Relations of water-power companies to public-service corporations. The preceding discussion has indicated a rather general relationship between water-power companies and public-service corporations. This common control of the agencies of traffic and distribution of light in our cities, on the one hand, and the sources of power for operating them, on the other, is an exceedingly important feature of water-power development. The list of public-service agencies controlled by or affiliated with water-power concerns is rapidly increasing. Generally the relationship between water-power companies and public-service corporations is that of ownership, but there are cases in which there is merely affiliation through common officers or directors or the sale of power.

Some idea of the extent of such common control of public-service corporations by water-power companies is afforded by the fact that six water-power interests control street railways in 29 cities and towns, electric-lighting plants in 204, and gas plants in 55. . . .

In brief, in the country as a whole, water-power companies, or companies affiliated with them, own or control and operate street railways in no less than 111 cities and towns in the United States, electric lighting plants in 669 cities and towns, and gas plants in 113 cities and towns. These companies, moreover, supply power to municipal lighting plants in a considerable number of cities and towns. Many of these are among the most important municipalities in the States involved. Furthermore, in many cities and towns in the United States all the public utilities - street railways, electric lighting and gas plants - are controlled by water-power interests.

Interrelationship of large interests [page 29]. Beyond the marked concentration of ownership already set forth, there is a substantial and growing interrelationship, of greater or less degree, among a number of these large interests that suggests the possibility, if not the probability, of still greater concentration. In other words, not only is there a tendency toward control of public utilities, including water-power, by large combinations, but there is a tendency toward a substantial relationship among the combinations themselves. This relationship is established in various ways. In some cases one interest owns stock and has directors in a water-power company that is managed or controlled by another interest; in other cases there are directors common to two or more interests that have directors in a third company. Again, a relationship is sometimes established through banking houses. The fact that an individual is a director in two companies does not necessarily point to a close relationship; but it must be admitted that it tends to establish a bond of common interest that might at any time induce and facilitate an actual consolidation. . . .

In this maze of interrelationships, ranging from practically joint control down to personal association in common direc18 torates, is clearly revealed the drift of water-power and public-utility corporations under the control of a few very powerful interests. These connections, some stronger and some weaker, suggest a favorable condition for a very small number of men to consolidate very large interests whenever they may decide it to their advantage to do so. This interlocking of interests through directors, while not necessarily indicating a purpose of monopoly, certainly affords an incentive and a means of combination. . . .

The best development of the resource [page 31]. The utilization of water-power directly tends to conserve the fuel supply of the country, without in any way diminishing the future supply of water-power itself, since water-power is not decreased by use. The power now (February, 1912) required to operate the industrial enterprises and public-service utilities of the country (excluding steam railroads) probably exceeds 30,000,000 horse-power. Approximately 6,000,000 horse-power are now developed by water. It may be conservatively estimated that this represents a saving of at least 33,000,000 tons of coal per year. It is certain that several additional millions of horse-power could be profitably developed from water, thus affecting a still further conservation of coal. It is obvious, therefore, that the early and complete utilization of all commercially available water-power of the country should be encouraged by every proper means. The real waste of water-power is its nonuse. The most efficient utilization of such power, however, tends directly toward concentration of control, through advantages derived from "coupling up" of sites and markets, unification of storage, and relationships with public-service corporations. This has been already brought out. The problem, therefore, is to reconcile this necessity of full and early development of water-power with the proper protection of the public.