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REPORT OF
**** Water. ommission
A ppointed by the
Governor
*
By Order of a Resolution Adopted by the
Legislature of 1913

INDEX TO REPORT
Underground Waters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Coal—Base of Power—Water Wheel . . . . . . . . . . . . . . . . ... 5
The Capacity of the Streams of the Country for the Pro-
duction of Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Fuel Saved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Developments of Water Power—Examples of . . . . . . . . . . . . 10
Concentration of Water Power. . . . . . . . . • • - - - - - - - - - - - - - - 17
Monopolistic Character of . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
The benefits of this Cheap Power Should be Secured to
the People . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Who Owns the Rivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
The Rivers of Nebraska—Possibilities for Power......... 24
Water Power Privileges Allowed. . . . . . . . . . . . . . . . . . . . . . . 28
Present Law of Water Power in Nebraska. . . . . . . . . . . . . . 29
Value of Water Power Beyond Comprehension. . . . . . . . . . 31
Illustration of Saving in Case State Owns. . . . . . . . . . . . . . . . 32
Cities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Fixed Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Rentals for Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Full Development—Speculating in Power Sites. . . . . . . . . . 40
Taking Over at End of Term—Compensation... . . . . . . . . . 42
Public Ownership . . . . . . . . . . . . • 0 e º º º e º & tº tº dº e º e º 'º e º 'º º t e º 'º 42
Proposed Legislation—State Ownership . . . . . . . . . . . . . . . . 49
Legislation Regulating Development by Private Persons
or Companies . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . 5]
To the Honorable Members of the Thirty-fourth Session of
the Nebraska Legislature:
The commission on water power appointed by his excel-
lency John H. Morehead in May, 1914 to inquire into the sub-
ject of water power and make report thereon and recom-
mendations as to basis of law upon the subject protective of
the people's interest in that great problem, to the legislature
now in session, beg leave to present to the legislature our re-
port and recommendations accompanying the same on that
subject. -
For centuries the water wheel was practically the base of
power for industry. Steam power, invented a century ago,
drove the water wheel out of the field. Industry must be
brought to the water power. Steam power could be brought
to the industry. Here is where steam triumphed. But water
power has come back, so to speak. An invention, the
dynamo, operated by falling water, creates electricity which
can be sent hundreds of miles from place of generation to
operate factories, mills and mines, move trains and street cars
and vehicles upon the public highways, operate the drag, the
threshing machine, the reaper and mower upon the farm and
besides, light and heat cities, towns and farm homes. It does
all these things in Germany, Switzerland and other European
countries where water power is fostered and carefully con-
trolled in the interest of the people. There is not a thing
done by steam power today that water power cannot do for
us and one hundred per cent cheaper. This power sleeps in
our rivers. Shall we call it forth and set it to work for the
people or will we let private monoply own and set this great
resource to labor for it to make profits and exploit the
people?
It is a great problem, becoming daily more so. Depleted
wood and coal supply will make it the greatest factor in all
the world. Today it is sixty per cent of all power in the
western states. Its cheapness, its promise of perpetuity, its
capacity of being transmitted hundreds of miles from a com-
mon center, the exhaustion of coal etc. invite water power
companies to efforts to own and control this, our remaining
natural resource. Shall we allow monoply to own and con-
trol this power and through it to control industries and the
lives of our people.
Our report shows the available power of the rivers of the
state and nation. The concentration of water power now
going on; inadequacy of the present laws to safeguard the
interests of the people in this resource; how other nations
deal with the subject. Some, Italy, France, Switzerland, give
but concessions of thirty years to private monopolies, reserv-
ing compensation and right to take over after termination of
period. Other countries own their water powers—Germany,
Sweden, Canada and New Zealand are among these.
Our report urges public ownership of power sites and de-
velopment of power for the people and founds this view upon
the presence of a universal and deep seated conviction of the
people that ownership of natural resources by private mo-
mopoly is a crime against humanity. Our report contends
that giving our rivers over for exploitation to private mo-
nopoly is utter disregard of their interests. The wrong of
private monopoly can be no longer concealed from the people.
Their intelligence sees through the mists of sophistry and
sham which surround and uphold this tyranny and keep it in
power.
If the legislature will not adopt the policy indicated but
yields to the habits of the time and gives this resource over
to private monopoly to make profits for stockholders, our
report in that case, reminds the legislator that perpetual fran-
chises may do in Mexico; they are not suited for Nebraska.
It favors a fixed term with compensation to state for property
of the people and reversion to the state of power site and
plant at end of term. It demands prohibition of assignments
of franchises before development. It requires full develop-
ment of all power available at power site. These will pre-
vent speculation in power sites and also render operator un-
able to increase prices or to limit supply. Other features of
equal importance are recomended by the commission—over-
, 2
capitalization is to be prevented as necessary for protection
of the people from unjust rates and prices.
The interests of the people are chiefly thought to be con-
served by this report and any conservation of the resource of
the people that does not take the people into account is a
sham. The people own the rivers. This fact must not be
lost sight of in any solution of this great problem. The peo-
ple must be the water lords.
Respectfully submitted,
J. J. McALLISTER,
C. H. GUSTAFSON, Chairman.
Secretary.
UNDERGROUND WATERS.
The conservation of the waters of the state is a question
for the state. One of our greatest assets, the fertiity of the
soil, and the life of the people are dependent on our water
supply. Water power, derived from running streams, is,
after all, secondary to the use of water for agriculture; and
the effect of canals, ditches, reservoirs, on the underground
Waters, is one the dealer in dividends takes no interest in.
But it is of first importance to the people. Underneath the
surface of the earth is a vast reservoir of water, likened to a
vast lake. Many states have experienced alarming recedence
in the level of this underground water, and much money
has been spent, by many states, in ascertaining their habits.
In some states, these are tapped and wasted, and legislation,
to prevent this, enacted, California, South Dakota, Canada,
are examples of those states interesting themselves in this
important matter. -
This ground water is the base of agriculture; supplies
Our springs and wells, used by our people. It would be
imprudent to ignore the claim upon our attention of this
source of our wealth and happiness. It is easy to divert
water courses so as to allow much of this underground water
to be lost, and, cause permanent damage to a large extent
of territory. What effect, as intimated, the development
of water power, requiring ditches, canals, diversion of streams,
in the country tributary to the Loup, Platte, and Niobrara
rivers, where this industry is proposed to be developed, will
have on such territory, we are unable to say. There are
no data on which to base a conclusion. The state has made
no inquiry or experiments into this phase of this great ques-
tion. :
We can not go to the promoters of power, and water
power sites for information. They are interested in dividends
and profits. If they can reduce the natural resources of
the people to these ends, they have achieved their ambition.
So, in this state of the case, we take no further notice of
this topic, only to remark, that it is one of significance to
4
the people; and one to which the state should give its imme-
diate attention. We take up the question of water power.
(Can. Commission Report pp. 2-5.)
COAL–BASE OF POWER—WATER WHEEL.
The base of all power for the industries of the country,
until very recently, has been coal, and is largely so yet.
Our coal deposits are being exhausted. More than 350,-
000,000 tons are yearly consumed in the production of power
by steam boilers. This year’s production is placed at 565,-
000,000 tons by Edward W. Parker, statistician of Geological
Survey department at Washington; being an increase of 30
to 40 millions over last year’s output. It is calculated the
supply of anthracite coal will be exhausted in 70 years. (Sen.
Doc. 469, 62d Cong., p. 39.)
In the presence of this threatened exhaustion and coal
famine, it is gratifying to know, that, a never ending and
universal source of power for the industrial world is deriv-
able from the rivers of the nation. In the days of Paroah,
the simple water wheel did duty in the river of Egypt, and
its music was heard on the Jordon before Joshua led the
Israelites thither. In Greece and in Rome it furnished
power for the simple industries of these states from earliest
times, and from thence it found its way to western Europe.
The Pilgrim Fathers brought it to the new world. In every
age, in every clime, the water wheel, with its coadjutor,
falling water, did service for humanity. It has been over-
shadowed since 1775 by steam power, produced from coal ; but
now it has come back to assert its ancient prestige, as a
sure, safe, perpetual and all sufficient agency of power for
the industrial world.
An invention—the dynamo–driven by waterpower, con-
verts the energy expended in driving it into electrical energy,
of the current form. This force, thus generated, is gathered
by other devices and carried on wires hundreds of miles from
place of production or generation over an area Senator
Barton says, greater than the six New England States and
four Middle States. Hydro-electric energy, thus developed,
5
may be utilized to operate railroads, street cars, factories,
mines, elevators, threshing machines, saw mills, grist mills,
all industries dependent on machinery; and in addition give
light and heat to city, town, and country. One might say
it is a miracle. It is miraculous. It is, however, a fact.
It illustrates, anew, if further illustration were required,
that when God laid the foundations of the earth, he filled
it with everything requisite to the existence and happiness
of the human race. This is faith, it may be said. But with
Pasteur (himself one of the greatest scientists), we would
wish for the faith of the Bretom woman who knows that
when one source of sustenance is taken away, God will
provide another.
Water power is an established fact. The investment, by
a Boston company of $20,000,000 in damming the Mississippi,
at Keokuk, Iowa, is evidence that the capitalist, the stock-
holder, and the scientist recognize its advantages, its power.
It is proposed, by the new electrical device referred to, to
send hydro-electrical energy, produced from falling water,
at Keokuk, into the cities, towns, and villages of Iowa, Illi-
nois, Missouri, Ohio, Indiana, and Kentucky, to operate
mills, factories, street cars, and railroads, and furnish light
and heat, besides to hundreds of thousands of homes—a
miraculous accomplishment, reflecting eternal honor on the
son of toil who invented the agency through which this
miracle is realized. Will the people receive the benefit?
In the past, the industry to be affected by water power,
must needs be brought to the immediate vicinity of the power.
In case of steam power—that could be brought to the in-
dustry, whether in city, forest, or in mine." Here is where
steam power triumphed over water power in the past.
This advantage is now overcome. Hydro-electric energy,
like the voice through the telephone, can be carried, as we
have said, hundreds of miles to the industry sought to be
operated by it; whether in city, or in forest; up in the
mountain; or in the mine, under the earth. It has become
in a night the master key of the industries of the world.
Steam power is eclipsed. In a few generations it will be a
thing of the past. Even now, of the 30,000,000 horsepower
6
used in the industries of the country, water furnishes one-
fifth. This in a short period of ten years.
The people are not awake to the importance of water
power. The stockholder, the capitalist, and the monopolist
are awake; they are rummaging the rivers of the earth
for waterpower sites. They own the coal now, they want
the nation’s water powers. They want to control industry.
This will give them control of humanity. An inordinate am-
bition. What will the statesman do? Will he keep the re-
sources of the people for the people? Or will he turn them
Over to capital?
THE CAPACITY OF THE STREAMS OF THE COUNTRY
FOR THE PRODUCTION OF POWER.
The Hon. W. J. McGee and Marshall O. Leighton, place the
available water power of the country, with conservation,
through reservoir system, at 230,000,000 hydro-electrical horse-
power; more than the nation will ever need in its industrial
career as long as the earth stands. Of this vast potential
energy but about 7,000,000 horsepower water is now generated.
The industries of the country consume from 26 to 30 million
horsepower in their operation. Clyde Wright, of Lincoln,
Nebr., whom the writer regards as one thoroughly informed
on this subject, states that there is many times more water
power in the country than will ever be needed; and now avail-
able, many times more power than is needed for all the indus-
tries now in operation, if every engine and boiler were re-
duced to “scrap.” We believe these statements. (Cons.
