Regulating Power (Chapter Source 9)
Regulating Power
On January 23, 1979, a panel of federal bureaucrats sat around a table to decide whether a species of fish should exist; the meeting ran from 9:00 am to 9:45 am, and they voted unanimously to kill a dam and save the fish. This illustrates how federal regulation can be used to resolve conflicts between competing societal aims (economic development, public safety, environmental protection, and resource use).
The dam-killing committee embodies the broader question the chapter pursues: how should the federal government regulate a resource (rivers and their power) that underpins both industry and community life?
Core definition and purpose of regulation
Regulation is government action that restricts individual rights and property to promote the common welfare.
Governments must balance encouraging economic and technological development with safeguarding public safety, stability, and competition in the economy.
Regulatory rights and the scope of what must be regulated are not static; they shift as industries, technologies, and society evolve. Examples mentioned:
18th century: regulation focused on bread bakers and innkeepers.
Late 20th century: regulation focused on telephone and pharmaceutical companies.
21st century: regulation now encompasses drones and the Internet.
Hydropower and the shaping of regulation in the United States
Hydropower, via dams, has disproportionately shaped U.S. regulatory ideas because dams were central to the nation’s industrial development.
The United States grew in step with the industrial revolution, and unlike England (coal and steam), America’s early industrial power relied on water power from rivers.
The 1840 U.S. Census illustrates the scale: nearly every river had a dam, many with multiple dams; 26 states had roughly 65,000 dams; population ~17 million; ratio ~1 dam per 261 people.
Geography and energy: New England’s Merrimack River and the Fall Line (Pawtucket Falls) created natural energy sites that also posed navigational barriers; the same features that hindered navigation also offered rapid currents and vertical drops ideal for early power.
Fall Line, mills, and the rise of waterpower in the East
Lowell, Massachusetts sits at the confluence of the Merrimack and Concord Rivers, downstream of Pawtucket Falls (the Fall Line), where the Merrimack drops about 30 feet through cataracts.
The Fall Line and upstream mountains offered a powerful combination: rapid river flow and drop, enabling waterwheels—the leading technology of the era.
Colonists used waterwheels for mills to process timber and grind grain; early sawmills and gristmills were ubiquitous in colonial New England by the 1660s, well before many English mills.
Gristmills were essential for grinding grain to flour or corn to meal; without a nearby mill, settlers faced high costs of transport or manual, labor-intensive grinding.
Grinding a bushel of wheat into flour by hand could take about two days of labor or a few hours with a horse-drawn mill; eighteenth-century water-powered mills could process dozens of bushels per day.
Mills increased export value: sawmills at Pawtucket Falls enabled timber to be exported as masts or lumber; gristmills enabled flour export, often at downstream ports.
Mills, more than any other infrastructure, formed the colonial economy and became central social services that a community relied upon.
Mills as public utilities and early regulation
Because mills were essential, they required regulation to ensure fair access and service.
A mill was effectively a natural monopoly: a single mill could command upstream damming and downstream water control, which could block others from servicing the area.
To prevent monopolistic abuse, governments granted franchises to authorized millers, giving them exclusive rights in a community but with conditions:
Obligation to grind grain for anyone who could pay (non-discriminatory service).
Oversight to maintain minimum service standards.
Regulation of rates, since the franchise granted a monopoly on a vital service.
This setup foreshadowed the public utilities model: private firms delivering essential public services under public oversight.
Hence, gristmills are often described as America’s first public utility.
The Proprietors of Locks and Canals and the dawn of a dual-purpose site
The Proprietors of Locks and Canals (formed 1792) started as a canal company along the Merrimack River to move timber around Pawtucket Falls and downstream to Newburyport.
In 1821, investors shifted focus toward power generation: Merrimack Manufacturing Company was created to exploit waterpower at the site.
Lowell’s Locks and Canals design was unusual: the Pawtucket Canal bent into a half-circle, forming an island with the river and falls to the north and the canal to the south. An elevated walkway (the canal) and a series of locks created a stair-step water gradient.
Innovation idea: instead of gradually lowering water to the river via locks, keeping the canal at a high elevation and creating a network of smaller canals could produce a large, consistent head (water drop) to generate hydropower.
Result: this configuration enabled a robust hydropower network that could be allocated to manufacturers at Lowell.
The shift from manufacturing-powered water use to power markets
Merrimack Manufacturing Company, owning land, water rights, and power, realized it could sell hydropower as a commodity separate from the manufactured product.
The Proprietors supplied “mill-power” equal to a precise amount of water drop: 25 cubic feet per second (Q = 25 ft^3/s) dropping 30 vertical feet (h = 30 ft).
This corresponds to about 85 horsepower, enough to power a mill with roughly 3,500 spindles and all required machinery for cotton processing.
Important conceptual shift: power became the thing bought and sold, not just the output (textile) produced by using that power.
The arrangement allowed manufacturers to focus on optimizing manufacturing, while the water-control and hydropower were managed separately by the canal/lock company.
This model laid the groundwork for a modern power market: energy supplied to industries and households, separate from the goods produced.
Power, regulation, and the fight over private property vs. public development
The ability to increase power output required regulatory adjustments.
In 1833, the Proprietors sought to raise the Merrimack Dam by two feet to back up more water upstream, which would inundate riparian lands all the way to Nashua, NH.
The plan reflected a broader regulatory shift: early 19th-century regulation favored economic development and the growth of larger, downstream mills over protecting upstream smaller mills and private riparian rights.
