of the McMahon Act provision which tied the 7 (b) report to a specific requirement that before any license could be issued by the Commission for the manufacture, production, export, or use of atomic energy equipment or devices, a report had to be filed with the Congress concerning the activity sought to be licensed, which report was to lie before the Congress for 90 days before issuance of the license. The framers of the McMahon Act evidently regarded industrial licensing in this field so important as to justify a congressional review of specific licensing actions.

4. PLACING AEC CHAIRMAN ON PEDESTAL

In considering legislation which proposes a complete overhaul of the McMahon Act, our joint committee might well have undertaken a systematic review of all phases of the Atomic Energy Commission's organization and management. This it did not do. The commitThis it did not do. The committee's interest in the management of the atomic energy program was directed mainly to a proposal to make the chairman of the Commission its principal officer. Seemingly innocuous and trivial at first, this proposal has opened up issues of such gravity and importance that it merits extended discussion.

Why the sponsors of the pending bill desired to elevate by statutory prescription the Chairman of the Atomic Energy Commission, it is difficult to say. Under the McMahon Act, basic authority to administer the atomic-energy program was vested in a five-man Commission responsible for important policy decisions. The act also provided for a General Manager to whom the Commission could delegate executive and administrative functions. The General Manager is the Commission's director of operations, responsible for day-to-day administration.

This organizational arrangement, which brings to bear the collective judgment of the 5-man Commission on crucial matters in the atomic-energy program, while centering in 1 officer the responsibility for directing its far-flung operational activities, appears to be wellconceived and conducive to good administration. Three of the five Commissioners testified as to its efficacy. The General Manager gave a clear and explicit statement of his duties and relationship to the Commission. No important evidence had ever been brought before the joint committee to indicate that the organizational arrangement was unsatisfactory and should be altered by

law.

Nevertheless, Chairman Strauss appeared before the joint committee to ask for additional authority in the Chairman's office. He disavowed any responsibility for originating the principalofficer proposal, suggesting that the Chairman's role should be defined more precisely than by the simple designation "principal officer." Mr. Strauss rested his argument on the recommendations of the first Hoover Commission that the chairmen of certain regulatory commissions be made responsible for carrying on the executive and administrative tasks of these commissions.

Since Mr. Strauss relied so heavily on the Hoover Commission report, it is well

to emphasize that the Atomic Energy Commission-hardly more than a year old when the Hoover Commission started to work-specifically was excluded from the Hoover Commission studies on independent regulatory commissions.

The Task Force Report on Regulatory Commissions, Appendix N, upon which the Hoover Commission based its report, states at page 3:

Although the Atomic Energy Commission has certain regulatory powers and is an independent commission, it has been excluded partly because so large a part of its work is operational, and partly because so many of its problems appear to be unique.

Again the task-force report states at page 29:

To avoid misunderstanding, we emphasize that our examination has been limited to the regulatory commissions; we have not made any study of primarily operating commissions such as the Atomic Energy Commission and the Tennessee Valley Authority, both of which combine a governing board with an executive official to manage the operations of the agency. Consequently we do not intend to imply any judgment on such an organization for these purposes.

The statements we have quoted make it clear and certain that the first Hoover Commission's recommendations concerning regulatory commissions in general were not intended to apply to the Atomic Energy Commission in particular. Mr. Hoover has expressed his personal opinion in a telegram to Chairman COLE that the general recommendations are applicable to the Atomic Energy Commission, but there is no warrant for that opinion in the reports of the Hoover Commission. Whether the decision of that group not to study the organization of the Atomic Energy Commission was based on security reasons, as Mr. Hoover asserts, or on the unique and largely operational character of the agency, as the task force reported, the fact remains that the Atomic Energy Commission was not studied.

In an effort to bring the Atomic Energy Commission within the organization pattern which the Hoover Commission recommended for regulatory commissions generally, Mr. Strauss maintained in his testimony that the relationship of Chairman and General Manager in the Atomic Energy Commission is analogous to that of Chairman and executive officer in the recommended organization of regulatory commissions. This analogy is inaccurate and misleading.

