Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1912-03-16
FEARS WATER POWER TRUST
Report Made to Taft Warning of
Possible Monopolization.
SMITH MAKES RECOMMENDATION
Commissioner of Corporations Says
Government should Preserve Title
to Remaining Power sites
and Develop Them.

WASHINGTON, March 1S.-concentra-
ton of control over water powers by
large interests In important localities is
increasing so rapidly that Herbert Knox
Smith. commissioner OF corporations. has
reported to President Taft that the gov
eminent should preserve title to the re
maining power sites and develop them
to prevent a possible monopclization OF
public utilities companies. A fun report
of the commissioners investigation OF
water power development was presented
to the president today.
Commissioner Smith directs particular
attention TO the increasing afflllation OF
water power concerns and public service
agencies. such as street railway and
lighting corporations. and oftentimes
banks as we'll The connection between
such concerns he regards OF serious pub
lie significance. The concentration Of
control over water powers. the commits
sioner declares, is exercised partly by
direct ownership OF stock. but mainly
through interlocking dlrectorates.
The rapidly increasing concentration of
water power control about which the
commissioner sounds a warning may be-
come, he says. the nucleus for mon
opoly OF both water and steam power.
II the water power cannot meet the en-
tire demand Of a given locality. he points
out that the owners can acquire auxili-
airy fuel plants and handle water and
fuel power over the same distributing
lines and thus a complete commercial
power monopoly might gradually be built
up-in fact already exists in a number
of communities.
Ten Great Groups.
Ten great groups OF interests. with the
General Electric company as the most
powerful, are declared by Commissioner
SMITH TO control or strongly influence
about 60 per cent OF the developed COM
mercial water power of the United States.
These ten groups themselves are more or
less inter-related, with resultant grow
ing community OF interests. In this con-
nection tho commissioners report says:
In this maze OF inter-relationships,
ranging from practically Joint control
down TO personal association In common
directorates. is clearly revealed the drift
OF water power and public utility cor
porations under the control OF a few
very powerful interests. These connec-
lions. some stronger and some weaker.
suggest favorable condition for a very
small number Of men to consolidate very
large interests whenever they may decide
1t to their advantage to do so. This in
terlocking OF interests through directors,
while not necessarily indicating a purpose
of monopoly. certainly affords an incen-
tive and means TO combination"
Mr.. Smith, urging the immediate
formulation of a definite policy Of de-
veloping the remaining water power sites
on the public domain. recommends gen.
orally speaking that the government re-
tain the ultimate control of these sites.
They should be developed at once, he de-
clares. not only to conserve the fuel
supply OF the country. but because they
are fast passing into private control. II
Is estimated that the water power now
in use saves 100000 tons OF coal an
nually and, Mr.. Smith adds, the water
power resource is not expended in Its
using.
The problem Of development the com.
missioner continues, cannot 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 ef-
fieient use Of water power required
degree OF unified control, the
axes this Recommendation
for the developent Of public water power.
THE public can either develop and
operate the sites, selling the energy at
market rates, or the public may lease
the sites at a rental fairly representing
its natural value" The commissioner
favors the rental system.
The water power OF the country, do
vcloped and practically capable OF de-
velopment at this time. probably does
not exceed 100000 horsepower" Mr.. |
Smith says. The total developed
water-power today Is about 100000
horsepower. The total stationary power
used In the United States-steam, water
and gas-is probably over 100000 horse
power.
The Bureau of Corporations, In its In |
vestigadons, found concentration Of !
water powers. according to the report, in |
three distinct phases. First, there was
a Capitalization OF control In each i'm
portant locality: secondly, large interests
influenced a number Of those local con-
Germs. and finally there was found \ |
growing relationship among the big in