A Reviewers Notebook
Admiral Ben Moreell is one of the most fearsomely efficient men alive today. He organized the Seabees during World War II. Since his retirement from the Navy in 1946, he has presided over the rising fortunes of the Jones and Laughlin Steel Corporation. In addition to his skills as industrial planner and administrator, Ben Moreell is an intellectual in the non-pejorative, non-egghead sense of the word. He thinks clearly, and his thoughts flow easily into lucid, direct English. Beyond all this, fusing it all into an effective entity, Ben Moreell has a firm grip on the moral values that underlie both the American Constitution and the system of voluntary economic association and free exchange.
Given his special characteristics, it was a foregone conclusion that Admiral Moreell’s chairmanship of the Second Hoover Commission Task Force ‘on Water Resources and Power would result in a report that would go way beyond the journeyman necessities of the assignment. The Task Force not only gathered the facts, which were all there in thousands of reports anyway. More important, it approached the job with the genius for conceptual thinking. Patriotic beyond the call of duty, it took a completely serious view of the mandate handed it by Congress to provide philosophic criticism of our sprawling, hit-or-miss and frequently wantonly socialistic federal water policies.
Naturally, since Admiral Moreell and his mates are partisans of the libertarian philosophy (Madison and Jefferson were, too), the framing of the report has had the public power associations up in arms. Admiral Moreell realizes that his “six principles” of freedom as applied to the control and uses of water are “poorly designed to attract the support of those who believe in special privilege for political pressure groups.” Nevertheless, he hews to his line and, to mix the metaphors, damns the torpedoes.
Just how merrily the chips fly and the torpedoes explode is apparent in his new book, Our Nation’s Water Resources—Policies and Politics (published by the Law School, the University of Chicago, $3.50). Originally designed as a series of lectures, the book contains much sober history of the evolution of our federal water policies. There is also a clear exposition of the way the federal government is organized to handle water resources development. The conclusions that are to be drawn from Admiral Moreell’s sober juxtaposition of incontrovertible facts are, however, not exactly conducive to a sober state of mind. In fact, the implications of the conclusions are frequently hair-raising.
Take, for one example, Admiral Moreell’s treatment of the recently authorized Upper Colorado River Storage Project. On the face of it nobody could object to conserving Rocky Mountain water for use in the more arid reaches of the Colorado-Utah uplands. The full Upper Colorado project would consist of ten storage dams for impounding water for “river regulation” and development of power, and thirty-three participating irrigation projects. Four of the dams and eleven of the irrigation projects are ticketed for early construction and development, at an initial expense of $760 million. Although estimated at $3 billion, the full Upper Colorado project will probably chew up the better part of $6 billion, given the inflationary bias of the American political economy.
What earthly objection is there to going ahead with the Upper Colorado dams? Well, in the first place, the proposed reservoirs will not be needed for river regulation for at least twenty-five years. (This is a statement made by the Department of the Interior, not something dreamed up by Admiral Moreell.) The sole function of the dams for many years to come will be to provide revenue from the sale of power to subsidize the irrigation projects which are to be operated independently of the dams.
So what, you may ask, is wrong about bringing life-giving water to dry Colorado acres? There would be nothing wrong about it if it were economically justified. The truth is, however, that the capital costs for direct irrigation investments in the Upper Colorado region would range from $200 to $800 an acre. This is so far in excess of the present $150-an-acre selling price of’ comparable land that is already irrigated that it would be a true give-away to large and small realty interests. It would be much more practicable and intelligent to hand the money to Georgia or Pennsylvania farmers to improve soil that is far closer to big urban markets. There is a further irony to the whole Upper Colorado irrigation project: the land that is to be fructified at a cost of $200 to $800 an acre would produce grains, sugar beets, and sheep, all of which are in sufficient superabundance to be under the price support program.