The Hoover Commission Task Force regarded the executive officer as the designee of the chairman, working under the chairman's active direction, speaking in his name, reporting to him exclusively, taking from him the burden of routine administrative detail but keeping away from policy matters which are the business of the Commission itself-see Task Force Report on Regulatory Commismissions, Appendix N, pages 47-48. In other words, the executive officer is the Chairman's helper in discharging dayto-day administrative duties which the task force proposed to be vested in the Chairman of the regulatory commission.

Under the law governing the Atomic Energy Commission, the General Manager enjoys a much more important posiager enjoys a much more important posi

tion than that of Chairman's helper. He receives a salary of $20,000 per annum, equal to that of the Chairman and exceeding by $2,000 that of each other Commissioner. He performs executive or administrative duties delegated by the whole Commission, whereas the executive officer, in Mr. Strauss' analogy, would be merely carrying out such duties vested in the Chairman.

The anomalous situation that would be created by increasing the Chairman's statutory authority is highlighted by Mr. Hoover's suggestion that the phrase principal officer be clarified by substituting administrative and executive authority. Precisely this authority now is vested by law in the General Manager by delegation from the Commission as a whole.

before the joint committee, pointed out Commissioner Smyth, in his testimony cogently that to cogently that to give the Chairman greater administrative authority implied

that he should assume the functions of the General Manager who has been responsible, since the establishment of the Commission, for day-to-day administration of the Commission's business and

staff.

If the Chairman were to become the senior

administrative officer of the Commission, with the General Manager as his deputyCommissioner Smyth observedthe essential purpose of our commission form of organization would be defeated.

uninformed

It was his judgment that in such a case "the other Commissioners would be left and essentially without function"-hearings, part II, page 785. To accept Mr. Strauss' analogy for the Atomic Energy Commission could only mean that 1 of 2 alternative developments would ensue: Either the General Manager would be reduced in status and authority to a mere executive assistant of the Chairman, or else a straight line of authority or chain of command would be created, running from the Chairman as principal officer to the General Manager in his present position as directing officers of operations, with the four other Commissioners being shunted aside. Under any such arrangement, to use the expression of Commissioner Zuckert, "you would have a Chairman and four junior-grade Commissioners. The Commission would be maintained in form, but there would be a one-man adminis

tration in substance.

Although Mr. Strauss said he retained a preference for the commission form of organization in the atomic-energy field, his conviction was a halfhearted one; a substantial portion of his testimony on this matter was given over to the argument that "you can't operate a large business by committee." In this approach he had the backing of one Commissioner, Joseph Campbell, the newest appointee. newest appointee. Mr. Campbell, it appeared, was not quite sure what his duties were as AEC Commissioner or whether a commission even was necessary; he was "not sold" on the commission form of organization and wanted a "more coherent chain of command." Adding up the testimony of Messrs. Strauss and Campbell leaves the net impression that

they have little use for the commission form of organization, but that they are not quite ready to say so.

A year ago, when President Eisenhower designated Mr. Strauss to be Chairman of the Atomic Energy Commission, the New York Times in an editorial warmly applauded the choice and made this observation about the agency Mr. Strauss was to head:

The Atomic Energy Commission is probably the most important technical body in the world today. It commands intellectual, financial, and industrial resources of unprecedented magnitude. Its power is immense; its decisions have an influence which

is far-reaching. For those reasons, it has responsibilities that far transcend those of other Government agencies, except those that are concerned with national defense and with foreign affairs.

That editorial statement is enough to suggest why the Congress placed the management and direction of the atomic energy program in a five-man commission. The undertaking is vast, the responsibilities great, and there is still much pioneering work to do, as Commissioners Smyth and Zuckert emphasized before the joint committee. A commission, the latter said, would make surer progress in charting the tasks ahead "than a line organization of the kind that builds bridges, fights wars, or sells tooth paste."

Similarly, the joint committee reported after its extended investigation of the atomic energy program in 1949:

The framers of the McMahon Act deliberately established a five-man directorate, rather than a single administrator, to control our atomic enterprise for the very purpose of assuring that diverse viewpoints would be brought to bear upon issues so farreaching as those here involved (81st Cong. 1st sess., S. Rept. No. 1169, p. 81).

