poration Commission of Virginia at Richmond, Va., which position I have held for over 5 years, previously employed as director of the transportation division of the commission.

The same opposition exists today and will continue to a proposal which if carried through could only result in an adverse effect on the State of Virginia and seriously affect the great port of Hampton Roads.

This project has been before the Congress for over 40 years and the office of commerce counsel has expressed its opposition a number of times within the past 12 years.

We see no merit in spending the taxes of all of the persons in the United States for a very uncertain advantage to a small part of this large Nation.

We see no merit in using the taxes of the citizens of the State of Virginia to build an outmoded waterway and if such waterway is of any use to take away from this State and from its great port revenues which now accrue, not only in taxes but to the people, by the use of its present facilities.

The State is greatly interested in the development of the port of Hampton Roads and this port is served by efficient railroad service from the very territory presumed to be added by the waterway.

The waterway does not pass through United States territory; its mouth is not a port of the United States; its control is not under the United States and its use is limited to 7 months of the year. However, whatever earnings are made in those 7 months must, in part, come from earnings now enjoyed by the transportation agencies of the State of Virginia and other States.

The original expense for this seaway is not the only expense and figures presented in the past and possibly which will be presented before the present Senate committee will show that a toll high enough to ultimately in the far future pay for the waterway will be so great that it is likely the seaway will be little used. There is also the question of what will happen if this is such an important seaway in the time of war. On whose shoulders will fall the problem of defense? One atomic bomb will undo the work of months and this seaway is not on United States soil. Its entrance port is not on United States soil.

Assuming that enough ships can use this seaway and its canals and can pay enough to maintain and in time take care of all sums spent in its construction, what about the taxes which are now being paid and would be paid by other transportation agencies when such transportation agencies will lose the traffic to this seaway? The United States is certainly in no shape today to lose any taxes when the demand is constantly for more taxes and more places to lay taxes. The States are certainly in no position to lose taxes when the demands of the Federal Government are so great that the places from which taxes may be secured by the States are few and far between.

The cost of this project is constantly going up and if the future can be judged by the past, whatever is determined as the cost at the present time, the ultimate cost will actually be 100 percent greater. An examination of the cost of all waterways constructed in the past will bear out this statement.

There is no justification for taking away the advantages of the port of Hampton Roads or the other ports in the United States for this project.

The iron ore that is supposed to furnish a great part of the revenue can easily find other means of transportation. It must find means of transportation from its source to the water and the iron ore in Canada is not the only source of ore today.

Recent newspapers have published the statement that the Canadian Government has a surplus of $722,000,000 and is in a quandary as to its ultimate use. Alas! What a difference! If the Canadian Government wishes to embark on a project of this kind on its own soil which will possibly result in benefits to its own ports, that is an internal problem of Canada.

The people of the United States have reached the point that taxes are becoming so great that the incentive to earn and to build is being lost and we are running deeper on the deficit side each year of existence. The United States should not appropriate one penny nor enter into any treaty, any agreement, or any contract to spend any money on this project. There have been billions of dollars spent in other lands up to the present time, but in those cases the reason or excuse has been the need for defense.

Sometime ago the need for the St. Lawrence waterway project was shown as defense, but in this project the money spent on foreign soil will not only cost the taxpayers in taxes, but cost the citizens of the State of Virginia and the citizens of the other States of the United States in diverted revenues and higher taxes. There is the possibility of a benefit for a comparatively few citizens in

the United States, but this is at the expense of the country at large. The principal beneficiaries will be shipping interests and the importers to this country of commodities which now reach our ports and are transported by rail promptly and efficiently without delay to their destination in all 12 months of the year.

This project will result in injury to capital, labor, transportation, ports, and the people of this State and of the other States.

The statement of the previous commerce counsel made in 1941 is true today that the construction of the project would be an outright waste of public funds at a time when the national debt is higher than it has ever been and increasing all the time and the project has no merit either as an economic or defense

measure.

STATEMENT OF E. C. ASH, TRAFFIC MANAGER, ON BEHALF OF THE MOBILE (ALA.) TRAFFIC AND TRANSPORTATION BUREAU

The Mobile Traffic and Transportation Bureau is a nonprofit organization, duly incorporated under the laws of the State of Alabama, and represents the city, county, port, commercial, and shipping interests of Mobile in transportation matters.

