Secretary CHAPMAN. You mean amortization of the whole project? Senator SPARKMAN. The power.

Secretary CHAPMAN. I have not worked out an estimate on that, Senator, as to the exact time limitation. Most of our projects that are worked out on a self-liquidating basis usually run from 35 to 55 years. It varies according to location and circumstances. This one is estimated on the basis of about 50 years.

Senator SPARKMAN. You do not know what the amortization period would be for the canal part, the transportation part?

Secretary CHAPMAN. I do not.

Senator SPARKMAN. I know in a good many parts of the United States there is a great shortage of power. Is that true up in that area?

Secretary CHAPMAN. There are shortages of power at certain points in the Northeast area.

DECENTRALIZATION OF DEFENSE PLANTS

Senator SPARKMAN. Let me ask you this: I think this is something of real concern to the country. Would the generation of this power in that area tend to create a further concentration of our defense industries in that area? You know, there was quite a study during and just after the last war, on decentralization. A good many of us feel there has not been much of that decentralization due to the availability of power and shipping and raw resources, and so forth, and that in time of war it does become a matter of great concern. Now would this cause a still further concentration of defense installations?

Secretary CHAPMAN. I would like to answer that in this way. I do not believe the additional kilowatts that would be produced here would create any additional concentration of defense plants, because you need that power now for the defense plants that are already in there, such as the aluminum plant at Massina. I do not think that it would necessarily mean that you would concentrate any new additional projects there because of power alone.

Senator SPARKMAN. You do not think it would run contrary to our national security program of decentralization, do you?

Secretary CHAPMAN. I do not think so, because you are now going to need all this to help serve whatever you have there now, including millions of domestic customers.

DISTRIBUTION OF POWER

Senator SPARKMAN. I notice another thing in your statement. You do provide for distribution over a 300-mile radius.

Secretary CHAPMAN. That is right.

Senator SPARKMAN. Which would be a pretty considerable diffusion of power, provided Congress sets the policy that enables you to do

that.

Secretary CHAPMAN. Right.

Senator SPARKMAN. Will this take in a great part of New England? Secretary CHAPMAN. It would take in practically all of New England. That is in that circle there. I have a map here that shows you how that circle bounds the New England area there. Here is the map

which shows you the 300-mile area, from the Great Lakes here in that circle.

Senator SPARKMAN. How far would that come down south?
Secretary CHAPMAN. Right here.

Senator SPARKMAN. Is that down about

Secretary CHAPMAN. Part of Pennsylvania and down to Long Island.

Senator SPARKMAN. Takes over clear into Maine, about the middle of Maine?

Secretary CHAPMAN. This is Maine, right through the center. It covers all of those areas, that 300-mile radius.

Senator SPARKMAN. How far does it go west out that way?
Secretary CHAPMAN. Lake Erie.

Senator SPARKMAN. I believe that is all.

The CHAIRMAN. Any further questions?

Senator HICKENLOOPER. I would like to ask a question.
The CHAIRMAN. All right.

FRENCH INTERNAL WATERWAYS SYSTEM

Senator HICKENLOOPER. Mr. Secretary, I have just been handed here a story on the French internal waterways system which we apparently are financing in France. Do you know anything about that?

Secretary CHAPMAN. No, Senator. I do not have any information in my own department about that.

Senator HICKENLOOPER. The statement was made in this article-I have never seen it before and know nothing about it-that we are spending eventually close to $600,000,000 developing some locks and dams in the waterway system in France on one phase and one segment of this system, that we have in effect agreed to underwrite a substantial additional portion of this tremendous waterway and the statement is made in this article it will cost several billion dollars before it is completely finished, a major portion of which at the moment we are putting up with American funds and will get no return on it whatsoever by way of use or control or anything else. You are not familiar with that project?

Secretary CHAPMAN. No, I am not familiar with that at all.
The CHAIRMAN. Is that all?

Senator HICKENLOOPER. Just a moment, Mr. Chairman. I will ask a question.

The CHAIRMAN. I was giving the Senator an opportunity. I am sorry if I offended him.

Senator HICKENLOOPER. I am not offended. I am just deciding whether I want to ask another question, and I hope I have that privilege.

Have you checked recently on the estimated cost of deepening the channel and the locks in the canal from, let's say 30 feet to 34 feet?