Cong. Rep., vol 1, p 41.) #
‘‘The theoretical power of our rivers is reckoned by the hy-
... drographic department of the government, at 230,000,000 horse-'
graphic department of the government, at 230,000,000 horse-
power. The amount of water power in use is 6,000,000 horse-
power, and that running over government dams and not used,
is 1,400,000 horsepower. The amount available at cost com-
parable with that of steam installation is 37,000,000 horse-
power; and the amount prospectively available is 75,000,000
horsepower. The 37,000,000 now available, exceeds our en-
7
tire mechanical power now in use, and would operate every
mill and drive every spindle, propel every train and boat, and
light every city, town, and village, in the country. The nomi-
nal value is $20 per horsepower. Steam power ranges from
$100 to $150.” (Sen. Doc. 274, p. 274; Cons. Com. Rep. 1909,
vol. 1, p. 41, McGee.) y
“Every river in the United States capable of delivering hy-
dro-electrical energy is increasing in importance daily. Each is
the source of an actual or potential supply of “white coal.”
Their ownership and control is a question of vital importance.
Private interests are trying to control them. An able school
of attorneys maintain that the states, not the nation, should
control water powers. Behind this theory are the power trusts.
They can manage the state easier than the national govern-
ment. Big power companies are stealing the powers of our
rivers under the nose of the states.” (IC. & C. 689, Vol. 19, No.
10, March, 1913.)
FUEL SAVED,
It is evident that the development of this water power, and
its application generally, to the uses now compassed by steam
power would, not to speak of other patent advantages, cause
a great saving of coal. Countries that have no coal, like
Sweden and Italy, are eagerly taking advantage of the new
power, and are forging ahead in the commercial and industrial
world.
“Under the most efficient conditions of steam electric gen-
eration yet devised, it requires seven tons of coal to generate
one horsepower year; while, under average conditions, from
twelve to fifteen tons are required. About 340,000,000 tons
are, now, yearly consumed in production of steam and steam
electric power. And of the latent energy of coal so consumed,
only from 5 per cent to 12 per cent is actually transformed
into dynamic energy.” (Sen. Doc. 469, Rural Rept. Water-
way Com. p. 40 (1912).
Other authorities speaking on the matter, fix the tonnage of
coal, requisite to produce the motive power, now used in the
industries of the nation, at a greater amount. Lewis B. Still-
8
well, (engineer Am. Inst. Elec. Engineers, Sen. Doc. 469, p. 40,
note 1) states “that twenty-one tons of coal are required to
produce one horsepower year, ten hours a day, or fifty tons
for twenty-four hours service. This he bases on the usual
practice of steam boilers. At page 32, Sen. Doc. 274, this
gentleman states, ‘‘that, with the average steam practice today
(1912), utilization of water power to the extent of 35,000,000
horsepower, would save in coal 600,000,000 tons per year.”
If we figure coal at $5 a ton, this would equal a saving of
$3,000,000,000. Edwin B. Taylor, representing the electrical
chemical industry before the waterways commission, 1912,
Sen. Doc. 274, p. 26, says, “that water power is the cheapest
known means of producing electricity and should always be
preferred to coal. One developed horsepower water is equal
to the saving of twelve tons of coal per year. In many
places coal is worth $5 a ton.’’
John D. Ryan, president of the Great Falls Power company,
Montana, before the same commission, at pages 139 and 143,
of the same document, says, “that steam power costs $100
per horsepower in Montana; that it takes seventeen and one-
half tons at $5 a ton to produce one horsepower year; that they
have 2,000,000 horsepower water available in that state; that his
company develops 100,000 horsepower water and sells it at
$40 per horsepower year. So that replacing steam power,
there, with water power, saves $6,000,000 a year and 1,750,000
tons of coal yearly.”
“This company in addition to other uses for their water
power have undertaken to supply the C. M. & Puget Sound
Railroad company with hydro-electrical energy to move its
trains over 450 miles of its lines in the Rocky mountain re-
gion.’’—Sheldon.
In the United States, then, there are over 500 millions of
tons of coal mined annually, and half again as much, it is
said, lost in the mines or wasted in shipment. A tremendous
yearly drain on our coal supply. By use of water power, to
the extent of coal produced power, we would save at least,
400,000,000 tons annually. A few generations will see our
coal supply exhausted. -
DEVELOPMENTS OF WATER POWER.
Examples Of.
The importance of the new industry, water power, is visible
everywhere in the interest taken by power companies in it.
It is not confined to the United States—this interest. Syndi-
cates are retaining experts, graduates of colleges and univer-
sities, and sending them over the earth, into all lands, to
discover power sites. All the rivers of the world are under
examination. In Europe, Australia, Canada, South America,
Mexico, the United States, and even in our own Nebraska,
capital, syndicates, trusts, looking for sources of eternal reve-
nue, from the heritages of the people, are busy. They are
looking over the Loup, the Platte, the Niobrara and wish to
reduce these streams to their control.
Of examples of development, we must furnish one from un-
happy Mexico, our neighbor to the south, the hunting grounds
of the capitalists of the old and new world. At Nacaxa,
northwest of the city of Mexico, is a wonderful water power.
The water falls 1,600 feet. Frederic Pearson of Boston, ‘‘the
wizard of electrical enterprise,’’ seeing the possibilities of
these falls, obtained for his company, from Mexico, a perpe-
tual franchise in this power site. The game was easy. Fifty
million dollars has been spent on the enterprise, and fifty more
is at hand. I understand the courts of Mexico regarded the
terms of the grant as harsh and slavish ; but Diaz overruled
the court. What was a perpetual franchise to him 2 What
were the people to him? (Bul. Pan. Am. Union, p. 1040.)
To make provisions against dry seasons, and secure con-
tinuous flow for power, more than 150 streams are drawn, by
canals, into a series of reservoirs, covering 6,000 acres, of ca-
pacity of 5,000,000 cubic feet of water. The plant has six
generators of 8,200 horsepower each; four generators of 16,-
000 horsepower each. There is now developed (1912) 120,000
horsepower; another power house in the course of construc-
tion will add 140,000 horsepower. It is aimed to furnish
power for the Eloro mines, 200 miles away; light and power
are furnished for the City of Mexico; and with the comple-
tion of auxiliary power houses now under construction, towns
10.
will be lighted, street cars will be operated; mines will be
opened, and factory wheels will revolve throughout all central
Mexico; and this industrial awakening will spring from the
water power of Nacaxa. A perpetual source of revenue for
foreign capital. The water power was intended by nature for
the Mexican people. It is harnessed by a Yankee firm of
Boston, with its stockholders in Downing street London.
They will levy eternal tribute on the unfortunate Mexican.
Over in Norway, the people are alive to water power. Near
Christiana, a development of 400,000 horsepower is in progress.
Norway gives limited term only, and imposes rentals for
water privileges. Those who use streams for commercial pur-
poses derive special privileges therefrom and the good-sensed
Norseman insists on pay for this privilege. Cost of producing
power, there, does not exceed $2.70 per horsepower with fixed
charges of $6. (Sen. Doc. 274, p. 65.) 5
Italy has no coal. She is rushing on to development of
her “white’’ coal. Recently an American editor of Des
Moines, writing from there stated that only in Milan, of all
the cities of Italy, did he see smoke arise from factory chim-
neys. Water power is universal in Italy. The rivers are
carefully controlled. In 1909, 805,675 horsepower water was
developed there. Italy’s income from rentals for privilege
for power sites, was in 1909, $475,005. It is more now. She
is rushing ahead in industrial activities. (Com. Rep. No. 134
Washington, Dec. 9, 1910.)
Sweden, lying far up under the seven stars, was an agri-
cultural country; her industry and honest citizenship pros-
pered in that, the first of callings. She is prospering now
in the commercial world. She has no coal; and she had no
factories therefore in the past to speak of. But now, her
water power possesses more than the energy of “coal of New-
castle;’’ and is very much cheaper. She owns and she de-
velops her own water powers. She has not turned them over
to capitalists. She believes what others can do for her citi-
zens, for a price, she can do for them herself, better and
cheaper too. She owns 127 power sites in which no selfish
corporations have a part. She has installed 80,000 horse-
power at Trollhatten; she is entering the lists with the
11
favored nations in Europe in the commercial and manu-
facturing fields. Her “white” coal, “that she owns her-
self,” is working for her well. In ancient times the Norse-
man conquered in the field of battle. He is conquering now
in the field of industry and progress. He is making wise use
of the forces of nature to aid his efforts. He is not depend-
ing on the patriotism of selfish corporations to develop these
forces for him and sell their products to him at big prices.
No 1 (Cons. Rep. No. 6, Washington, July 11, 1913, R. 75.
Prussia, the seat of philosophy and modern technics, as
applied to industries and practical affairs, is ridding herself of
monopoly. The Prussian is nothing, if not wise, progressive,
tactful. It stands him in hand to be so, in the face of mod-
ern struggles for supremacy in commerce, markets and prog-
ress. Prussia, long ago played with monoply and private
ownership ; and the wisdom that outwitted the invader of her
shores in ancient times, enabled her to outwit also, in these
later times, the cunning of selfish interests and all their
blandishments. To the new industry she is alive and eager
to derive the full benefits thereof for her people. In 1913,
she got rid of the “water lords’’—she wiped them out so to
speak—so far as she was concerned. She took over all water
power sites, and she owns her rivers and their powers; and
she is developing them extensively. “She believes she can
serve her people better than can corporations or syndicates.”
Her law of 1913 “covers the whole field of the use,
maintenance and improvement of inland waters.’’ ‘‘She
owns them and the right of improvement of them,
including water power.” She has water powers and
transmission lines all to herself. Such is her estimate of the
value of water power. It is the key to her industrial activity;
and she must hold the key. She has to face the commercial
activity of England, and water power that enables her to do
so by giving her cheap power, she will entrust to no one but
herself. Strange policy under the eye of royalty and ancient
privilege. ( Cons. Rep. 117, July 31, 1913, pp. 616-17.)
We have seen the activity in water power development in
Norway, Sweden, Italy, Prussia, and Mexico. How in Sweden
and Prussia the governments hold it in their own hands,
12
while in our neighbor south of us, perpetual franchises are
obtained by private companies. We could advance the ex-
amples of other European nations—France and Switzerland—
and the guarded care, and regard these countries give the
subject of our report—water power; but we refrain. Enough
is said to show how it is regarded in Europe. We will turn
to its development at home, in our own country.
The Niagara river—its falls have challenged the attention
of the world. The nation is interested in these falls. They
lift up the mind and soul of him who gazes on them, not al-
together in wonder, but in a spiritual sense to the Infinite
Architect who created them. Millions visit them yearly.
From the four corners of the earth the lover of the beautiful
and sublime come to Niagara. It ought to be saved for its
scenic grandeur—but no, the selfish eye of capital covets its
possibilities for commercial purposes. Its power possibilities
have been surveyed and estimated. The greatest engineers
of the nation have been engaged. Commerce is invoked.
Idealism is set aside. The Falls must be harnessed. (Can.
Com. Rep. 1911, pp. 75-95-97.)
The Ontario Power Company installed a power plant gen-
erating 240,000 horsepower. It furnishes power for factories,
the farms, and the cities of Ontario at $9.50 per horsepower
at the plant. Ontario puts in the transmission lines and
brings power, light and heat to cities, factories, and farms .
of that province.
The Niagara Power Company develops 200,000 horsepower.
It furnishes the cities and towns of New York state as far east
as Syracuse with cheap power, light and heat. It is a New
York enterprise. Its franchise is for fifty years, from March
1886. There are many other developments at Niagara Falls.
The reader is referred to the report of the conservation com-
mission of Canada, 1911, p. 93 et seq., a report and a com-
mission from first to last that has kept the interests of the
people of Canada in view. The Canadian motto is “the
water powers of Canada must be free as air.’’
The Southern Power Company has water power develop-
ments at many points in North and South Carolina (near
Rockhill, Great Falls, and Rockford) aggregating 300,000
13
horsepower at a cost of $15,000,000. From its plants, in dif-
ferent water sheds, radiate lines in duplicate. It has now
4,000 miles of high tension wires in service. They radiate
from Greenville, South Carolina, 100 miles southeast of the
center of the system, to Durham, North Carolina, a distance
of 300 miles, with network of wires “tying up’’ all these
plants. This company owns street railways in Greensboro,
North Carolina, in Charlotte and Anderson, in Greenville as a
part of their proposed 500 miles of interurban railway. (Sen.
