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the Carolinas. In each of these sections, one, or at most two concerns are predominant in their control of water-powers, publicservice companies, and power markets. The horsepower figures do not fully represent the extent of actual commercial control. The best powers have of course been developed first. These will always hold a disproportionately dominant position over later developed and less favored powers, because of their lower operating cost and prior hold on the important power markets. There is also going on a concentration of a wider sort—a process of deep significance, but as yet little recognized. There is a marked progress toward a mutuality of interests among public service companies generally, electric light, power, gas, and street railway concerns. The significant identity of officers and directors in a large number of such companies throughout the United States is very remarkable. This is due in part to specialization by financial houses in given lines of investment; in part to the common employment of certain eminent engineering firms; and in part to relations with certain leading equipment companies. Electric equipment is usually supplied by one of a few great equipment concerns and frequently paid for, at least in part, in the securities of the proposed project. Thus the equipment company acquires interests in widely separated power and light concerns. Take a single example, the General Electric Company, the most powerful electric equipment concern in the world. Men who are officers or directors of the General Electric Company, or of its three wholly controlled subsidiary companies, are also officers or directors in many other corporations. These other companies, with their subsidiaries, and the General Electric with its subsidiaries, make thus a group interconnected by active personal and financial relationship. This one group includes 28 corporations that operate hydro-electric plants, with at least 795,000 horsepower developed or under construction, and 600,000 undeveloped in 16 different States, a total of 1,395,000 horsepower (equal to more than 25 percent of all the developed water-power in the United States in 1908). This group includes also over 80 public-service corporations, not counting their minor subsidiaries; more than 15 railroads; 6 companies that use their power in the manufacture of cotton goods, with 35,000 hydraulic horsepower developed; and over 50 banks and financial houses, many of them in the first rank of importance. This remarkable financial connection in itself is very significant. Fifty-three General Electric men, in all, constitute this chain of connection. Nor are these men, as a rule, of the figurehead type; their presence on a directorate means something. Of course these facts in no sense always mean identity of control. They certainly do mean a striking degree of non-conflicting interests and personal relationship which makes further concentration easily possible. This wider concentration is still in a formative stage, developed almost wholly within the last decade. The forces compelling thereto are still operative. It is like a physical solution of chemical elements which is still in suspension but which a single jar may precipitate into crystallization. Water-power, being naturally allied with public-service business, will be included in any movement that affects that business generally. So wide is this interrelationship, and so comparatively few are the constantly recurring names in the directorates, that a few brief conferences, given the necessary impetus, might conceivably at any moment concentrate into definite legal form a sweeping control over the dominant water-powers of the country, as well as their related public service interests. Here, then, is the present situation of the hydro-electric industry: (1) It deals with a basic necessary, and its importance inevitably increases as the fixed supply of other sources of power decreases. (2) Substantial control of mechanical power means the exercise of a function that is essentially governmental in its effect on the public. (3) Driven by underlying economic and financial forces, concentration of control of water-powers in private hands has proceeded very rapidly. It is doubtful if anything can arrest this process, and a swift advance to a far higher degree of concentration is entirely possible. (4) Any chance, then, of restraint by competition is rapidly disappearing, certainly over given sections, and public regulation is therefore an imminent necessity. The extent of such regulation will depend mainly on constitutional limitations. A State, roughly speaking, can at any time exercise a high degree of control over power companies as quasi-public servants. The jurisdiction of the Federal Government covers a wider range geographically, but involves some difficult constitutional questions. Over water-powers on the public lands it has full control. I concede no merit to doubts as to the Government's unlimited jurisdiction there. As to powers on navigable streams not in the public domain, there is an undetermined constitutional question. It is well settled that no power dam can be maintained on a navigable stream without the consent of the Federal Government. Nearly everyone admits that the Government may impose upon such grants any desired time limitation, and may thus require readjustment of terms at any desired period. But some hold that the Federal Government, in exercising its arbitrary power as grantor, may also impose any further conditions it chooses upon such grant, as, for example, that the grantees shall pay a rental for the power acquired. Others hold that the Federal Government can only impose such conditions as are directly connected with the Federal power over interstate commerce, such as navigation. Even this view would apparently at least permit a rental charge, if applied to navigation improvement. Personally, I am strongly inclined to the former and broader view that any conditions whatsoever may be imposed (applause , both on general principles and on well-established legislative precedents. In numerous bridge and dam acts Congress has used the broad power and imposed conditions in no way related to interstate commerce. In the California Debris Commission Act, operative since 1893, Congress imposed a straight charge on placer miners for the privilege of emptying their refuse into the streams. The scope of the Federal jurisdiction is of first importance, because the water-power problem is, in the main, a National one. Much of the power is transmitted across State lines, or is used by interstate carriers. The bulk of the capital that is developing our most important powers comes from interests outside the States where the powers are located, and from the brief survey I have already given of the interrelationships existing between public-service companies it is obvious that State lines and State jurisdiction have no practical relation whatsoever to the sweep of these forces (applause). The hydro-electric industry has been largely nationalized by those who are foremost in it. The Nation and the State will have to use their full powers to meet the water-power situation. The most effective time to use them is before, not after, private rights accrue. The one certain method is for the State or the Federal Government, to retain its interest, or impose its conditions, at the inception, as a part of the grant. Then public control and private rights go together, as they must if we are to safeguard the public interest in water power. (Applause) Let there be no unnecessary hampering of hydro-electric development, but let the public be in on the ground floor at the start: for at the start the public must grant the power and for all time the public will be the party chiefly interested in its use. (Applause) As President Taft very justly said yesterday, when a man talks to you about conservation, you have the right to ask him to specify what steps he desires to take. I am going to specify. (1) The status quo of all water-power still controlled by the Nation or State should be maintained until we know what we have, and can act intelligently thereon. (2) No water-power grant should be made except for a fixed period, with at least the reserved right to readjust terms at the end thereof. That period, however, should be long enough to permit adequate financing and complete development. (3) Complete publicity of accounts and transactions should be required, as well as a record of cost, and the real relation of investment to stock and bond issues. (4) Power to revoke the grant for breach of conditions should be lodged in a specified public authority. Otherwise there will always be the possibility of protracted litigation to determine the status. (5) So far as is possible, direct provision should be made against excessive charges and monopolistic abuse. (6) Public authorities should reserve such constitutional compensation or rental as will establish the principle of underlying public (7) All public easements of navigation, fisheries, etc., should be safeguarded.
