New-York tribune., 1907-05-23
CHARGING FOR WATER POWER

Governor Hughes by his insstence that the
bill incorporating the Long Sault Development
Company should be amended as to compel the
concern to pay the state for the use of its water
power has instituted a new and wholesome policy
1t has been the custom IN New York and we
think, generally throughout the United States.
for the state to give away land under water
water rights and the right TO develop and use
water power to private corporations The most
accessible and valuable sources OF such power
have already been disposed Of in this way and
many of them have not been developed but are
in the hands of companies with sleeping fran
chises, waiting until the natural development Of
the states industries shall make their rights
valuable. If the precedent set by the Governor
in this Long Saut case is followed there will
be no more free grants Of land under water or
OF water power, and there will be no more
sleeping" franchises. The Long Sault grant is
to cease if the company does not begin con-
struction within one year after it obtains per
mission from Congress- and all land and water
rights not put into use are to be reclaimed by
the state. The company by way of compensa-
ton for its franchise is to pay the state $4,000
the first year. $4,000 the second year AMI $40
600 the third, and when In operation 1t Is TO
pay the state according to the number of horse
power 1t uses, the minimum sum to be S25OOO
a year.
because ii Is departure from the previous Gus
tom of the state. When the country was
younger and there were vast undeveloped re-
sources the tendency of legislation was TO offer
every encouragement TO capital TO enter upon
projects Of development. This Is the reason
why all the earlier franchise legislation was so
much more generous than the legislation of to-
day. Railroads not merely got their franchises
free In perpetuity, but grants OF land which
I nm r1fa1
with them. Streetcar franchises In earlier days
were always free and in perpetuity. Now. here
In New York City we get a company to pay all
the expenses OF building a subway merely for
the privilege OF operating 1t for fifty Years
other cities exact annual payments from cor
porations for short term franchises This
chahee "nlch mas come over the terms of pub
lie service franchises is extending now 70 fran
chises involving the OF state lands and
water power. And rightly SO, for the granting
OF such franchises has come to he bound I'm
with political favoritlsm. Capital needs now
no such encouragement as it once needed and
many of these franchises are obtained simpIv
on speculation, the grantees makng a profit ont
of holding a sleeping" right
Ii Is objected by some that compensation for
water power franchises is an indirect tax upon
the users of water power and, shifted bv them
upon the users Of its products but this Is true
only In limited sense If all or the greater part
or the manufacturing in this country were car
rled on by water power compensation for fran
chises would be charged by the manufacturers
to the users Of their products. But most of the
manufacturing is done with the power from
coal, and the man who has free water power
VIII not sc his products cheaper than the mar
ket price fixed by his competitors on the basis
or the cost of their artificial power He will
simply set down to profit the difference between
the cost of bis power and the cost of mower from,
coal II he has to pay for his franchise he
cannot charge more for his products than the
manufacturers who coal. COMPENSATION
simply diverts some of the profits from the man.
ufacturers to the state. 1t is therefore nor an
indirect tax upon the people, but reservation nv
the state Of some Of the gains that spring from
the use OF the states natural resources