1948 foreign trade of the port of New York commodities potentially divertible to St. Lawrence seaway

1 Woodpulp in 1948 was at its lowest ebb through the port of New York. Imports were increased at port authority facilities alone by 35.000 tons in 1950.

OPPOSITION TO NAVIGATION FEATURES OF SEAWAY

Mr. HEDDEN. Now, the position of the port of New York Authority on this matter has been determined by resolution of our commissioners on several occasions. They are in opposition to the navigation features of the seaway, and that is all I am going to talk about.

I have been instructed to come here in their behalf to give you facts upon which they base that conclusion.

the Now, broadly speaking, their opposition is based on the fact that after the careful studies which have been made by our organization of this subject for over 20 years, we are convinced that this is not a self-liquidating project, and that it will cost the United States taxpayers $60 to $70 million a year, and we are cognizant of the fact that New York and New Jersey pay over 20 percent of those taxes, or at least the people living in them do.

ESTIMATE OF LOSSES NEW YORK PORT MIGHT SUSTAIN

Furthermore, we believe that it will be a severe blow to the district which we are charged to develop and protect, and the details of that are in my statement. They are very specific, our estimates of what we think the losses will be, and I can summarize by saying that we think it would affect 17 percent of our general cargo and grain business, meaning the livelihood of 200,000 people in the port district, or a billion-dollar payroll.

The CHAIRMAN. You mean that much will be diverted from the present business of New York?

Mr. HEDDEN. Yes, sir.

The CHAIRMAN. All right, go ahead.

DEFICIENCIES IN SEAWAY COST ESTIMATES

Mr. HEDDEN. Now, first, I would like to talk briefly about those phases of the uneconomic part of this project-the non-self-liquidating features that have to do with the estimates of cost. I will not repeat any of the things that have been said. I agree with many of them, but I do want to point out to you a few of the deficiencies in these cost estimates that have been presented to you that have not been mentioned so far.

You have behind you a chart with the estimate presented, I believe this morning, on the cost of the remaining work on the 27-foot channel which is put at $818 million. General Wheeler testified in 1947 that that figure was $802 million, and the difference between now and then in those figures is only 2 percent.

Now, we have occasion to examine continuously and closely the construction index on heavy construction work because we have constructed $400 million worth of improvements in our district, and the construction index between 1947, when General Wheeler's figure was presented and the present date, has gone up 18 percent, and the difference in these figures is only 2 percent.

We are also convinced, sir, that the 27-foot project not only is not an economic depth for operation of the American merchant marine but for the world's merchant marine.

When I testified in April 1951 before the House committee I was confronted with these figures which have been mentioned before-that 84 percent of the ships entering New York Harbor enter it on a draft of less than 24 feet. At that time I challenged those figures as having any meaning whatsoever in relation to the problem we are talking about, namely, real overseas trade.

Those are, as has been explained to the committee, records which include motorboats, fishing boats, garbage scows, sludge craft, and things of that type.

We have a shore-based radar installation in New York Harbor which we have operated for nearly a year, and if I could show you that scope or the motion pictures developed from it you would see a whole show of these fishing craft going out across that harbor bar every day. Those are all counted in the figures that have been considered by this committee before, and they have no meaning.

WORKING DEPTHS OF CARGO SHIPS

Now, at the request of the House Public Works Committee, I went back and assembled figures from what I believe are reliable sources on what the actual working depths of cargo ships in our harbor are.

We operate marine terminal facilities and we have occasion every time a ship comes in to measure the draft fore and aft to determine how deep she is in that slip, and based upon those records and the records I have been able to get from certain cooperative steamship companies it develops that not over 30 percent of all the ships, not

just United States flagships, but all of the ships that use the berths are able to berth in a channel on a draft which would be in salt water consistent with this 27-foot channel. In fresh water under way much less than the 30 percent could navigate on a 27-foot channel.

QUESTION OF SELF-LIQUIDATING FEATURE

I want to say a word about the other phase of the economics which has been presented to you so often, namely, the revenues and tonnage alleged to be part of the self-liquidating so-called feature of the

seaway.