Doc. 274, pp. 61-2-3-66, 69.)
It operates 160 mills; it lights fifty cities and towns; it
operates street railways of several cities and it contemplates
building 500 miles interurban railroad which it will operate
with water power. -
In Georgia is the Georgia Power Company doing like
service in that state as the Southern Power Company is doing
in North and South Carolina. It has plants in Etowah, Chat-
tahooche, and Savannah rivers. The price of power is governed
by the price of coal.
The Southern Power company in a region well occupied by
steam power has a load of 100,000 horsepower water which
sells at $22 per horsepower year, eleven hour day.
In Great Falls, Montana, is a power company of that name,
furnishing a vast extent of power from the Missouri river.
It moves the C. M. & Puget Sound railway trains over the
mountains for a distance of 450 miles in addition to fur-
nishing power, light, and heat, for mills, factories, cities and
towns, for hundreds of miles around the plant. Steam power
sold there for $100 per horsepower year; water power, sup-
planting steam, sells according to Jno. D. Ryan, president of
the company, for $40 per horsepower. This gentleman testi-
fied, which testimony is heretofore alluded to, that seventeen
and one-half tons of coal at $5 per ton was necessary to pro-
duce one electric horsepower year. -
In Fresno county, California, at 7,000 feet elevation is a
wonderful development. The outlet to Big Creek has been
drained, the waters gathered forming a great lake or reser-
voir. The water is carried in a tunnel through the mountains
to a canyon. two miles below, where stands power house
14
No. 1, which will utilize the water in its fall. Used there, it
will be discharged into another basin and thence through
another tunnel 2,100 feet long and be discharged into the pen-
stocks of power house No. 2, with a fall of 4,000 feet. These
two plants will supply light, power and heat for Los Angeles,
250 miles away. In the construction of this plant fifty-six
miles of railroad were used, twelve camps were maintained
along Big Creek for tunnel men, dam men, concrete workers,
etc. Schools, playhouses, moving picture establishments,
churches and club houses were installed. The camps were
like towns, they carried on the work night and day. Most
of the power used in construction was hydraulic, carried on
temporary wires from a plant in Crane Valley. Tunnel drill-
ing and great cranes on various dams was worked by electricity.
(St. Louis Globe Dem., April 20, 1913.)
What evidence of the importance of this new industry and
of faith in those who undertake its development ' The power
will be used to move trains, street cars, every form of ma-
chinery needing power, light and heat, for the whole state of
California. This source of power will control the fate of all
the industries in that state in the future. Will the fate of
California be in the hands for all time of a few water power
lords?
In Oregon, on the Salmon river, is a power plant for Port-
land; one at Grace, one at Oneida, Idaho for Salt Lake City.
Many more developments of water power could be cited,
but we will but refer to the power at Keokuk, Iowa, and one
at Passaic Falls, New Jersey. In the latter place, at Patter-
son, New Jersey, the Passaic Falls there are devoted to power,
second only to that at Niagara Falls. It operates 100 silk
mills in Patterson and adjoining country. There is power
for street cars and other conveniences of Patterson, and it is
contemplated developing power enough here for the whole
state of New Jersey, for all its industries, and for light and
heat for city, town, and farm. This is the present purpose of
those who own this water power system.
At Keokuk, Iowa, is a power to challenge the attention of
the world. The power house is a monster—1,718 feet long.
The dam from the Illinois side to the Iowa shore of the Mis-
15
sissippi is nine-tenths of a mile long. This is what is known
as a strategetic site—controlling the markets of three states;
and according to high authority of six states; Iowa, Missouri,
Kentucky, Indiana, Illinois, and Ohio. The dam is fifty-three
feet high; forty-two feet wide at bottom; twenty-nine at top.
The power house has twelve chambers, thirty-nine feet in
diameter each, and thirty turbines develop 300,000 horse-
power. It will furnish power for cities within a radius of
400 miles. St. Louis takes 60,000 horsepower for its use at
$1,000,000 a year. Thus the mighty Mississippi, the Father of
Waters, the pride and glory of the nation, is harnessed by
private corporation, to turbine wheels and generators, dis-
tributing its mighty power over 100 cities in the most efficient
section of the United States, near transportation routes to
the Panama Canal and the states of Central and South
America. (Pan. Am. Union Bulletin, 938, et seq.)
Gilson Gardner says the franchise for this privilege is per-
petual and without compensation. St. Louis pays a million
dollars for 60,000 horsepower yearly, under contract running
for 999 years. This is 5 per cent on the investment of $20,-
000,000, the cost of the enterprise. The total power developed
is 300,000 horsepower; on the same basis for balance of power,
the income of Stone and Webster of Boston, the owners of
the plant, would be a profit of 25 per cent per year on the
investment forever, without a farthing in return for this great
privilege. The company will run power lines into Illinois,
Iowa, Indiana, Ohio, Kentucky, and Missouri, and perhaps
farther.
Continuing Mr. Gardner says: “The water problem will be
brought home to all sooner or later. The use of power in a
few years will become a daily problem, to the men on the
farm, the woman in the home, and the workman in the shop.
Depleted wood and coal supply will make hydro-electric
power the greatest factor in the power world. Today it is 60
per cent of all the power used in the western states. The
General Electric Company and Stone & Webster recognize all
this.’’
We agree with most of the views of Mr. Gardner, but we
doubt his statement that the franchise to the Keokuk power
16
site is perpetual. If such were the case our faith in Con-
gress as a true representative of the people would be shat-
tered. The act of congress giving this right to the Keokuk
Power Company provides that it is subject to amendment,
and even to repeal. This in a measure secures the people,
though it gives the company too great advantage. It is easier
to prevent legislation than to obtain it. It will have mil-
lions to maintain a lobby. But Americans will allow no
tyranny to stand between them and freedom and happiness.
We have absolute faith that the people will set things right.
The Mississippi will not always work for Stone & Webster.
It shall be free and will work for the people. No puny stock-
holder can ultimately reduce the river of the people to his
service and control.
CONCENTRATION OF WATER POWER.
Herbert Knox Smith, before the National Conservation Com-
mission in Washington, in 1908-9, declares “the recently de-
vised means of transmitting hydro-electric energy for hun-
dreds of miles from the place of generation has led to concen-
tration and monopoly of power sites. The General Electric
Company, the Westinghouse Company, and their subsidiary
companies owned already in 1908, of water power developed
and potential, 1,879,000 horsepower, or 40 per cent of the
whole power then in use. The best sites, strategetic points,
were taken up fast as possible for their large power and mar-
ket control. Should these powers be coupled and tied up
there is danger ahead for the people.’’
Before the opening of the Keokuk enterprise in 1913, Stone
& Webster of Boston, its owners, had a total of 278,000 horse-
power developed, and owned undeveloped 372,000 horsepower
additional. This made for this company developed and un-
developed 950,000 horsepower. It is connected with the Gen-
eral Electric Company, so is H. S. Dougherty, who is in the
power promoting business in Nebraska.
Gifferd Pinchot before the Conservation Congress at Wash-
ington, November, 1913, states, ‘‘that ten groups of power
interests control 65 per cent of all the developed water power
17
in the United States; that the rapid growth of concentration
and control is more striking than the amount of it.” Two
years ago the ten greatest groups of water power interests
controlled in round numbers, 3,270,000 horsepower, developed
and undeveloped. Today, (November, 1913) the ten greatest
groups control 6,270,000 horsepower. Thus the amount has
nearly doubled in two years. The water powers, held, unde-
veloped, by the ten greatest groups of power companies are
larger by one-third than the developed powers controlled by
them. Great effort to get hold of the water power sites of
the nation has been made within a few years, and is being
made today, everywhere by water power syndicates. The sit-
uation presents conservation in form of a fight against mo-
nopoly. That is what conservation means if it means any-
thing—keeping our resources free of monopoly. A prime
necessity, in the interest of the people, is to prevent specula-
tive holdings of water powers unused; and force prompt and
full development of the vast aggregation of power resources
now held unproductive, under concentrated private control.
If we take the valuation of $45 per horsepower the water
powers now held undeveloped in the control of the ten great
groups of interests represents a total annual loss to this coun-
try of $160,000,000 worth of power. No right to use a public
water power should ever be granted unless the grantee can
show that he or it controls no water power not developed or
in the process of development.” (Pinchot Water Power Rept.
5th Cons. Cong., Wash. November, 1913.)
MonoPolisTIC CHARACTER OF.
Water power is monopolistic in its nature. It is founded in
natural resourcés, stream flow, private ownership of site, and
markets for its products. It is gigantic mechanically, it re-
quires tremendous sums of money in its development. It is
an undertaking for the state or nation. Other countries so
recognize it. It involves the work of gauging streams, making
surveys, records of stream flow, study of underground waters,
and how these are likely to be affected by water power devel-
opment. In Oregon, the state in union with the federal gov-
18
rnment, spent recently $64,000 (in 1909) in gauging, survey-
ing, drafting and compiling information relative to the Salmon
river in Oregon. Water power is a monopoly, must begin as
a monopoly, it does not tolerate competition. If power sites
are not developed as a monopoly, they will not be developed
at all. No institution, like a water power, fits into a com-
petitive system. For the state to undertake the work is as
fundamentally necessary as the task is difficult, involved and
essential to the prosperity of industry and the convenience and
comforts of the people.
The people own the rivers of the state. Any solution of the
water power problem must take this into account. The people
must be the water lords. When water becomes the source
of power, ‘‘the monopolization of electricity produced from
running streams, involves monopoly of power for transmis-
sion of freight and passengers, light, heat and other domestic
and agricultural and municipal necessities, like coal, gas, heat,
mechanical power, from falling water, is a necessity of mod-
ern life. Control over a necessity of life is control over the
people who must have that necessity. Private control over
any necessity means control over the people without respon-
sibility to the people. It means the "power to increase the
cost of the necessities of life.” The great men of the nation
advise legislation preventing monopoly of this resource; and
the conduct of other nations emphasize their views. (Sen.
Doc. 274, p. 148, Pinchot Before Wash. Cons. Cong. November,
1913, Rept. Cons. Cong. November 1913, pp. 35-46.)
Water power is a necessity. It is monopolistic in its nature
and the state should own and operate it. This policy will
neutralize the efforts of syndicates and trusts who are now
trying to control water power and who are searching the
rivers of the earth for power sites. It is a question state and
national in character, one for the people to engage in and
control. (Sen. Doc. 274, p. 148.)
19
THE BENEFITS OF THIS CHEAP POWER SHOULD BE
SECURED TO THE PEOPLE,
Water power is the cheapest form of power. Power Com-
panies should not be permitted to deprive the people of the
benefit of this cheapness by selling it to them at “but little
less than power produced from coal.” This has been the
policy of power companies. Canadian cities found it so in
their dealing with Niagara power companies. They defeated
the tendency. How 2 Canada proclaimed the rivers of Canada
the property of the people. She authorized her cities to instal
power plants, to condemn power sites, developed or undevel-
oped. She appointed a commission to aid them. This com-
mission armed with these laws, contracted with a large com-
pany at Niagara, getting power for the people of Ontario for
$9.50 per horsepower at the plant. The commission installed
transmission lines for the people at public expense, the cities
repaying the cost. (Can. Cons. Rept. 1911, p. 56.)
In Norway, they develop water power and sell it around
four to five dollars per horsepower. Coal development costs
real money, falling water costs nothing. After the first cost
of construction, water power construction is more permanent.
This means less improvement, less need of repairs or renewals.
It is a matter of inquiry after all, this thing of a reasonable
price for water power. The companies “must show every
dollar invested, expense of operation, renewals, and earnings;”
from these what is a fair price can be ascertained, and what
a fair profit for the company also. Prices now charged by
some of the companies—in Montana, $40 per horsepower;
Toronto gets power from the Ontario Power Company at $9.50
at the plant; Georgia developments charge $22 per horsepower
eleven hours day. (Sen. Doc. 274, p. 65, Can. Com. Rep. 1911,
pp. 75-95-97.)