(8) In the case of new grants, all these provisions should be made conditions of the grant.
Finally, the purpose and probable effect on the public of any waterpower grant should first be fully ascertained and carefully considered, in order to determine whether public interest justifies beyond a reasonable doubt the surrender by the public of even a part of its power over this great public resource. Where reasonable doubt exists, the surrender should not be made. (Applause)
[During the delivery of the address President Baker arrived and resumed the Chair.]
Honorable Jo HN BARRETT–Ladies and Gentlemen: President Baker has requested me to announce that Professor George E. Condra, of Lincoln, Nebraska, has been appointed chairman of the Committee On Credentials in lieu of Mr Edward Hines, of Chicago. (Applause) Governor Pardee has an announcement to make in regard to the Committee on Resolutions. Governor PARDEE—Simply that the Committee on Resolutions will meet at the Saint Paul hotel this evening at 8 oclock, in Room 534. President BAKER—The program in your hands announces that an address entitled “Safeguarding the Property of the People” will be delivered by Honorable Francis J. Heney, of California. He is prevented from being here this afternoon, but will arrive later. We have now the opportunity of hearing from one whose name has been so closely associated with the work of Conservation that he is regarded as one of its greatest and ablest advocates; I have great pleasure in introducing, to speak on “The Federal Government's Relation to Conservation,” Honorable James R. Garfield, of Ohio. (Applause) Mr GARFIELD–Mr President and Delegates, Ladies and Gentlemen (renewed applause): I appreciate your applause at this time very much, for I fear me at the end of what I have to say it may not be forthcoming. The subject I have chosen is one that affects very directly what may not merely be talked about but can actually be done by the people of this country in connection with Conservation problems. It was often said a few months ago that Conservation was an enthusiasm—that it was an idea, or perhaps an ideal, and that those who were urging Conservation were not practical men and looking forward to practical work-aday solutions of their own problems. So I chose to speak on the relation of the Federal Government to Conservation—a very practical subject, one on which we have been working, as well as talking, for a number of years.
There are two good reasons why the Federal Government is directly interested in Conservation. In the first place, it is the largest landowner in this country; and, in the second place, it has high duties to perform for the interests of all the people of this country. For these reasons, the Federal Government comes directly in touch with the practical questions of Conservation in dealing with what is left of the natural resources of our public domain. The value of these resources cannot be measured in mere terms of acres. Some 700,000 acres of our public lands remain; but that means nothing unless we know what is contained in or on the land represented by the mere statement in figures. Now we are learning that this great area, both on the mainland and in Alaska, is filled with priceless treasures in the resources needed for the lives of the people of our country; and it is in the handling of these resources—either disposing of them or providing for their use or development—that the Federal Government must deal practically with the problems of Conservation. Only as we know this tremendous area and its priceless treasures do we realize that we must, in the practical handling of these resources, make as few mistakes as possible, and constantly keep in view the interest of all the people as a guide in the solution of any given problem.
Now, we meet with serious difficulties in attempting to decide how best to use the property owned or held by the United States Government as trustee for all the people. We have under our system of government a dual jurisdiction, or rather, two jurisdictions—that of the Nation on the one hand, and that of the State on the other. Yet between these two jurisdictions there is no real conflict; there ought to be no insuperable obstacle to such cooperation between States and Nation as will make possible a wise solution of all questions in which both jurisdictions have duties to perform. We hear much about States' rights, as though the problems of Conservation have brought to life again an old doctrine, as though in some way the Conservationist is endeavoring to take something away from the States. The very opposite is true. There is no effort on the part of the Conservationist to interfere with any duty that the State ought to and can perform. Those duties devolving on the States should be performed by the States; and the people of each commonwealth should see to it that their State representatives not only do what is wise and necessary each year but exercise foresight in dealing with all resources subject to their jurisdiction (applause). That, however, does not mean that the Federal Government is debarred from proper use of the public domain within the areas of the several States; it likewise has great duties devolving on it in so administering its property as to safeguard the interests and the rights of all the citizens of the country. The State lines are merely accidental in many instances. The States of the old Northwest and the States of the Middle West today were carved out of public territory simply by drawing of lines; they were