1927 Calvin Coolidge - Boulder Canyon Project (Hoover Dam)

In 1927, President Calvin Coolidge seemed reluctant to push forward with plans for the Boulder Canyon Project (Hoover Dam) because it would put the federal government in the business of selling power. While this seems consistent with Coolidge's belief in smaller government, upon closer we find that Coolidge wanted the governors to take ownership of the decision to turn it over to the federal government. After all the Secretary of Interior had already recommended a plan as such. Coolidge told Congress that the federal government should only take on the distribution and sale of hydroelectric power if the states interested reached "mutual agreement" and were willing to make the "necessary concessions to each".

In June of that year, Coolidge's Secretary of Interior, Hubert Work delivered his report on the Boulder Canyon Project. Secretary Work reported that the primary importance of the project would be to protect the southwest including Imperial Valley, California, and the Yuma reclamation project in Arizona. In addition to flood control, he reported that the expected receipts from selling hydroelectric power from the dam were expected to be incredibly significant and would in fact "return the entire cost" within a "reasonable period of years".  The river was not only interstate, it was international and the Federal Government thus had full authority and responsibility to build the dam, but Secretary Work raised the concern that "primary development and sale of hydroelectric power by the Government is not consonant with the policy of the Department". It was not however, completely out of the question. Work continued to explain that the "subsidiary development at storage dams brings a direct reimbursement for Federal expenditures in constructing projects, and often supplies electricity for homes, agriculture, and municipalities not available from other sources."  In other words, so long as the primary purpose of the dam was not to sell electricity, the Federal Government could not only construct the dam but could develop and sell the electricity. This subject was not without controversy, in fact, the problems were so numerous that "interstate and international compacts or treaties were deemed advisable" and after "long and careful consideration in Congress", no compacts or treaties came to fruition. In fact, it was bad enough that in early 1927 the federal government contemplated pulling the plug on the whole project. Despite these difficulties, Secretary Work recommended that the Federal Government not only develop the dam but also use the sale of power to recover any costs.  Secretary Work recommended that the Government lease the rights to generation and distribution to the highest bidder, and if no lease could be made, then the Federal Government should be given the right to build the power plant itself and lease it to a willing party.  If no one was willing to lease the plant, then the Government to generate and sell the power itself.

In his 1927 State of the Union Address, President Calvin Coolidge summarized the report from his Secretary of the Interior and asked Congress to consider legislation "for the construction of a dam at Boulder Canyon on the Colorado River".

"Legislation is desirable for the construction of a dam at Boulder Canyon on the Colorado River, primarily as a method of flood control and irrigation. A secondary result would be a considerable power development and a source of domestic water supply for southern California. Flood control is clearly a national problem, and water supply is a Government problem, but every other possibility should be exhausted before the Federal Government becomes engaged in the power business. The States which are interested ought to reach mutual agreement. This project is in reality their work. If they wish the Federal Government to undertake it, they should not hesitate to make the necessary concessions to each other. This subject is fully discussed in the annual report of the Secretary of the Interior. The Columbia River Basin project is being studied and will be one to be considered at some future time."

On December 21, 1928, President Coolidge signed the bill authorizing the Boulder Canyon Project authorizing the dam and to appropriating $165 million for the construction of the dam. The dam was completed in 1935 and electricity from the dam's powerhouse was sold pursuant to a fifty-year contract, authorized by Congress in 1934. By 1939, the dam's power plant became the largest hydroelectricity facility in the world. In 1961, the dam reached a maximum generating capacity of 1,345 megawatts. Originally known as Boulder Dam, it was then the tallest dam in the world. 21,000 workers contributed to the dam, and it required 21,000 workers and 6.6 million tons of concrete enough to pave a road from San Francisco to New York City. In 1930, Secretary of Interior Ray Wilbur announced the structure would be called Hoover Dam. The name change was made to recognize the contributions of Herbert Hoover who as Secretary of Commerce in 1922 brokered a deal among the seven states (California, Nevada, Utah, Colorado, Arizona, Wyoming, and New Mexico) in the region to divide the water proportionally. In 1947, the name of the dam officially became Hoover Dam.