At a regular meeting of the board of directors of this organization, held on Thursday, February 21, 1952, the undersigned was directed to continue to oppose, on behalf on said bureau, the construction of the St. Lawrence seaway and power project. This proposed development has been the subject of legislation over a long period of years and the justification has been changed from time to time as the proponents have used various and different ideas which might have public appeal. This time they are using the national defense, the scarcity of iron ore, and the shortage of electric power as the main issues.

We are not at all impressed by contentions that this project is necessary for the defense of the country. It is known that it will take from 6 to 10 years to build. In the building it will divert labor, scarce materials, and public funds from the many essential defense projects which are needed at this critical time. This, we believe, is extremely unsound and contrary to the welfare of our Nation and its citizens.

The waterway would be ice-bound for approximately 5 months each year and therefore could be used for transportation purposes only for a period of about 7 months, during which time an enormous amount of tonnage would be diverted from the railroads. It would seem most unreasonable to expect the railroads to maintain sufficient equipment to accommodate the traffic requirements of the shipping public throughout the 5 winter months when navigation by vessels of the waterway would be impossible. The railroads constitute the backbone of transportation in this country, particularly in times of national emergency such as now exists. Anything which would tend to weaken the railroads, such as the proposed waterway, would be a calamity rather than a furtherance of the national defense.

The seaports on the Gulf, Atlantic, and Pacific coasts have spent enormous sums of money to develop their terminal facilities, and any great diversion of tonnage from these various ports through the use of the proposed St. Lawrence seaway would seriously affect all of them. At Mobile, the State of Alabama has constructed modern ocean terminals at a cost in excess of $20,000,000 (replacement value: nearly $40,000,000), and this investment would be seriously menaced by the diversion of tonnage.

Our Federal Government is committed to the policy of encouraging and developing a first-class American merchant marine, but because of the maximum 27-foot depth of the project it could not be used by modern American-flag vessels, which require a substantially deeper draft, as even the Liberty-type vessels draw 28 feet 3 inches in fresh water. On the other hand, the proposed depth of 27 feet is adequate to accommodate innumerable foreign-flag vessels which undoubtedly would be the sole beneficiaries from the development of this project, insofar as shipping services in our foreign commerce are concerned.

A very large percentage of the proposed navigable distance of the St. Lawrence River from Ontario to the open sea is located in Canadian territory. It seems unrealistic for anyone to suggest that the taxpayers of the United States should provide funds for the development of any such transportation project which would result in a terrific loss of business to American railroads, American rivers, American-flag shipping services, and American coastal seaports.

During this critical time, when the country is operating in the red financially, and the citizens are struggling under high taxes, every possible economy in our Government expenditures is extremely necessary, and our citizens should not be further burdened with the tremendous cost of developing this nonessential project. We are not in position to know personally as to the scarcity of iron ore in this country; but, from what we have read, we are inclined to believe that there is actually no scaricity but, instead, there are vast quantities of ore which could be made available at cheaper transportation costs than can the Labrador ore which the proponents claim is so badly needed as to justify the construction of this project.

As to the scarcity of electric power in New England, we understand that a report has just been made by the Defense Production Administration Special Committee of Power Experts that in the Northeast the prospect is for increasing power surplus. This being true, there certainly is no necessity at this time for the construction of power plants on the St. Lawrence, at the expense of the Federal Government. As a matter of fact, we are convinced that private industry is willing and able to take care of all necessary construction where and when more power is needed.

It is the sincere hope of our organization that this committee will decline to approve this project.

STATEMENT OF CARL GIESSOW, DIRECTOR, TRANSPORTATION BUREAU OF THE CHAMBER OF COMMERCE OF METROPOLITAN ST. LOUIS, MO.

Mr. Chairman and gentlemen of the committee, before proceeding further I desire to express to you my appreciation and that of our organization for the privilege of presenting to you the following statement in opposition to the St. Lawrence seaway and power project.

My name is Carl Giessow. I live in St. Louis, Mo., and am employed as director of the transportation bureau of the Chamber of Commerce of Metropolitan St. Louis, a new name but recently adopted by the former St. Louis Chamber of Commerce. I have held my present or equivalent positions with these organizations since August 1, 1932. The transportation bureau handles transportation matters for the chamber, subject, on policy, to action by the chamber's executive committee and its board of directors.

