places where they are practically very close to the mine and have condensing water. Where there is waste heat that can be used, it is used—the waste heat electric power of the Bethlehem Steel Works is turned into the Lehigh Electric System on holidays, Sundays and Saturday evenings, and the waste heat from other steel works finds its way in a few instances into public utility systems. All these things are being done and have been done for years. They are not novel. The limitations on them are, frankly, commercial, they are not technical at all. The vision of the interconnection of the St. Lawrence water power clear down to the Chesapeake Bay, and to the Chesapeake Capes, for that matter, is a great vision. The vision of unity of power supply is a great vision. It is approximated to a certain extent already in that district. There are at least two states on the Atlantic Coast that object to the import or export of power, as the case may be, and have laws forbidding the same. There are others which are very, very local and parochial in their ideas, but betterment is actually in progress and coming along good commercial lines. It requires, however, the coordination of individual opinion, the removal of the prejudices of individual operators, the recognition of a necessity for greater facilities in the matter of obtaining rights of way, a rather more liberal policy by the states towards capital; it requires these things, and these are all that it does require. One big difficulty that is very rapidly being removed, in fact it is being removed so suddenly it has almost vanished, is jealousy between existing organizations or neighboring states or neighboring municipalities.

Now what are we promised? We are promised cheap power for industry. Well, we built that line of ours pretty cheap. It runs about seven towers to the mile. Most easements cost very little. We swung it away from a few districts where real estate would have been costly, though we did in more than one place buy a whole row of lots in order to get through. Its cost tends to run with a good two-circuit line that would have a capacity for moving up to 100,000 kilowatts if pushed, but will never be expected to do so much, to about $10,000 a mile for line alone, excluding switches, transformers, and so on, all of which are costly. It would increase the cost very materially to insist that the line go through by the most direct 'route, and you would find that you had added very greatly indeed to your costs if you superimposed upon the State of Pennsylvania, or any other state or any industrial district, the high tension lines that have been visioned by the Governor of Pennsylvania; and you will acquire a tremendous burden of fixed charges, as well as a very serious technical problem. The reliability of these lines is not what it ought to be. Some of you have found it not desirable to locate too far from the source of power, or perhaps, have recognized that being close up to the power house has advantages. What I mean is that the reliability of these lines has not yet been established; they are only made reliable by duplication and even triplication. In other words, you must figure that there will be one or more lines of a set out of service at frequent intervals from a number of causes that are not controllable. Lightning is one, and so on from the most spectacular phenomena of nature down to reasonably large dickey birds who have a habit of misbehaving themselves and getting us and them-selves into trouble.

