pounding and releasing water, and thus creating an uneven stream flow, can any effect upon the navigability of the Kanawha River be produced. Under the date of September 2, 1926, Appalachian Electric Power Company, as successor in interest to New River Development Company, submitted its application for license under section 23 of the Federal Water Power Act. The Commission thereafter, on June 1. 1927, made the following decision with respect to this application:

"The Commission having caused investigation of such proposed construction to be made and it appearing from such investigation and from reports submitted thereon that said project, unless operated in the interests of interstate or foreign commerce in accordance with the requirements of said Act, would have an adverse effect on such interests, but if operated in accordance with such requirements would materially benefit such commerce, thereupon found that said river and the part thereof involved in said declaration is not "navigable waters" within the definition thereof in said Act, but that the interests of interstate or foreign commerce would be affected by such proposed construction. (Seventh Annual Report of the Federal Power Commission, 1927, pp. 113-114.) "

In my opinion of July 1, 1930, with reference to an application for license for a power project on the Cumberland River in Kentucky, I had occasion to advise you in regard to the application of section 23 of the Federal Water Power Act to a project for the development of water power on the upper nonnavigable part of a stream which in its lower reaches was a highway of interstate commerce, and conIcluded that the Commission had jurisdiction in that case to entertain the application of the Cumberland Hydroelectric Power Company for a license to carry on its project on the Cumberland River. Similarly in this case I am constrained to conclude that in view of the findings of the Commission above quoted the Commission has power to entertain the application of the Appalachian Electric Power Company, and to issue a license for this project under the provisions of section 23 of the Act. The Commission having found that the interests of interstate and foreign commerce would

be affected by the proposed construction, the Appalachian Electric Power Company is prohibited by the terms of section 23 of the Federal Water Power Act from proceeding with the construction of its project "until it shall have applied for and shall have received a license under the provisions of this Act."

Section 10 of the Act provides that all licenses issued under the Act, except minor-part licenses authorized under paragraph (i) of section 10, shall be on certain specified conditions, and such other conditions not inconsistent with the provisions of the Act as the Commission may require. Many of the conditions specified in section 10 appear to have no effect in preventing impairment of or in developing the navigable capacity of the Kanawha River, which can only be affected by the manner in which the flow of the stream is controlled in connection with the operation of the projected water power. It is to such conditions that the applicant for a license objects. The only authority granted to the Commission to dispense with these conditions specified in section 10 is found in subdivision (i) of section 10, which reads as follows:

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(i) In issuing licenses for a minor part only of a complete project, or for a complete project of not more than one hundred horsepower capacity, the commission may in its discretion waive such conditions, provisions, and requirements of this Act, except the license period of fifty years, as it may deem to be to the public interest to waive under the circumstances: Provided, That the provisions hereof shall not apply to lands within Indian Reservations." (41 Stat. 1070.)

The question is therefore presented whether the Commission may in this case issue a minor-part license with such conditions as it shall deem necessary in the public interest.

The legislative history of this provision throws but little light upon its precise meaning. The genesis of the clause is found in a Conference Committee Report on a bill pending in the 65th Congress which failed of passage. (House Report No. 1147, 65th Congress, 3rd session; Congressional Record, Vol. 57, p. 4635.) This report shows that the Conference Committee added to section 10, paragraph (h), which reads as follows:

"(h) That combinations, agreements, arrangements, or understandings, express or implied, to limit the output of electrical energy, to restrain trade, or to fix, maintain, or increase prices for electrical energy or service are hereby prohibited. In issuing licenses for a part only of a complete project, where the land of the United States required is to be used only for transmission lines, water conduits, or for storage reservoirs, or for a complete project of not more than fifty horse-power capacity, the commission may in its discretion waive such conditions, provisions, and requirements of this Act as it may deem equitable in the circumstances."

The only comment upon this amendment found in the reports is a statement by the managers on the part of the House: "It is thought by your conferees that such discretion should be vested in the Commission."