Therefore we are deeply disturbed at the indications that the Atomic Energy Commission is disintegrating as a commission under the chairmanship of Mr. Strauss. Three of five Commissioners, Mr. Smyth, an eminent scientist; Mr. Murray, an experienced businessman; and Mr. Zuckert, an able public administrator, registered their concern with the joint committee over the increasing centralization of authority in the Chairman. They urged the Congress to resist this tendency, and expressed the fear that the designation of the Chairman as "principal officer" would only accelerate it. We agree with them, and we will not support any statutory provision which reinforces the dominance of the Chair

man to the detriment of the Commission

as a whole.

The committee decided to strike "principal officer" from section 21 of the bill, and the phrase does not appear in the final version, H. R. 9757. The committee also wrote language into that section

specifying that each commissioner "shall have equal authority and responsibility." However the Chairman's position was singled out by the following language:

The Chairman (or the Acting Chairman in the absence of the Chairman) shall be the official spokesman of the Commission in its relations with the Congress, Government agencies, persons or the public, and, on behalf of the Commission, shall see to the faithful execution of the policies and deci

sions of the Commission, and shall report thereon to the Commission from time to time or as the Commission may direct.

This particular phraseology apparently represents an attempt to write into law pårt of an informal description of the Chairman's role which Commissioner Smyth presented to the committee. So far as we know, this is the first time a Federal statute proposes to give the chairman of a commission formal status as "official spokesman." Whatever the legal effect of this phrase, we believe it would be a mistake to pin down by law the chairman's accepted position as chief spokesman of the

agency.

Designating the Chairman as "official spokesman" and obliging him "to see to the faithful execution of the policies and decisions of the Commission," are either redundant or a roundabout way of granting him the additional authority he seeks. If redundant, as Commissioner Smyth pointed out in connection with the "principal officer" proposal, the wording had best be eliminated. It does not appear in the McMahon Act and its inclusion now would be construed as meaningful since the Congress cannot be assumed to legislate for idle or trivial reasons. If the language is not redundant, this is a grant of new authority which, uncertain though its dimensions, conflicts with the "equal authority and responsibility" of the other Commissioners and overlaps or replaces the authority and responsibility of the General Manager.

5. WITHHOLDING INFORMATION FROM COMMISSIONERS

It was generally acknowledged in the testimony of the other Commissioners that Mr. Strauss is a strong and vigorous chairman, and this, in itself, is a matter for commendation and not criticism. But Mr. Strauss emerges in a dual role; he is not only Chairman of the Atomic Energy Commission, but also special adviser on atomic-energy affairs to the President. He admits he "wears two hats," as they say in Washington. By putting on the hat of special adviser, he can plead the confidence of the Chief Executive and keep his fellow Commissioners in the dark about atomic affairs of the greatest significance.

Three of the five Commissioners, with a combined record of nearly 12 years of fied in substance before the joint comservice on the Commission, have testimittee that the present Chairman has that they were not informed about cernot taken them fully into his confidence; tain important actions affecting the atomic energy field; that their access to the President has been virtually cut off; and that there is an increasing tendency to one-man rule in the Commission.

These Commissioners first read in the

newspapers the President's speech before the United Nations General Assembly, calling for an international atomic pool of resources to promote peaceful development of atomic energy. Commissioner Smyth, the only scientist on the Commission and senior in length of service, was not even consulted when the Chairman called for an international conference of scientists. A press confer

ence announcement by the President to the effect that atomic weapons have reached optimum size, came as a surprise to the other Commissioners. Since Mr. Strauss became Chairman, none of the others, with the exception of Mr. Campbell, has had an opportunity to visit the White House or to discuss atomic matters with the President.

There was a noticeable and understandable reluctance among these three Commissioners to place on the public record instances of disaffection and discord in the Commission. And there are those who argue that the Chairman was fully within his rights in withholding information from his fellow Commissioners because of his separate and privileged status as special adviser to the President on atomic-energy matters. Nevertheless, there is enough in the testimony, taken together with evidence from other sources, to warrant the conclusion that the Atomic Energy Commission has fallen to a low point in harmony and effectiveness.

