New-York tribune., 1912-03-15
GREAT CORPORATIONS
CONTROL WATER POWER
Warning Sounded by Commits
sioner H. K. Smith in Report
to President Taft.
GENERAL ELECTRIC BIGGEST
Action by Government to Pre-
serve Remaining Sites and Pre-
vent Monopoly of Public Util-
ity Companies Urged.

lty companies urged.
Washington, March INSTRUMENTATION of
control over water powers by large in
terests in important localities is increasing
so rapidly that Herbert Knox Smith, Com
missioner Of Corporations has reported TO
President Taft that the government should
preserve title to the remaining power sites
and develop them 10 prevent a possible mo-
nopolization of public utility companies.
Commissioner Smith directs particular
attention 10 the increasing affiliation of
water power concerns and public service
agencies. such as street railway and light
ing corporations, and often banks. as We'll.
The connection between such concerns ne
regards OF serious public significance. The
concentration OF control over water power,
he says. is exercised partly by direct own
ership of stock, but mainly through inter-
locking drectorates.
The rapidly increasing concentration Of
water power control may become, he says.
the nucleus for a monopoly of both wafer
and steam power IL the water power can
not meet the entire demand of given To-
cality, he points out, the owners can ac-
quire auxiliary fuel plants and handle
tributing lines. and thus a complete COM
r1ereial power monopoly might gradually
be built UP. In fact, It already exists in
number of communities.
General Electric Most Powerful.
Ten great groups Of interests with the
General Electric Company as the most
powerful, are said by Commissioner Smith
80 NV 3pNn oho
per cent of the developed commercial water
power of the United States. These ten
groups themselves are more or less inter-
related. with resultant growing community
Of interests. The report says:
In this maze OF interrelationships. rang
ing from practically joint control down 20
personal association in common directo-
rates, is clearly revealed the drift of water
power and public utility corporations under
the control Of a few very powerful inter-
ests. These connections. some stronger
and some weaker, suggest a favorable
condition for very small number OF men
10 consolidate very large interests when
ever they may decide ii to their advantage
20 do so. This interlocking of interests
through directors. while not necessarily in
dicating a purpose OF monopoly, certainly
affords an incentive and means TO cOmbi-
nation
Urging the immediate formulation Of a
definite policy Of developing the remaining
water power sites on the public domain.
the commission recommends, generally
speaking, that the government retain the
ultimate control of these sites They
should be developed at once, he says, not
only to conserve the fuel supply of the
country. but because they are fast passing
into private control. IL is estimated that
the water power now In use saves 80, 1000
tons Of coal annually, and, the Commis-
siorer adds, the water power resource is
not expended In its usirg.
The problem of development, he contin-
ues. cannot be solved by fixing by law the
selling prices of water power by itself,
which, in any event, will be controlled by
the cost OF fuel power. Recognizing that the
most efficient use of water power requires
a considerable degree of unified control, the
Commissioner makes this recommendation
for the development Of public water pow
ers:
The public can either develop and operate
the sites selling the energy at market
rates, or the public may lease the sites at
e rental fairly representing the natural
value.
He Favors the Rental System.
oped and practically capable Of develop
ment at this time probably does not ex-
ceed o, 10000 horsepower, Mr.. Smith says.
The total developed water power to-day Is
about 100000 horsepower. The total sta
tionary power used in the United States
steam. water and gas-is probably more
than 10000, 900 horsepower.
The bureau in its investigations found
concentration of water powers in three dis
tinct phases. First, there was a ccntraiza-
uon Of control in each important locality;
secondly, large interests influenced num-
ber of these local concerns. and. finally, a
growing relationship among the big inter-
ests. The Commissioner says:
In California six great power corpora
tions, of which the most Important is the
Pacific Gas and Electric Company with
1888 horsepower). together control 5000
horsepower-over 50 per cent of all the de-
veloped water power In the state.
In Washington two companies control
10000 horsepower, OF about 20 per cent of
all developed water power.
In South Carolina the Southern Power
Company owns about i0l, 900 horsepower, or
75 per cent Of the total commercially de-
veloped. with 1900 horsepower undeveloped.
In the southern peninsula of Michigan
the Commonwealth Power. Railway and
Light Company controls 5000 horsepower,
or 73 per cent OF the commercially devel-
oped. together with probably 1000 horse
power more undeveloped.
Practically similar conditions exist in
Montana, Colorado, Georgia and at Mag
ara Falls.
Ten Groups Of Big Interests.
More important than this local centrsliza-
ton, the Commissioner says, are the opera-
tions Of ten large groups Of interests
which possess control or influence over
i,s2l 900 developed horsepower, about 90 per
cent of the commercial water power in the
United States, together with $4,000 horse
power undeveioped.
The General Electric interests. the report
says, control or influence $4,000 horsepower
Of develnned water mower In eighteen dif-