Competence refers to how big a particle the stream can carry whereas capacity refers to how much material a stream can carry. If a stream has a low competence it would have much smaller particles than compared to a stream with high competence, which could be carrying boulders!
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http://www.123rf.com/photo_7248027_splashing-waves-on-the-atlantic-beach-near-biarritz-aquitaine-in-france.html
http://hill-stations.tourtravelworld.com/peak-glaciers/aiguille-du-dru.htm
Glaciers scour the land as they recede, leaving behind things like kettle or trough lakes. Kettles are the depressions, in which water can fill, left from stagnant ice. When you see huge boulders left over in the landscape, it is posible they could be glacial erratics. On a separate note, outwash plains form from the melting of the ice from the volcano rushing over the landscape.
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http://www.123rf.com/photo_7248027_splashing-waves-on-the-atlantic-beach-near-biarritz-aquitaine-in-france.html
http://hill-stations.tourtravelworld.com/peak-glaciers/aiguille-du-dru.htm