In trying to treat generously of the strong-man propensities in their Chairman, several Commissioners pointed out that atomic energy is becoming a subject of increasing interest to military men, diplomats, and industrialists; that the difficulties

and disturbances in the Atomic Energy Commission reflect the changing role of the agency in relation to other agencies of Government and the public; and that in keeping with these changes, the Chairman necessarily is called upon to take an active part in affairs not directly related to the internal business of the Commission.

There is an important element of truth in these assertions. But the larger truth is that the Congress intended the Atomic Energy Commission to administer the atomic-energy program. There mission, well organized, with a normal is every reason to suppose that a comamount of self-discipline and good sense in each commissioner, with a chairman possessed of tact and understanding and keep the President fully informed and a degree of administrative ability, can well advised on all atomic-energy matters without distorting the Commission pattern of organization.

It goes without saying that the President can select whomever he pleases to advise him on atomic energy. It does not go, in our judgment, that the President and the Chairman of the Commission can utilize the device of special adviser to thwart the objectives of the Atomic Energy Act and disrupt the performance of the Commission by putting a blank wall between the Chairman and the other Commissioners.

One of the Commissioners took pains to prepare and submit to Chairman Strauss a detailed memorandum on the latter's dual status as Chairman and

special adviser, in an effort to determine where the Commission stood. Mr. Strauss himself acknowledged that a psychological conflict had been created by his two-hat role.. He offered to lay aside the hat of special adviser if the other Commissioners so desired. The suggestion ought to be accepted. Maintenance of the integrity of the Commission, of full and equal access by the

Commissioners to the information necessary to the proper performance of their duties, will contribute more lasting benefit to the Nation than setting the Chairman on a pedestal closer to the President's ear.

In this context, we are constrained to note that the committee majority, though willing to acknowledge in the bill the equal authority and responsibility of the five Commissioners, were unwilling to write in a guaranty that these Commissioners would have full and equal access to atomic information. The committee report states, page 10:

The right of the members to have access to all information within the Commisssion flows from this responsibility and authority.

Undoubtedly this is the case, but explicit statutory affirmation is in order, considering the committee majority's insistence on writing new language with regard to the Chairman's position.

Whether the committee report is intended to mean that atomic information outside the Commission does not come within the purview of the Commissioner's authority and responsibility is uncertain. In any event, we consider the omission of the information guaranty in the bill a sad commentary on the extent to which distrust and suspicion condition the affairs of government.

Our committee chairman has stated publicly his view that a majority of the Commission at some future time might want to vote to withhold from 1 or 2 Commissioners information on a particular subject. With great affection and respect for our committee chairman, we must say that this suggestion astounds us. It throws doubt upon the ability of a President of the United States to select Commissioners deserving of trust and respect. It throws doubt on the competence of our investigative agencies in checking the background of such appointees; and it throws doubt on the judgment and wisdom of the Senate in confirming them.

When and where do doubt and suspicion come to rest if they are carried into the highest levels of government? They will eat like a cancer at the vital organs of free government in a democracy.

6. OVERRIDING THE COMMISSION'S WILL

The independence and integrity of the Atomic Energy Commission as a commission are seriously threatened not only from within, by the position of dominance assumed by the Chairman, but from without by overriding orders of the President.

This

The Nation is treated with the unpleasant spectacle of the Commisssion being ordered, against its better judgment, to enter into a 25-year contract with a private utility syndicate. contract is not for the purpose of providing utility services to the atomicenergy program. It has all the earmarks of a smart play, figured out in the White House and the Budget Bureau, to have the Atomic Energy Commission run interference for the private utilities in their contest with the Tennessee Valley Authority.

The committee's immediate interest in this activity stems from the fact that the contract is being negotiated under color

of the authority granted in section 12 (d) of the McMahon Act, as amended, which section is carried over intact as section 164 of H. R. 9757.