During the first session of the 66th Congress, H. R. 3184 was introduced containing section 10 (h), as above quoted, from the bill which failed of passage in the previous Congress. Thereafter the Committee on Commerce of the Senate proposed an amendment to the bill by deleting the second sentence of paragraph (h), above quoted, and adding paragraph (i) in the following form:

"(i) In issuing licenses for a minor part only of a complete project, or for a complete project of not more than two hundred horsepower capacity, the commission may in its discretion waive such conditions, provisions, and requirements of this act, except the license period of fifty years, as it may deem to be to the public interest to waive under the circumstances. (66th Congress, 1st session; Senate Report No. 180, p. 15.) "

There was no statement in this report regarding the purpose of the Committee in proposing this amendment.

The bill passed the Senate, with a proviso added to this clause reading: “Provided, That the provisions hereof shall not apply to lands within Indian Reservations," and was then referred to a Conference Committee of both Houses. In conference, section 10 (i) was amended to read in its present form. A statement by the managers on the part

of the House appearing in the 59th Congressional Record. part 6, p. 6384, with reference to this clause, reads as follows: "On amendments Nos. 42 and 43: These amendments strike from the House bill the provision authorizing the Commission in its discretion to waive certain conditions. provisions, and requirements of the Act in issuing licenses for a part only of a complete project, where the land of the United States required is to be used only for transmission lines, water conduits, or for storage reservoirs, or for a complete project of not more than 50-horsepower capacity. In lieu of the House provisions the Senate excepted from such waiver the license period of 50 years and increased the horsepower capacity to 200 horsepower. The House conferees agreed to the Senate substitute with an amendment reducing the horsepower capacity to 100. Under the House provision the Commission could allow perpetual grants without conditions for transmission lines, water conduits, and storage reservoirs if the remainder of the project was on private land."

The bill containing section 10 (i), as thus agreed upon by the conferees, passed both Houses without debate on this paragraph.

The intent to broaden the application of the clause and thus to bring within the discretion of the Commission the provisions of any license for a minor part of a complete project is entirely clear but precisely what was meant by the clause "In issuing licenses for a minor part only of a complete project" is left obscure, and this clause requires interpretation in the light of the powers which Congress intended to exercise, and the purposes which it intended to accomplish.

Upon the facts stated by the Commission in this case the United States has no power to prevent the construction of the proposed project on the New River unless its operation will tend to impair the navigability of the Kanawha River by changing the normal and regular flow of the stream; and the only interest which the United States has to protect, and for which it may be justified in issuing a license, is a very minor part of the complete project, viz., the manner in which the flow of the stream below the dam

is affected by the operation of the water power. I am advised by a representative of the Commission that under a license providing merely for proper control of the retention and release of water, this project will tend to improve the navigability of the Kanawha River. Under these circumstances every purpose within the power of Congress may be accomplished by the issuance of a minor part license under paragraph (i) of section 10. Accordingly I am of the opinion that the most reasonable construction of this statute is that paragraph (i) of section 10 was intended to have application in such a case provided the interests of the United States may be fully protected by the issuance of a license to control the flow of the stream and/or to use physical instrumentalities which may be constructed for this purpose, the conditions of such license to be fixed by the Commission in its discretion under section 10 (i) of the Act.

This interpretation appears necessary in order to avoid serious questions regarding the constitutionality of the Act which might be presented if section 10(i) should be interpreted so as to have no application to projects constructed in or on nonnavigable streams, which only remotely and indirectly affect the navigability of waters in the lower reaches of streams to which they are tributaries. If paragraph (i) of section 10 is not applicable in such cases the Commission would in no such case be authorized to waive any of the conditions specified in section 10, because section 23 prohibits any such construction, once the Commission finds that the interests of interstate or foreign commerce will be affected, until a license is issued under the provisions of the Act. To hold that the Commission has full authority under this section to exercise its discretion in granting a minor-part license in this case leads to a reasonable construction of the statute and a full accomplishment of its legislative purpose.

This interpretation of paragraph (i) of section 10 finds some support in the administrative construction of the Act adopted by the Commission on May 23, 1925, in its consideration of several applications (Project No. 15) of Hydraulic Race Company and other corporations, reported in the Fifth Annual Report of the Federal Power Commission, 1925, at pp. 111 and 112.