On the cost of construction there is much silence on the part
of experts testifying before the commission on water power,
intentionally or not, we will not state. Gana Dunn, a member
of the American Institution of Electrical Engineers puts the
cost of water power construction at from two to four times
that of steam plant construction. (Sen. Doc. 274, p. 12.)
20
Generating plant at 50 per cent of the cost, transmission plant
is the other 50 per cent.
It is said the Keokuk enterprise cost $20,000,000. This
would be a cost of $66 2-3 per horsepower; it develops 300,-
000 horsepower. The Southern Power Company’s plant cost
$15,000,000. They develop 300,000 horsepower. This would
be $15 per horsepower cost. The Long Sault Rapids com-
pany’s plant cost $40,000,000. It develops 500,000 horsepower.
This represents a cost of $80 per horsepower. (Sen. Doc.
274, p. 284.)
There are no novel engineering principles involved in water
power construction. It is a matter of putting concrete in the
bed rock of the Loup, Platte, or Niobrara rivers. This has
been done in the Missouri at Nebraska City, Omaha, Blair,
and Sioux City. The length of the dam, its depth, width and
height above water line being known, the cubic yards of
concrete required at so much a yard, will show the cost of the
dam.
WHO OWNS THE RIVERS2
No one can show a patent from the Almighty to any of
our natural resources. These belong to the race. When God
scooped out the beds of the rivers of the earth, and bade the
waters run therein, he did not do so, for syndicates or trusts
or stockholders of Wall street or Downing street. He made
the rivers for the whole human family. This natural principle
with regard to rivers, at least, is recognized by all. Many of
our western states, in their constitutions, assert ownership in
the people, of the waters of the state. California, Idaho,
South Dakota, Arizona, New Mexico, Colorado, Wyoming,
Montana, have discarded the common law doctrine of riparian
rights as inapplicable to their condition, either for develop-
ment of natural resources of the state or for the equitable de-
termination of rights between citizens pertaining to public
waters—the rivers of the state. (Sen. Doc. 469 pp. 311-12,
320-1.)
The waters of natural streams is declared to be the prop-
erty of the public by the constitutions of Colorado and New
21
Mexico, and to be the property of the state by those of North
Dakota and Wyoming. The constitution of Arizona wipes
out the doctrine of riparian rights. “It shall not obtain or
be in force and effect in that state.” -
Prior appropriation is the determining rights in the con-
stitutions of Arizona, California, Colorado, Idaho, and Wyom-
ing, and by legislative enactment in Nebraska.
All waters used for beneficial purposes are declared to be
a public use by the constitutions of California and Idaho. In
those of Colorado, Idaho, and other states, including Ne-
braska, preference is given to the domestic use of waters over
that for agriculture, and for agriculture and irrigation over
the use for manufacture. “The right to collect rates for
water or compensation for the use thereof, supplied to any
county, city, or town or the inhabitants thereof is a franchise,
and cannot be exercised except by authority of and in the
manner provided by law.” (Sec. 2, Art. XIV, Const. Cal.) In
the constitution of New Mexico ‘‘beneficial use shall be the
basis, the measure, the limit of the right to the use of water.’’
(Sec. 2, Art. XVI Const. New Mexico.)
The common law doctrine of riparian rights is extinguished
in all of these states and the doctrine of the Roman law, that
the rivers belong to the people is asserted. Even in the east-
ern states, where the common law doctrine has received rec-
ognition from the earliest times, courts are receding from it
as inapplicable to our great rivers, and the Roman law princi-
ples adopted as more in harmony with our conditions, and
founded as it is in nature, that gives the rivers to the whole
human race, as a natural heritage, “water being essential to
the race for domestic and industrial purposes, of limited
amount and easy of diversion from its natural channels, its
ownership and control must and ought ever remain in the
people, and subject to their control.” (Art. 1, Sec. 31 Const.
Wyoming.) Cities are given right to acquire waters for mu-
nicipal use and may condemn prior appropriations of others
for that purpose on compensation. (Sec. 5, Art. VIII, Wyom-
ing Const.)
Water for hydro-electric purposes is not covered in any of
the constitutions of the states referred to, unless the general
22
term “for manufacturing purposes” embraces it. We doubt
if this term covers the use of water for hydro-electric power,
its transmission and application to the movement of trains,
street cars, operation of factories, and for purposes of light
and heat. *
In this respect running streams are daily increasing in im-
portance, and the necessity of comprehensive legislation cov-
ering the entire field of hydro-electric energy, produced from
water, is apparent. The foundation must be laid now for
protection of ourselves and our children after us. To be
derelict here, is to commit a crime against ourselves and our
posterity. The ownership of the rivers of the state with pro-
vision against alienation in fee, or other right, in prepetuity,
would be a measure of importance. If interests, for develop-
ing water power from our rivers are given, these should be
limited to a fixed time. The state should be the water lord;
those to whom power sites are given should hold them as
tenants, and pay for the privilege a just rental.
We have given away our coal, oil, gas, iron and forest to
the few, who use them to their own enrichment, and impover-
ishment of the people. They should never get our streams nor
our water powers. Our former policy is now regarded unwise,
and under the surface is heard a growing demand that our
natural resources taken from the people by fraud, and im-
politic and unwise legislation be reclaimed in the interest of
the people. dº -
It is shocking to think of giving to private corporations
perpetual rights to water power. President Taft, in view of
absence of law covering the matter, withdrew from entry
hundreds of thousands of acres of the public domain with
their gas, coal, and water powers. The people will never yield
to the giving away of our remaining natural resources. No
friend of the people will advocate such folly. In this respect
our solicitude should be for the people and not for capital,
that stormy petrel, continuously searching the earth for privi-
lege and natural resources for profit and exploitation. Our
solicitude should be for the people. Capital seems to be able
to care for itself.
23
THE RIVERS OF NEBRASKA.
Their Possibilities for Power.
We have in our state many rivers, chief of which are the
Platte, Niobrara, Loup, and Republican. The Platte and the
Niobrara take their rise outside of the state. The Loup rises
among the sand hills in the western part of the state. The
Platte flows through the whole state from west to east empty-
ing into the Missouri river near Plattsmouth. The Niobrara
rising, also, beyond the borders of the state, flows through the
northern section of the state, emptying into the Missouri
river near the town of Niobrara in the northeast corner of
the state. The Loup river composed of the north, middle and
south branches, rising in the sandhills of the state, enters the
Platte river near Columbus. These are, as we have said, the
principal rivers of the state and those in which center the
interest of water power privilege hunters.
The water power possibilities of these rivers are said to
be great. This is nºt due to falls or rapids, but to great
uniform slope of their beds. The Loup has a fall of from
six feet in its lower reaches to eight feet to the mile
in its upper reaches. East of the mouth of the Loup, the
Platte river falls about seven feet to the mile, decreasing
as it approaches the Missouri river. The Niobrara has, it is
said, greater fall than any other river in the state, its fall
being from eight to ten feet to the mile. That the fall of
these rivers is remarkable can be seen by comparison with the
Missouri, for instance, whose fall is about seven inches to
the mile. The flow of these rivers is equable at all sea-
sons of the year, a feature of great importance in the
matter of power development. There are some locations
in these rivers offering more advantages for waterpower
than others, and these the syndicates are fighting for. One
of their engineers, a Mr. Arnold C. Koenig, if the public
press is right, states that in these rivers of ours there is
found “a uniform power possessed by rivers nowhere else
in the world.” This statement he makes after “studying the
rivers of the world.” Nowhere, says this authority, “have
I found a stream so constant, so uniform, as the Niobrara;
24
and the Loup is second to that.” We believe the company
Mr. Koenig is interested in circles around the Loup (?).
He places the available horsepower of these rivers at a
million. We must take the talk of this representative of
the Common Wealth Power Company with caution. We must
not place too much confidence in his generalities. A mil-
lion horsepower water from the streams of Nebraska he states
is possible. Is the statement thrown out to create in the
public mind a feeling of unwarranted assurance, that even
though desirable water sites are being stolen from the
state, yet there is so much left that no apprehension may
be entertained regarding the amount of power rights being
grabbed up. We must not forget that the dissemination of
such generalities is, too often, part of a plan to make
easy the acquisition of power, by selfish interests, of the
most coveted sites. Are our best sites given away? Are
there any good ones left? The people are interested in
this waterpower matter, where the power is, the amount,
the effect of canals, etc., on adjoining lands. They are
vitally interested here. Have they to rely on the assertion
of a private corporation counsel or engineer for this?
Unfortunately, yes. There never has been any guage or
measurement of stream flow or survey, or inquiry into the
waterpower possibilities of our rivers; of the amount of
power or of the best points for power development, made
by the state or any official for it. The resources of the
state, in this respect, are better known to waterpower trusts
than to the people themselves. The matter of waterpower
has not been studied by our people nor by their repre-
sentatives. Knowledge of the state’s resources on this line,
is woefully wanting. In this we are behind every civilized
nation on earth, and this results from letting utility and
privilege corporations manage our business for us so long
that we have abandoned it to them.
In the Loup river, where so many syndicates are man-
euvering, and in the Platte, are found very desirable ad-
vantages for power. The Loup rises in the sand and clay
hills of Nebraska, giving the state jurisdiction of all its
waters. These hills act as a reservoir for storage of rainfall,
*
25
which finds its way through the gravel strata to the bed
of that river, making a constant flow, which makes it and
the Platte, east of its junction in the Loup, the most valu-
able water supply for power in the state, notwithstanding
A. C. Koenig's demonstration to the contrary.
In Vol. 2, p. 160, Report of the National Waterway Com-
mission, 1909, is given the available waterpower of the Nio-
brara and Platte (which includes the Loup, we think) as
follows:
Niobrara minimum horsepower.................... 122,000
Niobrara maximum horsepower.................... 140,000
Platte minimum horsepower........................ 290,000
Platte maximum horsepower........................ 657,000
It must be remembered these are mere estimates, not
based on any accurate survey of the waterpowers of the
state, by the state or national authority, but founded
largely on representations of power companies’ agents. We
have undoubtedly great power resources. The biggest power
hunters in the world know more about them than we do.
Our rivers will shed blessings upon us and our posterity
as long as the continent stands; but to attain to the full
and complete benefit of them, we must own and control
them. The menace of a waterpower trust, for power or
irrigation we must avoid. We must not be blind to the
dangers of monopoly. We must not allow a few monarchs
to control our waterpower. - -
We must remember the elevator combines, the refrigerator
cars, the money trust, the coal and iron trusts, the beef
trust, the lumber trust, and other trusts, with which we
now fight for life, and who, notwithstanding all our regu-
lations, and all our commissions and boards of control, our
investigations, and suits for dissolutions, etc., prevail with
a high hand, and defy all our efforts to dissolve or check
them. If water power were the only matter involved,
that were enough; but irrigation of our lands is in ques-
tion. These power companies will be also irrigation com-
panies. . When our farmers pay rent to these companies
26
they will feel the yoke they should now be solicitous never
to Wear. *
We advert again to a subject with which we introduced
this report, the subject of underground waters. It is essen-
tial that the amount, movements, functions of underground
waters, in every district of the state be studied in connec-
tion with any general scheme of waterpower. Ditches, drain-
ing and canals change the balance that nature maintains
between soil and moisture.
Two sections of Nebraska will be affected by power in-
stallation from the Loup; land along the ditch, and land
along the Platte east of its union with the Loup. How
the digging of deep ditches will affect the moisture of land
along the ditches is not ascertained. The affect on the
Platte territory, after withdrawal of waters from the Loup,
is not known. Promoters of power don’t care. They want
profits. This is a matter for the state. It has power to
act now. It ought to act. Protection for the people is
the warrant of government. The water power question
should become one for the state to administer and instal,
and all relevant matters attendant upon it. Those indicated
for instance.