When the Atomic Energy Commission sought and received this authority from the Congress to make long-term contracts, and to pay cancellation charges to the utility groups involved in the event the contracts were terminated, the authority was specifically limited to utility services for the Oak Ridge, Paducah, and Portsmouth installations of the Commission. As the former General Manager, Marion W. Boyer, testified in answer to a question from me at the time the authorizing legislation was being considered by the committee:

In other words, it is limited to the power requirements for those three installations. It is not a wide-open authority.

Although many Members of Congress had misgivings about this particular grant of authority, which really served no other purpose than the convenience of the private utilities in financing construction of their new plants, the Members understandably were unwilling to overturn arrangements already made for supplying electricity to the atomic-energy projects. The proposed new contract, however, has nothing to do with the power needs of the atomic-energy program. In the words of Commissioners Smyth and Zuckert:

The present proposal would create a situation whereby the AEC would be contracting for power not 1 kilowatt of which would be

used in connection with the Commission production activities (hearings, pt. II, p. 958).

The scheme is for the Commission to maintain its present firm contract for TVA power to run the Paducah plant while contracting for some 600,000 kilowatts of additional power to be delivered by the private-utility group to the TVA for service in the Memphis area, several hundred miles away from any atomicenergy installation. In other words, the AEC would become a power broker, purchasing power it does not need for an area far removed from its activities. The TVA would be forced into buying the power from the private group through AEC instead of building its own plant to serve the Memphis area.

Over the life of the contract, the taxpayers would foot a bill of at least $90 million over and above the cost of power that TVA could produce itself. The $90 million figure is the AEC's own estimate; the TVA estimate is that this new proposal would result in $140 million added cost to the taxpayers.

The members of the Commission and their General Manager struck us as rather shamefaced about the whole business when they came before the committee. They said in effect: "This proposal did not originate with us. We don't like it but higher authority has decreed it, and we will be good soldiers and carry out orders."

The General Manager testified that the proposal "originated in the Bureau of the Budget as an administrative policy." He cited instructions received from the Bureau of the Budget to proceed with negotiations looking toward a definitive

contract, despite his advice to the Bureau "that the Commission did not agree on the wisdom of AEC entering into this type of contract"-hearings, part II pages 946 and following.

Chairman Strauss and Commissioner Campbell were the only Commission members who did not object; in fact, Mr. Strauss had been apprised of the Bureau's intentions at least a month before the matter was brought up at a Commission meeting. The meeting in question was held January 19, 1954, 2 days before the budget message of the President was presented to the Congress, stating that "arrangements are being made to reduce, by the fall of 1957, existing commitments of the Tennessee Valley Authority to the Atomic Energy Commission by 500,000 to 600,000 kilowatts." The arrangements involving discussions with the interested utility group, had been going on at least since early December of 1953, and when finally revealed, did not propose to reduce existing TVA commitments to AEC but to compel the TVA purchase of new and additional power from private

sources.

Commissioners Smyth and Zuckert, in reau of the Budget, undertook to express a joint letter to the Director of the Butheir personal views that the proposed action was awkward and unbusinesslike and involves the AEC in a matter remote from its responsibilities. Commissioner Murray took substantially the same position in testimony before the committee.

Murray, as the Commissioner responsiIt is noteworthy that Mr. ble for initiating the first long-term contract between the Commission and a private utility group, frankly acknowledged the unsatisfactory performance of that group in comparison with the TVA, and strongly objected to the proposed new contract-hearings, part II, page 1001.

A great deal more is involved here than a simple controversy between private and public power. Is the Atomic Energy Commission, created by the Congress as an independent agency of Government to administer the vast atomic energy program, which now represents a public investment of $12 billion, to lay aside its collective judgment in deference-nay, subservience to unrelated budgetary and power policies of the current administration?

Who, one may well ask, is in charge of the Atomic Energy Commission? Are there not five Commissioners duly appointed and confirmed under the law, sworn to administer it faithfully, and answerable to the Congress as well as the President for their performance? Or does higher authority take over whenever the Budget Bureau or the White House has a pet scheme to promote?

As Members of Congress and of this committee, we are interested in the efficient performance of Government agencies. We have supported constructive proposals to improve the organization and management of the executive branch. Certainly the President as the Chief Executive and the appointed heads of the departments and agencies should have the requisite authority to organize their administrative units in a manner conducive to efficient execution of the laws passed by the Congress.