Though he thinks it a silly waste of money, the prospect of putting water on soil that would only add to unwanted agricultural surpluses is not what really causes Ben Moreell’s blood pressure to rise. His scorn derives its full force from his positive conviction that Colorado will someday need all the water it can get to develop and utilize its oil, oil shale, coal, uranium, titanium, and manganese deposits. With such a plentiful supply of the raw materials of industry, Colorado could support a far greater industrial development than she has at present. Where one thousand gallons of water will grow ten cents worth of crops in Colorado, the same thousand gallons would permit the production of $5.00 worth of industrial products. Once precious water is committed to sugar beets or grain, however, it would be politically impossible to take it for any other purpose.
Admiral Moreell’s flair for devastating statistical analysis gets free play in his treatment of the TVA. According to the Army Engineers, once in 500 years a flood occurs in the Tennessee Valley which would cover some 666,000 acres of land if there were no dams to impound the water. It would seem, then, that the TVA can be credited with offering protection to a lot of soil. But the TVA’s value as a soil protector becomes a trifle elusive when one considers that to save 666,000 acres from a once-every-half-millenium flood it has been necessary to submerge 463,000 acres of land below the normal level of the reservoirs. In addition, 128,000 more acres of river lands must be reserved by the TVA for flood discharge. Thus the TVA has effectively drowned 591,000 acres of the 666,000 it was created to protect. If this makes sense, then Count Screwloose of Toulouse ought to be sitting in the White House!
Admiral Moreell is not suggesting that it would be wise to tear down Norris and Bonneville and Grand Coulee dams. What he is suggesting is that Congress should count the true costs of the water control programs which it initiates. He is willing to admit the federal government has some responsibility in the fields of flood damage abatement and reclamation. But the ultimate objective of the federal government should be to “assess against beneficiaries” the full cost of providing benefits. There is no reason why Georgia or Pennsylvania farmers should be assessed to aid competitors on desert acres in Utah.
According to the findings of Admiral Moreell’s Task Force, there are so many overlapping agencies and authorities in the public water and power fields that it is impossible to find any consistent pattern or purpose in the way things are being done. Lacking coordination, government agencies compete with each other for the right to build dams and irrigation ditches. Things are always being put over under wrong names; power is subsidized in the name of navigation, reclamation is instituted in the name of flood control, etcetera, etcetera. The federal government often uses water resources and power development projects not for economic purposes but to accomplish indirect social and political ends. Programs are undertaken without sufficient analysis of data, the federal government is hit-or-miss in its requirement of adequate contributions for the use of its money for capital outlay, and the states are seldom given enough consideration in planning for the use of water and water power.
Admiral Moreell is particularly critical of the “yardstick” theory of federal power. There can be no “yardstick” when tax exemption and cheap government money make impossible a sound comparison of costs between investor-financed utilities and government projects. Federal power, the Admiral says, “is always subsidized and the rates do not include all of the real costs.” When power is disposed under preference clauses to cooperatives and municipally-owned systems, the favored groups get two unfair advantages, price and priority, over other citizens. But the non-preference customers contribute to the cost of the subsidies. If the “privileges and immunities” of the citizens are supposed to be equal, then the “preference clause” must be an illegal thing.
Even the old saw that water power projects are usually “too big” to be handled by the states or by private groups fails to survive Admiral Moreell’s withering treatment. Says Moreell: the Wisconsin Valley Improvement Company “furnishes an excellent example of an integrated and complete river development undertaken without government subsidy. Here is a privately owned, tax-paying organization which has constructed a series of twenty-one reservoirs on the Wisconsin River.” The improvement is “subject to regulation, pays full local, state and federal taxes, and provides for a six percent return on investments.” As for irrigation, “over three-quarters of the irrigation in the West and all of the irrigation in the East has been provided by private enterprise.”
Thus the cliches fall like trees in a hurricane in Admiral Moreell’s pages. The biggest cliché to bite the dust is the one about the unconscionable private power lobby which is supposed to be mulcting the citizens of hard-earned cash. Ben Moreell brings out the statistic that the cost of power to the average U.S. householder is about 1 per cent of his family budget as against 29 per cent for food and 2 per cent for tobacco. A reduction of 3 per cent in the citizen’s tax bill would pay for all of his power!