There are ready markets for power. Steam power could
not compete with cheap waterpower. Such an enterprise
in the hand of the state, would be a guarantee that the
people would share in the power resources of our rivers.
With cheap power and the raw materials of the southern
continent, through the Panama Canal, of easy access, Ne-
braska’s future, not alone as an agricultural state, but
as a manufacturing state also, would be assured. (Set her
growing in power and majesty and honor forever.)
State ownership might retard development for a time. It
may require an amendment of the constitution. But if the
state takes it in hand, power would be afforded our people
at cost, whereas if developed by private interests for private
gain, the rates charged will be all the traffic will bear and
that just a little less than the cost of power derived from
27
coal; but a few of the people would benefit from our
rivers.
WATER POWER PRIVILEGES ALLOWED.
In April, 1913, “as per report of the state engineer, the
total applications and docket entries for the use (of water
of Nebraska streams) as power, was 180. Of these applica-
tions, 61 were acted on and allowed, and seven applications
were pending. -
Water Power Corporations and Individual's Applications and
Grants in Nebraska.
Name and number of application: A-1187, Common Wealth
Power Company.
Capitalization, $7,500,000.
Grant: 2,000 second ft.; 66 ft. head; 15,000 theoretical
horsepower.
Incorporators: W. E. Sharp, J. M. Bramlette, Arnold Koe-
nig, Charles Boggs, E. J. Hainer, Allen W. Field, Sanford
W. Ladd.
Location of site: Taken out of Loup river, southwest of
Columbus, and returned to Platte river, south of Schuyler.
Name and number of application: A-709, Babcock Group.
Capitalization ............................
Grant: 2,700 second ft. 110 ft. head. About 27,000 horse-
power.
Incorporators: New Jersey Corporation; no record in Ne-
braska. - .
Location of site: Taken out of Loup river, southwest of
Genoa, and returned to Loup river, west of Columbus.
Name and number of application: Sharp & Moore.
Capitalization ................................ .
Grant: ..... -------------------------------
Incorporators: Not incorporated; included in Common
Wealth Power Co.
Location of site:
Name and number of application: A-894, Kountz Patter-
SOIl.
Capitalization:
Grant: 2,000 second ft.; 150 ft. head; 34,000 horsepower.
Applied for 500 2d ft., 150 ft. head.
Incorporators: Not incorporated; private individual; New
York, 141 Broadway.
Location : Taken out of south side of Platte river, south
of Schuyler, and returned to Platte river, south of Fre-
mont.
Name and number of application: A-970, 971. Ross ................
Capitalization: ....
Grant: 3,500 second ft.; 70 ft. head; 20,000 applied for;
10,000 or 15,000 probably can be developed.
Incorporators: Private individual; not incorporated.
Location of site: Taken out of Platte river, southeast of Yu-
tan, and out of Elkhorn river, southeast of Waterloo, and
returned to the Platte river, north of South Bend, at State
Fisheries.
PRESENT LAW OF WATER POWER IN NEBRASKA.
Law of Water.
Under our law ‘‘the right to divert water from any stream
in the state, for beneficial use, must never be denied.” (Sec.
6822, Cobby's Ann. St.). Under this section, waterpower
companies get right to divert water for power purposes,
and the only limitation is the beneficial use of the water
in the production of power. Beneficial use is the limit
and extent of the right. In other words, the franchise is
perpetual. The only condition is that the power is produced,
29
or rather the water applied to the production of power. In
this respect our law is deficient. And it is admittedly all
that there is not, now, in the state or nation, any law on this
subject sufficiently protective of the people. In Nebraska a
Waterpower franchise is perpetual. There is no limit as to
time. Any person without regard to ability to develop power,
may get a power site, or liberty to divert water for power.
He may assign his franchise before development and, so may
hold sites for speculation. This has been done. There
is no provision for compensation for the privilege of using
the resources of the state. There is no bond or security
required from the applicant that he will develop the power
There is no provision requiring him to develop all the power
available at the site granted, if required, and when required
by the industries of the people. By permitting assignments
One never intending to develop, is enabled to speculate on
the property of the state, and failure to provide for full
development enables the power owner to increase the price
of power by limiting the development below the amount
demanded, and under that available at his site.
There should be a reasonable charge based on the value
of the site and the production of power, adjustable at inter-
vals. We have no law on this point. The power companies
should pay for what the public gives them. The state should
have supervision of issues of capital stock of power companies
in order to prevent over capitalization, and to see that moneys
derived from such sources be expended upon the plant and
not diverted to the pockets of stockholders. There should
be provision giving the state the right to take over the
power site and works at end of term, on compensation for
actual value of plant at the time, excluding franchise and
consequental damages.
In France, Italy and Switzerland franchises are limited
to 30 years, and, in all compensation is reserved for the right.
In France the plant is taken over at the end of the term
without compensation. In Norway, Sweden, and Prussia pub-
lic ownership of waterpower prevails. In Canada the state
owns the power sites, but gives, in some instances, leases
30
for a term of years, receiving rent, with condition that at
end of term, the power site and the works, becomes the
property of the state upon paying its then actual value.
In our state no franchise should be granted for a period
longer than fifty years, that will bring about great changes
in water affairs, and the interest in and relation of the state
thereto. At the end of that time conditions of the franchise
will necessarily become subject to review under circumstances
most conducive to the public good.
VALUE OF water POWER BEYOND COMIPREHENSION
Survey, Etc.
The waterpower resources of our streams have a value so
vast it is beyond comprehension. “If it were in form of flakes
of gold, in the streams where power sites are Iocated over
the country, there would be a rush of men into the valleys
and canyons of the country that would surpass the rush to
California for gold in the days of “49.’’
The Geological Survey estimates the possible waterpower
resources of the nation at 212,000,000 horsepower. Nebraska
has a million horsepower. This wealth is beyond the reach
of individuals. It requires vast capital for its development.
The individual man is shut out here. The government is ade-
Quate.
The waterpower syndicates are after these sites. In Cali-
fornia four companies own 570,000 horsepower. In Wash-
ington two companies control 110,000 horsepower. Similar
conditions as we have shown in this report, exist in Montana,
Colorado, Georgia, North and South Carolina, Alabama, New
York, New England, Nebraska and Canada and Mexico.
Water power syndicates are moving quietly getting sites,
getting this natural resource of the people into their clutches
while the people sleep. The syndicate wants no control,
gnashes its teeth at those in or out of office, who speak for
the people on this issue. Public servants are content in
many instances, with administering the law as it is, without
31
apprising the country of the dangers in store if power trusts
are allowed their own way.
The state and the nation should have their surveyors and
engineers in every valley, along every stream in the country,
measuring stream flow, determining where power sites are,
their availability, the cost of development, and kindred infor-
mation for the people’s use and protection. Plans for develop-
ment of the water powers of the people, for the use of the
people, should now be laid and acted upon before the power
syndicates, by special laws in their favor, or the absence
of all laws, get a strangle hold on the people and the pos-
session of this great natural resource. This policy will be
opposed by the syndicates, by capital, by their lackeys, and
their attorneys. These will stand as a solid phalanx in ef-
forts to get control of this great fountain of wealth. What
will the people do? What will their servants do? Permit
this spoilation of their rights and properties? Never.
ILLUSTRATION OF SAVING IN CASE STATE owns.
State plant including lines, say cost............................ $10,000,000
Develop 100,000 horsepower at $50 per horsepower 5,000,000
Steam power sells 100,000 horsepower at $100 per
Year -------------------------------------------------------------------------------- 10,000,000
Saving to people in replacing steam by water power
yearly … - - 5,000,000
Interest at 4 per cent on capital............ $ 400,000
Operation and extension yearly............ 150,000
Sinking fund 5 per cent yearly.............. 500,000
Extensions yearly -------------------------------------- 100,000
Total expense yearly.......................... $1,150,000
Profit to state... - - - - - - - * * * - - - - - - - - - - - as * * * * * * * * * - - - - - - - - - - - sº * * $ 3,500,000
This can be used in relief of taxes or applied to further de-
velopment of powers and extension of lines. The money
saved to the citizen engaged in industry and manufacture
could be added to capital for purchase of materials for fur-
32
ther manufactures. It would be equal to $5,000,000 and in-
crease in proportion as the state could, in time reduce the
cost of power. This it could in a short period, bringing the
cost down to $25 per horsepower as is the price in Canada.
This would mean a saving to the industries of the state in re-
placing steam with water power on a 100,000 horsepower load,
at present prices for steam power ($100 per horsepower) of
$7,500,000.
The market to the extent that the state affords one, could
be secured immediately for water power, because steam power
or electric power based on steam owing to the great cost of
coal, could not for a moment hold the market against water
power, which is in every way cheaper, based as it is on falling
water which costs nothing.
CITIES.
If by some fatuitous folly or from long habit of yielding to
privilege and capital, the state is seduced into disregard of its
plain duty of enabling the people achieve the full measure of
benefits from their resources, by developing power itself, and
yielding to the clamor of corporations, turns over to them the
property of the people for their exploitation and enrichment,
“let it at last avow and declare its ownership of the water
powers of the rivers of the state. The legislature should see
to this. It should also give the cities of the state, separately
or in union with each other, ‘‘right to generate hydro-electric
energy, for their respective citizens, and the industries within
them, and the right to acquire by purchase, lease, or otherwise,
or without the consent of the owner or person interested
therein, to enter upon, take, and use, lands, waters, water
privileges, water power works, machinery and plant of any
corporation or person owning, operating, or using the same
for generation or adapted to the generation of hydro-electrical
power upon compensation therefor, in mode prescribed by
law. To own and operate the same, build lines to convey
power, condemn lands therefor, distribute hydro-electrical
energy from such power,” “all till the state saw fit to assume
33
ownership and control for the people.” Privileges given the
citizen or private corporation for waters of the state for
power, should be by way of lease only, and for a time definite
and certain, upon compensation for the privilege, and in other
respects, surrounded by conditions protective of the people.
We cite the example of Canada as set forth at p. 30-31 and 45-46
of this report in favor of this proposal. -
FIXED TERM.
There should be a fixed term. We have seen that power de-
velopment implies monopoly. The companies developing them
must become public utilities, subject to control of the state.
Under these circumstances how will we treat them? Give
them perpetual rights? Perpetual franchises are slavish, in-
consistent with public policy and public interest.
The companies want perpetual or indeterminate franchises.
They do not want a limited or fixed term or revocable fran-
chise.. They want to exist forever. Public ownership is the
death of corporations, and the fixed term franchise implies in-
vestigation, discussion, examination, deliberation, and these
lead to public ownership and the destruction of public utility
corporations. The other forms of franchise shut out this ex-
amination, and guarantee perpetual control by corporate in- .
terests of the nation’s business. In case of a limited term the
time will come when their right will end, and opportunity for
new conditions and readjustments are offered the people.
We know the importance of this industry. From a single
power plant hydro-electric energy can be sent hundreds of
miles. Cities, towns, industries of every description may be
supplied with light and heat and power from such a plant.
The lease of water privilege for the purpose of developing
power should be limited in time—not to exceed fifty years.
A fixed term protects the people, better than an indeterminate
grant. “The company whose term ends in a certain fixed,
definite day is less able to hold up the people than a company
whose franchise is going to keep on as long as the company
can prevent legislation taking its franchise away. It is easier
34
to prevent legislation than to secure legislation. The termina-
tion of the lease or franchise will enable the people to readjust
conditions of public service, which opportunity would not exist
with the same force, if in order to get it, the public would
have to put through a bill putting an end to the franchise.
(A thing that could not be done in case of a perpetual fran-
chise.) (Sen. Doc. 274, p. 150.)
Power sites are valuable. The efforts of power companies
to get them show it—no matter how lightly they speak of
them. Under a fixed term lease—say fifty years—you have the
greatest regulation of corporate control.’’