But there is a line to be drawn between Presidential direction of the executive branch for good administration and Presidential usurpation of the authority of independent commissions. The members of the Atomic Energy Commission do not serve at the pleasure of the President. They are appointed by him, of course, but the Senate confirms the appointments, and the period of ten

ure is fixed by law. The President can remove a Commissioner only for "inefficiency, neglect of duty, or malfeasance in office."

The administration of the atomic energy program is vested by law in the Commission, not in the President. True enough, the President is charged with certain responsibilities of the highest importance, such as directing the Commission to deliver atomic weapons to the Armed Forces for such use as he deems necessary in the national defense; and the President is given extraordinary authority to exempt the Commission from Federal statutes relating to contracts when he determines such action necessary to the common defense and security. But the President is not authorized to substitute his judgment for that of the Commission members in matters committed to their administration, and certainly he is not authorized to direct the Commission to engage in matters foreign to their duties.

For the benefit of the members of the Atomic Energy Commission we say this: The Commission will forfeit the respect of the public and insult the dignity of its high office if it allows itself to become a puppet agency for the execution of purposes alien to the Atomic Energy

Act.

Our own committee, too, has a responsibility in connection with this matter. It is proposed to reenact authority which, in our view, provides no legal justification whatever for the contract under negotiation. None of the three installations named in section 164 of the bill is involved in the proposed new electrical power arrangements, and only by the most violent stretching of an incidental phrase can the general counsel for the Atomic Energy Commission wrap the cloak of legality around this action.

This latest move of the AEC at the behest of the Budget Bureau illustrates the danger of legislating quickly without laying down adequate standards. As the Federal Power Commission observed in connection with section 164:

Here again the grant of power is without any definition of governing standards, any policy guide, or any limitation of any kind. Apparently this may ratify or authorize ratification of existing contracts. The Federal Power Commission has not indicated any position as to the terms of the contracts heretofore entered into. (Hearings, pt. II, p. 1133.)

We should take the opportunity now to make clear the intent of Congress in originally enacting this section if the plain wording and legislative history of the amendment leave any doubt on that score. We regret that the committee majority has voted down clarifying clarifying language and has refused to adopt a motion disapproving the transaction in question. Our responsibility and obliga

tion in this regard are all the greater, since we are asking the Congress to add prerogatives in this bill to the Committee's already important jurisdiction and status.

7. LIMITING AEC POWER PRODUCTION

A remarkable series of incongruities show up with regard to the power position of the Atomic Energy Commission.

The determination to cast the Commission in the role of "power broker" under the proposed new contract would commit that agency to continuing responsibilities for a 25-year period in a field which is external to the Commission's own concerns and power needs.

This contractual arrangement would bring the AEC into the conventional power business as an additional Government agency and tie it to TVA's future power activities despite the professed intention of that agency and the present administration to limit the role of Government in business.

The AEC already has entered into two long-term contracts, and is about to become involved in a third, for the supply of electrical energy from conventional private sources for the next quarter century, even while freely predicting that electrical energy from atomic sources will be available in the next decade.

Most incongruous of all, the AEC wants to stay out of the atomic-power business, a field in which it might be expected to have a legitimate and continuing function.

The Atomic Energy Commission is the largest single consumer of electricity in the world. When presently authorized facilities are completed, the Commission will be utilizing capacity on the order of 5 million kilowatts, exceeding the combined capacity of the New England States. Its consumption of electrical energy in the near future may reach 8 or 10 percent of the Nation's total.

In view of its enormous power needs, which will come to represent an outlay of $150 million to $200 million a year, one would expect the AEC to show initiative and enterprise in adapting its own facilities to supply a substantial portion of these needs rather than to waste the heat energy created by nuclear fission. The framers of the McMahon Act contemplated use of atomic power by AEC as well as the transfer or sale of such power to others when they provided in section 7 (d) of the act:

Byproduct power: If energy which may be utilized is produced in the production of fissionable material, such energy may be used by the Commission, transferred to other Government agencies, or sold to public or private utilities under contracts providing for reasonable resale prices.