I have been engaged in and with transportation for over 44 years. I have been active in and held office in many shipper and commercial organizations. To name a few, I was president of the Louisiana Industrial Traffic League and the Southwestern Industrial Traffice League, vice president of the Southern Industrial Traffic League, and vice president, director, and member of the executive committee of the National Industrial Trafiice League, serving in the last two capacities for over 30 years. I was also alternate general general chairman of the Southwest Shippers Advisory Board, general chairman of the Trans-MissouriKansas Shippers Board, succeeding the late Honorable Clyde M. Reed of Kansas in that capacity when he was elected to the United States Senate, and successively national secretary, vice president, and president of the National Association of Shippers Advisory Boards. During World War I, I was a member of the New Orleans Western District Traffic Committee of the United States Railroad Administration; and, during World War II, I was a member of an informal advisory group to the late Honorable Joseph B. Eastman, and the Honorable J. Monroe Johnson, when they were serving as Directors of the Office of Defense Transportation. I am currently a member of Defense Transportation Administrator James K. Knudson's Shippers Advisory Committee.

I am admitted to practice and have practiced before the Interstate Commerce Commission and the Civil Aeronautics Board, and during their existence was admitted to practice and practiced before the United States Shipping Board and the United States Maritime Commission. I have had no occasion to qualify for practice before the United States Maritime Board since its creation. I have testified before committees of Congress on several occasions in relation to pending legislation.

I am appearing before you in opposition to the St. Lawrence seaway project, on behalf of the Chamber of Commerce of metropolitan St. Louis, pursuant to action taken by its board of directors. While I speak for that organization alone, I know that practically all of the organizations with which I have had official connection, and which I have named, are also opposed to the project, and many of them will individually express to your committee their opposition.

We are opposed to the seaway project because we are convinced that it is uneconomic, that it is devoid of any substantial military value, that it would be injurious to our merchant marine, and to our established ports on the Atlantic and Gulf seaboards, our railroads serving such ports, our coal industry, to the private producers of electric power, and to industry generally, which would be subjected to the subsidized competition which the project would create.

We hold no brief against our Canadian neighbors, for whom we have considerable admiration, but we do strongly feel that the interests of our own people, all of our people, must come first. If, as recent developments would indicate, our Canadian neighbors propose to build the seaway alone if we do not assume the cost with them, we feel they should be free to do so. Their proposed action affords no basis for our participation in the cost of the project. Unless it can be clearly shown-which, in our opinion, cannot be done that the project itself is economically sound and self-liquidating, we should have no part in it.

Before your committee gives endorsement of the project, it should be convinced, beyond all reasonable doubt, that the project is a sound one economically and that its benefits to our people, the citizens of the United States of America, fully and completely outweigh the losses and injury which our citizens and our Nation would sustain if the project were undertaken and completed.

The estimates on the cost of the project as of today, which I have seen and which would be borne largely by the United States, range from $1,000,000,000 to $1,500,000,000, but this does not include the cost of deepening harbors on the Great Lakes and the channels necessary to reach them. As compared to our national debt, this is not a great deal of money, but to the average man like myself, who would in all probability have to bear additional taxation to provide and carry it, it is still a lot of money. So, I ask and urge you gentlemen to be sure beyond all reasonable doubt that the project is economically sound before you give your support to it.

A realistic, honest-to-goodness, economic survey and report on the project has not, in my opinion, so far been made. I am aware of the so-called appraisal of the project of August-November 1947 made by the Bureau of Foreign and Domestic Commerce of the Department of Commerce. This appraisal does not, in my opinion, meet the test of realism-is an optimist's dream. Furthermore, the costs since that time have gone skyward by leaps and bounds and might well be double what they were then.

I feel that your committee should have, in justice to yourselves and to the people you represent in Congress, a current study on the economic soundness, or lack of it, by an impartial agency such as the Interstate Commerce Commission, before reaching a decision in this matter. The conclusions of such an agency would be based on complete factual data and not objectively biased. The debt and operation charge on the project will run into big money. Exaction of tolls to meet this would result in imposition of tolls on a substantial volume of traffic now using the same waters toll-free. In my opinion, transfer of freight, and particularly bulk freight such as grain, oil, coal, and ore, from oceangoing vessels to craft now operating west of Montreal and vice versa, might well result in lower through-handling costs than obtainable by the operation of oceangoing vessels through, with payments of tolls required to make the project self-liquidating.

The imposition of tolls on the seaway project, if undertaken and completed, might well presage the imposition of tolls on other water-borne commerse elsewhere, thereby further restricting the ability of our industries and farmers in meeting competition in world markets.

