The daily Gate City. [volume] (Keokuk, Iowa) 1855-1916, 1912-03-15
United States Commissioner Smith in
Report to President TAFT Favors
Federal Control to Pre-
vent Monopoly.
BIG INTERESTS FEARED
Commissioner Says That Ten Great
Groups Of interests Control or
Influence 60 Per cont De-
veloped Power.

WASHINGTON, March 15.-Concen.
tration of control over water powers
by large interests in important locall-
ties in increasing SO rapidly that Har-
bert Knox Smith, commissioner. of
corporations. has reported, to Presi-
dent Taft that the government should
preserve title to the remaining power
sites and develop them to prevent
a possible monopolization of public
utility companies. A full report of
the commissioners investigation OF
water power development was pre-,
scented to the president.
Commissioner Smith directs partic.
ular attention to the increasing affilia-
ton of water power concerns and pub.
lic-service agencies, such as street
railway and lighting corporations, and
Ioftentimes banks as well. The con-
nection between such concerns he re.
CARDS of serious public significance.
The concentration of control over wa
ter powers, the commissioner declares,
is exercised partly by direct owner.
ship of stock, but mainly through in.
,terlocking directorates.
Monopoly Of Power Feared
The rapidly increasing concentra-
ton of water power may become, he
says, the nucleus for monopoly of
both water and steam power. II the
water power can not meet the entire
demand of a given locality, he points
out that the owners can acquire
auxiliary fuel plants and handle water
and fuel power over the same distrib-
uting lines and thus complete com
Imercial power monopoly might gradu-
ally be built up; in fact already exists
| in 2 number of communities.
Ten great groups of interests. with
the General Electric company as the
most powerful, are declared by Com
missioner Smith to control or strongly
Influence about 60 per cent of the de.
veloped commercial water power OF
the United States. These ten groups
are more or less inter-related with re.
sultant growing community of inter-
estS.
/ Government Control Urged.
Smith, urging immediate formulation
of definite policy of developing the
remaining water power sites on the
public domain, recommends, generally
speaking, that the government retain
the ultimate control of these sites.
They should be developed at once, he
declares. not only to conserve the fuel
supply of the country but because
they are fast passing into private CON
troll 1t is estimated the water power
now in use saves 33,000,000 tons of
coal annually
The problem of development, the
commissioner continues, can not be
solved by fixing by law the selling
price 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 considerable degree OF
unified control, the commissioner
makes this recommendation for the
development of public water powers:
The public can either develop ana
operate the sites, selling the energy
at market rates, or the public may
lease its natural value" He favors the
rental system.
Water Power 100000 H. p.
4 The water power of the country de-
veloped and practically capable of
development at this time, probably
does not exceed 25.o00,0 900 horse pow.
er, Smith says. The total developed
water power today is about 100000
horse power. The total stationary
power used in the United States =.
steam, water and gas-is probably
over 30,000,000 horse power.
The bureau of corporations, in its
Investigations found concentration OF
water powers. according to the report
in three distinct phases: Cd There
was a Capitalization of control in each
important locality; (2) large interests
Influenced number of these locaI
concerns, and, finally there was found
growing relationship among the biz
interests.
The General Electric interests, the
report declares, control or influence
$4,000 horse power of developed wa
ter power in eighteen different state.
and 100000 horse power of undevei
oped resources, total of over 1,5o0,001
horse power. Next are the Stone ant
Webster interests, the report contin
ued, (which either own or strongly in
fluence 27S,o00 horse power, chiefl,
in connection with public servic,
concerns. They exercise control
largely through management rattle
than ownership, over fifty-fiye o
| sixty companies. Eight have waite
power, the largest being on the Mis-
sissippi river and in the Puget Scum,
region.
Others Dominating Factor
7. The other groups are the Hydraul