Back in 1946, when this section was written, the atomic-energy program was centered primarily upon the development and production of atomic weapons. Atomic power was still a remote possibility and the section pertaining to its production was embryonic. Now that we stand on the threshold of the atomicpower era and consider legislation designed to usher it in, singular, indeed, is the fact that the new legislation does not enlarge upon the embryo, so far as

AEC production of atomic power is concerned.

Section 7 (d) of the McMahon Act is now section 44 of H. R. 9757, dignified only by having a whole section number to itself, and containing a few minor word changes, but still an incidental item tucked away in a corner of the bill instead of becoming a full-fledged set of provisions to launch a positive program

of Federal development in the atomicpower field. If anything, the language

in the new bill is more restrictive than in the existing act.

The Federal Power Commission, in an extended analysis of the proposed atomic energy legislation, criticizes, among other things, the paucity of legislative standards with respect to section 44. It points out that the sale of byproduct power is not a new problem and calls attention to the series of acts in which the Congress has provided detailed and explicit standards governing the disposition of electric power from projects involving the development of irrigation, water conservation, flood control, and navigation improvement projects. The Federal Power Commission then remarks:

Corresponding enunciation of policy in the sale of byproduct power from Government atomic energy installations may present some new or different problems, but the precedents cited are sufficient to suggest that the Congress has been jealous to enunciate the policy to be effectuated by the agency marketing the power and has not been willing to leave the responsibility for policy to the agency. (Hearings, pt. II, p. 1132.)

One of the long-established Federal policies to which the Federal Power Commission adverted is the according of preference to municipal, cooperative, or other public bodies in the sale of federally generated power. Section 44, covering the marketing by the Atomic Energy Commission of surplus energy from its own nuclear operations, contains no such preference. This is in conflict with the policy established by every law governing the marketing of federally generated power within the last 50 years. The section should be amended to accord with established Federal power policy.

The Atomic Energy Commission, whether for lack of a positive congressional mandate or because of preoccupation with atomic weapons, has never been a power-minded agency. It has steadily backed away from any concept of Government responsibility for the production of atomic power. It regards the atomic power authorization in section 7 (d) of the McMahon Act as incidental and unlikely to be productive of any important achievements. Chairman Strauss describes the AEC's planned power reactor program for the next few years as a minimum program by choice. The future power role conceived for this agency by the present administration is a narrow and declining one. President Eisenhower said in his message to the Congress on February 17, 1954:

The creation of opportunities for broadened industrial participation may permit the Government to reduce its own reactor research and development after private industrial activity is well established. For the

page 15:

This section will permit the Commission to dispose of that utilizable energy it produces in the course of its own operations,

but does not permit the Commission to enter

into the power producing business without further congressional authorization to construct or operate such commercial facilities.

We fail to see why the Commission should be enjoined from producing atomic power for commercial use when it would be given broad authority to license others for such production. If the Nation is to realize the maximum power benefits from its investment in this new resource, a positive program of atomic power production by the Federal Government is essential. The history of electrical power development in this country affords ample evidence that a reasonable balance between public and private power serves as the most important check on monopoly control in the vital field of energy resources. The very magnitude of economically feasible nuclear powerplants persuades us to believe that the balance will be thrown heavily in favor of private monopoly unless provision is made for Federal development of atomic power, particularly where supply is desired by public or cooperative systems.

The committee members are convinced, for security and perhaps other reasons, and have affirmed in the pending bill, that the special material which produces nuclear energy should remain the property of the United States. Another finding in section 2 of the bill is that "In permitting the property of the United States to be used by others, such use must be regulated in the national interest." It is judicially established beyond question in our constitutional system that what the United States owns and permits others to use, it may use itself and dispose in any manner the Congress sees fit, including the transformation of owned resources into electrical energy and the transmission of such energy to market. Private companies engaged in similar and competing enterprises have no vested right to be free from Federal Government competitionAshwander v. Tennessee Valley Authority (297 U. S. 288); Tennessee Power Co. v. Tennessee Valley Authority (306 U. S. 118).