I have followed these figures for years and we have made our own. The first studies that were presented to you in 1941 by the Department of Commerce of the United States said that the total commerce on the St. Lawrence waterway would not exceed 10 million in import and export trade-4 million United States, 6 million Canadian.

Now, on studies which were made in 1946 and 1947, they are talking about 84 million, and I may emphasize to you that the difference is not explained by the Labrador ore.

The figures have been increased, for example, on general cargo and grain to 22.8 million instead of the original figures, which were 4 million for the United States and 6 million for Canadian.

And you are asked to accept these figures as being the basis for the self-liquidating argument. If they were true, we should certainly shake in our boots, because the record shows that those figures are based on th assumption that 90 percent of our grain in the North Atlantic ports and 36 percent of our general cargo would be diverted, and I may say at the port of New York it would mean 44 percent of our commerce would have to be diverted to get that tonnage on to the waterage.

Now we don't agree with those figures. We think that the more reasonable figure is 12 to 15 million tons of new business which might go on a St. Lawrence seaway, not 84, but 12 to 15.

The CHAIRMAN. Your time has expired. You have already put your complete statement in the record, haven't you?

Mr. HEDDEN. I have, but I would like to mention one other thing, if I may, and that is on this ore traffic I presented a chart in the House testimony that I gave, which appears on page 17, and I hope you will study that.

It shows the iron ore production and consumption, and there is a surplus and will be a surplus in 1960 of 30 million tons of ore in the Midwest, and the deficit is in the East, and the movement is from the Great Lakes and will continue to be from the Great Lakes down to the eastern mills.

To carry Labrador ore, or to argue that Labrador ore is necessary to be carried to the Midwest by way of this deepened St. Lawrence is like carrying coals to Newcastle.

The plain truth of the matter has been stated by the vice president of Republic Steel Co., who in a recent pamphlet, when the question was asked why doesn't Labrador ore go to the east coast and the Midwest production go to the Midwest, said:

The reason is because the companies who own the Labrador ore also own certain mills in the Midwest.

And that, sir, is the real answer why it is being agitated at the present time that a deep canal that would do this damage to our eastern ports, that would cost the taxpayers so much money, is being argued on iron ore. It is not a matter of national defense. The exact quotation is by Mr. Richards:

But as for Labrador ore, the suggested use of Labrador ore in the east coast is not realistic because this ore is mostly the property of Middle West companies and they would be expected to use most of it in their Midwest plants.

Is that the national defense argument? I think the logical situations develop in a wartime emergency is to use the ore that is available no matter who owns it, and they may deal freely back and forth between each other.

I would like the privilege also, sir, if you care to, of submitting in behalf of the Chamber of Commerce of the State of New York at their request their committee report in opposition to this proposal. They have asked me to do that. If you can accept it, I would appreciate it. The CHAIRMAN. Is there any objection? Senator WILEY. I have no objection.

The CHAIRMAN. Without objection, it will be printed in the record.

[Report of the Chamber of Commerce of the State of New York]

NOTICE. This report was mailed to all members of the Chamber five days before the meeting and copies were also placed in the hands of each member attending the meeting, when opportunity was given for discussion. The vote thereon therefore can fairly be said to represent the opinion of the entire membership. The meetings of the Chamber are attended by three or four hundred members.

CHAMBER OF COMMERCE OF THE STATE OF NEW YORK

At the regular monthly meeting of the Chamber of Commerce of the State of New York held April 5, 1951, the following resolutions and report presented by its Committee on Internal Trade and Improvements and its Committee on the Harbor and Shipping were unanimously adopted:

THE ST. LAWRENCE SEAWAY AND POWER PROJECT

To the Chamber of Commerce:

The Committee on Internal Trade and Improvements and the Committee on the Harbor and Shipping offer the following:

A Committee of Congress is again holding hearings on the proposed St. Lawrence Seaway and Power Project, a matter which has been the subject of discussion for more than thirty years.

In a number of reports and resolutions, beginning in 1920, the Chamber of Commerce of the State of New York has demonstrated its views that the construction of the project is not justified, that the waterway cannot be made selfliquidating, and that the proposal is economically unsound and commercially unwise.