Excerpt from the Secretary of Interior Report for fiscal year ending June 1927

"The interest of the Federal Government is based primarily on the fact that the stream is not only interstate but international, that several Federal reclamation projects have been constructed and secure their water from this stream, and the fact that the development involves flood control, irrigation, power development, and domestic water to a very large area. 

Of perhaps primary importance is the protection from floods of Imperial Valley, Calif., and the Yuma reclamation project, Arizona, with their large investments and tremendous agricultural resources. Incidentally, the same storage will provide water for irrigation of large areas of fertile arid lands and domestic water for southern California.
Engineers and economists have reached the conclusion that receipts from irrigation, domestic water, and hydroelectric power developed at such a structure would, in a reasonable period of years return the entire cost. The primary development and sale of hydroelectric power by the Government is not consonant with the policy of the Department, but its subsidiary development at storage dams brings a direct reimbursement for Federal expenditures in constructing projects, and often supplies electricity for homes, agriculture, and municipalities not available from other sources.
As indicated, the problems are so numerous and varied that interstate and international compacts or treaties were deemed advisable. While the matter was the subject of a bill which received long and careful consideration in Congress during the last session, such compacts have not been finally consummated. In fact, at present writing contents are made by some, which, if maintained, might leave the Federal government without reason to expend further time and money in connection with the project. 

If the rights and privileges incident to such a project are purely local and intrastate, there would appear to be no warrant for the expenditure of Federal moneys for its construction. If, however as was the view when the departmental investigations and reports were made and the legislation proposed in Congress at its last session, the Federal Government has rights and interests. the whole matter should receive consideration. Therefore during the past summer I secured the services of several eminent engineers and attorneys to make individual studies of the situation and individual reports to me, with the view of being thereby enabled to submit to you further information relative to this project and its problems. 

These storage works being not only of interstate character but also vital to public interest in their phases of flood control, irrigation , and domestic water supply, and especially in the protection of our international water rights, I deem that the dam should be constructed with Federal aid and under Federal control. 

Moreover, the Federal Government should in all prudence endeavor to recover the cost from power potentialities and other revenues. Lease of the rights to use the water to the highest bidder would be the simplest and best means of reimbursing the Federal Government for its outlay. In March of last year, I publicly invited proposals for such leases form these interested in the generation and distribution of hydroelectric power.
I have suggested that if it should prove that no adequate lease could be secured form parties willing to undertake generation and distribution, then the Government should have the authority to erect the power plant and lease the plant itself, and I have considered that if no adequate contract of this character could be made, then the Government should have authority to generate and sell the power at the generating station to persons willing to purchase it and provide their own transmission and distribution."

References

Presidency.ucsb.edu. 2020. Fifth Annual Message | The American Presidency Project. [online] Available at: <https://www.presidency.ucsb.edu/documents/fifth-annual-message-5> [Accessed 22 April 2020].

Annual report of the Secretary of the Interior for the fiscal year ..., 1., 2020. Annual Report Of The Secretary Of The Interior For The Fiscal Year ... 1926/1927.. [online] HathiTrust. Available at: <https://babel.hathitrust.org/cgi/pt?id=mdp.39015059062789&view=1up&seq=49> [Accessed 22 April 2020].

HISTORY. 2020. Hoover Dam. [online] Available at: <https://www.history.com/topics/great-depression/hoover-dam> [Accessed 22 April 2020].

Walker, P., 2020. Impact Of Politics On The Colorado River Basin Water Agreement: In-Depth Administrative Analysis. [online] Available at: <https://ascelibrary.org/doi/10.1061/%28ASCE%291532-6748%282006%296%3A2%2872%29> [Accessed 22 April 2020].