8. INADEQUATE POWER-LICENSING PROVISIONS

H. R. 9757 not only fails to mark out a clear and constructive program for Federal production of atomic power; it is altogether deficient in the matter of safeguards to protect the public interest in the licensing of non-Federal agencies to produce and sell atomic power.

As noted above, the nuclear-energy resource itself will remain the property of the Federal Government. Thus, in terms of the public interest, the use of nuclear energy and the use of the energy in the falling water of streams should be subject to the same safeguards established by law.

These safeguards involve far more than

the bare assurance that the electricity generated from the resource shall be subregulation. They are based on the prinject to the ordinary processes of utility ciples that a public resource must be conserved and developed for the best possible use, that it must be always kept open for public use if the people so decide, and that whatever States may do or fail to do about it, the use must always be directed at providing electricity at the lowest possible rates through preventing private capitalization of the value inherent in the right to use a public resource.

The very fact that there are still six States which have set up no State agency to regulate the rates charged by privately owned electric utilities reveals the extraordinary importance of these public resource safeguards, and the necessity for their incorporation in any legislation designed to facilitate the use of atomic energy as a source of commercial power. These safeguards for the right of the people to get the full value out of their resources, without any toll being taken above what is necessary to assure the funds required for development, have already been formulated in detail by Congress in the Federal Power Act which prescribes how hydroThey electric resources may be used. include:

First. Safeguard for the prior right of Federal development of the resource in any specific case where this will best serve the public interest.

Second. Safeguard for the prior right of public bodies and cooperatives, as against a private applicant for a license for any specific development of the resource.

Third. Safeguards for the right to public hearing in connection with any application, with specific provision for admission of interested States, State commissions, municipalities, representatives of interested consumers or competitors as parties.

Fourth. Safeguards for the right of Federal or other public recapture of any development by a private licensee at the end of the license period on payment of no more than the licensee's net investment in the project.

Fifth. Safeguards for reasonable rates to consumers by provision requiring licensees as a condition of any license to agree to Federal regulation where States have provided no regulation of electric rates, with further provision that in any rate proceeding the licensee can claim

no more than net investment in the development for rate base purposes.

Sixth. Safeguards for the preferred position of public and cooperative electric systems to obtain power supply from Federal development of the resource.

The bill, as reported, is wholly lacking in such safeguards. It would enable the Atomic Energy Commission to turn this greatest energy resource over to private power monopoly under licenses unconditioned except for the requirements of national security and public health and safety. Aside from section 271, providing that nothing in this act shall affect the authority or regulations of Federal, State, and local

regulatory agencies, it is barren of any recognition of the public interest in seExperience has shown clearly that such curing electric energy from this new resource at the lowest possible rates. regulatory authority is entirely inadequate to protect the public interest in electric power developed from public re

sources, unless supplemented by specific standards governing licenses and the availability of public or cooperative competition in the distribution of electric energy.

The bill includes no provision to en

courage public or cooperative distribution of nuclear power. Furthermore, it includes no provisions assuring that privately owned electric utilities producing nuclear electric energy under license from the Commission shall sell the power at the lowest possible rates consonant with sound business practices.

The following comments on specific licensing features of the bill indicate what we consider essential requirements for protection of the public interest in the use of this new public resource for the generation of commercial electric power.

Section 103 (b), establishing the minimum qualifications for applicants for commercial licenses to construct, own, and operate facilities for the utilization and production of special nuclear material or atomic energy, contains no provisions requiring agreement by the applicant, where the end result is generation of electric energy for sale, to claim no more than net investment in such facilities for rate-making purposes. Such a limitation is placed upon all licensees for use of the people's waterpower resources under the Federal Power Act. This section of the bill should be amended to bring it in line with established Federal power policy.

Section 103 (c), providing for a limitation on the term of commercial licenses issued by the Commission for the ownership and operation of facilities for the utilization and production of special nuclear material or atomic energy, contains no provision for the right of the United States, after reasonable notice, to take over, maintain, and operate such facilities at the end of the license period on payment to the licensee of its net investment, plus severance damages, if any. All private hydroelectric power developments, licensed under the Federal Power Act, are subject to such a provision. This section should be amended to bring it in line with established Federal power policy.