In addition to their developed power, these companies own 641,000 h.p. undeveloped. There is, therefore, total water power in the United States of at least 1,580,000 h.p. com ing under the General Electric group. These figures assume a much higher significance when it is understood that they generally represent not only the best, but in some instances all, the water-power practically- available in the respective communities. It should be repeated, however, that the Gen eral Electric companies do not have complete control of all these concerns, but that in the case of many they simply have a voice in their management thru representation on directorates.
17. Types of community of interest.—The reader can readily see that there are different types of com munity of interest. One of these may be spoken of as community in direction only, the other as community in ownership. In the previous case the community of ownership was illustrated. In the other type an officer or director of one corporation is put on the di rectorate of another corporation. This may be true even without the existence of an interholding of stock sufficient to create a community of ownership. There is no question, however, that the community will be more positive if .the directorate is based upon a con siderable mutual holding by the corporations of each others' stocks.
Some conununity-of-interest organizations consist in an interlocking body of stockholders or directors binding together interrelated corporations no one of which is decidedly dominate.
In a special report on intercorporate relations pre pared by the Division of Statistics of the Interstate Commission the interrailway community of interests is described, embracing many types. Besides the joint holdings of the Pennsylvania and -New York Central lines in the Baltimore and Ohio, and the Chesapeake & Ohio, the Lehigh Valley was brought into the "com munity" thru holdings of its stock by the Erie, the Reading, the Lake Shore, the Central of New Jersey and the Lackawanna. This report concludes: The extraordinary concentration of railway interests shown in the situation in the Middle Atlantic seaboard would lead to the conclusion, that, so far as this group of railways is concerned, competition has been practically eliminated.
18. Control of an industry thru special practices.— Competition among various members of an industry may be thwarted in various ways about to be de scribed. A patent right belonging to one competitor
or a group ef patents belonging to several competitors may be turned over to an association which will give a license to the various members. The duration of the license will depend upon the observance of cer tain regulations, in regard to such things as the amount of output and the price to retailers.
A complete catalog of special practices of this kind in the transportation field has been drawn up by the Committee on the Merchant Marine and Fisheries, as follows: A railroad obtains control of a water line or canal and fails to maintain the efficiency of the same, thus making water transportation so expensive as to eliminate competition, or fixes rates so high as to preclude its use, or abandons the property.
A railroad charters space from a competing water line, altho not using it, thus depriving shippers of space and mak ing them dissatisfied with the water-line service.
A railroad or its controlled water line or terminal com pany holds all the available docks and shedded piers, and refuses access to an independent line for the purpose of dis charging and receiving cargo, or allows access only upon payment of unreasonable charges. The independent line is thus required to unload at some other dock and team the goods to and from the railroad station.
A railroad or its controlled water line owns the available water frontage, which it refuses to utilize, at the same time refusing to release the same by sale or otherwise.
A railway-water line or large all-water line cuts rates un duly (either by putting "fighting ships" in the trade or by having its regular boats quote unremunerative rates) and, when competition has been destroyed, advances the rates even higher than they had been originally. While cutting rates the large company recoups itself out of rates at non competitive points,' or on thru business secured from rail roads on a favorable basis.
Railroads manipulate rates so as to make the differential between their all-water, all-rail, ,and rail-water routes inef fectual as far as water transportation is concerned. The only inducement to use the water route is economy, and if the differential between the rail-and-water rates is made such as to just counterbalance the disadvantages of the water route, the railroads will secure the business because, all things con sidered, their service is preferred.