The ruling depth of the present channel between the Great Lakes and Montreal, I understand to be 14 feet. The projected depth is 27 feet, with approximate maximum fully loaded vessel draft of 24 feet. Less than 5 percent of our United States merchant marine could operate under full load at that draft. Small ships, mostly motor-driven and of foreign ownership, are presently operating into the Great Lakes. Somewhat larger ships of this character would be the principal beneficiaries of the deeper channel, to the injury of our merchant marine, our ports on the Atlantic seaboard and the Gulf, the agencies of inland transport serving them and their employees, and our citizens generally. Perhaps the proposed 27-foot depth may be the camel's nose in the tent. I have seen estimates that a 30-foot depth would cost 11⁄2 times and a 35-foot depth twice the cost of a 27-foot-deep seaway.

To the extent foreign materials and products would displace our domestic materials and products by reason of the seaway project, our own producers of such materials and products would also sustain irreparable injury and loss.

of business and their employees loss of employment. I might add that our Government would also lose taxes.

I think I might well here remind you that the seaway would be open but 7 months of the year, as Nature puts it out of business 5 months of the year. On the other hand, our railroads and highway carriers operate the year round. They are expected to provide facilities to handle added traffic when the seaway is closed. I think the present seasonal operation of the seaway, producing unbalanced demands for service on our railroads and highway carriers, results in higher rates and charges by such carriers than would prevail under conditions of balanced movement. Further seasonal diversion of traffic from them by an expanded though economically unsound seaway could only serve to aggravate this situation.

The current great agitation for the project, aside from that of a political nature, seems to emanate from a small number of steel producers, located in the vicinity of certain of the lake ports, who desire to move iron ore from recently discovered deposits in Labrador-Quebec, now undergoing development, at low cost to them. This ore will move whether the 27-foot channel is constructed or not and can move on existing channels. I can see no good reason why these firms should be given a subsidy and an advantage against their competitors at the expense of our taxpayers.

The section of the country in which they are located is at no economic disadvantage, having experienced the greatest industrial expansion of any section of the Nation in the last 30 years.

Depletion of iron ore in the Michigan-Wisconsin ranges has been advanced in support of the project. This would appear as a red herring drawn into the picture. It is true the volume of high-grade ore is receding, but there are tremendous reserves (up to 3 billion tons) of lower grade ore which can be satisfactorily upgraded at relatively small cost. In a talk in St. Louis on February 11, 1952, Hjalmar W. Johnson, vice president of Inland Steel Co., clearly stated that the steel industry in the Middle West is here to stay and faces its future with confidence.'

Construction of the seaway project has been advanced as being necessary to our national defense. It would take five or more years to complete, would require the use of now scarce material essential to our military program, and much skilled and unskilled personnel at a time when manpower is scarce and 18-yearold youths are being drafted into military service.

If there ever was a time, from a military defense viewpoint, when the seaway project should not be undertaken, that time is now. I subscribe to the views expressed by Mr. Charles E. Wilson, Director of Mobilization, while still president of General Electric Co., when he said "The development of the St. Lawrence would take a long time. There are much more pressing problems if we are to win the war of production."

I make no pretense at knowing a great deal about military strategy. But, to me, an ordinary citizen, of reasonable intelligence, I hope, a seaway which is closed by nature for 5 months of the year and which could be closed perhaps for years by one well-placed bomb, bottling up all the ships upstream from the point where it exploded, is, to say the least, of questionable military value. There is one more matter that I want to mention, and that is the power phase of the project. As to this, I want to say that we are against the Government in business and particularly where private enterprise, which pays its way, including taxes, is willing and able to meet the requirements of industry and the people.

The principal beneficiaries of the power phase of the project would be in northern New York and some of the New England States. In this section, I am told, there is now more than a 20-percent reserve capacity with an increase in power scheduled by the end of 1952 of 450,000 kilowatts, all privately financed. This, with the 500,000 kilowatts added in the past 2-year period, will have added in 31⁄2 years, one-half the time it would take to build the St. Lawrence works, only 190,000 kilowatts less than twice the firm capacity of the projected power works. Gentlemen, if my information is correct-and I think it is, as it comes from a reliable source-there is no present or prospective power shortage in that portion of the United States which the subsidized seaway power project would serve.

I hope you gentlemen of the committee will recommend against the St. Lawrence seaway and power project. This I ask you to do. In the alternative, I ask you defer action on the matter pending a realistic, factual, and unbiased economic study of the project by an unbiased agency such as the Interstate Commerce Commission.