The farmer and mechanic., 1909-02-02

a new corporation. What happened
was that in 1905 the Pacific Gas and
Electric Company was organized FOR
the purpose as the prospectus of the
underwriting syndicate handling an is
sue Of it's securities announces, "Of
purchasing and holding the stock. o..
stock and property, Of the California
Gas & Electric Corporation, the San
Francisco Gas & Electric Company
and such other public utility corpora
tiOns. Operatoing in central California,
as the management might deem it ad-
Visable to acquire.
Such other public utility corpora
tions as the management might deem
it advisable to acquire" was generally
understood to mean the four other
power companies of considerable size
as we'll as such outside power cOnceS-
sions as would give it a practical
monopoly of the field. AS yet this
combination has not been carried
through, but the Pacific Gas and Elec-
tric Company has been strengthening
it's hold on the California power situa-
ton in another way. by buying up
! local gas and electric companies, and
thus securing control of the important
markets for power. The company
commands the field by dominating the
power supply in San Francisco, Oak
land and over a hundred other places
including practically all the larger
It's operations extend over territory
of more than thirty thousand square
miles or four times the size of New
Jersey. q State which itself is able to
maintain public service corporation
powerful enough TO WELD a mighty in
| huence. The water rights which this
company has developed amount to
over one hundred thousand horse
| power worth at the current California
| estimate $2O.0OO.O00 year. One OF
| the strongest features in the com
| pany's situation. as explained by its
! bankers. is that it owns "a reserve
amount Of undeveloped hydra ulic
/ power sufficient to supply the entir.
central California market for many
| years to come.
The company's bankers also explain
with becoming mcdesty that "by the
control on the one hand. of the bes
and most economical water powers
and, on the other hand of the mar
4 kets for power through the owner
ship Of the distributing companies il
/ the principal cities and long term con
! tracts with large users of power. the
! business of the company is beyond the
reach Of serious competition.
This statement of the California sit
uatiOn is not to be taken as refiectins
on the Pacific Gas and Electric Com
pany, or the men who are engineer
complete their mastery of the pOWel
| situation in the State they are dOins
/ good business for their stockholders
and as long as the public encourage.
their course they are not to be blamed
| for following it. What we are inter
ested in is observing the trend O
| events in the utilization of water
/ pOwer-a trend which has PROGRESSED
simply d little further on the Pacific
! Coast than in other parts of The
country.
The significant fact for us is tha
almost fOur-tifthS of the water-pOwel
| that can be developed commercial,
| in California has passed irreVocabl,
| from the ownership of the public Il
! the ownership of corporations. Th,
policy that permits this inevitabl!
/ leads to the creation of monopoly, t
placing the public's interest last in
stead Of foremost.
1t is hard to imagine any industr,
! better suited to the sort Of cOmbina
tan that spells monopoly than the
| development of power from publ,
/ waterways. The possible supply il
! limited: one cannot construct water
/ fall wherever the fancy wills. TIL,
i economies of combination are mum
j erOus; they include the savings tina
come from avoiding the duplication
! of transmission lines and generatin.
! plants, as we'll as the economies com
mon to concentrated control in othe
| Industrial enterprises. The dOmi
i nance of the markets for power ma.
| be made as complete as the contro
. Of it's sources; it comes from tn
/ ownership of municipal franchise
and from long-term contracts will
/ private consumers who are at th,
i mercy of those who own the Onl
\ available power. Under these condi
| tions it hardly requires any argumen
/ to prove that the inevitable tendenc,
In this business, once the public relin
quishes it's authority. is to the crea
ton Of the monopoly. .
i 1t matters not so far as the power
consuming public is concerne,
whether this monopoly is exercised b.
a single combination extending al
/ over the country or by series o
/ com bina tons each one sllnrerne In it