On this question Secretary Fisher says, “I would put it in
the grant fifty years, the state to take it over at the end of
the term, paying the actual value of the plant. It is not nec-
essary to have a longer period. No engineer or promoter
cares for it beyond that time. He will never get bond issue
beyond that time. He must take care of his finances, in
most cases in a shorter time. If you don’t grant a renewal
you must take the plant over. Generation of power and trans-
mission ought not be carried on by two companies, one is
enough. There is no economic use in it. It creates a con-
stant inquiry into the relations between the two, calls for
regulating two companies instead of one. “Effective regu-
lation ought to be provided.” (Sen. Doc. 274-196-7, 201.)
Continuing the secretary states: “The fixed term grant has
the great advantage of forcing inquiry into the question,
whether the grantee is to continue or whether the circum-
stances are such that he ought to be retired.” (Idem 185.)
Marshall O. Leighton, one of the witnesses before the same
commission, who with Pinchot and Fisher seems to be disin-
terested and fair to the side of the people, states: “The public
will find the fixed term franchise more easily administered.
It fixes definite time when the whole subject must be renewed,
and the state at end of fixed term can say to a recalcitrant,
grantee, “take this or nothing.” This advantage under a
fixed term; under indeterminate term the grantee has an ad-
vantage similar to the camel who received permission to put
his nose in the tent. In all issues involving negotiation there
35
is a decided advantage arising from possession and in pro-
viding stipulations in any indeterminate franchise readjust-
ment, the public could hardly avoid being influenced by the
fact that the grantee holds a franchise which to all intents
and purposes is perpetual. No specific complaint or protest
on the part of the public, these in power would consider them-
selves justified in assuming old stipulations in franchise satis-
factory, and would renew them. (Sen. Doc. 274, pp. 150, 163,
196, 197, 185, 207.)
Abuse inflicted by public service corporation is long borne
before dissatisfaction is merged in common protest. The fire
Smoulders at many points before it becomes a general con-
flagration. Therefore, if left to the public to initiate demand
for a readjustment of a continuing contract, the readjustment
will go by default in many cases. On the other hand, if the
public and grantee encounter the definite end of a franchise
period—a dead wall which must be thrown down in order to
continue the journey—both parties will be prepared suit-
ably. Another point under the indeterminate franchise, the
grantee would be always in politics to ward off or neutralize
opposition. Under limited franchise the public would be re-
lieved of this evil. -
The Italian law provides thirty year concessions. Swiss
laws are the same. While in France, where water power is
studied more than elsewhere, there is general agreement as to
propriety of fixed terms. The law there (proposed in Cham-
ber of Deputies) proposes power sites of no more than 250
horsepower shall be subject to cancellation, and in no event
extend beyond fifty years; while as to sites generating more
than 250 horsepower, franchises are limited to a fixed term,
at end of which the nation takes them over without compen-
sation—as part of public domain. In view of experience in
Europe, where limited water power franchises are successful,
it is proper to ask why they are so objectionable in the
Jnited States.” (Ibid. 280-1-2.)
The state of New York limits to fifty years. The federal
law relative to water power, known as the General Dam Act
of June, 1910, limits to period of fifty years, and in the case
36
of powers in the public domain issues but revocable fran-
chises. In other cases where special act of congress gave
power franchise, the period was fifty years, or the act was
made subject to amendment or repeal. Canada issues but
lease hold interest and limits to twenty-one years with re-
newal privilege of twenty-one years additional at end of
term, and right in government to take over plant at end of
term. w
A perpetual franchise, or one without fixed term, is giving
key to our water powers—the only natural asset we have,
forever. The trend of the best thought and conduct on the
subject, is, if franchise is given, to limit it to a fixed term.
Fifty years is long enough, if not too long. That time will
bring great changes in water power affairs and the interest
in and the relation of the state thereto. Power to move in-
dustry will be the base of all our industrial efforts, and the
state must keep such power well in hand. It must not
give it away, if at all, but for a definite period.
Often in the past, the people’s natural wealth has been
stolen under form of law, until now the nation is laid under
tribute to owners of such wealth. We see water powers
picked up with avidity by speculative syndicates everywhere.
The policy that allows this is wicked. We trust it will never
more be allowed in Nebraska. The billions yearly levied on
the people for use of that which nature intended for all, are
beyond comprehension. Nebraska will never pay tribute. If
franchises in water power be granted, let them be so, but for
a fixed term, surrounded with ample conditions to protect
the people. We have raised up in America a genie whose
name is capital. We have given him our forests, our mines
of coal and iron, and our oil lands and gas lands. Instead of
being our servant he has become our master; a genie, who
has become a scourge, and has driven our men and our
women and children into sweatshops and brothels and over-
heated factories. A new age is upon us. A new type of
statesmen has arisen to declare that humanity no longer pay
tribute to capital nor be its slave.
37
RENTALS FOR PRIVILEGE,
The public waters belong to the people. Those who secure
the property of the people out of which to make profits, re-
ceive a special privilege for which they ought to pay. This
is right and it is justice. It is recognized everywhere. The
imposition of a fee for privilege forces recognition of overlord-
ship of the people and secures more efficient supervision of
the affairs of power companies.
Senator Burton, chairman of the National Waterways Com-
mission (Sen. Doc. 469, p. 61) asserts that special privilege in
Water power ought to be paid for. That this is a principle
that should be clearly established. (Case & Comment, vol.
19, No. 10, p. 648). The Secretary of War relating to the
Connecticut river dam, writes on the same principle, “the
grantee of the privilege should be required to pay the United
States a reasonable annual return.” (Ibid. 648.)
The Federal Dam Act of June, 1910, requires the Secretary
of War to “fix charges for water power privileges granted
under the act.” For privilege granted the Ragland Power
Company in the Coosa river, Georgia and Alabama, $1 per ten
hour horsepower year is charged. (Sen. Doc. 469, p. 350.)
For water power privilege from government dam over Cum-
- berland river, Tennessee, above Nashville, Act June 30, 1902,
the Secretary of War is authorized to issue franchise ‘‘to high-
est responsibe bidder.” (Ibid. 353.) Act (Federal) of June
30, 1906, authorizing H. T. Henderson, to divert water of
Little river, Alabama, for power requires compensation for
value thereof. Act of March 3, 1909, relating to St. Mary’s,
river Michigan, declares flow of water therein riparian rights,
water powers therein and thereof are reserved to the gov-
ernment forever. Privileges granted for using waters thereof
for power must be compensated for. (Ibid. Sen. Doc. 469,
419.)
As to water power of Wabash river, Illinois, the Secretary
of War may grant lease but for twenty years for such com-
pensation as he may deem just. The same provision is made
38
relating to power of White river, Arkansas, charge must be
paid federal government by grantee of lease. (Ibid. 440.)
The same regarding the Muskingum river, Ohio. (Ibid.
444-5.) And in all permits of water power granted in public
lands, compensation is taken. (Ibid. 457.) These charges are
scaled, increasing 10 cents each year for ten years, after
which the charge is $1 per horsepower year. This done on
two grounds: First, the assertion of right in the government,
forcible, in requiring payment; and second, the site is a re-
source of the government that is owned by all the people and
should be paid for, because those who sell the power there-
from are getting special privilege. This source yields about
$75,000 yearly. It is placed in federal treasury. (Sen. Doc.
274, pp. 233-235-6.) t
President Taft withdrew power sites in the public domain
until their development could be more adequately controlled.
(Sen. Doc. 469, p. 453), thus recognizing absence of legis-
lation in this new and growing and soon to become universal
and powerful industry.
Gifford Pinchot favors charges (Sen. Doc. 274, pp. 158-162),
instances the case of Long Sault Power company, New York,
where 70 cents for the first 100,000 horsepower is charged;
lesser sum as development increases. This system he dislikes
claiming the greater the development the cheaper the produc-
tion of power and the better able to pay, is the company in
such case. The purpose of the charge is to force recognition
of the state's ownership to compensate for the people’s prop-
erty. Secretary Fisher favors compensation also (Sen. Doc.
274, p. 189) will not increase price to consumer. -
Canada charges for privileges. Niagara Power Company
pays yearly $15,000 on first 10,000 horsepower developed, and
for each horsepower generated and disposed of:
From 10,000 to 20,000 at......#1.00 per horsepower
From 20,000 to 30,000 at...... .75 per horsepower
Over 30,000 .......................... .50 per horsepower
This 40,000 horsepower disposed of would bring a rental of
39
$37,500 yearly. (Can. Com. Rep. 71, 35.) She imposes
charges for every water power privilege issued.
In Norway, where power is produced at from $4 to $5 per
horsepower year, twenty-four hours in the day, 365 days in
the year (Sen. Doc. 274, p. 65), they charge one krone per
horsepower. (Ibid. 65.)
Italy has 3,126 power developments strictly regulated on
fixed term basis for which she got in 1909, $475,005. Power
developed equals 805,675 horsepower. (Dail. Consular Report
134, Washington, Dec. 9, 1910. Consul James A. Smith,
Geneva.)
No one but the beneficiaries of the privilege oppose com-
pensation for water power rights. The company wants no
charge, no laws governing. Socialization of water powers for
the few, without limit as to time, without compensation, with-
out control—is what the water trusts desire. Socialization of
these powers for all—state ownership and management—in
the interest of the people, should be our policy. Until this is
recognized and acted upon, let those who get this special privi-
lege in water power and incidentally, over the industry of the
state pay for it.
FULL DEVELOPMENT.
Speculating in Power Sites.
The franchise should provide for full development of the
power. That no partial development can be made that will
prevent development of the rest of it. The plants should pro-
vide for complete development. (Sen. Doc. 274, p. 158-9.)
Full utilization should be the aim of the law. Speculation in
sites must be prohibited. There is chance for such in con-
nection with actual development as well as speculative with-
holding before development. Consider the case of three power
sites in a stream capable of developing 15,000 horsepower
each. Say the market demands but 15,000 horsepower at
present. An applicant may demand a permit for 5,000 horse-
power at each site, which can be constructed cheaply, and
supply the present needs. Public interest demands that one
40
of these be fully developed leaving others for future de-
mands, rather than the partial development of each. Failure
to get full development of each site puts the owner in a posi-
tion to control the supply of power, thereby forcing prices up
to consumer. If there was but demand for 15,000 horsepower
in the case supposed, permit but for one site to one individual
should be given, development of that should be forced. (Sen.
Doc. 274, pp. 225-204-226, 232-3.) No big company is going
into development without complete maps and plans in detail.
Any company that does without such details is not a bona fide
company. (Ibid. 227.)
Provisions of Canada laws on this head should be adopted.
(Can. Com. Rep., pp. 279-80-81.) Upon showing a greater
amount of power could be developed, authority should re-
Quire such additional development, and increase scope of
works to that end if necessary. Company should yield to de-
mand or forfeit privilege with all the works to the state, on
compensation for actual value of work without franchise.
No assignment before development ought to be allowed.
(Italy insists on this rule.) Holding for speculation would be
defeated by that requirement. Assignments of interest in
sites are now encouraged and allowed (and consequent specu-
lation) by board of irrigation. (See action in re Water site as-
signment of filing number 894 to Fremont Canal and Power
Company, September 5, 1912 and December 5, 1912.)
Fixed time should be set for completion of enterprise. (Sen.
Doc. 274, p. 203.) Definite time should be fixed to begin con-
struction, to finish construction and to begin operation of
plant. (Ibid. 232.) A statement of financial standing should
be required of every applicant. He should give bond to the
state conditioned to do the work, carry out the development.
(Can. Com. Rep. 277, p. 55.) These provisions will destroy
speculation.
Regulations respecting waters which are to be set aside for
power should be so framed as to require that the preliminary in-
stallation of dams and other main works necessary for the
control of the waters, be made with reference to the possible
future development of the full water power that may be
41
available. If, at a particular point 20,000 horsepower is avail-
able, preliminary works should be constructed with a view of
utilizing when needed that full amount. (Can. Com. Rep., p.
12, cop. 11.)
TAKING OVER AT END OF TERM.
Compensation.