Now here is a cold fact. It is promised that this superpower system is going to make electricity cheaper to the farmer. We have 800 miles of rural lines serving some 3200 farms. You will recall that in these middle-western states the average farm is of 160 acres, which checks with the average of four farms per mile of line. The service to those farms does not amount to enough at regular rates to pay for the interest and maintenance on the mile of line. If you put an excessive rate on it you go beyond the value of the service to the farmer. There is just one way in which the farmer is going to be served with electricity at a price he can afford to pay, and that is by treating great big areas, including urban, suburban and rural territories, as rate zones, economic districts, if you please to call them such, and letting the thick business carry the thin, letting the profitable business carry the unprofitable, serving them all alike. That's the only way it can be done. I made a set of figures to see what would happen if the power were not merely transmitted over government-owned lines or something of that kind, at a minimum cost, but if it were free entirely. I found that the costs, not the selling price, but the cold costs to the average farm customer, the average dirt farmer, might be reduced thereby 10 per cent. I also found by very quick calculation, which may be a trifle in error, that additional fixed charges that would have to be imposed to carry these superpower lines over rural districts would be greater than 10 per cent; so that if the farmer broke even he would be in luck, very much in luck. I am not denying at all in this the real function of transmission. I am not, for instance, belittling what is across the River—the big hydro system. We live so close to that here we know what it means. We know that, to begin with, the only way they are able to reach the farms is by offering and paying a bonus of one-half the cost of the extension to the farms, and the Province of Ontario is doing that very thing and has been doing it. We know even at that the cost of an extension is a lien upon the farms, having priority along with taxes. We know that the municipalities have refused to carry that rural business and the Province has to take it on as some-thing in the way of fostering agriculture. I think that's a mistake. In the hands of a private concern the costs would have been spread over the whole territory, but it is now an item in the provincial budget. We know that the cost of power at Niagara was at first' fictitiously low because it was bought from a bankrupt concern. We also know now that because of overdevelopment at rather high prices—I shouldn't say overdevelopment, but somewhat premature development—the cost of power at Niagara has gone up and we know it will stay up. We know that the cost is now being spread over the system, and it will inevitably have to be paid. We know even with that handicap that it is a good thing for the Province of Ontario, having no coal and desiring to develop its industries, to distribute that power and we know that the reason the Province had to take it in hand was that the people already engaged in the business were too busy trying to scalp one another to get together and do it among themselves. The Province came in under conditions that made it almost inevitable that the Province would come in. We also know that the cost of service to the ultimate consumer—the residence customer—is kept down by various devices. For instance, that system over there pays no taxes on anything but the land that it occupies, no taxes whatever upon any improvement of any kind or any personal property, so-called. We know that the municipalities, the one across the River, complained quite seriously about the rates that are fixed for street lighting. Street lighting, of course, falls upon the general taxpayer and the price is high. We know that while the cost to the residence consumer, who is also the voter, is quite low in comparison with similar costs here, it is not so low as it appears because of different details of the service. There are different facilities furnished on this side that are not furnished over there—inspection, lamp renewals, supervision of apparatus, re-pairs to household apparatus, and so forth and so on. We know that all these things are not included in the rate across the river to the domestic consumer. We also know that our rates to industries not having a load factor which involves the use of 24-hour power, where the 24-hour power of Niagara cataract, therefore, has a definite advantage—we know the rates come very close to being comparable. We know, in other words, that we have there not a superpower system, as is supposed, but the development of a provincial trans-mission system along a good provincial plan that puts the burden where it will be carried by industry and by the person who earns the taxes rather than by the man who is the ultimate voter. We know, on the whole, that it is well engineered and honestly financed, except for some hangers-on, of course, who at times do a little stealing, but on the whole it is a perfectly honest and creditable example. We know the conditions that made it a success; conditions, in fact, of absolute dictatorship backed by Parliament not operating under strict constitutional conditions as our congresses and state legislatures do. We know that that dictatorship is most fortunate in its personalities and in its continuities. Under all these conditions many of us would be able to do as well or better—given the same facilities, given the same government endorsement of our securities and given the same security for our investment. We do not believe, we tell you frankly, that in any state of the United States or in any group of states, can those Ontario conditions be reproduced, and knowing them as we here know them we question whether they will continue on the Ontario side of the River.

The dream of superpower is in the course of realization. Inter-connection is not only coming but is here. I sat recently with a group of very capable people who know much about interconnection, and I heard them say that one of the most remarkable things was that interconnections made under war conditions or under stress, with fear and trembling lest they make a lot of trouble, have worked so smoothly that they wouldn't like to do without them.

The thing is here. It can be helped along by the right kind of legislation; it can be helped along by the right kind of protection; but there is no place where the Government or state organization can benefit industry or the ultimate consumer in any way whatsoever by exercising any power now in the Government or obtainable by constitutional grant, or by in any way whatsoever doing anything but facilitating by suitable legislation the progress which is now being made and by giving protection to the capital which can be gotten into it and is in it now. That's the whole story.

I want to thank you all for having sat so long. Like any other man who loves his work, when I get to talking about it I talk. When we were all young we loved the girls and we wanted to talk about them. As we grow older there are other things we love, and when we are old and we have found our job we talk about our job. I don't know of any man who really loves his work and to whom the Lord has given any facility of language, who can't talk about it entertainingly, and it seems I have entertained you fairly well tonight. What I said you are welcome to. It is the expression of a man who knows his job, I am quite sure about that, and who is glad to talk about his job, who has no concealments about his job but who sticks to the rule, as told you seven years ago, of talking about what has been done and not what he expects to do.

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