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terprise could be carried on without a proper name, a business office, or even a post-office address. When some of those who speak of water-power trusts are asked to be specific, they do not seem to know the names of any power companies, nor the geographical location of any water powers, unless it be Niagara Falls. Those more exactly informed point to the General Electric Company and the Westinghouse Company,-both of which manufacture electrical machinery and appliances on a vast scale, as the chief culprits in this octopus" game of gathering in all the water-powers.

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Some
Pertinent
Facts

66

There are certain facts, easily ascertained, that the fair-minded reader ought to understand. In the first place, the development of a large water-power is a very expensive undertaking, usually costing much more than the sum originally estimated, and requiring a long period of waiting before the investment makes return in dividends. Such enterprises cannot properly engage the savings of small investors, nor can they look to the resources of people of wealth who prefer safe and stable opportunities for the use of their capital. The reason why the same names appear in the directorates of a number of different water-power and electric companies is because certain men of large resources have specialized in that kind of business, and have initiated or financed different power enterprises in various parts of the country. To assert that these gentlemen are doing harm rather than good, would seem to us a highly fanciful and quite topsy-turvy way of dealing with the facts. There is hardly any other respect in which capitalists can so much. help a particular region directly, and our country itself indirectly, as in finding a great water-power running to waste and harnessing it for the purpose of supplying electric light, electric transportation, and the power that operates factories and mills. To do this work is beneficent because it saves the waste of fuel from our coal beds, which are being too rapidly exhausted; of wood from our forests, which are being too rapidly swept away; of petroleum from those hidden reservoirs that are all too soon pumped out,-besides lessening the toil of thousands of men, women, and children, and relieving other thousands of patient horses from the drudgery that was theirs before the electric age. Indeed, it is a work of saving all

A great deal of discussion has been current in newspapers and periodicals regarding the socalled "power trust" that is said to be buying up all the principal opportunities in the country for water-power development. Some writers are so mysterious and vague in their allusions to this "trust" that the reader who is familiar with practical business affairs might naturally wonder how so large an en- around.

Who Owns

the Power Plants?

If the General

Electric Com

pany and the Westinghouse Company have become interested in the development of power and electric plants where water can be made to operate dynamos they would seem to us to have been showing commendable enterprise. It would be easy, however, to show that in a good many cases this connection has been reluctant rather than eager. These great companies have had to protect their sales of machinery and supplies by taking part payment in bonds or stocks

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ness in financing and engineering projects
that have been of great benefit to the com-
munities within reach of the electric trans-
mission of power. No one can object to in-
quiries, conducted by the Bureau of Cor-
porations, into the ramifications of water-
power control by affiliated corporations or
associated groups of capitalists.
But we
cught in this country to rid ourselves of a
very petty and antiquated sort of prejudice
against the large way of doing business.

or by subsequent acquisitions of title due to or community, have earned the thanks of the the inability of local companies to go on with localities they have entered by their usefulunfinished projects. The Westinghouse Company itself could not escape a receivership in October, 1907,-although perfectly solvent and doing the largest business in its history, because so many of its customers had paid in stocks and bonds. That these properties were justified by a real public need was later demonstrated, and the receiver was discharged on December 5, 1908. But in the interval the banks had been unwilling to carry the load. When such instances are looked into it will appear that these great companies, and certain bankers and financiers in our large cities, far from having insidiously grabbed the water-powers of a given State

Where to Find Remedies

Ours is a large country, with a vast development of wealth. This wealth is so massed and specialized that it can bring to pass great and beneficent results. The remedies against the dangers of monopolistic tendency do not lie in the disintegration of capital, or in attacks upon large associated enterprises. The remedy lies rather in direct regulation and control in the public interest. Let those who have the capital and the ability develop our water-powers. The rivers will continue to flow in their natural channels, and the cataracts cannot be removed Street. bodily to Wall

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TYPICAL SUMMER CONDITIONS OF THE SAME FALLS AS ABOVE

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PRESIDENT TAFT ADDRESSING THE OPENING SESSION OF THE SIXTH ANNUAL CONVENTION
OF THE NATIONAL RIVERS AND HARBORS CONGRESS, WASHINGTON, LAST MONTH
(Sitting. left to right-Mr. Brown, Official Stenographer; Capt. Jas. F. Ellison, Secy. and Treas.;
Albert Bettinger, Board of Directors. Standing, left to right-Capt. Butt, Pres. Staff; W. B. Jones,
M. F. Bryan, Board of Directors, Memphis, Tenn.; Sen. Francis G. Newlands, Nev.; Edw. H. Butler,
Board of Directors, Buffalo, N. Y.; Thos. Wilkinson, Burlington, Iowa; President Taft, Thos. P. Eagan,
Cincinnati, O.; Hon. Jos. E. Ransdell, Pres.; John A Fox, Special Director; Rev. Geo. Alexander,
LL.D., New York City; Col. John I. Martin, Sergeant-at-Arms)

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itself through the principle of taxation. If, in addition to the principle of taxation, the national or State government uses the principle of the lease with periodic revaluing, there can be no possible danger to the general interest. The conservation of so many other things depends upon our utilizing water-power that the burden of proof should be wholly upon those who would do anything to check or retard the building of dams and the electrical transmission of power.