Should the state take over the plant at end of term, or for
violations of any provisions of law before the end of term,
it should pay for but the actual value of the plant, and lands
held in fee in connection therewith. In this valuation the
privileges granted, the revenues or profits or dividends being
or likely to be derived therefrom should not be considered.
(Can. Com. Rep. 280.) The state should not pay the amount
of money invested in the works in the beginning, nor for un-
necessary investments due to unwise execution or engineering
estimates. (Sen. Doc. 274, p. 186.)
What is the proper worth * Investment should not be made
a basis. If it were, we then make no discrimination between
wise and unwise investment. The actual value of the prop-
erty is the sole amount. (Sen. Doc. 274, p. 198—Secretary
Fisher.)
PUBLIC OWNERSHIP.
Water power is the cheapest known form of power. It is
becoming daily more and more important, superseding in
many centers already, power produced from coal. The fact
that coal is increasing in price and diminishing in quantity
lends further significance to water power. The ability to trans-
mit it hundreds of miles attracts the attention of power trusts
which now own 65 per cent of developed and undeveloped water
power. Water power is by nature a monopoly. Ownership
of power sites, of available flow, together with the great
amount of capital required, and control of the markets, make
it a monopoly. It is on this account a proper subject for
state development and state ownership.
It is absurd to think that a monopoly, a business superior to
42
competition and to regulative influence, conducted according
to the principal that the highest possible prices should be de-
manded for services rendered, can be managed in a spirit of
fairness to the public. Private ownership will work for
profits. The higher the price the greater the profits and we
know that control does not regulate. We have the effort to
regulate the tobacco trust, the meat trust, the oil trust, the
steel trust, in evidence to show how futile regulation is.
Public ownership works on different principals from pri-
vate ownership. The state has no motive to acquire riches nor
motive for exacting, for services of state owned utilities, ex-
tortionate prices. Under state ownership price equals the
cost of production. The question of profits is eliminated.
Private ownership on the other hand has no interest in the
people. The stockholders’ interest is the only one; besides
private ownership breeds contention, litigation, bribery, cor-
ruption, fraud, treachery in public servants, control of state
government, of courts, of legislatures, thus bringing govern-
ment into ridicule and contempt and leading the citizen to
despair of honest government. State development will mean
uniform not haphazard development; full development not
partial; cheapness not dearness of water power products;
multiplication of factories and dissemination of population in
all parts of the state and not in some specially favored section;
rapid development and not slow development. -
Private ownership, of water power no matter how well
regulated, will not satisfy the public demands for a just share
in this natural resource. State ownership is necessary to attain
unity and economy under conditions in harmony with the
public welfare which is never promoted by private corpora-
tions whose object is always gain. The inadequacy of pri-
vate management and state supervision become daily more
obvious. Under regulation the antagonism of interests be-
tween the private monopolist and the consumer is never re-
moved. By taking over monopoly of water power, the gov-
ernment has an opportunity to adopt methods for establish-
ing rates and maintaining services impossible under private
ownership.
43
We have given a quarter of billion acres of public lands to
railroads, a territory equal to Germany and France. We
have given our forests away to private parties. One syndi-
Cate OWns today a stretch of forest land reaching from Port-
land, Oregon, to Sacramento, California, 680 miles, and 60
miles wide, forests that should have been reserved to the
people. Our coal, iron, oil, copper and other resources of the
people have been given away. Our means of transportation
and communication are in the hands of private monopoly; the
inventions of the race, a natural resource belonging to the
people are controlled by monopoly. Four million, five hun-
dred thousand men aided by these inventions turn out a pro-
duct equal to the hand made product of 50,000,000 men. This
means that in the factory 90 per cent of the work is done by
machinery. This power is socialized by the few and made to
yield to their enrichment at the expense of the entire nation.
Capital and private utility companies have then, our lands,
our coal, our oil fields, our forests and our mines, the inventions
of the race, our railroads and these they have capitalized in
bonds and water stock, in amounts running into billions on
which they levy tribute on the people. Have they not enough
Shall we give them our water powers? We have, in our
streams a million horsepower. We may increase this by a
reservoir system in which flood waters may be imprisoned to
work for our welfare. What the coal and iron fields of Penn-
sylvania are to the industries and conveniences of that state,
our water power will be to us. It will furnish power for our
railroads, our street cars, our factories, our farms and light
and heat for cities, towns and country. The Panama canal
and our mighty river will bring the raw product of the south
to our door and factories will spring up in our cities oper-
ated by cheap water power and our labor will send out a
tide of manufactured products to the markets of the world.
Cheap power will enable us to do this. The experiments of
Italy, of Sweden and of Prussia are before us. Water power
is enabling these agricultural nations to become also great
manufacturing centers, giving employment to their people and
securing glory and prosperity to these nations.
44
The special promoter of the power trusts replies to all
this. “The Wind will blow down your transmission wires,
the frost will break your dams. The state must not experi-
ment. We favor control.” I reply, “Is the state less able
to withstand the fury of a storm than private monopoly 2 Is
the danger of a frosty night more to be feared by the state
than a Wall Street bond clipper ? The state should not ex-
periment. Would to God the state and nation experimented
in public ownership years ago. We would not now be the
slaves of private monopoly. Or is the state less able to man-
age the resources of the people for the people than a few
selfish and generally corrupt and egotistical directors?’’ ‘‘We
favor control,” says the agent of the trust. I reply, “Regu-
lation is a failure. It has increased rather than lowered
rates; it blocks public ownership and is an invention of capi-
tal through which it robs the people with impunity. It is at-
tended with interminate delay and millions of expense to the
people without any adequate benefit. It is an absolute failure.
The nation is tired of this high sounding talk of regulation
that does not regulate and that is only playing a paternal at-
titude to protect the enemies of the people from the people's
wrath.” We prefer the principle of Canada, Sweden and
Prussia.
Power companies enter the field for profits. Sympathy for
the public welfare is not their motive. The Canadian com-
mission report in relation to water power recognizes this fact.
‘‘The tendency of power companies is to keep the price of
water power pretty close to power produced from coal,” and
thus deprive the people of these resources. (Can. Com. Rep.
196, p. 56.) Where water power enters private hands, “there
was a disposition to sell hydro-electric energy but at a small
figure less than steam power, ‘‘thus depriving the people of
the benefit of one of their greatest assets. (Can. Com. Rep.
Ibid.) To thwart this, Canada, first reserved in itself all
water power sites; second, her statesmen proclaimed water
power should ever be free; third, in the field of water power
she authorized a commission to install power and condemn
power sites for cities. Enables cities themselves to do so;
45
install transmission lines at the expense of the state, for the
transmission of power to city, town, and farm.
She took special care of cities and towns first, and of the
industries in these, providing that cities, singly or in union,
could develop power, condemn sites, issue indebtedness for
such purpose. Armed with this power and in the presence of
this statesman-like policy, power companies remain within the
law of conscience and a square deal, Canada and her people
are able to cope with water power companies. Ontario co-
operates with her cities in the development or securing in
other ways cheap water power. After ascertaining their re-
spective power needs, she entered into contract with one of
the Niagara power companies for 100,000 horsepower at $9.40
per horsepower, the province engaging to install wires. (Can.
Com. Rep. 1911, p. 50.) In this way Ontario has eliminated
the middlemen, brought power companies to a sense of justice,
and secured cheap power for her cities. She has erected 281
miles of transmission lines at less than $40,000,000 cost. The
cities do their own selling. Having done this for the cities,
she does not neglect the farming community. In addition to
281 miles of high tension wires, they have 200 miles of low
tension wires for delivery to small communities. Ontario sent
an agent to Europe to study water power, its management and
prices there, where electricity is applied to every day work of
the farm. Thousands of German farmers use it. In Bavaria,
this representative of Canada, found electric light in the
homes and barns of the peasantry. Now effort is made to
give benefit of water power to the farmers of Ontario. The
great “advantage of the public owned non-middleman.”
features of the Ontario system enables it to do this. The
farmers will pay what this power cost to develop and deliver
at his door and no more. No big profits to monopoly, no big
salaries to water power presidents, directors, counsel, no in-
terest on inflated stock and bonds, fictitious and fraudulent, to
contend with. He will get his power, light and heat, yearly
for not to exceed $15 per horsepower year.
We have referred to Sweden and its water powers. From
carliest times Sweden has been an agricultural country. Me-
46
chanical industry, till very recently, occupied but a sub-
ordinate position; this was due to lack of coal. Lately, how-
ever, the scientific development of water power, so abundant
in Sweden, has had the effect of greatly increasing the pro-
portion of her population engaged in manufactures, from 17
per cent in 1880, to 28 per cent in 1900. Her water power is
estimated at 10,000,000 horsepower. The government is trying
to get in working order as much of this power as possible.
The state owns at present 277 falls. The largest fall, now
managed by the state is at Trollhatten, of 80,000 horsepower.
At Porgis Falls, 50,000 horsepower is expected to be realized.
In the past Prussia left development to private companies.
In 1913 this policy was reversed. Prussia now develops water
power. She issued bonds for money for that purpose. The
ministry of public works constructs the plants and operates
them. In adopting this policy, Prussia believes the state can
be served better by public ownership of water power than by
a private corporation. She builds transmission lines also.
She expects 2 per cent of her Weser project. This obtained,
expenditures will be for improvement, since in calculating
prospective dividends she includes depreciation on plant,
amortization of the loan, to finance the project, and payment
into the Rhine-Weser canal fund a yearly contribution of
$19,000 the first year, to $47,000 in the eleventh year. The
law fixes the maximum return at 6 per cent. All above this
will be applied to reduction of rates. Prussian law of 1913,
covers the whole field of the use, maintenance and improve-
ment of inland waterways. The right of eminent domain is
reserved in the state, the right of improvement including
water power is in the state. A state waterways office is
created. -
Fifty years will see great change in the relation of the
state to industry. Big business will be too big for the in-
dividual. Power to move industry will be the base of all our
progress. A necessity of life as it is, and as it will become
daily more and more, the state must own it. It should begin
now before complications set in that will involve disputes,
litigations and expense in the future.
47
The ownership by the people there in our judgment is the
only way to secure the full benefits of water power for all.
Humanity demands general genuine conservation. Public
ownership of our natural resources and their operation by the
people for the people will alone secure this conservation. They
do not wish these to be owned by monopoly and doled out to
them at exhorbitant prices. The commission regards with
favor the views of Secretary Lane who advises public owner-
ship by the states of water power, and that this resource in
its infancy be taken over by the state and operated by the
people. In this way entanglements and complications will be
avoided, arising out of private development by private mo-
nopoly. -
48.
PROPOSED LEGISLATION.
State Ownership.
t
A
To the end that the water powers of the state be conserved,
developed and controlled, so as to secure full benefits thereof
to the people the following principles to be embodied in the
law are offered.
I.
That the constitution of the state be amended declaring
ownership in the state for use of the people of all natural
streams within the state to be forever conserved for the bene-
fit of the people for domestic, agricultural, manufacturing,
and incidentally, hydro-electric purposes, directly owned and
operated by the state.
II.
The state constitution should be amended giving the state
monopoly of the functions of generating and selling hydro-
electric energy, right to develop power and issue bonds for
such purpose. -
III.
Public utility commission with right to take over all water
powers issued, develop power, hydro-electric power, trans-
mit same, for price to consumers, should be created.
IV.
Declare rivers, flow of water therein, riparian rights and
water powers thereof, the property of the state.
49
B
If legislature will not favor or enact legislature empowering
State to own and develop power sites for the people, then the
Commission recommends the following principles for its adop-
tion.
Legislation giving cities singly or in union right to generate
power för the industries therein, its citizens, for power, light
and heat, and to acquire by purchase, lease, or otherwise, or
without the consent of the owner thereof or persons inter-
ested therein, to enter upon, take and use lands, waters, water
privileges, water powers, works, machinery, and plant of any
corporation or person owning, operating, or using the same
for generating or adapted for generating hydro-electrical
power or for transmission thereof, upon paying compensa-
tion therefor in mode to be determined by law. (Can. Com.
