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<br />c-J <br />a"; <br />N <br />C'J <br /> <br />c <br /> <br />controversies, in which there may be resort to arbitration or <br /> <br />court revie~, and the scope of the review to be had in such <br /> <br />proceedings. There has been preserved to the Operating Agents <br /> <br />security of tenure under the contract, and at the same time <br /> <br />orderly and efficient administration of the project has been <br /> <br />assured through provisions that, in accord~~ce with the general <br /> <br />rule respecting review of administrative action, in those <br /> <br />instances where arbitration or court proceedings may be employed, <br /> <br />the action taken by the Secretary is to be subject to review <br /> <br />only if he has acted arbitrarily and without a reasonable basis. <br /> <br />Attached hereto is the draft of agency contract which I am <br /> <br />prepared to recommend to the Secretary for approval. In addition <br /> <br />to the matters specifically discussed above, other revisions have <br /> <br />been made in the wording of the draft of November 14, 1940, for <br /> <br />the purpose of clarification. The reason for each of these <br /> <br />changes is believed to be readily apparent from a reading of the <br /> <br />attached draft and for that reason no further explanation is <br /> <br />given here. <br /> <br />2. THE ENERGY OR "FALLING WATER" RATE <br /> <br />The computation of this rate involves the determination of <br /> <br />the quantities of falling water expected to be available at the <br /> <br />dam during a 50-year period; of the standard of efficiency at <br /> <br />which this falling water must be converted into electrical energy <br /> <br />to obtain the stipulated amounts of energy; of the cost of the <br /> <br />structures and their probable useful life; of the cost to operate, <br /> <br />7 <br />