The water-power company will always capital necessary for development and by be dependent upon the patronage of the large outlays for machinery and plants. Any region tributary to the particular water- future "unearned increment" appertaining power in question, even more than the com- to the monopolized control of water-power munity will ever be dependent upon the is always within grasp of the community company that develops and sells the power. If Mr. Ballinger's principles of regulation and control are accepted by Congress, as they ought to be in the present session, we should have an end of the talk about a power trust invading the public domain. If the principles that the New York State Commission proposes to practice, with the sanction of the Legislature, should go into effect, a fine example would be set that other States could follow. Every State for itself would have it in its power from time to time in the future to protect its people from any possible encroachment by a trust or combination exploiting the power of streams as a commercial resource.

At the present time, generally Encourage the Use of speaking, water-powers have very Water-Power little value beyond that which the developing companies create by risking the

Navigable
Rivers and
Power Control

There is an interesting question under discussion touching the right of the federal government to control for purposes of water power those streams which it clearly controls for purposes of navigation. We have in our hands a very suggestive and interesting brief by Mr. Edward B. Burling, of Chicago, upon the legal and constitutional

17

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right of Congress to control water-power developed in navigable waters of the United States. The brief is addressed to Dr. Charles While W. Eliot, who is president of the National Conservation Association.

recent

opinions by Attorney-General Wickersham seem not to have gone so far as Mr. Bur's argument carries him, it does not folling's low that if Mr. Wickersham were addressing himself to the same exact question he We are about would arrive at a different result. It is not merely an academic matter. to enter upon very large policies in the way of improving our navigable streams at an immense cost to the country. It is well worth while for Congress to understand the full limit of its authority over every phase of waterway development. Last month's Waterways Conference in Washington, attended by thousands of delegates, helped in its measure to complete the outlines of the great policy that is to begin with regulating the Mississippi River and its chief tributaries. Mr. Saunders has written an article for us on this movement, which will be found on another page of this number of the REVIEW.

Mr. Meyer
and Naval

One of the most interesting of Mr. the annual reports is that of the Reform Secretary of the Navy. Root, while Secretary of War, brought about a reform of army organization which will remain to his credit as a lasting achievement in statesmanship. What Mr. Meyer as Secretary of the Navy is now bringing to pass in the matter of a reform of method in the direction of the Department's work bids fair to rank as importantly as Mr. Root's army reforms. Mr. Meyer has an admirable head for business, and a trained habit of proceeding directly to the securing of essential things. Thus he is gaining a place among the very ablest public administrators we have known for many years.

SECRETARY GEORGE VON L. MEYER

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Under general direction of the
Secretary, our navy business is
henceforth to be run by naval
The work falls into four logical de-
men.
partments, namely, material, personnel,
fleet operation, and inspection. The Secre-
tary of the Navy is to have four advisers,
each of them a Rear-Admiral, and each rep-
resenting one of the four departments. The
have to be cleared through the Secretary's
bureaus will be grouped and arranged under
these headings, everything important will

Navy Department a series of bureaus deal-
ing with different branches of work, such as
construction, equipment, personnel, navy
yards, and fleet operation, that were so de-
tached from each other, and so discordant
withal, as to make life miserable for the head
of the department, while also hampering
greatly the efficiency of the one thing for
which the Navy Department is supposed to
exist, namely, the power of military de-
Mr. Meyer is not so
fense and offense.
much getting rid of the bureaus and their
officials as he is finding a way to subordinate
them to the main object in hand.

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quadrilateral board of advisers, and the oldtime clashes and conflicts will necessarily disappear. An efficient organization of the Navy Department will not be liked by some of the bureaucrats, who will have to take their proper places, nor will it wholly please one or two well-known Senators, who have long imagined themselves the real rulers of Uncle Sam's navy,-more or less in the interest of certain small navy yards and local industries. But Secretary Meyer is so thoroughly right that his reforms will have general public approval; and it is not to be believed that Congress will obstruct improvements for which we have waited so long.

The announcement was made Ambassadors. last month that Ambassador Reid

Our

would remain at London for a year or two longer, that Mr. Hill would remain indefinitely as Ambassador at Berlin, that Mr. Richard C. Kerens, of St. Louis, would be sent to Vienna, and that the Hon. Robert Bacon, recently First Assistant Secretary of State, would succeed Mr. Henry White as our Ambassador to France. We have elsewhere spoken of the selection of an Illinois lawyer, Mr. Calhoun, as Minister to China. Mr. Henry Lane Wilson is to be transferred from Brussels to become Ambassador to Mexico.

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