A tale of power and capital

In the novel Det hvite kull, farmer Samuel wondered what value businessman Våtmyr saw in the waterfall he owned. Just like Samuel gazed into the falls, so did many farmers across the country around the 1900s. At the time, there was a scramble for the flowing water.

In the 1900s, the development of Norwegian hydropower gained momentum. In the water, there were forces that could be converted into electrical power. A large-scale industrialization was already underway in Europe, and foreign capital-strong investors turned their attention to Norway and its waterfalls. By 1906, three-quarters of the developed watercourses in Norway were in the hands of foreign companies.

Samuel's brother, Anders, was not forgiving when he heard about the deals that had been made. This was a concern he shared with many in the Norwegian public.

Acquisition of hydropower sparks debate

The newspaper Verdens Gang monitored the development with vigilance. In the Norwegian public, a disturbing picture emerged.

Norway had only enjoyed independence as a nation for just under a year, and the fear of losing the independence was a peculiar factor which contributed to unrest among the politicians. There was an understanding that the watercourses represented a crucial national economic resource. Thus, the question was how the Norwegian authorities could gain better control over the situation before it was too late.

«What will the government do to prevent more of the hydropower from falling into the hands of foreign companies?» Johan Castberg, 1906 - Representative for the Labor Democrats

Panic in the corridors of power

Castberg's question initiated a decade of legislative efforts to secure better state regulation of Norwegian watercourses. Debate over the so-called concession laws was going to influence the discourse of the Norwegian public for the years to come. These laws shared a common goal of formulating measures to safeguard national control over hydropower.

The first law that became significant for the development of hydropower was the new law on the use of watercourses from 1887. The old Norwegian landscape laws ensured the landowner's control over the water on the farm but did not account for the industrialization that gained momentum in the late 1800s. The Watercourse Act of 1887 granted the public more control over the watercourses.

With the pressing new situation that emerged throughout the 1900s, Norwegian politicians found themselves compelled to further tighten their grip on hydropower. The discussion dominated the political landscape in Norway, causing divisions within parties down to the grassroots level. But what scared people the most was the fact that the changes happened so quickly and seemed to have significant consequences.

In 1906, politicians responded by introducing the temporary concession law called the Panic Act. The law stipulated that foreign investors had to seek approval (concession) from the Norwegian state to purchase water rights to Norwegian watercourses.

The fact that the law is forever remembered as the Panic Act speaks to how urgent and pressing the law was for the authorities.

The Panic Act was meant to give the elected officials a moment of reflection, while at the same time, the politicians wanted to put a quick halt to foreign acquisitions of waterfalls. However, the law essentially marked several more years of ongoing debate around legislation. It led to deep political divisions between those who advocate for unrestricted freedom for both foreign and Norwegian capital, without interference from the state, and those who sought national control over natural resources.

The first concession following the legislative regulations was granted to A/S Tyssefaldene. The company utilized, and still do today, the Tysso watercourse in Tyssedal, at the innermost part of Hardanger, for power-intensive industrial purposes.

A term that will leave its mark on hydropower politics is the principle of reversion. In this context, 'falling back' means that the right to regulate watercourses used for electrical power production reverts to the state when the concession period expires. In practice, this means after a period of 60 years.

The first company subjected to the reversion law in Norway was A/S Kinservik in 1907, even though the reversion law was officially passed in 1909.

The Concession Act of 1909 did not give preferential treatment to Norwegian capital companies but equalized foreign and domestic interests. Everyone had to involve Norwegian national authorities as an intermediary where the larger Norwegian society could set its conditions for the purchase of natural resources. Only the state, municipality, or Norwegian citizens (not joint-stock companies) could acquire waterfalls without concession.

The Concession Act of 1909 included clauses about the 'reversion right.' This means that the acquisition, whether by Norwegian or foreign companies, obligated the buyers to return the natural resources, developments, or industrial facilities to the state after 60 years.

How did it go for farmer Samuel who stood and gazed into the rushing waterfall? The one who sold the waterfall rights for 100 kroner. Little did he know that businessman Våtmyr would sell it further for several thousand kroner to powerful industrialists.