Secretary CHAPMAN. No, Senator; that would be done by the Corps of Engineers. They would handle that. That is a matter of an estimated figure.

POSSIBLE ARRANGEMENTS FOR POWER DISTRIBUTION

Senator HICKENLOOPER. Do you contemplate that if power is developed on this system and the program goes through, there will be a substantial recoupment to the Federal Government by way of an initial payment on the part of whatever group, corporation or organization may take over the distribution of power which would substantially reduce the capital investment of this country?

Secretary CHAPMAN. I anticipate, of course, that regular revenues will be had from this source of power.

Senator HICKENLOOPER. It is reported that the State of New York has offered to pay some $150,000,000 or $190,000,000, some figure, I do not know just what it is, but it is short of $200,000,000, for the right to distribute this power. I understand no firm contract has been made. But would you say that some place between $150,000,000 and $200,000,000 might be an anticipated capital payment by whoever distributes this power?

Secretary CHAPMAN. That would be dependent upon what authority you decided to let distribute the power.

Senator HICKENLOOPER. If the Government distributed it exclusively, it would probably be changing the money from one pocket to another, I realize that.

Secretary CHAPMAN. That is right.

Senator HICKENLOOPER. But if the Government did not-of course, whatever that payment would be, would be reflected in the capital investment, would it not, upon which rates would be based?

Secretary CHAPMAN. That is right. The rates would be based accordingly.

Senator HICKENLOOPER. Things of that kind.

Secretary CHAPMAN. That is right.

Senator HICKENLOOPER. I think that is all, Mr. Chairman.

SHIPPING LOSSES DURING WORLD WAR II

Senator WILEY. Mr. Chairman, there was one suggestion that came, I think, from you or someone else in relation to shipping ore from down under, down from South America. I want to know, Mr. Chairman, if there is any information, any figures showing the amount of shipping that America lost in Atlantic and Gulf waters because of enemy submarine attacks during World War II?

Secretary CHAPMAN. I do not have those figures but they are available. I have been informed five out of seven of the Bethlehem vessels were lost.

Senator WILEY. What is that?

Secretary CHAPMAN. Five out of seven of the vessels of Bethlehem Steel were lost. But those figures are available in the Defense Depart

ment.

Senator WILEY. At that time we found these vessels were regular sitting ducks.

Secretary CHAPMAN. Yes.

Senator WILEY. Four or five hundred of them went down and thousands of lives were lost.

If we should have to get ourselves in a position where we would have to depend upon shipping ore in time of war from Venezuela and Liberia, we would probably find ourselves in the same position, sitting ducks. That could not happen if ore came through from Labrador through the canal to the ports of the Great Lakes.

Secretary CHAPMAN. That is right.

Senator SPARKMAN. Mr. Secretary, following that up, I know this submarine menace in the Gulf of Mexico was a matter of great concern to my area duirng the war. Bauxite was coming in from South American countries and I believe it is true-perhaps you could check this for us that at one time the import of bauxite was completely cut off by submarines in the Gulf.

Secretary CHAPMAN. That is right. They were totally shut off at one time for a short period.

The CHAIRMAN. A great many other ships besides those that had ore in them were sunk, too.

Secretary CHAPMAN. That is right.

The CHAIRMAN. You are not confining it to the ore ships?
Secretary CHAPMAN. No. All shipping of course.

The CHAIRMAN. They did not examine the ships before they decided to make shipment of the ore, did they?

Secretary CHAPMAN. They pretty well knew, Senator, what these ships carried; they knew pretty well what they were loaded with. The CHAIRMAN. They may know in a general way, but they do not know actually.

Secretary CHAPMAN. All those freighters had to carry much that kind of cargo.

The CHAIRMAN. Wouldn't one atom bomb dropped on the St. Lawrence seaway put it out business?

Secretary CHAPMAN. Oh, sure. I think it would.

The CHAIRMAN. That is all.

Senator GREEN. Mr. Chairman, are you through with Mr. Chapman?

The CHAIRMAN. Yes. For the present unless you ask some questions. Senator GREEN. I have no questions. I want to bring up something else.

The CHAIRMAN. Are you through with him?

Senator GREEN. I have nothing.

The CHAIRMAN. Thank you, Mr. Secretary.