In the current deliberations, principal emphasis is placed on the alleged necessity of the Seaway and Power Project on the grounds of National Defense. It is claimed that the Seaway is necessary as a means of bringing ore from the Labrador and other ore fields to the Great Lakes steel-making centers. It is asserted, further, that there is a power shortage in New York and New England. and that St. Lawrence hydroelectric power is needed to provide additional electrical energy in that area for increased production and other purposes.

These arguments are examined in the attached report, which concludes that the Seaway is not a National Defense necessity, either for the transportation of ores to Great Lakes steel mills or for the production of hydroelectric power. The report summarizes, again, the compelling reasons which led the Chamber, on previous occasions, to oppose the construction of the St. Lawrence Seaway and power project.

For the reasons stated in the report, it is the view of the Chamber that the Nation's best interests would be served if Congress would again withhold its approval of the Seaway and Power Project; and Congress is urged to cause to be

made a thorough study of the entire proposition by competent, nongovernment engineers and others who could bring a wholly objective view into their study and evaluation. It is suggested that the study cover all aspects, economic as well as those relating to National Defense, of the St. Lawrence proposal: Now, therefore, be it

Resolved, That the Chamber of Commerce of the State of New York urges the Congress to reject the current proposals which would authorize construction of the St. Lawrence Seaway and Power Project; and be it

Resolved, That the Congress inaugurate a thorough study of this entire proposal, to be undertaken by competent, nongovernment engineers and others, who could bring a wholly objective view into their study and evaluation; and be it further

Resolved, That copies of this resolution and report be sent to all members of Congress.

Respectfully submitted.

Attest:

GEORGE G. WALKER, Chairman,
GEORGE L. BLISS,

RAYMOND H. FOGLER,

FLOYD W. JEFFERSON,

HARRY C. KILPATRICK,

WILLIAM WHITE,

Of the Committee on Internal Trade and Improvements.

JOHN W. O. VON HERBULIS, Chairman,

EDWARD J. BARBER,

FRANK N. BOWERS,

E. MYRON BULL,

JAMES A. FARRELL, Jr.,

FREDERIC R. PRATT,

HUGH REID,

Committee on the Harbor and Shipping. ROBERT L. HAMILL, President.

B. COLWELL DAVIS, Jr., Executive Secretary.

It should be emphasized that these estimates do not include the cost to the United States Government of deepening the channels at the principal harbors on the Great Lakes to a depth consistent with the main channels. A minimum figure for the deepening of these principal Lake harbors is in excess of $100 million. In 1929 the Brookings Institution estimated the cost to be $175 million. On the basis of past experiences it appears likely that the cost estimates of the Army Engineers relating to the St. Lawrence Project are understated. For example, the original estimates for the Central Valley Project in California was $170 million. The latest revised estimate is $582 million. The Missouri River Basin project was budgeted at $529 million. The present revised estimate is $2.8 billion.

This "snowballing" effect was analyzed by the Task Force on Water Resources Projects of the Commission on Organization of the Executive Branch of the Government which concluded that "* ** once a project is under way, expenditures tend to rise in a geometric progression."

The inflationary effects of such large public expenditures as are contemplated in the St. Lawrence Project must be given serious consideration, particularly during this period when large public works expenditures for nonessential pur poses should be curtailed to lessen the demand for scarce materials and labor, and to help achieve a balanced Federal budget.

Insofar as the length of time necessary to complete the Seaway-Power project is concerned, a minimum of five years is agreed to by all who have studied the proposition, with the probability that six or seven years would elapse before it could be finished.

The resolutions on which hearings are now being held would authorize the Federal Government to spend whatever amount is needed to carry out the project. According to the resolutions, the new deep-water navigation works would be "self-liquidating by charging reasonable tolls" which would vary according to the character of cargo but in no event would exceed "the equivalent of $1.25 per short ton of laden cargo, and may be less, depending on character of laden cargo." Tolls are to be collected only on traffic utilizing the new deep waterway navigation works on the St. Lawrence River.