The emergence of mill acts granted eminent domain-like powers to dam builders and dam owners along rivers, enabling broad private property sacrifice for the public economy.
Legal historian Milton Horwitz characterized this shift as one of the great transformations of U.S. law: regulation moved from protecting private property to enabling economic development.
The new regulatory framework judged the relative efficiency of conflicting property uses: should society favor small, secure property rights or larger dams and economic growth?
This paradigm change allowed more dams and mills to proliferate, enabling America to industrialize rapidly with hydro power, ultimately outpacing English hydro-based manufacturing.
The legal checks and the pendulum of regulation
Throughout the mid-19th century, private property rights were rebalanced in favor of economic development via hydropower.
Meanwhile, flour milling, historically dominant, remained central to the economy as grain became plentiful with westward and internal expansion.
Gristmills and large merchant mills near the Fall Line processed vast quantities of grain for export to an Atlantic market; for example, a single mill could manufacture about 150 barrels of flour per day, supporting extensive export activity.
The Eastern Seaboard’s geography enabled a continuous chain of water-powered mills and manufacturing in the hinterlands, not just in port cities.
By the late 19th century, support for public utilities and regulatory oversight extended to power generation and distribution as electricity became more widespread in households and industries.
From the 1850s onward, questions about the legitimacy of eminent domain for power infrastructure and the scope of state regulation intensified, with courts increasingly scrutinizing the permissibility of mill acts:
Maine Supreme Judicial Court (1855) suggested mill acts pushed eminent domain to the verge of constitutional inhibition.
Vermont Supreme Court (1860) implied similar concerns about the limits of such regulation.
By the 1870s, state courts across the U.S. began striking down many mill regulations, placing water power on a level with other regulated industries.
The broader consequences for American industry and society
The regulation of power regimes intertwined with the growth of a metropolitan and industrial society: power was beginning to reach households as well as factories, tying the well-being of communities to the reliability and structure of the power sector.
A major technological and regulatory inflection point followed: the emergence of widespread electrical grids, which would later transform how power was moved and priced in society.
The chapter closes by signaling that the next major transformation would be the grid—the regulated, interconnected system that would move power across regions and redefine economic and social organization.
Key concepts and takeaways
Regulation is a balancing act between private property rights and the public welfare, which evolves with technology and economic structure.
Hydropower—dams and waterpower—was a central driver of American industrial expansion and the accompanying regulatory framework.
Mills functioned as public utilities in practice, requiring oversight and price regulation to ensure access and prevent monopolistic exploitation.
The emergence of a power market, where energy becomes a commodity bought and sold separate from goods, marked a fundamental shift in how the river and its power were valued and managed.
Legal and constitutional questions about eminent domain and property rights shaped the pace and character of river development, with significant long-term implications for the structure of the economy and the reach of government regulation.
Connections to prior and subsequent themes
Earlier chapters (not shown here) discuss rivers’ role in America’s settlement and industrial patterns; this chapter connects those dynamics to the legal and regulatory structures that governed resource use.
The long arc from private dam-building to public regulatory oversight foreshadows the later evolution of public utilities and the modern grid, which will be explored in subsequent chapters.
Notable numerical references and formulas (with LaTeX)
1840 Census: ~65,000 dams across 26 states; population ~17,000,000; dam density ≈ 1 dam per 261 people.
Fall Line energy context: Pawtucket Falls drop ≈ 30 ft.
Mills and power in Lowell: Proprietors sold mill-power equal to 25 ft^3/s dropping 30 ft (head).
Power equivalence: 25 ft^3/s at 30 ft head ≈ 85 horsepower, powering a mill with ~3,500 spindles.
Proportional conversion for power (illustrative):
The exact horsepower can be estimated from flow and head using the standard conversions:
1 ft^3 of water is 7.48052 gallons; 60 s converts to 1 minute; 3960 is the constant in the horsepower formula when using gpm and feet of head:
P{HP} \,=\, \frac{Q{ft^3/s} \times 60 \times 7.48052 \times h_{ft}}{3960}
With Q{ft^3/s}=25,\; h{ft}=30, we get
P_{HP} \approx \frac{25 \times 60 \times 7.48052 \times 30}{3960} \approx 84.9 \text{ HP} \approx 85 \text{ HP}.
Economic literacy: A single mill could manufacture about 150 barrels of flour per day, illustrating scale and export potential near the Fall Line.
Ethical and practical implications
Regulation as a tool for social welfare can entail sacrificing certain private rights (e.g., riparian rights) for broader economic development.
The shift from private property protection toward public interest and eminent domain reflects a broader American tension between liberty and collective advancement.
The evolution toward a power market raises questions about how to allocate scarce resources (water) efficiently while maintaining fairness and access for smaller actors and communities.
Summary line
The regulation of hydropower was not only about building dams but about shaping a new economic order in which energy became a marketable resource, laying the groundwork for modern electricity grids and the complex regulation that would accompany them.
Key terms to remember
Regulation, common welfare, eminent domain, mill acts, public utility, fall line, Pawtucket Falls, Merrimack River, Lowell, Proprietors of Locks and Canals, Merrimack Manufacturing Company, mill-power, power market, grid
Connections to real-world relevance
Today’s debates about infrastructure regulation, energy markets, and the balance between private property rights and public good echo the foundational questions raised by hydropower regulation in the 19th century.