Senator WILEY. I have just one question to ask. Mr. Secretary, is it not a fact that practically every year we run into a railroadboxcar shortage, because the railroads are literally choked with transportation which they cannot carry?

Secretary CHAPMAN. That has been especially true in our western area, particularly in shipment of our crops out of the West. That has been true there on a seasonal basis. They have had a serious difficulty.

Senator WILEY. Thank you.

The CHAIRMAN. All right.

Secretary CHAPMAN. Thank you, Mr. Chairman.

Senator GREEN. I have no questions to ask.

The CHAIRMAN. I want to place in the record at this point the statement of Under Secretary of State Mr. Webb, who is ill and cannot be here.

Now what do you have, Senator Green?

Senator GREEN. I was going to ask that same thing.

STATEMENT IN SUPPORT OF THE ST. LAWRENCE SEAWAY AND POWER PROJECT, BY HON. JAMES E. WEBB, ACTING SECRETARY OF STATE, BEFORE THE SENATE FOREIGN RELATIONS COMMITTEE

I am appearing before you today in support of the St. Lawrence seaway and power project. Americans, in and out of Congress, have debated the merits of this proposal for better than half a century. Now the year of final decision has come. The familiar St. Lawrence project is again before the Congress, but in new context-a context which requires a congressional decision—not as to whether the St. Lawrence project will be built-but whether the United States Government is to share in its building and management.

Rather than recite to you the manifold merits of the project, which other witnesses will discuss fully, I should like to explain how and why the circumstances surrounding the proposal have changed so much this year.

As the Congress was informed by the President's message of January 28, 1952, the Government of Canada sponsored, and the Canadian Parliament approved in short order in December 1951, two bills relating to the St. Lawrence project. One authorized the establishment of a St. Lawrence Seaway Authority to cooperate with the United States in the construction of the seaway under the 1941 agreement. The Canadian Seaway Authority is likewise empowered, and this is very important, to proceed with an all-Canadian waterway to be constructed entirely within Canadian territory, in the event that the United States does not elect to proceed with the joint project. The other Canadian bill provides for the development of power by the Province of Ontario in the International Rapids section of the St. Lawrence River in association with an appropriate agency in the United States.

The sincerity of Canada's desire to proceed, if possible, jointly with the United States in the construction of both the power and seaway phases of the project is unquestionable. In view of the delay which the Canadians have encountered in obtaining our cooperation on the joint project, however, the recent Canadian legislation is so drafted as to make it possible for Canada to go ahead with the all-Canadian seaway as soon as appropriate arrangements can be made for the construction of the power part of the project. It is up to the Congress to decide which alternative will be followed.

Canada has long considered the seaway a vital factor in the further develop ment of its rapidly expanding economy. Canadian defense authorities, as do ours, consider the seaway as essential to the national defense. In addition, Canada is faced with an urgent demand for greatly increased supplies of power. In only five more years, present and foreseeable supplies will become inadequate to meet the needs of industry in the Province of Ontario where more than one-third of the Canadian industrial complex is centered. The most economical way of meeting this increased demand is to develop hydroelectric power sources and the only available undeveloped water-power resource of any magnitude is the International Rapids section of the St. Lawrence River. The growth of Canada's industrial economy, which has been proceeding at an accelerated rate in the last few years, makes it essential, in the opinion of the Canadian Government, to proceed with this hydroelectric development as soon as arrangements can be made. If the start of this project, which will require 5 years or more for completion, is longer delayed, the Canadian economy would suffer serious injury. In this connection, let us not forget that the expanding facilities of Canadian industry will serve the critical defense needs both of our countries and of our allies.

The Prime Minister of Canada, Mr. St. Laurent, flew to Washington on September 28, 1951, and presented the case for the project in these urgent terms to the President. He emphasized Canada's desire that the whole St. Lawrence project be carried out jointly under the terms of the 1941 agreement. He added, however, that if Congress did not approve it in the near future, Canada would carry out, alone and in Canadian territory, the seaway part of the project. The President agreed that the joint execution of the project was eminently desirable and stated that the necessary authority should be sought urgently. He also agreed to support the alternative proposed by Canada if an early commencement of the joint development does not prove feasible. This understanding was subsequently confirmed by notes exchanged on January 11, 1952, between the Canadian Ambassador and the Secretary of State, copies of which