Rep. 46-7-8.) (39, 56, 37-40-41.) (Const. Wy. Art. XIII Sen.
Doc. 469.) To own and operate the same, and have right to
condemn lands for buildings, plant, transmission lines, neces-
sary for conducting and distributing hydro-electrical energy
generated from such water power, till the state saw fit to as-
sume ownership for the people. (Private Book 82.)
II.
Legislation enabling cities to issue bonds for purpose of
acquiring power sites, and generating and transmitting hydro-
electrical energy therefrom for use of their citizens and of
the industries within their borders, or other parties desiring
such power. -
50
LEGISLATION REGULATING DEVELOPMENT BY
PRIVATE PERSONS OR COMPANIES.
No grant or right, other than by lease for a period not
exceeding fifty years, in the public waters or power sites of
the rivers of the state shall be given to any person or cor-
poration. Right of reversion, in state, of plant at end of
term. The state at its option to take possession immediately,
payment of value and pay actual value without reference to
franchise or future profits.
II.
Declaring power companies, obtaining such right, public
utilities and the use of water, for power purposes, a public
|UISé.
III.
On condition of a reasonable annual charge—based on
value of site for power, $1 per horsepower year. Subject to
readjustment at intervals in accordance with changing value
of what the state has given.
IV.
With a view of determining reasonable rate for service, and
allowance of fair profits to company, the value of works or
plant should be fully known. To that end—
Require filing of all items of cost, labor, engineering, ma-
terials, equipment, putting same in place—expense of opera-
51
tion, with such agent of state as may be designated by law,
with cost of renewals or additions to plant. False statement in
any such report of items entering into plant construction and
operation and renewals, to avoid lease.
V.
No lease to one not able to develop. Bond to state to secure
development and guarantee good faith of applicant for lease
of power site and water privilege.
VI.
No assignment of lease or right in water for power till de-
.velopment fully completed; then only with the consent of the
state, after inquiring into capacity of assignee to operate and
develop the works, and the power such works are capable of.
VII.
Power to any person demanding it, on equal terms for equal
service. Sale at cost of water power without reference to cost
of steam, at fair profit only.
VIII.
No speculation, or holding for, allowed. Penitentiary of—
ense to do so. Power works complete in fixed time.
IX.
Combination to increase price, or limit production, with such
view, to work forfeiture of all leases, franchises, and works,
upon conviction.
X.
No partial development allowed, each site to be developed to
full capacity. No more than one site allowed to one company,
till such site is fully developed.
52
XI.
Map with scale so as to show entire project of works, the
location of dams, canals, power house, transmission lines, for
which final application for power privilege is made. Conduit
lines, distance and bearing of each terminus, nearest existing
corner of public survey, and approximate position and area of
flood line of reservoirs if any, location of each power house, esti-
mates in duplicate of amount of power available and that may
be developed at each proposed power house.
XII.
All plans of works with works themselves, must be based on
the principles of systematic and complete development of the
water power available. Independently constructed parts of
a general water power system, upon different scales of mag-
nitude, but increase difficulties occasioned thereby, renders
hard for the state to correct inadequacies in this particular,
when taking power over. She finds she must reconstruct the
whole on a uniform scale to attain the full use of water power
of its rivers. To avoid this the plan should now be adequately
laid. (Office Brief Dineen water system.) (France, vol. 1, p.
225, Cons. Com. Rep. 1908-9.)
XIII.
To begin construction within period fixed after allowance of
permit—and complete same in fixed time, generation and trans-
mission works. Construction not to embrace surveys, build-
ing of roads or trails, or clearing for reservoir sites or other
land to be occupied, or any preliminary works, but of dams,
conduits, power houses, transmission lines or some permanent
structure necessary to the operation of the completed works.
(Sen. Doc. 469, p. 465 B.)
XIV.
To complete the construction in the specified time. (Ibid. C.)
53
The plant will not be owned, leased, trusteed, or possessed or
controlled by any device or in any manner so as to form part
or in any way effect any combination in the form of an unlaw-
ful trust, or form the subject of any contract or conspiracy to
limit the output of hydro-electrical energy or in restraint of
trade with foreign states or within any state in the generation;
sale or distribution of hydro-electric energy. (Sen. Doc. 469,
p. 466, I.) -
XVI.
Data of stream flow, amount of water in reservoirs, data of
watershed furnishing water used in generation of power, shall
be open for inspection at all times to proper state officials, and
record of daily measurements shall be furnished under oath
during January to the proper state authorities for the year
ending December 1st preceding. (Sen. Doc. 469, p. 466.)
XVII.
If change of plan or construction, maps and plans thereof,
must be filed with proper state authority and no change with-
out the consent of such officials. No change allowed looking to
less development than the whole amount of power available
and of works unable to develop amount available must be en-
larged so as to become so. Inquiry in this score may be made
upon complaint of any one. Failure to develop power available
will forfeit lease. (Sen. Doc. 469, Reg. L. 14, Can. Com. Rep.
280, F. G. H. 1.)
XVIII
Applicant for privilege must file statement showing name of
company, names of directors, stockholders and officers of com-
pany, their place of business, and principal office in this state;
the amount of subscribed and paid up capital stock; the pro-
posed methods of raising money for construction and operation
of work. (Can. Com, Rep. 278.)
54
XIX.
To determine power developed or capable of development
(from amount of water granted) the proper state officers or any
engineer appointed by it for that purpose, shall have access to
all books, plants, records, of the company in connection with
works bearing in quantity of power developed and may make
measurements, take observations and such other things as he
may deem necessary for such purpose.
XX.
All leases granted or heretofore granted shall be subject to
all provisions of this law, or any legislation enacted from time
to time in relation thereto.
XXI.
During continuance of lease lessee shall keep all works in
connection with water power privilege, in good condition and
repair—dams, reservoirs, tunnels, canals, races, flumes, pits,
sluices, transmission lines etc. shall not destroy the same but
at end of privilege or sooner termination thereof leave them
in good condition and repair so that their subsequent usefulness
to state shall not be lessened by any act of lessee. (H. R. 792,
Sec. 13, 1.)
| - XXII.
Upon termination of lease, upon option of state, the water
privilege shall immediately vest in the state with all the works
pertaining thereto—dams, reservoirs, tunnels, canals, flumes,
sluices, pits, and lands covered by said lease. The state shall
(after taking possession) pay for the same if of permanent
character and useful for purpose of development or utilization
of water privilege the reasonable and fair actual value thereof
and no more. (H. R. 792, Sec. 14.) Franchises nor future
profits not to be taken into consideration.
55
XXIII.
That all franchises heretofore granted, if not in operation
within a year and not to exceed three years from passage of this
act, shall be forfeited and can be cancelled, ip so facto. (H. R.
792, Sec. 16.) -
XXIV.
A schedule of rates and prices to be charged, shall be filed
by lessee with proper state official for adjustment and ap-
proval before being put into effect. No charge shall be legal
till such schedule is filed and adjusted and approved. Said
schedule shall be adjusted every year. (H. R. 792, Sec. 17.)
XXV.
Compensation reserved for privilege for power shall be
$. . . . . . . . per horsepower generated and sold and shall be pay-
able the . . . . . . . . . day of . . . . . . . . . . . . each year into treasury
of the state. Failure in this respect or attempt to conceal
amount of power generated and sold shall forfeit lease.
XXVI.
No power privilege shall be granted until grantee shows
that he or it controls no waterpower not developed or not
in actual process of development. (Infra. 21 Pinchot.) (Pin-
chot 5th Cons. Cong., 1913.)
XXVII.
Official of state right at any time to visit works, not less
frequently than once in every 90 days, enter any premises in
which Hydro-electric energy is produced; inspect generating
plant, test wires, meters, or other measuring device; inspect
books to ascertain quantity and prices of energy sold, and
such other information as may be required for proper ad-
56
ministration of this law; inspect all contracts entered into
between company of generating power and the purchasers
for a supply of Hydro-electrical energy. (Can. Com. Rep. App.
IV) (Sen. Doc. 469, p. 466 H.) -
XXVIII.
The state official shall see to it that the accuracy of meter
for measuring energy is perfect and kept so by company.
XXIX.
Prohibit bonding in excess of issue authorized by state to
be fixed on actual value of plant upon the hearing of proper
state official, after hearing as the necessity and bonds or
stocks issued to be sold under direction of state official at
public auction, or in any other way they may direct, and
the funds realized, after payment of expenses shall be placed
in treasury of the company, and by the state authority, seen
to be devoted to the purpose for which they were issued.
(Sims Bill in Cong.)
XXX.
No duplication of companies, for generating and trans-
mitting energy; but must be done by one company. (Fisher
Sen. Doc. 274.)
!
XXXI.
Companies organized under this act may enter lands, con-
demn same on compensation, transmit hydro-electric power
build lines, erect poles and wires for transmission purposes.
Shall have right to sell power and transmit it, for power, light
and heat, and power companies organized under prior laws
may do the same, under filing with the proper authority their
acceptance of all the terms and conditions of this act. (Can.
57
Com. Rep.) The right to grant the right to impose conditions.
(Can. Com. Rep. 308).
XXXII.
Power companies shall not interfere with public right to
travel or using any road, street, etc., nor in any manner ob-
struct or endanger travel or travelers on said highways. (Can.
Com. Rep. 310. (Ibid 310.) -
XXXIII.
No land or works of any company under this act shall
be purchased by any other company engaged in constructing
or operating similar work (unless under authority of state, it
being made to appear such purchases is for public interest.)
(Can. Com. Rep. 310.) {
XXXIV.
No power to be sent out of state, except under license,
after all demand at home, for power, is supplied. Power
sent out, sold no cheaper than power under similar conditions,
is supplied to citizens of state. No line for exportation built,
poles set, or distributing agency established, before license
is obtained therefor. Compensation to state for right to ex-
port power. (Can. Com. Rep. 341-2-3.)
XXXV.
Export when used with reference to hydro-electric energy
to mean hydro-electrical power sent out of state by wire
beyond limits of state. Sending out such power out of the
state without license, or after license expires, if given, for-
feits all right of lease and privilege under waterpower laws
of the state.
58
XXXVI.
Monthly report to proper officials, containing full particu-
lars as to output of generating power plants, showing, separ-
ately, units generated for export, and for consumption in this
state.
XXXVII.
For measuring of Hydro-electrical energy integrating wall
meters of approved device, shall be installed by every de-
veloper of power for commercial purposes, to show the daily
number of units developed for consumption in state; and
for export, if license be granted for export. (Can. Com. Rep.
App. III-TV.) (Sen. Doc. 469, p. 466, G.)
XXXVIII.
Before commencing to construct, subsequent to the issuing of
license to export, transmission lines, the contractor shall fur-
nish drawing map showing location of line, the gauge of wire
conductors, for the transmission of power. Companies organ-
ized benefit of 12-13, etc., upon accepting act.
XXXIX.
To build and repair roads, bridges, when injured or de-
stroyed by construction work, flooding under permission ap-
plied for; to maintain suitable crossings for all roads inter-
secting canals, conduits or other devices, constructed, oper-
ated, or maintained in the lands the use of which is applied
for. (Sen. Doc. 467, O. M.)
XXXX.
To pay all damages resulting from breaking, leaking, over-
flowing of water works of company caused by neglect of com-
pany, its contractors or agents. (Sen. Doc. 467, O.)
59
XXXXI.
To sell power to the state when required at as low rates 8,S
charges any other purchaser for a like use at the same time.
(Sen. Doc. 467 P.)
October 16, 1914.
The foregoing report is adopted by the members of the
Water Power Commission as follows: .*
J. J. McALLISTER,
Chairman.
C. H. GUSTAFSON,
Secretary.
H. C. PALMER,
G. E. CONDRA.
GEORGE JACKSON.
h December 15, 1914.
, 60














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